The Global Goals for Sustainable Development: scoring for impact?

For Earth Day, we discuss the Sustainable Development Goals, the action plan through which we can all tackle the greatest challenges faced by today’s global society.

By Lindsay Smart, Head of Impact, Research and Innovation · April 21, 2017

The Sustainable Development Goals, or Global Goals as they are now more commonly referred to, are hailed as the sustainable development agenda turnkey.  The action plan through which we can all tackle the greatest challenges faced by today’s global society.

It could be said that the adoption of goals to tackle societal challenges initiated with the Millennium Development Goals (MDGs). Launched in 2000 these 8 Goals sought to galvanize the world’s efforts to meet the needs of the world’s poorest. Their focus was on developing nations and the action needed by governments and civil society to enact change in these emerging economies.

While great progress was made, the MDGs faced criticism. They were seen as too donor focused, difficult to measure, with uneven progress and much of the funding directed to debt relief rather than long-term sustainable development. As the 2015 deadline for the MDGs approached a post 2015 agenda was established to agree a stronger replacement solution. And so, in September 2015 the Global Goals were adopted by world leaders, officially coming in to force this January.

These new Goals cover the three dimensions of sustainable development: economic growth, social inclusion and environmental protection. There are 17 goals (see graphic), encompassing 169 targets, with 300 indicators (although these are still under review). An annual progress report is planned to demonstrate how countries are progressing against the targets.

Unlike their predecessor, the Global Goals are designed for all economies – developed and developing – and actively seek to bring the private markets to bear on the challenge. The acknowledgement that trillions of dollars of investment will be required to successfully implement the Goals, makes the inclusion of capital markets an imperative. Governments alone can no longer afford the solutions to the challenges we face.

This is an important evolution in the aspiration of the initiative. April 22nd is Earth Day, and all this week the Smithsonian has been leading an Earth Optimism Summit to reflect on a shift from problem to solution, and how optimism is more powerful in accelerating the emergence of solutions than hopelessness. It’s an opportune moment to consider what role the Global Goals might play in facilitating solutions to issues such as climate change, the need for clean energy, the need to protect our oceans and ecosystem biodiversity, and our water sources – not to mention hunger, food insecurity, and inequality.

It has been estimated that investment of $5-7 trillion per annum for the next 15 years will be needed to achieve the Goals. This kind of investment level can only be met if the capital markets engage with the agenda.

This need for investor engagement was highlighted in a report by ShareAction.  Reassuringly, their study indicated that institutional investors across the world are ready to engage and contribute to the Goals. More than half of the 52 institutional investors surveyed identified working toward achieving all 17 Goals as having high or medium potential to help them meet their investment objectives.

The report also noted that 67% of respondents reported they would potentially seek client and/or beneficiaries views on the goals, and a further 75% stated they already take action on 3 or more goals. This report was followed by MSCI launching a new index aligned to the Global Goals, to serve institutional investor interest in products allowing them to address major social and environmental challenges.

More recently the World Bank issued a Sustainable Development Goal Bond linking returns to the performance of companies advancing global development priorities set out in the Goals, including gender equality, health and sustainable infrastructure. In January, UNEP FI launched the Positive Impact Manifesto, backed by a number of large banks and investors, which calls for a new financing paradigm and looks to provide a road map for achieving the needed SDG financing.

So the signs are certainly there: this is a framework investors are willing to back. Of course the Goals are not perfect and more guidance on their implementation and monitoring is needed. Importantly institutions including the UN Global Compact and Global Reporting Initiative are releasing SDG-related guidance, and there is also considerable work in the pipeline from the Natural Capital Coalition in association with their new Protocol.

Given a PWC report recently stated that 71% of surveyed businesses are already planning how they will engage with SDGs, it is imperative this support emerges. 17 Goals can feel overwhelming and their breadth has been referenced as both a strength and a weakness. But perhaps the reality is that they just reflect the difficulty of this moment in time; a moment scorched with both environmental and social challenges. Each interlinked.

The desire is often to tackle them one at a time. But what is needed is an appreciation of all the challenges and to seek to positively respond to those you can, without inadvertently creating a problem elsewhere. It is the need to hold the whole challenge present.  The need to take a “systems” approach to bring positive action on all the goals.

It may be difficult, but thinking about the whole challenge, taking the systems approach to solving the challenge, is surely paramount. I am borrowing here from minds far greater than mine. You need only turn to the inspiring Amory Lovins-Hunter: “Interdependence is not easy to understand …. Failing to grasp this interdependence will cause firms to miss the opportunities for conceptual and practical breakthroughs, and can even leave natural systems worse off as a result of piecemeal efforts which appear sound but have long-term negative consequences.”

And the Global Goals try to represent the interdependent challenges we face, to capture the full breadth of issues. In doing so they potentially offer a powerful route for structuring and enacting impact – through an internationally adopted, and hopefully in time fully ratified, framework. What is needed now is more support and solutions to help businesses and their investors in this endeavour.

Our own award-winning solution, ClearlySo ATLAS, launched at the end of 2016, helps investors assess the social and environmental impact of their venture capital and private equity investments and guides them towards choosing sustainable businesses that deliver long-term benefit to people, planet, and the bottom line.

We align with current best practice for ESG integration and everything is aligned and assessed through the lens of the UN Sustainable Development Goals. By helping investors to uncover and create value in their investments through the SDGs, we hope to play our part in creating greater reason to be optimistic about our future!

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