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Corporations are increasingly building sustainability into their business strategies, and linking outcomes to the Sustainable Development Goals (SDGs), as seen in the 7,500 companies issuing annual sustainability or corporate responsibility reports in accordance with the Global Reporting Initiative. Given this evolution in corporate thinking and action, the pertinent questions are “why” and “how.”
To investigate, we studied 40 companies with a strong record on sustainability. A desktop review provided a foundation and structured interviews with executives of 14 of the companies provided detail and nuance. Here is what we learned.
Unlike many civil society organizations and governments, corporations do not automatically make the link between their mission and sustainability, or simply review the SDGs and sign on. They go through a deliberative evolutionary process. First, a progressive acknowledgement of the importance of environmental, social, and governance issues (ESG) to the company’s business interests. That leads to an understanding of the relevance of the broader issue of sustainability and, for some companies, subsequently seeing how specific SDGs fit with their business interests.
The “drivers” that link sustainability and the SDGs to the corporate interest can be either business-case or values-case. The business case for the SDGs is best articulated at a macro level by the report of the Commission on Business and Sustainability—capped by identification of a $17 trillion market potential for four of the SDGs by 2030.
Business-case drivers involve maximizing growth opportunities and minimizing risk and are the rationale for 80 percent of the companies studied. A few have moved a step further to a values-case by adopting a corporate values or purpose statement that moves the corporate strategy beyond just financial return.
More than half the companies studied link their corporate strategy to specific SDGs connected to their business activity and to which they plan to contribute. The SDGs provide a useful frame, both internally and externally, to organize and …