Progress on Reporting: Latest from the UN Global Compact
Two new reports from the UN Global Compact strengthen business efforts to monitor and achieve the Global Goals.
Last month, during Global Goals Week in New York City, the UN Global Compact launched its latest reports: the 2017 UN Global Compact Progress Report: Business Solutions to Sustainable Development and Business Reporting on the SDGs: An Analysis of the Goals and Targets.
The Progress Report illustrates the current state of business supporting the Sustainable Development Goals (SDGs), and the Analysis of the Goals and Targets is the first in a series of guides for business reporting on the SDGs. Both documents work together to set the stage for strengthening the role of business in the 2030 Agenda in the years to come.
Two years after the unanimous adoption of the Global Goals by 193 United Nations Member States, business leaders are following suit with their commitments of support for SDG implementation. But is the private sector living up to these promises? The Progress Report takes an uncompromising look at what companies say they are doing, what they say they are planning to do in the future, and what they are actually doing now to support the SDGs.
The Progress Report findings are based on survey responses from 1,950 companies (22% of Global Compact members). Respondents represents the general member profile in terms of company size, region, and joining year. The survey is dominated by companies that are European, are small (1–249 employees), joined the UN Global Compact between 2014–2016, and are in the Industrials sector. Survey questions explored how these member companies are enacting the Global Compact’s Ten Principles.
The Ten Principles are the fundamental values that businesses embed in their business strategy and operations to guide their conduct, and the 17 Sustainable Development Goals are time-bound targets defining the destination we have to work towards.
The findings are encouraging, but also show areas where progress can be made.
The Good News
- CEO engagement is high (69%) and increasing (up four percentage points from 2008). As Lise Kingo, CEO and Executive director of the UN Global Compact, explains:
“By becoming personally invested, top executives are sending an important message to their employees, customers and other stakeholders that the company’s sustainability engagement is a strategic and operational priority.”
- 75% of companies have actions in place to address the SDGs, with the most common approach being to align core business strategy with the Global Goals. Interestingly, 41% of respondents say that they have started developing products, services or business models that contribute to the Global Goals.
- 70% of companies are reporting their sustainability performance to the public, and 55% of respondents say reporting helps to integrate corporate responsibility into business operations. Thus the perceived usefulness of reporting is growing.
The Not-So-Good News
- Even though three-quarters of companies report action on the SDGs, a much lower percentage are conducting Impact Assessments on their actions (from 58% on Climate to 15% on Human Rights). While 61% of companies set measurable targets, only 55% monitor performance, and only one in three engage in partnerships and conduct impact assessment.
- Small and medium-sized enterprises (SMEs) need more support when it comes to implementing and reporting on sustainability performance. Only about 40% of SMEs monitor and report on sustainability progress (compared to over 80% of large companies) and only 25% of SMEs include sustainability metrics in their annual reports. However the importance of SME involvement is critical to SDG success. Approximately 95% of all enterprises globally are SMEs; they contribute approximately 52% to the total global economy; and they play a major economic role, particularly in developing countries.
- UN Global Compact membership has grown from the original 44 business signatories in 2000, to more than 9,500 companies from 145 countries representing 66 million workers. Yet only 28% of Fortune 500 companies are members.
Progress Assessment by Area and Geography
The report categorizes each of the Global Goals into a focus area: The Economic Dimension, The Social Dimension and The Environmental Dimension. It then outlines the progress for this area based on survey findings and predicts the likelihood of meeting the SDGs in five world regions by 2030.
The ensuing charts demonstrate just how much work remains, especially in less developed geographies.
Economic Global Goals
Social Global Goals
Environmental Global Goals
Looking Ahead: 10 Opportunities
Given these predictions, the report offers ten areas for the business sector in particular to focus its collective efforts. After all, much can be accomplished in the next thirteen years with the resources, technologies, innovations and partnerships that companies — large and small — bring to the sustainable development table.
For each, the report highlights what businesses can do to support the Goal achievement as well as what the Global Compact will do to support businesses in their efforts.
These opportunities include:
- Peace & Humanitarian Action — Even though the primary responsibility for ensuring peace rests with governments, business activity can play a stabilizing role through employment creation and economic growth.
- Climate Shift — Climate change threatens the foundation of the global marketplace while representing an enormous growth opportunity for the private sector.
- Saving our Oceans — Businesses aren’t targeting Goal 14 Life Below Water, but our marine ecosystems play a significant role in the global economy.
- Sustainable Cities — As the percentage of the world’s population living in cities rises from 50 to 75, businesses have an ever-increasing responsibility to ensure their employees have inclusive, safe, resilient and sustainable places to live.
- Increasing SME Support — Small and medium-sized companies are nimble and can reorient themselves towards the new market opportunities created by the SDGs, but they need know-how and sometimes additional resources to be able to do so.
- Support Sustainable Supply Chains — Managing supply chains for sustainability is difficult but necessary for protecting the populations that are most in danger of being overlooked.
- Rising Inequality — Reducing inequality makes business sense. Inclusive economic growth supports stable societies, widens access to labor, and opens up new markets for products and services.
- Mobilizing Finance — There is tremendous potential (and need) to redirect capital markets to support SDG implementation.
- Transformative Partnerships — Consulting with all stakeholders and forming strategic public-private partnerships adds value to companies.
- Protecting Life on Land — Businesses aren’t targeting Goal 15 Life On Land, but our natural ecosystems play a significant role in the global economy and companies can do more to protect them.
The launch of the Business Reporting on the SDGs report was the highlight of the UN Global Compact’s Leaders Summit, held on September 21st during Global Goals Week. The report is born out of the Reporting on the SDGs Action Panel, one of the Corporate Action Groups within the SDGs Action Platform, a partnership of the Global Compact, the GRI, and the Principles for Responsible Investment. The Analysis itself is the work of the Global Compact and the GRI, with the support of PWC.
This document is the first in a three-year initiative to help businesses of all sizes improve their reporting, and in turn, their performance toward achieving the Global Goals. The Analysis is “an inventory of possible disclosures” for each of the 169 Targets under the 17 Goals, and is developed from existing “globally accepted disclosure frameworks for business”. These lists of currently established disclosures are accompanied by an illustrative list of possible actions for each target, and a list of possible gaps where disclosures have yet to be established. The Analysis is essentially an organization of publicly available materials (including UN conventions, international agreements, and academic research) into helpful guides for each SDG Target, for businesses to see all potential disclosures they could make toward the SDGs. These disclosures are even divided into common business themes, such as Occupational Health and Safety, Employee Benefits, Inclusive Business, Access to Health Services, etc.
“[The Analysis] represents an important step towards a unified mechanism to help companies report on the SDGs in a comparable and effective way. By reporting on their progress, companies will improve their performance, which will enable meaningful progress towards achieving the SDGs.” — Tim Mohin, Chief Executive of GRI
The second publication of this series will be A Practical Guide to Defining Priorities and Reporting, and will use the SDG Compass as a starting point to offer companies a structured approach to choosing which targets to report, and how to drive action from that reporting. The Practical Guide is expected in January 2018.
This comprehensive list of existing resources and disclosures for each relevant target is the first step toward a unified and harmonized methodology for business to report on the SDGs. However, not all targets have enough information available for business to confidently contribute. In these cases, the Analysis does not include illustrative actions or indicator mapping. Further work on filling these gaps will continue to be addressed by the project.
New York, 21 September 2017: Business reporting on the impacts and contributions to Sustainable Development Goals (SDGs…blogs.thomsonreuters.com
The work of the Reporting on the SDGs Action Platform has only just begun, with next steps including:
- Further development of the Analysis of Goals and Targets to include sector-specific details.
- Further work and consultation on the Practical Guide.
- Development of recommendations on how to create disclosures in cases where existing disclosures are not well established.
- Potentially integrating the results into the GRI Standards and the UN Global Compact Communication on Progress, with further
alignment of both frameworks.
- Continuing to align with other work of the UN Global Compact and of the GRI, including the Blueprint for Business Leadership on the SDGs to accelerate corporate action on the SDGs.
Both the 2017 Progress Report and the Analysis of Goals and Targets work together to provide businesses large and small with valuable tools to understand their role in the Global Goals, and to begin to measure their progress comprehensively. While the next step of strategic corporate alignment with various SDGs is still on its way, with the Practical Guide to Defining Priorities and Reporting coming next year, being able to see the current progress in the private sector and a comprehensive, unifying list of potential disclosures are invaluable resources for business today.