Carlsberg is changing its supply chain and packaging to help achieve the Sustainable Development Goals
Adopted by all member states in 2015, the UN’s Sustainable Development Goals (SDGs) were developed in partnership with businesses, national governments, non-governmental organisations (NGOs), not-for-profits, and others.
With a target date of 2030, the goals are designed to improve socio-economic and environmental conditions around the world and are essential to avoid disaster in the face of global economic and population growth. While some progress has been made, the world is not on track for achieving the SDGs, and significantly more effort is needed.
Companies could play a bigger role in this, just at a point when many are reassessing their broader purpose of existence and looking beyond the financial bottom line for a deeper meaning and impact.
With much of today’s best young talent also seeking a deeper purpose in their work, and financiers, equity holders and governments eager to bare down on risks from ignoring sustainable decision-making, there is plenty of external and internal pressure on companies to pursue the SDGs.
In recent research, along with colleagues, we looked at how companies interact with a loose network of emerging for profit and not-for-profit organisations – including consultancies, investors, financiers, NGOs, and training and development agencies – to become more sustainable.
We describe this network as a ‘purpose ecosystem’, which is increasingly driving change in some countries and nudging companies towards adopting the UN’s SDGs as key influences for their organisational purpose and business strategies.
Drawing from this research, my advice to companies that want to get more involved in the SDGs can be broken down into five key steps.
1 Prioritisation of the SDGs
Senior leaders need to decide how to prioritise the 17 SDGs, playing to their company’s strengths and values.
Companies may agree with all the SDGs but still need to decide which ones could best be furthered through their actions, investments, attention, and resources.
Analysis using materiality matrices or stakeholder frameworks can help, as can the UN Global Compact, which has created tools and resources to help companies translate the SDG framework into practices and actions that can be adopted by management.
Prioritisation should also include reviewing the overlap between the SDGs and environmental, social and corporate governance (ESG) concerns. While they cover similar ground, the ESG approach involves a primarily risk and company-focused analytical framework, rather than a set of global aspirational goals necessary to provide the socio-ecological foundations for economies and businesses to thrive.
Not adopting certain SDGs may represent a material risk to business in a way that an ESG framework would not identify, and yet many companies are taking this limited ESG, compliance-driven approach. But on its own, consideration of ESG concerns is unlikely to be sufficient to fully achieve the SDGs.
2 View the SDGs as opportunities
It is also important senior leaders have a positive outlook on the SDGs and see them as opportunities, rather than simply as risks or problems.
Most are not attuned to think of SDG solutions as commercial opportunities – even though they often are the very things that society and the environment need most.
The provision of food, education, health and green energy, for example, are essential for the world to prosper and progress, and so embody significant intrinsic value.
Once the SDGs are seen as opportunities and the chance for organisations to add value, executives should ask how to develop the capacity to provide the innovative solutions, products, and services needed to achieve the goals on a commercial basis.
3 Alignment and integration
The next step moves the organisation towards being a truly purpose-led enterprise with the planet’s goals at the heart of its strategy.
This means aligning the organisation’s purpose with the UN’s SDGs and integrating their policy intentions into all functional areas, including marketing, operations, and product development. The key is embedding consideration of the chosen SDGs in decision-making across the entire organisation and its supply chain.
While this may take time and bring internal disruption, businesses need to understand the change process involved so they can adapt organisational structure and resources over time to achieve the goals. Examples include setting internal targets, adapting KPIs, providing revised performance incentives, ensuring board representation with sustainability expertise, and revising internal values and policies to integrate the targeted SDGs.
This can help dictate the strategic direction of a company. It should also help identify other potential areas to contribute to that may not have originally been considered.
4 Establish a co-operative network
Next, companies should work towards achieving the chosen goals in co-operation with a variety of external entities – academic institutions, financiers, social movements, NGOs, regulators, and others.
Initiating and supporting collective action will multiply any impact. Many of these entities are themselves increasingly considering their own purpose and seek to make an increased contribution to the SDGs.
Exactly who to collaborate with will depend on which goals are involved and where. For example, international supply chains have a social dimension that may benefit from interaction with a variety of non-profit organisations on the ground in a variety of countries.
Supply chains also need to become much more circular rather than linear from a resource perspective – an area where larger multinationals can have a particularly big influence.
Co-operation with other companies, including competitors, both inside and outside the firm’s own industry is also key, and often essential for wholesale transformation of sectors such as packaging, where multiple actors are involved, and a critical mass is required for change.
Companies must also collaborate with local and national governments to ensure regulations are well designed. It is necessary that policymakers impose regulation to guard against market excesses (including behaviour that undermines the UN’s SDGs).
However, lobbying from business will be accepted by an increasingly critical public, as long as it is transparent and aligned with what is being stated by the organisation externally – which is still often not the case.
Otherwise, organisations wanting to move further and faster than policies allow may suffer a commercial penalty from the public if regulation doesn’t keep up.
5 Create a purpose ecosystem
At this stage, it may also be possible for larger companies to create and co-ordinate their own purpose ecosystem, behaving in a similar way to the smaller entities found in our research.
Executives need to decide how best to use their organisation for driving systemic change within their sector and how to instil purpose within their own ecosystem.
This will depend on the size of the organisation and its position in the value chain. For instance, Danish multinational brewer Carlsberg has taken on the role of changemaker, leading the changes in its packaging and supply chain to achieve the necessary sustainability goals.
Larger companies can create a purpose infrastructure based on their own approach. However, this can mean divergent approaches to the same SDG resulting from companies playing to their strengths, as well as responding to their unique social and financial environments. While all approaches should move us closer to the UN goals, some may prove more effective than others.
These steps are part of a long journey, but one that is desperately needed if the world is to not just meet its net-zero targets to save us from catastrophic climate change, but also bring about a just and equitable society for all.
Stubbs, W., Dahlmann, F. and Raven, R. 2022. The purpose ecosystem and the United Nations Sustainable Development Goals : interactions among private sector actors and stakeholders. Journal of Business Ethics.
Dahlmann, F., Stubbs, W., Raven, R. and Porto de Albuquerque, J. 2020. The ‘purpose ecosystem’ : emerging private sector actors in earth system governance. Earth System Governance, 4, 100053.
Frederik Dahlmann is Associate Professor of Strategy and Sustainability and teaches Business & Sustainability on the Executive MBA, Executive MBA (London) and Distance Learning MBA. He also lectures on Business in Practice on the suite of MSc Business programmes.
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