Sustainability: ESG and SDG: Acronyms of the future

Bridget Williams, from Bead and Proceed, gets to grips with these acronyms and the challenges and solutions they provide for HR professionals.

Last year provided us with anything but 2020 vision (excuse the pun). The COVID-19 pandemic added significant uncertainty to the future. We’re halfway through 2021, still seeking clarity. However, one does not need a crystal ball to determine that economic, social and environmental issues will continue to be challenges. What are the specific challenges we’re facing? And how can we turn these challenges into opportunities?

Challenges

In my last article, I introduced the 17 United Nations Sustainable Development Goals (SDGs). This framework sets out the 17 biggest global challenges and separates them into three areas: economic, social and environmental. In 2015, New Zealand (along with 192 other United Nations member states) adopted the framework, and we have until 2030 to achieve these goals.

Since the SDGs adoption, the Sustainable Development Solutions Network has been issuing a report every year containing highly anticipated data on how each nation is tracking towards the SDGs and where we’re at with reaching the 2030 deadline. However, this year, I was more nervous than excited to read the 2021 report because, as can be expected, COVID-19 has created significant setbacks towards these 17 challenges, and New Zealand was not immune.

Key findings

• For the first time since the adoption of the SDGs in 2015, the global average SDG index score has decreased.

• SDG 9 (Industry, Innovation and Infrastructure) has exhibited the

largest spread between top and bottom performers (this is no surprise because the pandemic accelerated the roll-out of digital technologies and services).

• The SDGs that suffered the largest setbacks include:

– SDG 1 (No Poverty)

– SDG 3 (Good Health and Wellbeing)

– SDG 4 (Quality Education)

– SDG 8 (Decent Work and Economic Growth)

– SDG 13 (Climate Action)

– SDG 17 (Partnerships for the Goals).

• New Zealand has experienced slight improvements: SDG 9 has shifted status from ‘significant challenges’ to ‘challenges remain’, and the progress towards SDG 13 (Climate Action) has shifted from ‘stagnant’ to ‘moderately improving’.

• New Zealand is still going backwards on SDG 15 (Life on Land), and now has four SDGs with ‘major challenges remain’ (as opposed to three) – SDGs 12, 13, 15 and 17.

• New Zealand has moved from number 16 to number 23 on the SDG Global Rank Index (we can do better than this)!

Opportunities

Sadly, the findings above highlight we have significant challenges to tackle, but in the Decade of Action, now is the time to work and, in fact, it’s businesses (both in the private and public sector) that have the biggest part to play. ESG is another acronym we all must get familiar with because, according to Forbes, it’s the future of work 1 and strongly ties back to the SDGs.

ESG stands for ‘environmental, social and governance’ and accesses a company’s commitment to each, “be it greenhouse gas emissions and waste disposal (E), labour relations and employee safety (S), or board diversity and supply chain management (G)”. 2 George Serafeim, a Harvard Business School professor and ESG expert, explains that ESG is “no longer about ‘feel good’ issues. We are talking about even more important value drivers”. 3 This includes:

• growing your competitive advantage

• increasing your return on investment

• attracting talent and retaining it

• articulating your business values.

What do the SDGs have to do with ESG? According to the Harvard Law School Forum on Corporate Governance, the goals are the leading ESG framework for large companies. 4 With the 169 specific targets, the SDGs are an effective tool to manage ESG reporting and are complimentary to a business’s effort to increase supply chain transparency and accountability. 5 In a nutshell, the SDGs are used to measure ESG impact. Why is this important? Because ESG is the future of work, and the SDGs ensure we have a future to work towards.

Irrespective of these acronyms providing opportunities for our businesses, let’s think wider. This is an opportunity for Aotearoa. Let’s improve our SDG ranking and aim for one of the top three positions. Why are we not leading by example while we’re in the international spotlight? Let’s mainstream the goals by harnessing the power of innovation and creativity to address these global challenges because, if we can’t do it, who can?!

Bridget Williams is the founder of the social enterprise, Bead and Proceed, which exists to educate people about the 17 United Nations Sustainable Development Goals (SDGs) and inspire action towards them. Her passion for sustainability and using creativity as a tool for innovation has made her a recognised SDGs expert, helping organisations with sustainable strategy and SDG reporting. Bridget is a selected World Economic Forum Global Shaper and member of the Asia New Zealand Foundation Leadership Network, which has led her to become a creditable global change maker. Her efforts have been recognised and endorsed by the Rt Hon Helen Clark and the JCI Osaka Outstanding Young Person’s Programme.