This is how companies can make the UN's SDGs their own

Even the best-intentioned companies may struggle to see how they can incorporate the United Nations’ Sustainable Development Goals (SDGs), in all their scope and ambition, into their strategies. The 17 Global Goals (with their 169 action targets) seem so lofty as to be out of reach.

Take, for example, Goal 1: End poverty in all its forms everywhere. Or Goal 5: Achieve gender equality and empower all women and girls. Goal 8 is to Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. And so on.

The SDGs were adopted in 2015 and are meant to be achieved by 2030. The clock is ticking, and progress on the 17 global targets has been patchy at best. According to a 2023 UN report on the goals, only 15% of the goals are on track; 48% are moderately or severely off track; another 37% are stagnated or regressed.

Yet if there’s any hope of making progress toward meeting the goals by their 2030 target, it’s essential that companies do their part.

An extensive review of the practical guidelines of organizations such as McKinsey and PwC — and of related articles in leading management journals — has, however, shed light on this subject. The review integrates academic knowledge with practical guidelines to offer a robust and scientifically informed process-based framework for SDG adoption.

Based on that review, here’s the four-step process for companies to make SDGs their own:

1. Prioritize. Company leaders must identify the SDGs that are most relevant to the strategic goals of their firm. No company can make meaningful impact on all of the goals; pursuing too many of them runs the risk of spreading resources too thinly. Also, employee commitment and engagement tend to wane without a meaningful focus. Beyond alignment between SDGs and the firm’s core activities, relevance may be rooted in the personal values of decision-makers or other factors.

For example, Danish toy maker Lego prioritizes Responsible Consumption and Production (Goal 12) as well as Quality Education (Goal 4) because of its belief in “the transformative power of play to be adopted in education and early childhood development around the world”. The two SDGs are both focused and aligned with the company’s activities and values.

2. Contextualize. Companies should situate SDGs within their geographic and industrial contexts. They must reframe the goals from global calls to action to contextually relevant, manageable targets. Without this reframing, the goals can seem symbolic rather than practical. In addition, some SDGs — gaining access to potable water, for example — are applicable in some communities and not in others. Localizing SDGs also encourages managers and employees to visualize their firms making incremental progress towards specific goals and improves stakeholder engagement.

Explaining its approach to SDGs, French food giant Danone said that it would focus on areas related to nutrition and wellness, such as Zero Hunger (Goal 2) and Good Health and Well-Being (Goal 3). “We have decided to direct our efforts towards and actively contribute to several Goals on which our activities have the most material impact,” the company said. That involves projects such as conducting studies of mothers in Cameroon and Ivory Coast, where anemia is a critical concern, and reformulating its Phosphatine brand in these two countries so that it now provides 70% of children’s iron needs.

3. Collaborate. This requires working alongside other organizations and stakeholders to make more impactful progress on mutual goals. Again, the complexity of the SDGs exceeds the reach of any single organization. Cooperation with multiple external partners is necessary to make change. SDGs can be met only through the coordinated contributions of multiple stakeholders, including the public and private sectors, multilateral institutions and other civil society actors. For some companies, this will require a shift in thinking from managing stakeholders to partnering with them, and from organization-focused approaches to issue-focused approaches. This will require dialogue — which won’t always be easy.

After conducting a materiality assessment on all 169 action targets, pharmaceutical firm NovoNordisk settled on Good Health and Well-Being (Goal 3) and Responsible Consumption and Production (Goal 12). Partnerships are key to progress here. For example, for its Cities Changing Diabetes programme, NovoNordisk works with more than 100 local partners to map and analyze root causes of urban diabetes and provide solutions to systemic issues related to healthy living in cities.

4. Innovate. Companies may have to rethink how they normally do business, designing new business models to produce distinct SDG-related outcomes. Business model innovation can enable firms to foster sustainable changes by incorporating social and enviornmental consequences into their designs. The SDGs will never be achieved if we continue to do what we do, the same way we’ve always done it. We cannot rely on existing tools, techniques and technologies. Firms must find novel solutions that use fewer inputs and cleaner technologies while innovating their business models. This means signficantly altering current business practices while adopting new ones built on a novel logic of societal engagement.

The energy transition is, perhaps, the most consequential climate action. Spanish electricity producer Iberdrola has identified Affordable and Clean Energy (Goal 7) and Climate Action (Goal 13) as the goals where it can have most impact, and incorporated them into its business strategy. To make progress, the company has committed to accelerating investments in renewable energy, digitalization and electric mobility — all of which require fundamental innovations.

No one would deny that global progress in achieving the UN’s SDGs has been disappointing. But neither this slow headway nor the sweep of the goals should deter companies from taking action. With the right approach, the SDGs can be turned into specific action plans with measurable results.