Supply Chain
How to Incorporate the SDGs Into Your Business Strategy

For one of the last breakout sessions of the week, Tom Smith, Acting General Manager at Sedex; Vincent Kneefel, Manager of the United Nations Global Compact; and Christina Gossmann, Marketing Manager at Digital Divide Data (DDD) sat down to discuss the business applications for the UN’s Sustainable Development Goals (SDGs).

Ahead of the September SDG launch in New York this fall, both governments and businesses are trying to decipher how the goals will affect their strategies. Kneefel, a former account manager at Accenture, began by introducing the UN Global Compact, whose business participants commit to make the 10 principles part of their business strategies and day-to-day operations. Paraphrasing Sylvia Earle, he emphasized that our actions to mitigate climate change in the next 10 years will critically shape the next 10,000.

“By defining our goal more clearly, by making it seem more manageable and less remote, we can help all peoples to see it, to draw hope from it, and to move irresistibly towards it.”

He followed by outlining the key impacts of the Development Goals:

• Catalyze social mobilization;
• Create peer pressure;
• Spur networks of expertise, knowledge and practice into action around sustainable development challenges
• Mobilize stakeholder networks for a common purpose

Kneefel then explained how the SDGs, slated for implementation from 2016 through 2030, build on the previous Millennium Development Goals (MDGs), which end this year. The MDGs’ 15-year run yielded a marked reduction in poverty and better disease control, galvanizing a global effort previously unseen. The SDGs are designed, in part, to pick up where the MDGs left off. Beyond poverty reduction and education, the 17 SDGs go into climate change, energy access, biodiversity and oceans.

Proving the SDGs’ value to business is the UN Global Compact’s primary challenge. Kneefel posited that the SDGs’ business value is four-fold: They offer a source of inspiration; companies have their own sustainability goals, but the SDGs may reveal things they haven’t thought of; they help to identify opportunities and priorities; and provide a framework to measure impact and a common language for dialogue.

Furthermore, the SDG Compass Project supports companies in understanding the SDGs and business relevance, helps to assess impact and set business goals, and aids companies in communicating current and future impact to stakeholders in a credible and meaningful manner.

Hitting 169 targets within 17 goals is daunting to any company of any size. Kneefel concedes that the UN doesn’t expect companies to take on all of them at once, but considers it a good source of inspiration in considering the whole picture, especially with the upcoming Paris climate summit. Kneefel also noted that eventually, the SDGs are going to be the way governments spend their money, so if a business can tackle any of these goals, there is money to be made. Government has been the driving framework for building the SDGs, but without business buy-in they won’t be implemented. According to Kneefel, business-government collaboration needs to go beyond short-term and quarterly profits; for real impact there have to be longer-term relationships.

“We’re seeing big changes, but we need to work together if we’re going to address the kind of scale that we need,” said Kneefel.

Smith from Sedex, the largest collaborative platform for sharing ethical supply chain data, spoke next, highlighting the importance of supply chain inclusion when implementing the SDGs into business strategy. To narrow down goals your company can tackle, Smith suggests looking at your supply chain to understand where the weaknesses are around these 17 goals, then pick the targets that are most relevant to your supply chain — not just what’s going to look good on a CSR report — and ultimately your business will benefit.

Smith pointed out that it’s the second- and third-tier suppliers, the factories, farms and manufacturers, that actually make a business sustainable. 90 percent of Sedex’s business is done with small & medium enterprises (SMEs), generally companies with less than 250 employees. When asked, only 25 percent of Sedex’s SME clients even knew what the SDGs were, and less than 50 percent were comfortable saying they were familiar with CSR. Training your whole company and every employee in sustainability means nothing if suppliers aren’t on board.

“We’ve learned great stuff here at SB, but the key is the suppliers — we have to take everything we’ve learned here and push it down the supply chain,” Smith said. “The SDGs are a great opportunity to take these new principles and objectives and go to the supply chain and say, look — these aren’t my standards, this is from the UN, not just another code of conduct from above.

Gossmann then introduced DDD and its mission to implement the SDGs through impact sourcing, or socially targeted outsourcing, which benefits populations from low-income, low-resource communities by giving them digital jobs.

Currently, impact sourcing is 12 percent of the business process outsourcing market, which provides data entry, data hygiene, data conversion, online research, image processing and many other services. DDD uses a work-study model wherein it recruits high school graduates from low-income families: They’re paid for 36 hours of work per week plus scholarships and loans for attending university, and upon graduation they receive a Bachelor’s as well as a graduate certificate from DDD, setting them up for good jobs.

“Strategically for business, start with the lower-hanging fruit; once you demonstrate success to your board tackling the low-hanging fruit, then you can take it from there,” Gossmann said.