Why the UN needs CAs to make the world better
Can finance professionals help the UN achieve its Sustainable Development Goals by 2030? Every CA can play their part.
- The United Nations’ 17 Sustainable Development Goals (SDGs), launched in 2016, include targets such as No Poverty, Zero Hunger, Gender Equality and Climate Action.
- It’s estimated that achieving all 17 goals by 2030 could create US$12 trillion in market opportunities in food and agriculture, cities, energy and materials, and health and wellbeing.
- CAs can play an important role in including and monitoring selected SDGs as part of their organisation’s business strategy.
By Christopher Pash
The United Nations describes its Sustainable Development Goals (SDGs), launched in 2016, as a “global blueprint for dignity, peace and prosperity for people and the planet, now and in the future”. This ambitious set of 17 priorities to improve the world includes targets such as No Poverty, Zero Hunger, Gender Equality, and Climate Action, along with 13 others.
While it was governments that signed up to the goals, there has always been an acknowledgement that achieving them would be impossible without support from business leaders. And, indeed, a number of multinational corporations – such as Unilever – were quick to pledge their support.
Proponents of the goals say their potential upside for businesses goes way beyond social responsibility, arguing that the process of setting strategies against the goals will bring innovation, growth, enhance the reputation and brands of companies, and create new markets and opportunities.
“It shouldn’t be about looking at what you are already doing well that can tick a box… A business-as-usual approach is not going to get us to the goals by 2030.”
A 2017 Better Business Better World report by the Business & Sustainable Development Commission estimated that achieving the goals could create US$12 trillion in market opportunities in four economic systems: food and agriculture, cities, energy and materials, and health and wellbeing.
However, in the three years since the SDGs were launched, progress has been underwhelming. At the time of writing, Australia’s Joint Standing Committee on Foreign Affairs, Defence and Trade was due to deliver its final report from a 2017-2018 Parliamentary Inquiry into the United Nations Sustainable Development Goals. The intention is that this will set a framework to advance progress on the SDGs, by government and business, around the region.
The first step is to identify an appropriate goal
Karen McWilliams FCA
Karen McWilliams FCA, business reform leader at Chartered Accountants Australia and New Zealand (CA ANZ), urges the Australian and New Zealand governments to do more to raise awareness of the goals among business and the wider community.
“If businesses don’t understand the goals, then how can they contribute to achieving them? And if the public doesn’t know about the goals then there won’t be the demand for businesses to engage with them,” she argues.
While McWilliams acknowledges that the epic socio-economic challenges set by the SDGs can seem overwhelming for business leaders to commit to, she encourages accounting and finance professionals to engage with the SDGs and think about how to embed them into strategy.
A good starting point, she advises, is to identify one or more of the 17 goals towards which your organisation can make a significant positive contribution and then make them a strategic priority.
“My advice is to identify those key goals where you can make a real difference, but also make sure your business is not having a negative impact by harming progress on any of the other goals,” she says.
Why should a business care about UN goals?
KPMG International consulted internal stakeholders to agree on the four SDGs on which it would focus its efforts. They are Reduced Inequalities, Good Health and Well-Being, Climate Action and Quality Education.
While the nature of KPMG’s international financial services business means it is not a big carbon emitter, the firm nonetheless determined climate action was an area of high importance where it could make some practical changes.
KPMG offices globally have banned the use of plastic cups and cutlery at work, and put initiatives in place to encourage employees to reject disposable takeaway coffee cups. Bins have also been removed from under desks, encouraging staff to take waste to recycling points. Emissions from corporate air travel are tracked, and carbon offsets purchased.
“Climate change is one of the biggest issues facing the world, and facing our clients and governments, so we felt that to ignore climate change would be at our peril,” says Catherine Hunter, KPMG Australia’s head of Corporate Citizenship.
“We have a reasonably young workforce and millennials are very much global citizens. They‘re very aware of their environmental impact and the social impact we make as an organisation, so we find that we get a great response when we roll out these types of initiatives.”
Hunter is also the chair of the UN Global Compact Network Australia. The group connects signatories to the UN Global Compact – a non-binding pact to encourage businesses to adopt sustainable and socially responsible policies, and to report on their implementation.
“There‘s never been a better time to have companies understand and report on their social, environmental, and financial performance and how they work together in the ecosystem,” Hunter says. “It‘s vital to employee attraction and retention, and it‘s really important to acting with integrity and authenticity, which is key to public trust.”
As a chartered accountant, Mark Spicer, KPMG’s director of Climate Change & Sustainability, loves the challenge of reporting on sustainable development goals.
“You have to identify what‘s important to you as a business,” he says. “Why does a business care? What do you actually do? Of course, your relationships with your customers are important, but how do you measure those? What things impact on it? It‘s superb. It‘s taking business reporting to the next level.”
What SDG goals are businesses choosing?
ASX-listed property developer Stockland has set targets against 10 of the 17 goals. To contribute to the goal of Good Health and Well-Being, the company has set a target to lift the volunteering rate among staff from 31% to 50% by 30 June 2020.
Towards the goal of Gender Equality, Stockland has pledged to maintain a gender pay equity ratio between 97% to 103%, and increase the percentage of women employed in management roles from 45.1% to 50%.
On the Climate Action goal, Stockland has set a goal to reduce the emissions from its commercial, retail and retirement projects by 5% to 60%.
New Zealand’s largest electricity producer, Meridian Energy, directs its focus on the Affordable and Clean Energy, and Climate Action goals. “These are where as a renewable energy generator and retailer of electricity we can shift the dial for New Zealand,” the company states in its FY18 annual report.
It’s not a tick-a-box exercise
CA ANZ’s McWilliams stresses the SDGs are not just for the big end of town. “Even in a small, local accounting practice there are things you can do,” she says.
“Advancing gender equality and ensuring employees and contractors are not overworked to look after their mental wellbeing are a couple of really practical ways even small businesses can target two of the 17 goals.
A core point McWilliams makes is that organisations need to ensure their engagement with the SDGs is genuine and making a measurable difference – rather than merely making for a better-sounding sustainability update in the annual report.
“What is really important for companies who decide they want to incorporate the SDGs into their strategy is to take it beyond business as usual,” she says. “It shouldn’t be about looking at what you are already doing well that can tick a box, but about having a serious look at what else you can do differently. A business-as-usual approach is not going to get us to the goals by 2030.”
Adam Carrel, EY’s partner of Climate Change and Sustainability Services, agrees there is a risk that the corporate sector’s engagement with the SDGs becomes a box-ticking exercise, rather than a strategic initiative.
“I think a lot of clarity can be achieved by remembering, really, what the SDGs are about – the world‘s grandchildren, our grandchildren.”
“A lot of corporate sustainability programs are overly congratulatory of incremental progress,” he says. “They report on metrics and any kind of improvement is seen as a good thing, which it is to a certain extent, but what really matters is how we measure the aggregate problem – better or worse.”
Carrel encourages the business and finance leaders he works with to think more seriously about how they can embed the SDGs in their strategies.
“I think a lot of clarity can be achieved by remembering, really, what the SDGs are about – the world‘s grandchildren, our grandchildren,” he says.
What are the UN Sustainable Development Goals?
The 2030 Agenda for Sustainable Development, adopted by all United Nations members in 2015, has 17 Sustainable Development Goals (SDGs) listed below.
1. No Poverty
2. Zero Hunger
3. Good Health and Wellbeing
4. Quality Education
5. Gender Equality
6. Clean Water and Sanitation
7. Affordable and Clean Energy
8. Decent Work and Economic Growth
9. Industry, Innovation and Infrastructure
10. Reduced Inequalities
11. Sustainable Cities and Communities
12. Responsible Consumption and Production
13. Climate Action
14. Life Below Water
15. Life On Land
16. Peace, Justice and Strong Institutions
17. Partnerships for the Goals