'Without companies aligning their business models and operations with the SDGs - they simply won't be achieved' experts warn
Companies must urgently develop new, consistent standards for disclosing how business activities impact on progress towards the UN Sustainable Development Goals (SDGs), a group of accounting and disclosure experts have today warned.
Firms should shift away from reporting on how they are taking action to progress certain goals and towards disclosing how all business activities - including investment activity - impacts progress on the SDGs.
"To achieve the SDGs companies and investors will need to move away from mapping existing activities to the goals to a more integrated practice of directing and disclosing on investment activities that create more impact and contribute to progress towards the SDGs," said Elizabeth Boggs-Davidsen, director of SDG Impact at the UN Development Programme.
A report from the UN last year revealed that despite government and corporate ambition, progress to meeting the 17 goals by the 2030 deadline has been extremely limited, with the UN warning vast sums of private investment will need to be mobilised in order to meet the goals.
As such corporates have an opportunity to drive a step change in action from the private sector, experts said today. The Sustainable Development Goals Disclosure (SDGD) Recommendations paper, which was drawn up by global accounting bodies in conjunction with the World Benchmarking Alliance, makes a number of recommendations setting out how corporates should improve SDG disclosure to drive more thorough assessment and action in support of the goals.
For instance, a statement should be procured from a firm's Board Chair that says the Board accepts responsibility for the SDG Disclosures in the annual report. Firms should also consider sustainable development risks and opportunities relevant to their long-term business strategy, the report says.
"Without companies aligning their business models and operations with the SDGs - they simply won't be achieved," said Gerbrand Haverkamp, executive director at the World Benchmarking Alliance. "We therefore need to work together in translating scientific and societal expectations into clear reporting guidance for companies. This will create the data the World Benchmarking Alliance and others can use to assess and rank corporate performance in a manner that is transparent and free for everyone to see."
The report is not the only effort underway to encourage corporates to enhance their engagement with the SDGs. In March last year organisations such as CDP and the Climate Disclosure Standards Board published a paper outlining a corporate reporting model that enables both businesses and investors to focus on those SDGs most likely to affect financial performance.
The findings link to a wider drive to get corporates, investors and banks to standardise their reporting on climate and environmental risks, spearheaded by guidelines produced by the Financial Stability Board's (FSB) Taskforce on Climate-Related Climate Disclosures (TCFDs).
Standardised reporting on these issues would make it easier for investors and banks to compare vulnerability across sectors and move capital to more climate-resilient companies and sectors, experts argue.
The news comes in the same week as credit ratings giant Moody's warned there are significant credit implications for sovereign debt as a result of global sea level rise, especially in Asia, the Middle East, and North Africa.
World-renowned climate scientist and author joins BusinessGreen for a chat about climate justice, US politics, dealing with climate deniers, and the science behind net zero
BP announces pivot to become 'integrated energy company' as it pledges to cut oil and gas production by 40 per cent and ramp up clean energy and technology investment after suffering record loss in the second quarter of 2020
Pharma giant delivers on RE100 goal and turns its attention to delivering electric fleet