Companies should pursue social and environmental sustainability as avidly as they strive for market share and shareholder value, according to leaders in business, finance, civil society and labour organisations.
In its first major report since it was launched a year ago, the Business and Sustainable Development Commission (BSDC) said that, while the last few decades have lifted hundreds of millions of people worldwide out of poverty, they have also led to unequal growth, and higher levels of job insecurity, debt and environmental risk.
This has fueled an anti-globalisation backlash in many countries, with businesses and financial interests seen as central to the problem, it said.
The commission urged companies to regain public trust by transforming their business models to incorporate the UN sustainable development goals (SDGs). Making the goals key to how businesses function could generate market opportunities worth up to $12 trn, the commission estimates. The biggest opportunities lie in achieving the goals on developing affordable and clean energy systems, building inclusive, safe and resilient cities, ending hunger and improving nutrition, and ensuring healthy lives and promoting wellbeing.
‘If a critical mass of companies joins us in doing this now, together we will be an unstoppable force. If they don’t, the costs and uncertainty of unsustainable development could swell until there is no viable world in which to do business,’ the commission’s report states.
Much of the current mistrust of businesses comes from firms using their power to gain access to policymakers to lobby for their own narrow interests rather than aligning their agenda with the common good, it says.
The BSDC recommends that companies pursuing the SDGs in their business strategy:
• are fully transparent about all their public affairs activity, including what policies or decisions they are arguing for and to whom;
• avoid lobbying for policies that are contrary to achieving the goals;
• avoid ‘revolving door’ appointments of public officials and political donations that serve purposes that conflict with the goals;
• support sound science and make use of the results in setting science-based targets in sector roadmaps; and
• make their opposition known if a trade association they belong to takes a position at odds with the company’s principles, and say what action they are taking to oppose it.
The commission is to explore companies’ use of their influence in an independently compiled index of political engagement, which would see firms disclose their performance against the criteria above. An independent body, such as Transparency International, could compile rankings, it suggests.
It is also encouraging business sectors to draw up roadmaps to guide their shift to sustainable development. These would need to assess the impact of policies on both environmental and social goals. For example, if an agribusiness wanted to make aquaculture more sustainable, it should analyse both the environmental impact of reducing overfishing and the social impact of its net impact on job numbers.
‘This report is a call to action to business leaders. We are on the edge and business as usual will drive more political opposition and land us with an economy that simply doesn't work for enough people. We have to switch tracks to a business model that works for a new kind of inclusive growth,’ said Mark Malloch-Brown, chair of the commission.
Companies and organisations supporting the report include Aviva, Olam, Mars, Unilever, the World Business Council on Sustainable Development and the International Trade Union Confederation.
Meanwhile, a new ISO committee is working on organisational governance standards. ISO/TC 309 will consolidate good practice for effective governance of performance by developing standards on a company’s direction, control and accountability.
It is also examining whistleblowing, compliance and corruption, following on from ISO 37001 on anti-bribery management systems and ISO 19600 on compliance management systems.
So far, 38 countries, including China, Nigeria and Malaysia have expressed an interest in being involved, said ISO.