Linking value creation and the SDGs: key steps for business
Last week, RISE Director Nick Jackson spoke at the Global Reporting Initiative’s (GRI) Masterclass on Corporate Reporting as a Driver to Achieving the SDGs.
During the discussion, Nick outlined the key steps we believe businesses should take to embed the SDGs into their approaches to value creation.
First, the SDGs must be embedded into the sustainability strategy, which in turn must be embedded into the business strategy. The business strategy must answer the question: how will we be a successful, sustainable business for the long-term? And the response to that should be based upon an understanding of the risks and opportunities that social and environmental factors present to the business.
To do this, we recommend companies start by conducting a materiality assessment, based upon the double materiality concept. Double materiality forms the basis of the EU’s Corporate Sustainability Reporting Directive and requires companies to analyse both the financial impact of the risks and opportunities presented by different sustainability topics, and the impact of the business on those topics. From this, companies can set clear goals on their value creation efforts for different stakeholder groups which will help convey their ambition and drive their progress.
Second, businesses must define the social, environmental and financial value they are seeking to create for their different stakeholder groups across the value chain when acting to deliver the SDGs. This should be a forward-looking, intentional exercise, and focus on long-term value creation.
Third, businesses should build a business case for their efforts to help achieve the SDGs, based upon the different types of value they are seeking to create for different stakeholders. These can be based upon both narrative and data, and present a clear understanding of the risks and opportunities the SDGs present for the business.
Finally, businesses must ensure the right structures and engagement internally to achieve this. Value creation efforts linked to the SDGs cannot be an internal exercise led by the sustainability team. It needs to be embedded across the organisation, into people’s roles, and into key decision-making criteria during business planning, resourcing and investment decision-making processes as well as the attitudes, behaviours and culture of the organization.
To discuss how we can support you to incorporate the SDGs into your business’ value creation efforts, contact Nick Jackson.