Carmen Ene is CEO at 3stepIT and BNP Paribas 3 Step IT, Europe’s leading circular Technology Lifecycle Management providers.
In 2015, world leaders reached a historic consensus, agreeing to 17 global goals to tackle some of the world’s biggest challenges like climate change, world hunger, poverty and human rights abuses.
The deadline they set was 2030. In 2022, we are at the critical halfway point and have made some progress, but we need to do much more.
There’s still a $4.3 trillion annual gap in financing for the UN Sustainable Development Goals (SDGs). And there’s also a clear knowledge gap, as a recent survey found less than two in ten British businesses are aware of the SDGs—a critical miss at the most critical time.
Nice To Have, Need To Have
However, the days of blaming a lack of awareness will soon be over. While the SDGs are often criticized for being too broad and vague, it’s clear the principles behind them are still very much inspiring and informing today’s regulatory landscape.
Businesses will have to sit up and take notice.
Two new pieces of legislation are forthcoming in the European Parliament—one of which has been adopted—and they will turn compliance with SDG principles from a nice to have to a need to have. Within the next three years, The Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive will require companies to publicly (and accurately) report their environmental and social impact, ensuring that commitments align with actions and everyone is doing their bit.
International financial reporting requirements are also tightening. The International Sustainability Standards Board (ISSB), part of the International Financial Reporting Standards (IFRS) body, has just announced it will require companies to disclose their scope 3 emissions—which include all activities outside an organization’s direct operations across its value chain—under new standards being developed. Regulators typically take their lead from the ISSB, and major international governments will likely be quick to follow suit.
The Opportunity In The Challenge
Regulations are undoubtedly a challenge, but we shouldn’t forget about the opportunity they represent.
With their actions, policymakers are turning consumers’ and shareholders’ appeals for greener, cleaner practices into law, so aligning business operations to the new regulatory framework should strengthen reputation and customer engagement.
Not only that, investing in the SDGs is predicted to reap economic gains of $12 trillion by 2030, as well as 380 million jobs annually—a much-needed boost as we look set to face a global recession. Far from an impractical framework, remote from the reality businesses face on the ground, this global to-do list has the power to unite the corporate community around a common goal: sustainable growth.
But what can businesses practically do about it?
Time To Get Serious
There have long been calls for organizations to align their revenue streams with the SDGs.
As the EU pushes for stricter rules on defining sustainable investment, global financial institutions are also following suit, pushing their investment customers to align revenues with the SDGs. It makes a lot of sense—ESG issues represent investment risk, and meeting 2030 targets limits this liability. But without the capital behind these ambitions, we can’t hope to close the gap.
Given we face a climate crisis of grand proportions, I believe great ambition is needed to solve it.
Could we take this idea even further and ask businesses to align their operating costs with the SDGs? This would mean that operational activity—like hiring and procurement, for instance—would need to align with the UN goals.
Organizations would have to commit to and invest in systemic change, transition to new ways of working, consider assets and waste differently, and clearly demonstrate their impact on the planet. It’s no small ask, but just imagine the scale of the impact that could be achieved if every business began applying operational budgets as a tool to achieve our global goals.
Let’s take corporate tech investment as an example.
Traditional tech purchase and consumption models encourage organizations to take, make and waste. Organizations procure new tech assets, maintain them for their first useful life, dispose of them, then repeat the cycle.
Alternatively, in a circular economy, organizations still fuel digital transformation with new hardware as part of regular renewal cycles to remain competitive and resilient. But instead of dumping assets after a single use, devices are kept in circulation by ensuring they are refurbished and given a second (and even a third) life before being recycled and made into new products once again.
The approach ticks many boxes: It minimizes the liability and environmental costs associated with using technology, reduces the drain on natural resources and tackles the issue of e-waste. But it also aligns nicely with several of the UN goals (SDG 9, 12 and 13, to name a few), allowing organizations to demonstrate commitment and progress in a tangible, measurable way.
The Race Is On
2030 is fast approaching, and while we’re not on track to achieving the aims set seven years ago, it’s not too late to act.
Global leaders who met at COP27 earlier this month must continue to work together to address the SDG financing gap. They must also focus on offering businesses practical opportunities to contribute towards a more sustainable and better future for all.
On that account, aligning corporate revenue and spending with the SDGs goals might be an opportunity too good to miss.