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Pandemic Raises Stakes for Success of the SDGs – with Private Sector Crucial

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Archives, Global Trade Daily, International Trade

Pandemic Raises Stakes for Success of the SDGs – with Private Sector Crucial

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In this Decade of Action for the Sustainable Development Goals (SDGs), we hear much about how organizations, countries and individuals are stepping up their efforts to achieve the 2030 Agenda. Despite this, the reality is that the pace of action has not been quick enough and we are already far behind on delivering the Global Goals.

The countless tragic consequences of the COVID-19 pandemic bring an added layer of urgency. Yet, true to human nature, the focus has already shifted to how as a global community we can forge a new way ahead – with the ‘build back better’ mantra being highly relevant from the perspective of progress on the SDGs.

Against this backdrop and with Global Goals Week underway, GRI has analyzed the Voluntary National Reviews (VNRs) presented by countries at this year’s UN High-level Political Forum. Every year since 2016, GRI has reviewed how member states are involving the private sector in the implementation of the SDGs, in particular, to assess progress on SDG 12.6: to encourages companies to adopt sustainable practices and integrate sustainability reporting. With each year seeing a different set of countries submit their VNRs, the analysis varies in terms of the sample of political systems, economies, and geographical representation, providing insights over time to global trends.


 

Mixed messages on private sector engagement

In total, 42 countries carried out VNRs in 2021. Countries with informal, less regulated economies tended to find that they were facing challenges with tracking SDG progress, which have been exacerbated by the pandemic.

Overall, 86% of the analyzed reports recognized the need for private sector investment, which is more than double the level reached in 2020, perhaps triggered by COVID-19, and 85% refer to the contributions of the private sector to the SDGs. Yet less encouragingly, the number of countries consulting the private sector as part of the VNR has fallen to the lowest level since 2016, at 76% (down from 87% in last year).

There are though positive signs of governments and the private sector collaborating more for the SDGs, with 83% referencing public-private partnerships (compared to 54% in 2020). This aligns well with the building back together notion, something GRI discussed at length during our HLPF event – The key role of innovative partnerships and transparency for the SDGs – which we co-hosted with Enel and UNDP Business Call to Action.

Improving alignment of SDG priorities

What our findings show is that there is a clear understanding of the important role the private sector plays in achieving the 2030 Agenda. However, it is not enough that only three-in-four countries engage the private sector in the VNR process. If we are to deliver on the SDGs, we need open collaboration that gets all parties on board – from analyzing the issues, to defining the solutions, to implementation and reporting on the progress.

Government and business interests are naturally not always fully aligned. The role of the private sector for SDG 4 – Quality Education, SDG 5 – Gender Equality and SDG 7 – Affordable and Clean Energy, was most often mentioned in VNRs. Yet, as revealed in the 2020 KPMG Survey of Sustainability Reporting, the most prioritized SDGs by the private sector are SDG 8 – Decent Work and Economic Growth, SDG 13 – Climate Action and SDG 12 – Responsible Consumption & Production. What this indicates is that there can be a disconnect between SDGs priorities and ownership, illustrating how important it is for all stakeholders to engage and align, in order to achieve impact and progress.

Examples to learn from

We see a number of innovative digital initiatives in this space, as identified through the VNRs, that can serve as inspiration for others. For example, the success of the SDG Corporate Tracker in Colombia, a platform now used by 480 businesses in the country that is standardizing SDG-related data collection on the role of the private sector. The Initiative 2030 platform, meanwhile, which is aligned with the GRI Standards, makes it easier for companies to assess how they are contributing to the SDGs, driving SDGs participation within Cypriot society through the involvement of all stakeholders.

Simultaneously, the analysis found new or increased regulations for disclosure of non-financial information – as adopted in Indonesia and Sweden, as well as stock exchanges in Malaysia, Thailand, and Zimbabwe – which is driving an increase in private sector sustainability reporting.

Emerging significance of tax transparency

As a new element of the analysis, in 2021 we saw 29% of VNRs reference corporate taxation and tax reporting. Strong and effective tax systems are necessary to generate the resources needed to meet the SDGs and promote inclusive economic growth yet, as discussed in the opening episode of our new podcast series SDGs: The Rising Tide, it remains a significant challenge.

A fair taxation system is key to achieving the 2030 agenda, and we look forward to tracking the progress on how this will be reflected in VNRs in the coming years. GRI 207: Tax 2019 – the first and only global standard for comprehensive tax reporting at the country-by-country level – will play an important role in facilitating the regional and global conversations on fair tax policies. After all, ensuring finance for sustainable development is a cornerstone for fulfilling the SDGs.

Stepping up the momentum

Through the 2030 Agenda, world leaders have called on businesses to apply their creativity and innovation to solving sustainable development challenges. Yet we also need businesses to be transparent in how they maximize their positive impact on the SDGs. That is why governments must ensure they are bringing companies, and other stakeholders, into the operations room when it comes to developing and implementing their SDGs plans as well as reviewing progress.

Looking ahead, GRI will follow with keen interest the role played by the COVID-19 response in the next VNRs. Will recognition of sustainability challenges see the number of reports by countries – and engagement of the private sector – increase? And will we, years from now, be able to say that the pandemic instigated greater action and collaboration in support of the SDGs? On both these counts, there are opportunities within the adversity that can and must be seized.

When you view the SDGs as the roadmap to a better world – one without poverty or hunger, with gender equality achieved, fair economic growth and the environment protected – participation in their success should not be a hard sell for anyone, be it governments, business or citizens alike. Inclusion and partnerships, at all levels, will be the key to their successful fulfillment. Let’s stay positive that together we can reach that sustainable future.

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ABOUT THE AUTHOR

Tina Nybo Jensen is International Policy Manager at GRI. She leads on the development, management and implementation of GRI’s Sustainable Development Program, with a special focus on the SDGs and engagement with multilateral organizations. She joined GRI in 2014 and has previously worked with the GRI Community, report services and governance relations.

Prior to GRI, Tina worked for the Danish Red Cross Youth in Jordan and the Westbank, and at the Danish Embassy in Thailand. She holds Master’s Degrees in Development & International Relations (Aalborg University, Denmark), and Political Science with Specialisation in Environmental Governance & International Relations (Vrije University Amsterdam, the Netherlands).

ABOUT GRI

Global Reporting Initiative (GRI) is the independent, international organization that helps businesses and other organizations take responsibility for their impacts, by providing the global common language to report those impacts. The GRI Standards are developed through a multi-stakeholder process and provided as a free public good.

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Striving for Sustainability in Global Food Systems

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As the global community gears up for the 2021 UN Food Systems Summit, it is significant that preparations are also underway by Global Reporting Initiative to deliver a new sector reporting standard for agriculture, aquaculture, and fishing. The Summit aims to leverage the power of food systems to deliver progress on the Sustainable Development Goals (SDGs). Yet, unlocking the contribution of companies in the food production sectors will be impossible without clarity on their sustainable development impacts.

As part of GRI’s Sector Program, which aims to deliver 40 Sector Standards over the coming years, the exposure draft version of the Sector Standard for Agriculture, Aquaculture, and Fishing is currently out for public comment. The Sector Program has a remit to provide the global best practice for transparency within sectors, helping organizations meet stakeholder expectations for comprehensive and comparable sustainability reporting.

We are prioritizing agriculture, aquaculture and fishing because these sectors provide for basic and essential societal needs: food, most obviously, but also raw materials, such as fibers and fuels. They also have shared and overlapping materiality, which steered our rationale for bringing them under one umbrella.

The Standard will add to the reporting landscape for the sectors, bridging the gap on sector topics where stakeholder expectations are evolving and scrutiny is increasing. It will deliver disclosures that consider biodiversity and natural resources, measures to mitigate climate change, as well as how to adapt farming and fishing practices in ways that minimize their negative impacts.

This focus closely dovetails with the objectives of the Food Systems Summit, for which the pre-summit activity starts in July. The UN articulates the aims as ensuring access to safe and nutritious food for all; shifting to sustainable consumption patterns; boosting nature-positive production; advancing equitable livelihoods; and building resilience to vulnerabilities, shocks, and stress.

Research and rationale

The draft Standard’s content is the culmination of more than 12 months of rigorous research by our Sector Team, drawing on authoritative sources and a multi-stakeholder process. A 19-member expert working group was instrumental in developing the exposure draft. Reflecting diverse backgrounds, it includes representatives from five continents and constituencies, with a unique combination of sectoral skills and organizational experience, including crop and animal production, aquaculture, and fishing.

The proposed Sector Standard will help companies increase recognition and understanding on their shared sustainability challenges. It includes relevant reporting topics that are covered by GRI’s (sector-agnostic) topic-Specific Standards – for example, climate adaptation, biodiversity, waste, food safety, and occupational health – as well as introducing seven new topics.

By including topics not covered by existing GRI Standards, we have expanded the breadth of reporting guidance for agriculture, aquaculture, and fishing organizations to identify their most significant impacts – thereby supporting decision-useful data that can be a catalyst for the adoption of more sustainable practices.

The seven new topics

The newly introduced topics in the draft Standard are:

1. Food security recognizes the sectors’ central role in food production, guiding organizations to describe commitments to ensure their operations contribute to the stability of food supply and access to food, including how they work with other organizations.

2. Land and resource rights calls on companies to report how they respect individuals’ and communities’ land rights (including those of indigenous people). It also asks about their operations and suppliers whose access or rights to natural resources cannot be assured.

3. Living income addresses whether companies provide enough for workers and producers supplying to them to afford a decent standard of living. The topic also deals with reporting on the proportion of employees paid above living wage.

4. Natural ecosystem conversion covers policies, commitments and monitoring tools to reduce or eliminate activities that change natural ecosystems to another use or profoundly change an ecosystem’s structure or function.

5. Soil health guides reporting on soil management plans and fertilizer application.

6. Pesticides use focuses on how organizations manage and use chemical or biological substances for controlling pests or regulating plant growth.

7. Animal health and welfare addresses the approach to animal health planning and use of welfare certification schemes or audits, as well as disclosing the use of any medicinal or hormone treatments.

Grounded in the SDGs

With positive and negative impacts that link to the SDGs, all of the topics covered in this Sector Standard, and the way it is structured, will make it easier for businesses to understand their contribution to the achievement of the SDGs – and how they can contribute towards solutions.

Perhaps more than any other sector, agriculture, aquaculture, and fishing organizations have wide-ranging impacts that touch on all of the 17 SDGs. In particular, this new Standard makes multiple linkages between topics and goals on ending poverty (Goal 1); ending hunger (Goal 2); ensuring the availability and sustainable management of water and sanitation (Goal 6); promoting decent work for all (Goal 8); reducing inequalities (Goal 10); ensuring sustainable consumption and production (Goal 12); taking climate action (Goal 13); protecting life below water (Goal 14) and life on land (Goal 15); ensuring peace and justice (Goal 16); and building partnerships (Goal 17).

We need your input

The global public comment period to gather feedback on the exposure draft for Agriculture, Aquaculture, and Fishing Sector Standard closes on 30 July. We encourage you to channel your considerations on this draft’s feasibility, completeness, and relevancy by completing an online questionnaire. The more input from all interested groups and stakeholders, the more we can do to ensure the delivery of a Standard that is fit-for-purpose.

Our hope for the final Standard, which we intend to launch in 2022, is to empower organizations to achieve meaningful and consistent sustainability reporting that supports sustainable food systems and encourages responsible fishing and farming practices. We all know that companies within these sectors are essential for providing the food and resources that human wellbeing depends on. Let’s ensure that they can do so in a way that contributes to lasting and sustainable solutions.

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ABOUT THE AUTHOR

Margarita Lysenkova joined GRI Standards Division in 2019 and has been instrumental in the development of the new Sector Program, contributing to the GRI Oil and Gas Sector Standard and leading the pilot project for the Sector Standard for Agriculture, Aquaculture, and Fishing.

With a professional background in corporate, UN and non-for-profit sectors across four countries, Margarita’s expertise spans international labour standards and sustainability. Previous roles include working for the International Labour Organization in Geneva, and in financial reporting with a Belgian multinational. Margarita holds degrees in economics (Saint Petersburg University of Economics & Finance) and business management (ESC Rennes School of Business).

ABOUT GRI

Global Reporting Initiative is the independent, international organization that helps businesses and other organizations take responsibility for their impacts, by providing the global common language to report those impacts – the GRI Standards.

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Archives, Global Trade Daily, International Trade

Corporate Reporting on the SDGs: What are the Challenges and Opportunities?

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Since the launch of the Sustainable Development Goals (SDGs) in 2016, the role of the private sector in fulfilling the 2030 Agenda has been widely acknowledged, as set out under SDG 12. Yet to assess how companies are actually contributing towards these Global Goals, we need greater transparency on their impacts.

Over the past four years, GRI has championed the participation of companies in measuring their performance on the SDGs. As we look ahead to the Decade of Action needed to achieve the SDGs, it is clear that further progress will be needed, including doing more to increase private sector contributions.

Progress so far

At the end of 2020, a four-year Action Platform for Reporting on the SDGs, from GRI and UN Global Compact, concluded. This included a Corporate Action Group (CAG) that connected business representatives in a peer learning platform, which successfully helped companies define and improve their SDGs reporting.

Research on CAG participants revealed:

1. Increased clarity on how to engage with the SDGs from a business perspective

2. Improvements in how they measured SDGs performance

3. Better prioritization of the most relevant SDGs

4. More integration of the SDGs into business decision-making processes

However, the findings also indicate that many companies continue to face challenges with understanding and disclosing their SDGs contributions, with opportunities to make corporate reporting more relevant and effective.

Improving data quality and addressing gaps

Reporting on priorities at the SDG target level, within each of the overarching Goals, and linking them to the business strategy, is often missing. Overall, deeper connections between material topics with SDG targets and corporate priorities are needed. We also see there are opportunities to further explore the links between SDG priorities and the contributions of companies in the countries and jurisdictions where they operate.

Most importantly, corporate reporting on the SDGs often focuses on positive contributions that companies make to the SDGs, with a lack of transparency and accountability for negative impacts. This issue was also highlighted by KPMG research in December.

Reporting that has impact

Identifying SDG priorities throughout the value chain is a complex undertaking, as is demonstrating the cause-and-effect relationship between SDG contributions and business performance. Moreover, because of the interconnected and interdependent nature of the SDGs, companies need to identify and take account of synergies and trade-offs between positive and negative impacts.

Efforts to quantify impacts on the SDGs and contextualize them (for example, considering the social thresholds and planetary boundaries) needs strengthening. That is why it is necessary to move beyond assessing activities and outputs and focus on how to disclose outcomes and impacts. This is crucial as it enables businesses to manage their performance and demonstrate accountability for their impacts.

Making SDG reporting relevant to stakeholders

There is increasing interest from a wide range of stakeholders in business contribution to the SDGs, including how companies are aligning products, services and business strategy with the SDGs. Policy makers, investors, consumers, labor organizations and civil society all increasingly demand that companies show transparency through providing quality data and balanced reporting.

However, different stakeholders have different expectations and data requests. Steps business can take to provide more strategic and relevant information include:

-Providing aggregated or disaggregated information that allows stakeholders to assess their performance and contribution to the SDGs

-Setting long-term SDG-related performance targets, and regularly reporting on progress

-Clearly demonstrating how the business strategy aligns with the SDGs

Proactive communications on the issues that matter most – to both the company and stakeholders – is crucial. Not only does provide the necessary information to assess corporate sustainability performance and impact, it also allow stakeholders to make decisions that contribute to the SDGs.

Driving business action through reporting

Inspired by the progress to date and the opportunities still to come, GRI is launching a Business Leadership Forum on corporate reporting as a driver for achieving the SDGs. This forum, to commence in March, will offer participating companies practical insights on sustainability reporting, focusing on how to raise the quality and strategic relevance of their reporting.

The forum is built around a series of online sessions that will bring together corporate reporters and representatives from key stakeholder groups – including the investment community, governments, regulators, members of the supply chain, civil society and academia.

The experiences of the past four years have shown that both businesses and stakeholders benefit from strategic and relevant SDG-related information. Sustainability reporting is an essential driver of the transformational change that is required to achieve the SDGs. As we look ahead to the Decade of Action and the pandemic recovery phase, the case for meaningful corporate reporting on the SDGs is more compelling than ever before.