According to the WEF business could unlock 12 trillion USD in market opportunities by 2030 by reaching the UN’s Sustainable Development Goals while creating 380 million jobs worldwide.
Among the 17 SDGs, number 8 “decent work and economic growth”, is possibly the one that resonates the most in corporate boardrooms and with shareholders as it aims to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”.
Quality growth is an innovation opportunity
The target of the SDG is to provide at least 7% yearly gross domestic growth in the least developed countries. Thus, it is legitimizing the companies to invest and thrive in such countries through investments that are attractive for shareholders.
However, SDG 8 requires “quality growth”, in this sense growth is meant to improve performance but not to the detriment of the people or the environment. The objective is to decouple growth from the environmental and social degradation. An example is Unilever, that in 2010 declared the willingness to double revenues by 2020 while halving its impact.
Contributing to the SDG would be allowing companies to grow while effectively integrating the sustainability perspective into their operational model. According to a recent study, approximately 80% of the market value of companies is represented by intangibles elements such as human and natural capital or reputation. With the current reporting framework and business models, the ability of companies to identify and monitor their different intangible capital is significantly restricted. This is significantly limiting the ability of companies to understand and manage the different value drivers that are determining their market values.
The growth required by SDG 8 has a “triple bottom line” perspective, where the social and environmental elements are considered together with the financial implications. The social and environmental capital are representing a relevant part of the mentioned intangible assets. Thus,the approach would enhance the ability of companies in managing their market value.
The way forward
To harvest such opportunity, the objective is a vision in which the social and environmental considerations are fully integrated into the operating business model of the companies. Where the social and environmental implications are considered and monitored together with the financial and economic perspective. Because what gets measured gets managed.
To obtain such an ambitious objective, sustainability is integrated into the business strategy at all levels and for all job requirements. To ensure that every employee of the organization is aware of the sustainability requirements regarding his/her daily working life. One way of moving forward would be to start with small pilots and subsequently scaling up by leveraging the knowledge acquired in the process to identify relevant KPI’s and measures to monitor and redirect the performance of the company. This will ensure to lay the foundation to reach the SDG 8 in which the growth is beneficial for the present and future generations and the planet.
Written by: Michele Soavi, Finance and Sustainability Consultant
The views expressed in this article are those of the author alone and not The Sustainability Tribe.
The Sustainability Tribe is a network of independent sustainability consultants, helping organizations make their first steps towards #sustainability.
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