What Sustainable Development Goals Mean for Business
In September 2015 member States of the United Nations adopted 17 new Sustainable Development Goals (SDGs) to make our world more prosperous, inclusive, sustainable and resilient. The SDGs are an ambitious plan of action for people, the planet and prosperity. They are universal, applying to all nations and people, seeking to tackle inequality and leave nobody behind. They are wide ranging, including ending poverty and hunger, ensuring sustainable consumption and production, and promoting peaceful and inclusive societies.
The agreement on a new sustainable development agenda expresses a consensus by all governments that the SDGs can only be achieved with the involvement of the private sector working alongside governments, parliaments, the UN and other international institutions, local authorities, civil society, the scientifi and academic community – and all people. Hence, governments in the post-2015 declaration are calling on all businesses to apply their creativity and innovation to solving sustainable development challenges.
In the ‘SDG Industry Matrix’, a study conducted jointly by KPMG and the United Nations Global Compact (UNGC), each and every SDG provides an opportunity for business. Through various SDG industry matrices, the study presents great avenues for businesses in different industries to demonstrate shared value while contributing towards global sustainable growth. The SDG Industry Matrix builds on the recognition that all companies, regardless of their size, sector or geographic footprint, have a responsibility to comply with all relevant legislation, uphold internationally recognised minimum standards and to respect universal human rights.
In the context of the SDGs,‘shared value’ represents the coming together of market potential, societal demands and policy action to create a more sustainable and inclusive path to economic growth, prosperity and well-being. The SDGs provide an opportunity for companies to create value for both their business and society through developing products, services, technologies and distribution channels to reach low-income consumers; investing in supply chains that are ethical, inclusive, resource-efficient and resilient; improving the skills, opportunities, well-being and hence productivity of employees, contractors and suppliers; and increasing investment in renewable energy and other infrastructure projects.
Several trends are making these opportunities more compelling:
- Demographics: the population in developing regions is projected to increase from 5.9 billion in 2013 to 8.2 billion in 2050, while the population of developed regions will remain around 1.3 billion people;
- Income growth: between 2010 and 2020 the world’s bottom 40 per cent will nearly double their spending power from US$3 trillion to US$5.8 trillion;
- Technology: rapid innovation is catalysing improved market analysis, knowledge sharing, product and service design, renewable energy sources, distribution models and operational efficiencies. Technology is also lowering market entry costs for non-traditional actors and start- ups with innovative ‘disruptive’ business models;
- Collaboration: governments, businesses, international fi institutions, the United Nations, civil society and academia are developing new ways of working with each other in pursuit of compatible objectives. Multi-stakeholder partnerships and collaborations will become increasingly important in realising these shared value opportunities. For instance, in the financial services sector, many solutions will include blended fi e (e.g. combining a financial institution’s finance with third-party concessional funds); innovative financing mechanisms such as development and climate bonds; and application of new financial technologies that enable financial inclusion. There is critical momentum of activity and the SDGs are accelerating the coming together of market potential, societal demands and policy action.