Just 40% of global companies reporting on UN Sustainable Development Goals

04 April 2018 Consultancy.uk 5 min. read
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As the world attempts to adapt a seemingly contradictory growth-based economy to sustainability measures, aligning business practice with the UN’s Sustainable Development Goals remains a thorny issue for those in direct violation of the outcomes, while businesses in general continue to underreport their efforts. According to a new report, just 40% of the world’s businesses are reporting according to the goals, with the UK higher than average at 60%, and the US well below that at 31%.

The US’ decision to pull out of the Paris Agreement spurred global reinvestment in highly polluting forms of energy, which, given the likely long-term outcome of such investments, and the continued support of the accord from all other signatories, place shareholders at risk in multiple senses. Meanwhile, wider concerns across value chains, from labour violations to corruption, continue to drive efforts to improve supply chain transparency.

One effort to transform the footprint of companies is the UN’s Sustainable Development Goals (SDGs). These goals are often interdependent, and target, among others, the reduction of various negative social and environmental outcomes, including the impact of business practices – particularly externalities that are cost posts – as well as spurring businesses to support regional efforts that create mutual benefits; or through philanthropy and high impact projects.

Performance by region

A new report from KPMG aims to uncover in how far companies are reporting on their business’ alignment with the SDGs. Companies have an interest in such efforts as part of their wider corporate responsibility efforts. The report is based on data from reporting by the top 250 global companies.

When it comes to reporting on SDGs the survey found that European companies in the top 250 globally are considerably more likely to have the SDGs as part of their wider corporate reporting. Globally the average is 40%, while in Germany, 83% of companies report on SDGs, compared to 63% in France. US-based multinationals are the least likely to report among the top five, at 31% of those surveyed. The UK saw its results place it firmly in the mid-range of SDG reporters, at 60%.

The groups least likely to report on SDG are also those that have sometimes disproportionate effect on a particular goal. Oil & gas companies are the least likely industry sector to report, at 28%, followed by the industrial sector, manufacturing & metals, at 30%. Financial services firms, which tend to have large investment or financial interests in the former two industries, come in third to last at 37% of respondents. Utilities and automotive are the top of the rung, at 58% apiece.

SDG report card

However, the research also sought to identify how companies are performing when it comes to their reporting – when they do report. The analysis ranks three indicators each in three categories between D and A on their respective overall performance*.

In terms of understanding the SDGs, companies tend to underperform with a D ranking, in making a business case (where there is one) for SDG actions. Discussing the SDGs in leadership messages from CEO/Chair’s message was ranked a C, and is considered relatively low-hanging fruit in terms of improvement effort required. Companies collectively were ranked A- in terms of assessing the business’s impacts on the SDGs, largely because only positive outcomes are reported, while areas of negative impact garner less (or even no) mention in the report.

In terms of prioritising the SDG, companies are effectively prioritising the SDGs most relevant to their respective business, allowing for stronger responses to higher impact areas. The firm notes that, given the 17 total goals, specific focus on areas where the business makes the most impact is more effective. Few companies however, say how they are prioritising the SDGs that they do support, with a B score noted as leaving room for improvement. Few companies are going above and beyond the call of the targets – with considerable opportunity to create positive social and environmental outcomes above the current SDGs.

Which SDs are most and least prioritised by the G250

Companies are increasingly focused on key areas – which tend to have global impacts – such as climate action, reported by 64% of respondents, and decent work and economic growth, reported by 59% of respondents. Other issues with relatively high profiles include good health and wellbeing, at 55%, responsible consumption and production, at 54%, and gender equality, at 52%.

Improvement to global energy infrastructure focused on sustainability was noted as important by 48% of respondents, in line with industry, innovation and infrastructure development. Sustainable cities and communities was reported on by 46% of respondents.

* A: performed by >70% of companies; B: performed by more than >50% of companies; C: performed by >30% of companies; and D: performed by <30% of companies.