The SDG Challenge: A new perspective on innovation and business success.
Climate change has been marked as one of the most discerning issues of the 21st century. With the rising concerns over climate change and its associated risks on global economies, no one can afford to remain indifferent to consequences that will affect the whole world. All the United Nations 17 Sustainable Development Goals represent the risk areas that are jeopardizing businesses and societies. If left unattended, these risks will be worsening the current global scenario. On the other hand, these SDGs put a spotlight on the plethora of opportunities out there to make things right. The International Chamber of Commerce expressed the importance and opportunities related to SDGs as follows:
“The SDGs provide all businesses with a new lens through which to translate the world’s needs and ambitions into business solutions. These solutions will enable companies to better manage their risks, anticipate consumer demand, build positions in growth markets, secure access to needed resources, and strengthen their supply chains while moving the world towards a sustainable and inclusive development path.”
Irrespective of the size, scope, and industry niche, all companies can contribute to the SDGs. Aligning business goals with SDGs present opportunities to develop the multifaceted approach and gain benefits from that. Focusing on SDGs and generating profit to make businesses more sustainable is not an alien thing. It is quite easy; all you need to do is to be innovative and develop strategies to achieve goals. For example, consider the Solar and Wind energy business. The business is directly meeting the objective of SDG 7 and indirectly achieving the objectives of 5 other SDGs. The market is expected to hit 2.15$ trillion globally by 2025 in the clean energy production business. This is the easiest and simple example to understand that how sustainability and profitability go hand in hand.
The SDGs provide businesses with a framework to communicate with stakeholders about how to develop sustainable solutions that can change business models, goods and services, and the communities in which they work. The investment in sustainable or green buildings is increasing due to the higher rental incomes and lower operating costs. Although sustainable buildings with features like energy and water efficiency are costlier to construct as compared to the normal ones. Despite the higher initial cost, the flight of capital for sustainable buildings has been observed as reported by a real-estate expert Knight Frank because the business case of green buildings is a proven success.
Majid Al Futtaim, an Emirati holding company based in Dubai, has planned to be the Net positive throughout their portfolio by 2040. They invested a hefty amount of 6.13 Million USD in energy efficacy measures across their hotels saving annually 1.50 Million USD and the payback period is just shy of five years. On the other hand, in 2019 they issued Green Sukuk Bonds worth 600 Million USD. This Sukuk subscription or booking value went almost 3 Billion USD which is roughly six times more. It is an interesting fact the Majid Al Futtaim is the first corporation to issue Green Sukuk in the Middle East. All the above-mentioned examples debunk the myths associated with investments in sustainable projects and ensure that sustainable practices strengthen the business's economic case.
The E-commerce industry is adopting sustainability pretty quickly. The shipping and packaging are associated with waste generation and carbon emissions. However, the e-commerce industry adopted the sustainable approach and achieved goals related to the SDGs 3, 6, 8, 9, 11,12,13,14, 15 respectively. JD.com a Chinese company has introduced delivery boxes that can be re-used and are made from bio-degradable materials. Similarly, Nike is using a sustainable FSC certified packaging material for online orders to reduce their waste contribution. Many businesses are paying attention to initiatives that can reduce the carbon footprint of their businesses. For example IKEA, Amazon, and Etsy. FedEx and Ryder just collaborated to add 1000 electric vans to participate in net-zero delivery programs. This depicts that how innate synergic characteristics of SDGs can influence the decisions and create a positive impact.
According to the Ernst & Young Global Limited, businesses can harness the potential of 17 SDGs to embark on a journey of zero waste and zero emissions. They can aim to capture opportunities to reduce costs and risks coupled with increased resilience. Moreover, they have suggested six points that companies can adopt as an action plan to achieve sustainable development goals while generating revenues as well.
Consumer awareness and behavior regarding SDGs is an important factor to make efforts successful because SDGs focus on both the aspects of manufacturing and consumption of products. PwC global research found out that approximately 75% of the consumers are willing to pay for goods or products offered by businesses that are committed to SDGs. This provides further impetus to the business owners, stakeholders, and investors. Unilever CEO Paul Polman expressed that putting sustainability at the core of the business model is an ideal situation if a company is aiming for long term growth and progress. According to the Business and Sustainable Development Commission report, it is estimated that by 2030, a staggering investment of amount 12 trillion USD is expected for sustainable practices, and innovations. This will transform the global business scenario to achieve the objectives of SDGs while creating 380 million jobs.
To conclude it is imperative to incorporate SDGs into business philosophy. The business community should invest in research and development, enforce sustainable practices within their circle of influence, support innovative solutions and hire top talent to ensure their business success coupled with achieving the goals and objectives of Agenda 2030. The core reason for the emphasis on the SDGs is that they are universal and formally agreed upon globally. Governments, companies, and all other stakeholders can establish and enact policies to achieve the SDGs leading to a bright and resilient future, and it also channels innovative thinking into places where there is real value to humanity, and hence ensures success.