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Corporate peer pressure and the SDGs

Last updated on January 11, 2023

As I look at the U.N. Sustainable Development Goals (SDGs), it seems that the world has taken one step forward, and a dozen steps backward. The United States has announced plans to back out of the Paris Agreement, citing profits over planet. Climate change denial is rampant at the highest levels of U.S. government. It seems unlikely that the public sector will be driving progress on Goal 13, Climate Action — at least not in America.

But the 17 SDGs are about more than just climate action. Goal 5 (Gender Equality) seems like an impossible dream as we’ve heard countless reports of gender inequality. Goal 1 (No Poverty) and Goal 10 (Reduced Inequalities) become further out of reach as income inequality grows. My decades-old Political Science degree tells me that this leads to social instability and economic consequences. 

Education was once a means to improve socioeconomic status. Yet Goal 4, Quality Education, is becoming increasingly cost-prohibitive, having tripled in expense during my lifetime. Meanwhile, Good Health and Well- Being (Goal 3) is getting harder to come by. Your pre-existing conditions may exclude you from health coverage. And the death rate is rising in America for the first time in a decade.

This is a demoralizing list. So if the impetus for change isn’t driven by regulations, where does SDG support come from? I think that the answer lies in the private sector.

Corporations Are Leading Adoption

I’m seeing increased momentum for companies to adopt the U.N. SDGs. This is driven by three key factors: supply chain pressures, pressure from customers, and peer pressure.

Corporations have taken the reins on the global sustainability agenda in a way that I wouldn’t have imagined a decade ago. But it makes sense. Supply chains now reach around the globe. It’s in corporations’ best interests to support a world where the SDG achievement helps to minimize risks.

One of my largest clients is a Scandinavian company, so I’ve spent a lot of time researching their peers. Ikea, in particular, has made a massive and vocal commitment to sustainability, which has set the tone for other businesses in their peer group. They created this excellent infographic about why sustainability matters to their business. This isn’t just slapping some solar panels on a building and calling it a day. This is because they know firsthand the cost of climate change on their business, having lost $9 million in revenue due to Hurricane Sandy’s devastation in 2012.

They report that:

  • The future success of business depends on limiting global temperature rise to 2°C
  • Legally binding targets focus on CO2 reduction, renewable energy, and energy efficiency
  • These targets will unlock the innovation and investment needed to build a low-carbon economy

Ikea cites the World Bank when they say that every $1 invested in energy efficiency saves at least $2 in energy expenses. Since 2010, Ikea reports savings of €40 million through improved energy efficiency in their stores and distribution centers. With a company of this size, reduced reliance on fossil fuels alone can improve the world. But the company goes beyond environmental themes. They have detailed sustainability reporting about responsible consumption, production, gender equality, and their ongoing commitment to children’s rights.

Companies like Ikea are integrating their SDG action plans with their long-term business goals. This isn’t just good PR. These decisions also make solid economic sense. I wouldn’t be surprised to hear about more detailed plans from other corporations in the coming quarters. Within the next year, implementation will gain traction.

Soon we’ll see the introduction of consistent reporting metrics across companies and industries. These metrics will help investors and business partners understand the potential

for positive global change, and assess the risk to the bottom line. They will also help consumers make more informed decisions about the products they buy.

* After writing this, I spotted an article from GreenBiz about how climate risk disclosure is going mainstream. Companies are seeing the impacts of climate change. It makes sense that they would support business initiatives that cushion against those impacts, initiatives that also support SDG advancement.

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