What are SDGs, and what is their purpose?
In the last decade there has been a shift in corporate culture with regards to social responsibility, a pivot that emphasizes companies’ increased focus on inclusivity and sustainability. Customers, regulators, and investors increasingly expect companies to deliver both economic and social value, a call echoed in the United Nations’ 2015 publication of the Sustainable Development Goals (SDGs), which directly urged the private sector to take responsibility for its social and environmental impact.
Since the publication of the SDGs, 181 CEOs from some of the largest American corporations have released mission statements that include pledges to “serve all Americans.” In Europe, several leading companies have formed coalitions to address the financial and social inequalities deepened by disasters such as the COVID-19 pandemic, in addition to creating opportunities for the most disenfranchised people in the EU.
How are SDGs being implemented, and what is “SDG-wash”?
Despite the intense pressure for the private sector to take more accountability for their impact and notwithstanding numerous statements in favor of inclusivity and sustainability, many companies have found it difficult to effectively follow through on their SDG-related promises. Globally, only 56% of the companies that officially pledged to contribute to the UN SDGs actually measure their impact against those same goals (in the United States, that number drops to 36%). While many of the largest companies refer to the SDGs in their reporting, fewer than 10% actually have goals to measure their contribution to the SDGs. In addition, few companies have made changes to their core business activities to reduce negative externalities, and only a few have substantially changed their Corporate Social Responsibility (CSR) efforts. The unfulfilled commitment to the SDGs has led to what is known as “SDG-wash,” the risk of companies using the SDGs as a communication and marketing tool without much actual adoption of the SDGs’ core principles and targets.
How can this issue be addressed, and what can we do to help?
So, how can a company follow through with its SDG promises? The answer is deceptively simple: with impact management and data transparency. But it begs the question: how can organizations implement processes that ensure transparency and measure impact?
Impact management can be defined as “the ongoing practice of measuring and improving our impacts, so that we can reduce the negative and increase the positive. It is relevant for both enterprises and investors who manage environmental, social and governance (ESG) risks, as well as those who also want to contribute positively to global goals.”
In order to properly manage impact, however, impact measurement is necessary. In other words, clear and concise guidelines/metrics are needed in order to collect and compare data to gauge the company’s impact, be it general or specific. And that can be done using a framework such as Theory of Change or Five Dimensions of Impact. Finally, it is through these processes and the resulting increased availability of important data that a company can move towards a greater degree of transparency with its employees, stakeholders, and clients. Data transparency is incredibly important in the fulfilling of SDG promises, as it promotes SDG contribution measurement and reporting, and allows companies to be held accountable for their impact.
Given the scope and scale of our challenges, many companies have understandably struggled with articulating these metrics and analyzing data in such a way that connects their SDG efforts with impact. Companies are not only being extensively scrutinized for the effectiveness in which they handle their money and the impact these decisions have on social and environmental scales, but also in the way they communicate this impact with the greater public. Thus, companies and services that specialize in impact management and measurement, such as Corecentra, provide an effective solution to the SDG-wash that companies face.
If you’re interested in learning more SDGs and SDG-Wash, please feel free to reach out to Anish Nagar (firstname.lastname@example.org). Anish is the CEO of Corecentra Solutions, a software company providing purpose-built digital solutions for socially conscious and outcomes-focused companies, foundations, nonprofits, and frontline government agencies.
Corecentra provides advanced digital tools for organizations to manage, monitor, and report their social performance and impact. We help socially-conscious companies, impact investors, foundations, nonprofits, and frontline government agencies manage portfolios and programs, aggregate and analyze data, and easily report outcomes to key stakeholders. By seamlessly integrating program management, budgeting & finance, stakeholder engagement, predictive analytics, and impact assessment, our products empower organizations to increase their social impact and deliver a quantified view of social performance to investors, donors, beneficiaries, employees, and communities.