Businesses and the Sustainable Development Goal -a healthy society makes good business sense

Short paper for a Workshop on National Perspectives on Implementation of the Sustainable Development Goals (SDGs) – 29 February 2016

Launched in September 2015, the Sustainable Development Goals or SDGs are a set of goals agreed by the international community to articulate the means of achieving sustainability for the betterment of society by 2030.

chart1

At a national context, it has been pointed out that the goals align neatly with inclusiveness (1,2,5,6,10 and 11), well-being (3,11,16), human capital development (4 and 8), green growth (6,7,8,12,13,14 and 15), infrastructure (7 and 9) and economic growth (2,8,9 and 17).

However, how can SDGs serve businesses, and vice versa? Businesses sometimes earn themselves a reputation for being self-serving and profit-seeking at all costs. In such a perspective, it is not surprising that the perception is that businesses can only prosper at the expense of society and the environment. Corporate social responsibility (CSR) is the response and actions of businesses to redress this wanton behaviour – although in the eyes of many stakeholders this merely constitutes window dressing and mostly is too little and too late. 2

But businesses need a healthy society to operate and SDGs align with basic hygiene necessities for a robust economy. Furthermore future-proofing of business involves protecting the planet, human capital and innovation. Hence responsible businesses are actually protecting their interests.

To better understand the needs of business, it is sometimes necessary to probe into the issues that concern managers.

War for Talent – how do businesses attract talented staff and crucially how can they retain them?

Riding the Economic Cycles – how do businesses cope with fluctuations in economy brought on by lowering currencies, drops in commodity prices or even financial crises?

Productivity Losses – these occur not just in the workplace but outside, for instance how much time is lost sitting in traffic jams commuting to work?

Ageing Workforce – how do businesses ensure a steady pipeline of skilled workers set against the backdrop of a shrinking urban birthrate?

Keeping Up With Technology – how do businesses ensure that technology is available to modernize operations and not encumber it?

Growth in Global Markets – the dilemma facing businesses is that the only way to survive is to grow and in doing so venture into unfamiliar global markets.

Protecting Our Reputation – how do businesses do the right things and be seen to be doing so? The consequences of getting it wrong can impact the brand reputation irreversibly.

Climate Change –this will get us in the end if not directly then it will be through supply chains and resources.

How Do We Innovate? – the billion dollar question.

So with all these issues causing CEOs and captains of industry to spend sleepless nights, it is an appropriate time to revisit CSR and beyond. SDGs actually align with the points above.

chart2

Achieving CSR and beyond will require:

Building awareness at board level – a case of telling learned directors that they don’t know what they don’t know.

Embedding SDGs into core values – making the goals highly visible and immutable.

Operationalizing along the value chain – translating the purpose of the goals into actionable work tasks with measurable outcomes.

Formulating the business case – getting the accountants on board.

Doing the less popular things and persevering – things like sharing profits with staff, not exploiting gullible customers and collecting post-consumer waste for recycling back into the processes.

Businesses try to minimize costs of doing business and maximize profit. The SDGs, especially Goal 12, attempt to do the same thing, although the profit is not necessarily in the financial sense but in the social and environmental sense.

So why are businesses reluctant to make this shift? A combination of old-fashioned thinking and fear of change seems to be the cause. To rectify this, driving forces need to come from government (businesses prefer to be told that they have to change or else) and customers (who won’t buy products from one business if another one offers a friendlier and softer carbon-friendly alternative). 4

Civil society can play a key role too as the traditional impasse between cold-hearted business people and tree hugging NGOs are myths of the past and both sides today seek closer cooperation and partnerships to achieve the same goals of sustainability.

So in the end, good policy and regulation will drive SDGs, and businesses will respond accordingly by finding the right partners, somehow meeting the costs of compliance and leading the transformation in some parts and following civil society in others.

In conclusion, a healthy society makes good business sense.

Dr Thomas S.K. Tang

Kuala Lumpur Centre for Sustainable Innovation

sk.tang@klcsi.com