The business case for driving pursuing globally agreed sustainability goals is often laid out in terms of estimates and projections of future earnings. And on paper, at least, the case is certainly hard to argue with.
According to the Business & Sustainable Development Commission, achieving the UN’s 17 Sustainable Development Goals (SDGs) could open up $12tr of market opportunities in food and agriculture, cities, energy and materials, and health and well-being alone, creating 380 million new jobs by 2030 in the process. Meanwhile, the theory goes, we should all find ourselves living on a far cleaner, greener, fairer, more secure, and more prosperous planet once the goals are met.
All that, you would think, goes quite some way towards justifying and incentivising the $5-7tr of investment the UN expects will be needed to meet the SDGs through to 2030. Yet, projections aside, there have to date been few attempts to actually quantify the impact the SDGs are already having on the global economy, despite the fact 193 countries, 9,000 companies, and investors worth more than $4tr in assets have so far pledged their support for the goals. However, a new tool developed by ESG analyst Trucost looks to do just that.
Released yesterday, the analysis of 13 major corporates makes for pretty positive reading, demonstrating that business strategies aligned with the SDGs delivered hundreds of billions of dollars in revenue last year alone. The startling findings are the result of a new SDG Evaluation Tool developed by Trucost which provides quantitative analysis of company performance against the SDGs across the value chain, from raw material inputs to product use and disposal, within the context of a firm’s geographical location.
Trucost, which is part of S&P Global, began working alongside multiple companies, investors, and academics earlier this year to develop the set of metrics, which are aimed at providing market participants with the data transparency needed to accelerate progress on the UN goals.
Among the 13 companies which agreed to take part in the inaugural application of the Tool were renewables firms Iberdrola and Ørsted, as well as a variety of major corporates such as Rockwool, the Walgreens Boots Alliance, HP and, of course, S&P Global. The advisory panel for the research, meanwhile, included the London School of Economics, the UN Global Compact and the World Business Council for Sustainable Development. Overall it found the 13 companies generated almost $233bn of ‘SDG-aligned’ business revenues in 2017, equivalent to as much as 87 per cent of their entire revenues that year. If the SDGs represent the world’s biggest to do list, then the work is certainly very well paid.
Libby Bernick, managing director and global head of corporate business at Trucost, welcomed the findings. “Working with a diverse range of companies and market specialists has enabled us to develop a robust framework to assess SDG-aligned business value so that it is comparable across business activities and regions,” she added. “We are grateful for the collaboration of our program participants in helping to address growing demand for holistic SDG metrics to meet the decision-making needs of investors, company boards, and other market participants.”