The UN Sustainable Development Goals are a useful high-level framework for thinking about your organisation’s ability to make a positive social impact. The 17 goals cover a broad range of environmental, social, health, wellbeing, education and climate change-related areas.
Your business may be able to make a change to its operating model that could help at least one of these goals. In an environment of ever-increasing stakeholder expectations, particularly for financial services companies, revisiting your purpose and strategy to build a new target operating model that incorporates sustainability outcomes as a critical success marker is vital.
Boards and senior executives should be actively considering how their risk management framework accommodates the identification and management of environmental, social and governance risks. The focus on financial risks has moved towards a focus on operational risks in recent years, however many organisational-level risks still struggle to make appearances in the strategy documents and annual reports of some companies.
Many major global and local companies have gone back to basics and reviewed their purpose – why they exist, and which stakeholder communities they are delivering outcomes for. They want to make a difference for their customers, stakeholders, shareholders, employees, and countries where they operate. Some are clear in their aspiration to make a positive difference for the world as a whole.
A decade ago, these ESG issues were on the radar of boards and senior executives but typically dealt with by way of a press release or modest amounts of spending on a few sustainability projects. This approach will no longer satisfy rising community expectations around corporate behaviour. Their very license to operate in society is at risk if they don’t make changes to their operating model that reflect a higher level of community expectations.
Goal 4: Ensure inclusive and quality education for all and promote lifelong learning
Goal 4 of the UN Sustainable Development Goals is about quality education and lifelong learning for all. Education is an integral part of building a country’s human capital and productivity.
In developed countries, lifelong learning is supported by many employers. In developing countries, rates of literacy and numeracy are still well below where they should be.
Getting a quality education is a vital part of sustainable development. Over 265 million children globally are currently not in school – 22% of them are primary school age.
The sub-goals include targets for raising technical and vocational skills as well as tertiary education. It won’t be cheap to increase investment in education facilities globally. But it’s an investment in the planet’s future.
Some board members and senior executives may believe that these social problems are for politicians and non-governmental organisations to resolve. This way of thinking is increasingly outdated and risks surprising the board and shareholders when a clear communication around increased community expectations is received.
An example of how this could manifest is through the employees of your business. The younger employees no longer want to come to work to be told what to do, receive their pay, and go home. They want to be supporting a clear purpose and strategy that not only helps them self-actualise but helps society.
In developed countries, there are still issues with education and vocational training. To support the Goal 4 objectives, considering how the organisation’s training and people policies support the lifelong learning of employees is one area of potential focus.
Another area of focus could be the provision of scholarships and vocational training support in your industry. Creating supportive pathways from education to valued work is essential to reduce the negative social consequences of people studying for qualifications that don’t land them an entry-level job.
As an example of how individual businesses can make significant impacts on some of the UN Sustainable Development Goals, consider an engineering consultancy. They could partner with a developing country education provider and provide pro bono or heavily discounted consulting services to support the development of educational facilities. They could offer employees the opportunity to do a 3-month secondment without having to volunteer and incur financial impact.
If an engineering consultancy was to consider this, it communicates how it is making a difference through its actions. When it produces sustainability outcomes reports for stakeholders or needs to respond to questions in a tender response situation, having clear examples of projects its people do for others will increasingly become a vital procurement benchmark to reach.
Board Director And Senior Executive Considerations
From an operating model perspective, through sharing knowledge and undertaking projects in its niche in a developing country would build its employees skills and enable them to share knowledge with host country staff. While there are issues to work through, it should be clear to board members and senior leaders that using unconstrained thinking to decide how your business chooses to make a positive social impact can lead to credible, adjacent opportunities that are genuine win-wins.
Small projects that are in line with your operating model can mean that helping improve sustainability outcomes is efficient for your business because its in line with the people, process and technology platforms that you have in place already. If your current operating model could support small adjustments to support part of the UN Sustainable Development Goals, then that could be reported on as part of your overall impact.
The business case for many of these sustainability projects is reasonable. Enterprise value in 2020 and beyond will change based on the external perception of how board directors and senior executives identify and manage ESG risks.
If a business is clear about its purpose, value creation and the strategy it has designed accommodates for sustainability outcomes, then creating the right target operating model that ensures sustainability outcomes are delivered from Day 1 should be achievable.
One consequence of going back to basics and incorporating sustainability outcomes into the overall operating model design is that some clear decisions – like eliminating paper-based processes – obviously have a positive impact through reducing paper consumption and waste, but also lead to lower operating costs.
Boards and senior executives should ensure realistic cost-benefit analysis calculations are incorporated into business cases. The clear message from the community is that many groups of stakeholders are highlighting the financial risks to not actively considering ESG risks and adjusting your operating model to ensure that part of the value your business delivers to society is a positive social impact.