1 Introduction

1.1 An Unsustainable Word

Everyone in the world depends completely on Earth’s ecosystemsFootnote 1 and the services they provide, such as food , water, disease management, climate regulation, spiritual fulfilment, and aesthetic enjoyment (Millennium Ecosystem Assessment 2005).

Over the past 70 years, humans have changed these ecosystems more rapidly and extensively than in any comparable period of time in human history, largely to meet rapidly growing demands for food , fresh water, timber, fiber, and fuel. Global aquifers are being pumped 3.5 times faster than rainfall can naturally recharge them (Gleeson et al. 2012). Topsoil is being lost 10–40 times faster than it is formed (Pimentel 2006). Oceans are being overfished (UN 2015a). Worldwide, we have lost over half the vertebrate species in the air, water, and land since 1970 (WWF 2016).

This “transformation” of the planet has contributed to substantial net gains in human well-being and economic development. Extreme poverty has declined significantly over the last two decades – more than 1 billion people have been lifted out of extreme poverty since 1990. Between 8.8 to 17.3 million lives were saved due to faster progress on child mortality, 8.7 million due to expanded treatment for HIV/Aids, 3.1 million due to a decline in TB deaths, and approximately half a million due to improvements in maternal mortality. Worldwide, 2.1 billion people have gained access to improved sanitation. The number of people living on more than $4 a day nearly tripled between 1991 and 2015. The number of out-of-school children of primary school age worldwide fell by almost half, to an estimated 57 million in 2015, down from 100 million in 2000. Gender parity in primary school has been achieved in the majority of countries (UN 2015b).

However despite the progress achieved, levels of poverty remain high, inequities are growing, and many people still do not have a sufficient supply of or access to ecosystem services (Millennium Ecosystem Assessment 2005). In 2015, an estimated 836 million people still lived in extreme poverty and 795 million people still suffered from hunger (UN 2015c). About one-fifth of people still didn’t have access to reliable electricity. The poorest children are four times less likely than the richest children to be enrolled in primary education across developing countries . Among the estimated 780 million illiterate adults worldwide, nearly two-thirds are women. Poor people face higher risks of malnutrition and death in childhood and lower odds of receiving key health care interventions (World Bank 2016). Oxfam Footnote 2 has calculated that in 2015, just 62 individuals had the same wealth as 3.6 billion people – the bottom half of humanity. The wealth of the richest 62 people has risen by 45% to $1.76 trillion in the five years since 2010, –an increase of more than half a trillion dollars ($542bn). Meanwhile, the wealth of the bottom half fell by just over a trillion dollars in the same period – a drop of 38%. Since the turn of the century, the poorest half of the world’s population has received just 1% of the total increase in global wealth, while half of that increase has gone to the top 1%. The average annual income of the poorest 10% of people in the world has risen by less than $3 each year in almost a quarter of a century. Their daily income has risen by less than a single cent every year (Oxfam 2016).

Ecosystems degradation and inequitable development, unless adequately addressed, could grow significantly worse and substantially diminish “the ability of future generations to meet their own needs” (World Commission on Environment and Development 1987). The current situation has to be considered as particularly serious in view of the fact that the World population is expected to exceed 9 billion by 2050. That’s 2.3 billion more mouths to feed than in 2009. Feeding this population will require raising overall food production by 70 per cent from the 2005/7 levels. Taking into consideration that we are currently using 50 per cent more resources than the earth can support – today we are living as if we had one and a half planets – it is clear that this challenge cannot be met solely through a more intensive exploitation of natural resources (WWF 2016) and that a new development model is needed. Finding and implementing this will certainly be the largest challenge mankind has ever faced.

2 The Path Towards Sustainable Development

With the coining of the definition “sustainable development”, the World Commission on the Environment and Development (WCED), chaired by Gro Harlem Brundtland, stated that development is only ‘sustainable’ if it “meets the needs of the present without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development 1987). The concept of sustainable development, launched by the WCED as a “global objective”, has been moving up the global public policy agenda for almost 20 years.

In 1992, the United Nations (UN) held its Conference on Environment and Development (UNCED) in Rio de Janeiro, Brazil. During the Conference, which came to be known as the Earth Summit, more than 178 governments adopted Agenda 21, a program of action for sustainable development for the twenty-first century. Recognizing that economic development and environmental protection are not mutually exclusive, Agenda 21 outlined measures that fight poverty while preserving natural resources.

Ten years later, at the Johannesburg Summit, a plan of implementation was agreed upon by participating countries, along with a commitment to achieve the Millennium Development Goals (MDGs), eight time-bound goals, which range from halving extreme poverty rates to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015 (see Table 10.1).

Table 10.1 The UN Millennium Development Goals
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In 2009, the UN General Assembly adopted a Resolution agreeing to have a UN Conference on Sustainable Development (UNCSD) in 2012, also referred to as “Rio+20”. The three objectives of this summit were to secure renewed political commitment for sustainable development, assess the remaining implementation gaps of commitments that have already been agreed upon and address emerging challenges. The Rio+20 Conference took place in Rio de Janeiro, Brazil on 20–22 June 2012. It resulted in a focused political outcome document, which contains clear and practical measures for implementing sustainable development. In Rio, Member States also decided to launch a process to develop a set of Sustainable Development Goals (SDGs), build upon the MDGs, but also including issues such as natural resources management, sustainable consumption and production, effective institutions, good governance, the rule of law and peaceful societies (UN 2012).

The 2030 Agenda for Sustainable Development, which includes a set of 17 Sustainable Development Goals, was adopted on 25 September 2015 by the UN General Assembly. It represents a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.

On 12 December 2015, few months after the adoption of the 2030 Agenda, a landmark agreement on the reduction of climate change , also referred to as the “Paris Agreement”, was signed within the UN Framework Convention on Climate Change (UNFCCC ).Footnote 3 The Agreement establishes:

  1. (a)

    To keep global temperatures “well below” 2.0C (3.6F) above pre-industrial times and “endeavour to limit” them even more, to 1.5C;

  2. (b)

    To limit the amount of greenhouse gases emitted by human activity to the same levels that trees, soil and oceans can absorb naturally, beginning at some point between 2050 and 2100;

  3. (c)

    To review each country’s contribution to cutting emissions every five years so they scale up to the challenge;

  4. (d)

    For rich countries to help poorer nations by providing “climate finance” to adapt to climate change and switch to renewable energy .

The Paris Agreement entered into force on 4 November 2016, thirty days after the date on which at least 55 Parties to the Convention accounting in total for at least an estimated 55% of the total global greenhouse gas emissions have deposited their instruments of ratification, acceptance, approval or accession with the Depositary.

Even if there is no formal interrelationship between the Paris Agreement and the Agenda 2030 for Sustainable Development it is clear that they move towards the same direction. Managing the climate crisis while simultaneously implementing a new, ambitious agenda for sustainable development, they chart a fundamentally new course in the two-decade-old global sustainability efforts.

2.1 The UN Sustainable Development Goals

On 25 September 2015, the UN General Assembly adopted the 2030 Agenda for Sustainable Development, which includes a set of 17 Sustainable Development Goals (see Table 10.2) and 169 targets to end poverty, fight inequality and injustice, and tackle climate change by 2030.

Table 10.2 The 17 Sustainable Development Goals
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Initially seen as the successors to the Millennium Development Goals, the ambition and scope of the SDGs are much broader. By comparing MDGs with SDGs it’s possible to fully grasp the significance of the new Sustainable Development Goals.

Comprehensive Goals

While the MDGs were primarily focused on human development outcomes centred on poverty alleviation, the SDGs take a more holistic approach, broadening the range of goals to capture aspects of the so-called ‘triple bottom line ’ approach to sustainability . The SDGs can be broadly divided into four categories. The first six goals can be seen as an extension of MDGs. Goals from seven to twelve introduce economic development, with an emphasis on inclusive growth, for the first time in the global sustainability agenda. Goals thirteen, fourteen and fifteen refer, with a greater emphasis compared to MDGs, to environmental sustainability . The last two goals can be considered as enablers with respect to others, namely, designed to create the conditions for the previous fifteen goals to be achieved.

The several aspects of sustainable development included in the SDGs have to be considered of the same importance, in a sense that SDGs must be implemented as a whole, in an integrated rather than a fragmented manner, due to the fact that the different goals and targets are closely interlinked.

Zero Goals

The MDGs targets for 2015 were set to get the world “half way” to the goal of ending hunger and poverty, with similar proportional goals in other fields. The SDGs are designed to finish the job – to get to a statistical “zero” on hunger, poverty, preventable child deaths and other targets (UN 2014).

Universal Goals

While the MDGs provided a framework for action within developing countries , the SDGs apply equally to developed and developing countries . The MDGs were largely determined by OECD-countries and international donor agencies. They were thought in the context of rich donors aiding poor countries and, for this reason, they mainly gave consideration to the special needs of least developed countries . The SDGs were defined in a completely different context. First of all, they are the result of detailed international negotiations that have involved not only high-income countries, but also middle-income and low-income ones (See Table 10.3). Furthermore, the SDGs definition process was strongly influenced by the tremendous changes that had occurred during the previous fifteen years in terms of distribution of wealth (both among and within countries), technology development, global governance structure and by an always more diffused consciousness of the effects of globalization on sustainable global development challenges. Within these circumstances, each set of goals not widely applicable to all countries would have been perceived to be totally inadequate to face the current challenges of sustainable development. Moreover, focusing on inequality more than on national-level poverty, SDGs apply to rich and poor countries alike, taking into consideration, for example, that the majority of the poorest people live not in poor but in middle-income countries and that gender equality is an extremely relevant issue both in ‘developing’ and ‘developed’ countries . As well as including goals addressing industry, innovation and infrastructure, responsible consumption and production, and climate action, besides refreshed goals targeting poverty and hunger, and health and well-being, all countries have some way to go to achieve all of them.

Table 10.3 The SDGs Inclusive Goal Setting
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Polycentric Governance

The 2030 Agenda is based on the concept of global partnership among different actors. The SDGs were defined within a context in which the traditional governance model that considers State agencies the only political institution that directly focuses on the well-being of society was completely overtaken. Upon the consequences of globalization, indeed, neither nation-states nor international institutions seemed to be able to regulate the economy, deal with transnational social and environmental problems, provide public goods, protect citizenship rights and serve the public interest by themselves (Scherer and Palazzo 2011). The global governance has increasingly been seen as a polycentric and multilateral process to which governments, international institutions, civil society groups, and business firms contribute knowledge and resources (Detomasi 2007) within a collaborative framework. It has significantly transformed the role of non-state actors within the global arena, acknowledging their additional political responsibility to contribute to the development and proper working of global governance (Scherer and Palazzo 2008). This approach is strongly reflected on SDGs governance framework according to which businesses, governments and civil society actors are equally called upon to pursue a more sustainable path forward.

3 SDGs and the Central Role of the Private Sector

3.1 The Role of Business as Development Actor

Undoubtedly business has been involved in discussions around sustainable development policy since the 1987 Brundtland Report and subsequent UN Conferences on Environment and Development at Rio de Janeiro in 1992 (Kolk 2005), in Johannesburg in 2002 and at the Rio +20 Conference in 2012. At these meetings, an expanded role for the private sector as a development actor was highlighted. The Johannesburg Declaration stated, for example, that “the private sector, including both large and small companies, has a duty to contribute to the evolution of equitable and sustainable communities and societies” (UN 2002), while the outcome document of Rio +20 asserted that the private sector was an important partner in development.

In addition, the creation of the UN Global Compact (UNGC )Footnote 4 in 2000 and the unanimous endorsement of the UN Guiding Principles on Business and Human RightsFootnote 5 by the UN Human Rights Council in 2011 have been crucial milestones in the evolving engagement of business on sustainable development issues.

Strongly involved, together with political leaders and civil society actors, in the SDGs definition process, business actors are considered as a vital partner in achieving them. The SDGs call on companies everywhere to act as a “Development Actor” to advance sustainable development through the investments they make, the solutions they develop, and the business practices they adopt. In doing so, the Goals encourage companies to reduce their negative impact while enhancing their positive contribution to the sustainable development agenda.

Many assert that the private sector has particular strengths to bring to bear in delivering on the SDGs, including innovation , responsiveness, efficiency and provision of specific skills and resources (Lucci 2012; Porter and Kramer 2011). Discussions about the private sector as a Development Actor go well beyond provision of resources, innovation and technology, however. Sachs, among others, argues that also the leadership of the private sector, not only its operative strength is needed in meeting the SDGs (Sachs 2012).

The SDG framework was devised to be adopted as a whole, with the business impact across all 17 goals intended to be viewed in its entirety. Nevertheless, some SDGs seem to be less supportable by companies: SDG1 – End poverty in all its forms everywhere; SDG2 – End hunger, achieve food security and improved nutrition and promote sustainable agriculture; SDG10 – Reduce inequality within and among countries; SDG16 – Promote peaceful and inclusive societies for sustainable development, provide access to justice for all, and build effective, accountable and inclusive institutions at all levels. However, it is only a matter of creating the right connections within Goals, e.g. if companies will be able to improve employment for all (SDG8), one of the main causes of poverty (the lack of work) will fail, and SDG1 will be addressed.

Nevertheless, if all the 17 goals are relevant for the private sector, not all goals are equally relevant for all companies. Trying to cover them all would be operationally overwhelming and a waste of resources. That’s why companies are supposed to map their positive and negative impacts on SDGs related aspects and to focus their efforts on the most “relevant” onesFootnote 6 including them both in their strategic plans and in the operation management. What companies should certainly avoid is cherry picking goals which maximise their profits while avoiding those which have a negative impact. For example, an energy company choosing to focus on SDG7 – Affordable and Clean Energy, but not SDG13 – Climate Action. This could result in the re-purposing of dirty energy under the guise of energy access and the undermining of both goals.

The business sector has the opportunity to play its role of Development Actor not only through its core business activities, but also making cross-sectorial and innovative multi-stakeholder partnerships. The 2030 Agenda is based on the concept of global partnership. SDG17 recognizes multi-stakeholder partnerships as important vehicles for mobilizing and sharing knowledge, expertise, technologies and financial resources to support the achievement of the sustainable development goals in all countries, particularly developing countries . Goal 17 further seeks to encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships.

4 The Business Drivers

While the SDGs are not legally binding, they will act as de facto regulation and drive the implementation of national regulation and incentives to see them succeed. Expectation is high that business will make a significant contribution to help governments, and society for that matter, achieve the goals.

In 2015, Price Waterhouse Coopers (PwC) undertook a detailed survey of business and citizens conducted via social media and shared with PwC clients with PwC clients, UN Global Compact and Global Reporting Initiative (GRI) members. It found that 90 per cent of citizens said it is important that business signs up to the SDGs and 78 per cent of citizens said they were more likely to buy the goods and services of companies that had signed them up (PwC 2015).

After all, the private sector delivers nearly 60 per cent of worldwide GDP and reaching the SDGs would be inconceivable without its alignment and support. There is a growing realization that business cannot succeed sustainably in societies that fail. The corollary is also true: societies striving for sustainability open up many opportunities for the private sector.

Beyond the external expectations, signing up to the SDG can represent an opportunity for private sector actors in at least four areas:

  • Innovation & market development – The SDGs essentially highlight and address the huge gaps in development that exist across the globe – whether they be due to a lack of access to finance, clean water, food or education. These ‘development’ gaps also represent unmet market needs. As governments direct their policy and resource towards meeting these needs, businesses can benefit from analysing which of these may present opportunities for innovating new products, services and business models.

  • Efficiency & cost savings – Many of the SDG targets aim to tackle the pressures on the environmental system and encourage economic growth within planetary limits. The impact of limited natural resources will increasingly be felt by businesses through rising costs and volatile supply. The impacts of climate change will exacerbate this effect. Doing more with less will become an imperative for every business – helping to save costs in the short-term and reduce risk in the long-term.

  • Reputation management – Some SDGs clearly point to the elimination of the negative impacts that result from the activities of the private sector: pollution, environmental degradation, bribery, corruption, forced labour, child labour. Tackling these issues is vital to building and maintaining trust with key stakeholders and maintaining a company’s licence to operate. Neglect of these issues, whether in companies’ operations or further along the value chain, can strike a damaging blow at reputation , sometimes undermining the viability of a business.

  • Risk reduction – The SDGs aim to tackle many issues which pose significant risks to ‘business as usual’ over a longer time frame. These might be risks in the supply chain or financial, regulatory or technological risks, to name a few. Businesses can minimise their vulnerabilities by understanding the way the Goals impact on their sector and value chain. The SDGs will also increasingly shape the regulatory environment for business. Businesses that respond proactively will increase their resilience in a challenging operational and regulatory context.

5 In the State of the Art

If the SDGs explicitly call on all businesses to apply their creativity and innovation to solve sustainable development challenges, the 2016 UN Global Compact-Accenture CEO Study, demonstrates that business leaders are ready to accept the mandate to act on global development, reorienting their companies to create not only value for shareholders, but for society at large (Accenture 2016). The Study is based on over 1,000 survey responses and one-to-one interviews conducted with more than 50 CEOs of UN Global Compact participant companies of all sizes across more than 150 countries and 30 industry sectors. Results suggest that business leaders are committed to driving forward this universal ambition, forging a stronger global environment for doing business in the foothills of the fourth industrial revolution. The majority of CEOs surveyed (87 per cent) believe the SDGs provide an opportunity to rethink approaches to sustainable value creation and 78 per cent already see opportunities to contribute through core business. Nearly half of all CEOs surveyed (49 per cent) believe that business will be the single most important actor in delivering the SDGs.

Although it’s too early for practical, widespread business action on the SDGs, companies are already doing the groundwork to integrate the goals into their sustainability strategies. The 2015 PwC Survey findings highlights, among other things, that awareness among companies is already high with 92% of the total group saying they already knew of the goals, 71% of business say they are already planning how they will engage with the SDGs, 13% of business have identified the tools they need to assess their impact against the SDGs, 41% of businesses say they will embed SDGs into strategy and the way they do business within five years (PwC 2015).

In order to support companies in taking action to advance SDGs, several tools have already been implemented by different kind of organizationsFootnote 7 and inspiring examples on how business can give its contribution to achieve the SDGs by 2030 can already be found.

Several Reports, mainly produced by corporate sustainability’s practitioner, showcase and analyse companies who are engaging in activities oriented toward SDGs. Companies themselves started to valorise their commitment and activities on this fields on their Sustainability Reports. In the state of the art, Sustainability Reports mainly contain the results of the linkages between companies’ business and SDGs mapping activity. In some cases companies also showcase inspirational examples of good practice they implemented in support of SDGs.

6 Conclusions

6.1 What’s Next? Opportunities and Challenges

Within the SDGs, there is an appreciation of the private sector’s role in the complex process of social and economic development and environment protection. Business leaders have declared that they are ready to accept the mandate to act as global development actors and have already started to work on this direction. Nevertheless, in order to succeed, at least three extremely important challenges have to be faced:

  1. (a)

    Companies have to find a way to align their business strategies with the Agenda 2030, reorienting them to create not only value for shareholders, but for society at large. Blowfield provides a useful, related distinction between business as a development tool and business as a development actor, noting that business is increasing being constructed as the latter – a ‘consciously engaged agent of development’ (Blowfield 2012) – rather than simply contributing to development through its (sometimes contested) economic contributions. That has to become always more part of the private sector priorities and strategies.

  2. (b)

    Define a reliable measuring and reporting mechanism able to show how companies are contributing to the SDGs. While sophisticated systems are in place for measuring and tracking business outcomes, the ability to measure associated development outcomes (positive and negative) has to be significantly improved. A consistent set of indicators able to measure the business activities impacts on the sustainable development aspects included in SDGs is needed in order to provide quantitative information on the contribution of companies to the achievement of SDGs both to companies themselves and to their stakeholders ;

  3. (c)

    Engaging Small and Medium Enterprises (SMEs). SMEs play a crucial role in the growth of developing economies and, more generally, they are key to the success of the SDGs, especially in those countries in which they represent the real engine for the local economy. Currently, SMEs are not particularly engaged in Agenda 2030, in some countries they are at all. A big effort has to be made in order to bring them on board.