If the latest analysis of business reporting on the SDGs is anything to go by, action on climate change feels like a box some of us leave hanging around, never opening and unpacking it properly - but yet it contains the keys to unlocking progress on so many SDGs
The optimist in me starts 2020 with something of a spring in my step due to a seeming increase in public engagement on sustainability issues. But like New Year's resolutions, there's a lingering worry about whether there will be the progress we need, at the pace we need it, as we start the crucial 'decade of delivery' for the SDGs.
In the third and largest analysis of published reporting on the SDGs, PwC explored the public reports of over 1,000 companies to find out how businesses are engaging with the goals.
How companies are reflecting their focus, in their published reporting, on the 169 targets that underpin the 17 goals is a good indication of whether they're really considering the SDGs at more than a superficial level and whether they are integrating the goals into business strategy. And that is the key question we need to be asking: are companies using the SDGs as a language to explain their strategy, or are they using them as a framework to really drive their strategy? Of course the latter is key to creating the change at scale that will achieve the SDGs, but our research suggests that it is almost entirely the former that is the current status quo.
This year's findings indicate that only 14 per cent (157 of 1,141 companies) mentioned specific SDG targets. Of those, 39 per cent are setting qualitative ambitions and 20 per cent are setting quantitative ambitions.
Climate Action (SDG13), appears in the top three goals mentioned by business. It ranks first for the Energy, Utilities and Resources (EU&R) sector, with Financial Services, Technology, Consumer and Manufacturing sectors putting it within their top three. Despite the clear link between climate action and energy consumption, it is interesting that the Affordable and Clean Energy goal (SDG7), only appears in the top five of one industry sector (EU&R), which does suggest that there is a lack of joined-up thinking on the cross-connected nature of the SDGs.
Also less encouraging is the fact that Life Below Water (SDG14) doesn't appear in the business top three in any of the countries in our sample, even though it is consistently one of the worst performing goals for many.
Despite the profile of climate change issues in 2019, Decent Work and Economic Growth (SDG8) remains the most popular goal identified by business for the third year. And whilst goals related to water, land and energy have strategic opportunities and risks for almost every sector, they don't appear to be widely identified as considerations in future business strategies and investments.
And here's the rub. Companies are starting to prioritise goals they believe are relevant to them, but we've little evidence of holistic thinking on how the goals are approached. With only 1% of our sample measuring their progress against a quantitative ambition in relation to an SDG target, it suggests that companies still aren't looking in enough detail at what sits behind the goals and are not thinking about how to set sensible targets against which they measure their performance .
Action on climate change is a prime example. In understanding it, and acting on it, it contains direct and indirect links to many of the goals.
The SDGs offer a comprehensive map of the risks and opportunities associated with climate change and the threat of inaction. While only one SDG (13) specifically references climate action, its definition - Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries - means if we can't solve it, it could compromise our ability to achieve many of the other goals.
As 2019 closed with unprecedented wild fires in the US and Australia, and the latest in a long trail of extreme weather events impacting countries such as Pakistan and the Philippines, business leaders will be acutely aware of the need to improve our capacity to be resilient to climate events, and the wider benefits action can bring to other SDGs including clean air, water, land use, and health.
Analysis shows the links between Climate Action, Affordable and Clean Energy, and Life Below Water. Clean Water & Sanitation, Good Health and Wellbeing, and Zero Hunger are also linked to the goal of Climate Action to address and protect sustainable food production, water resources, and health.
The linkage is echoed in the UN Environment Programme's recent report highlighting that progress on climate action would "boost" the Sustainable Development Goals. Critically it also warned that emissions now needed to fall by over seven per cent each year for the next decade if the 1.5C goal of the Paris Agreement is to be met.
Talk of global targets can make it seem like someone else's problem to solve. In reality, it's about action on an individual organisational level to show leadership, understand and manage risk, innovate and change, in order to sustain growth and social impact (employment, pay and inclusion, wellbeing as just a few examples).
In this respect, the SDGs can and should act as a framework that shapes business and corporate strategies over time, through sustainable innovation projects and investments. It is also underpinned by the critical role of collaboration - across and between companies in different sectors.
Leadership and investment in uncertain times - particularly when responding to a globally inconsistent policy response to climate action - can be a hard road to take alone. Collaboration between companies, academics, and other sectors can accelerate positive change and avoid duplication. Creating alliances with multiple and interdisciplinary sectors can amplify and extend companies' impacts on climate action.
It's a crucial point for many industries, including energy and manufacturing, where what's required is nothing less than radical transformational change in industry and policy, the kind the WBCSD refers to as "system transformation".
There are encouraging signs that corporate action is growing in response to the threat posed by climate change. Since September, the CEOs of over 100 pioneer companies have committed to achieve net zero emissions across their operations and value chains by 2050. And over 1,000 businesses have signed up to the "We Mean Business" coalition's other climate action initiatives (such as science based targets and committing to 100 per cent renewable energy).
Such progress is critical, albeit not uniform. Despite the lack of movement within the UNFCCC process, exemplified by the over running, results-light COP25 summit, non-state actors are pushing hard for decisions to be made and also to make additional voluntary pledges themselves.
Looking out to the ‘decade of delivery' what our analysis underlines is that the issues of sustainability and climate change will increasingly rely on innovation and the responsible application of technology. It could be an important aspect of the shift we could see in how business and regulators accelerate investment and strategies to address climate action.
For years we've heard the call for business to embrace the opportunities, not just minimise the risks of climate change. The role of emerging tech and new business models, particularly including start ups, gives us practical examples of the potential to rethink what's possible, and who we collaborate with in order to make it happen.
Right now, a board room or strategy discussion on innovation - driven by a need for more energy and resource efficient and advanced approaches to how we live and work - feels like less of a leap of faith than navigating an incoherent global policy response to climate change, not to mention the slow running COP process.
Business cases are already written for climate action in tech start ups and elsewhere. Artificial Intelligence (AI) is identified as one of eight emerging technologies that can help solve environmental challenges, from climate change to biodiversity. While Cities could slash GHG emissions by an additional 35 per cent through startup and corporation innovation, while helping create a $5tr market for cleantech solutions.
There is a great deal of work to be done in the next ten years if business is to contribute meaningfully on climate action and more broadly on achieving the SDGs. Not least because apart from the energy sector, companies in most other industries have yet to build a strategy around Affordable and Clean Energy (SDG7) despite the need for rapid decarbonisation.
And so, companies need to break open the box, look inside. With 17 goals, and almost 170 targets, the SDGs are a framework that can be used as the overarching lens through which organisations think about, plan and conduct their business, making them part of decision-making processes and embedding them into the organisation's strategy, culture, values, relationships and employee engagement.
If you're looking for sustainable direction on climate action, there's no better place to start.
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