Corporate reporting bodies launch framework championing SDG alignment
A coalition of corporate reporting framework providers and CDP have published new advice aimed at unifying the business community's approach to reporting in line with the UN's Sustainable Development Goals (SDGs).
Developed by the Corporate Reporting Dialogue, which consists of eight corporate reporting organisations and is overseen by the International Integrated Reporting Council (IIRC), the ‘SDGs and the future of corporate reporting’ framework aims to help private-sector organisations determine which of the 17 Global Goals are most relevant to their business models.
The document argues that, by using annual reporting to illustrate the SDG-related work being undertaken to their investors, companies will be able to better align sustainability with profitability and embed social and environmental issues in their boards’ decision-making processes.
It goes on to explain which corporate reporting frameworks include each of the SDGs in their methodology, advising businesses to choose a framework based on the SDGs most likely to impact their financial performance – or those where they could drive the most positive impact.
Additionally, the document provides practical advice on how corporates can ensure their SDG-related actions receive boardroom-level support and produce “meaningful” positive results.
“We will strive with our further co-operation to enable effective and efficient capital allocation for the benefit of companies, investors and society,” the document states.
“This includes providing frameworks that measure progress toward achieving the SDGs and providing frameworks that enable a better understanding of the link between the SDGs and company financial performance and risk.”
The SDG stumbling blocks
Since the unveiling of the framework in 2015, 193 countries, more than 9,000 companies and investors with more than $4trn in assets have pledged their support to the SDGs.
But as more and more businesses move to align with all or some of the Global Goals, recent research by KPMG found that companies are still struggling to achieve boardroom buy-in for action on the SDGs due to a lack of available metrics for tracking progress against their aims.
Similarly, PwC has found that two-fifths of businesses are still failing to engage meaningfully with the SDGs, while the UN Global Compact has concluded that the private sector is failing to follow through on commitments.
In other words, despite recent studies suggesting that as much as $12trn and 380 million jobs could be generated by 2030 if the SDGs are placed at the heart of global economic strategies, case studies proving the specific benefits of adopting each and all of the Goals at a business level is rare.
In response to this issue, financial assessment firm Trucost recently analysed the benefits that 13 companies had reaped from taking SDG-aligned actions across their value chains. The analysis revealed that the coalition of companies had collectively generated $233bn of revenue through SDG-related action in 2017. Walgreens Boots Alliance, Unilever and Ørsted were among the companies included in this calculation.
Aside from the SDGs, the Corporate Reporting Dialogue’s new framework also includes a further call for the adoption of integrated reporting, which the body has been championing for several years. It states that doing so will help companies to better create value for their stakeholders in both the long and short-term.
“The Dialogue has taken the integration of non-financial and financial information as one of the cornerstones of its work,” the report states. “There is increasing recognition that companies’ value creation goes beyond financial value to include environmental and social value amongst others.”
The report comes shortly after the World Business Council for Sustainable Development (WBCSD) and consultancy Radley Yeldar co-published the results of a survey which quizzed 158 corporates on their approach to sustainability reporting. The survey found that one-third of the corporate respondents produced combined reports for this financial year – an 11% increase on 2017 figures.
Other recent research has also found that consumers are keen to see integrated reporting adopted by more corporates. A survey of 639 UK adults from YouGov and Social Value UK, for example, found that four in ten people believe large companies should be forced to account for their positive and negative financial, social and environmental impacts when calculating their overall profitability.
The SDGs at edie Live 2019
The Sustainable Development Goals are taking centre stage at the UK’s largest sustainability and energy exhibition this year, with an entire Theatre and day dedicated to the topic at edie Live on 21-22 May.
The two-day show – edie’s biggest event of the year – has become a highlight of the calendar for sustainability, energy and environment professionals looking for new ideas and solutions that will help them achieve a low-carbon, resource efficient and profitable future for their business.
© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.