The global challenges we face from climate disaster to gender inequality, unsustainable food systems to digital exclusion are interconnected and affect us all. They could build up to a perfect storm while the clock is ticking to deliver on the UN Sustainable Development Goals and the Paris Agreement over the course of the next decade. Against this backdrop business has tremendous urgency to drive change. But there is currently no global mechanism for business or investors to understand where companies stand and need to step up.
The World Benchmarking Alliance has set out to develop a range of benchmarks by 2023 to comprehensively assess the progress of 2,000 keystone companies against the SDGs. Free and publicly available benchmarks will help investors in their role as stewards of the companies in which they invest. This will enable investors and other stakeholders to hold those companies to account.
Our current global economic and financial model rewards shorter-term objectives rather than long-term value. When investors do look at non-financial performance it’s mostly through a risk-based ESG lens. This limits the influence of the companies in which they invest to be active agents of change and significantly accelerate the pace of progress on the SDGs. ‘Business as usual’ or incremental progress will not deliver the sustainability transformations needed. We want to harness the massive potential and need business to raise its game. Our benchmarks will function as roadmaps and produce data and insights for the world’s most influential companies so that investors, governments, civil society, individuals and the companies themselves understand where they stand in contributing to the SDGs.
The power of 7:
Through global stakeholder consultations with more than 10,000 capital market, corporate, government, civil society representatives as well as individuals, we know we cannot assess progress issue by issue, SDG by SDG, company by company or industry-by-industry. We need to think and act in systems to drive transformative change and identify the ‘keystone companies’ which can help put the world on a more sustainable path and signal to investors the companies with the best SDG business models to drive long term performance.
Seven transformations to achieve the SDGs
1. Social transformation: Achieving universal human development by respecting human rights, promoting equality and empowering people to pursue the choices they value
2. Agriculture and food system transformation: Producing healthy and nutritious food to feed a growing world population while staying within planetary boundaries, offering farmers, fishers and their families a decent standard of living
3. Decarbonisation and energy transformation: Providing universal access to modern energy services while drastically reducing the world’s dependency on carbon-based energy
4. Circular transformation: Decoupling consumption and production from natural resource use and designing out waste and pollution
5. Digital transformation: Harnessing the benefits of digital technologies while ensuring universal access and managing risks, including safeguarding*6. Urban transformation:* Creating sustainable, inclusive and connected cities that are safe, resilient and clean
7. Financial system transformation: Reorienting the flow of capital to accelerate the economy’s transition toward long-term sustainable development
We are working across these seven systems transformations needed to achieve the SDGs and accelerate sustainable business beyond 2030.
Here are three examples:
Agriculture and food system transformation: One of the most pressing global challenges and opportunities of our time is feeding a growing population of 10 billion people by 2050 with healthy and sustainably produced food. The upside is that companies in this sector especially have an enormous capacity to drive change through their entire value chain. By developing clearly defined global targets based on the SDGs and those set out by the EAT Lancet Commission we can collectively steer this influence in the right direction. WBA is currently developing the methodology for the Food and agriculture benchmark and has identified the 300 keystone companies across the entire value chain that can drive the great food transformation.
Decarbonisation and energy transformation: WBA in partnership with CDP aims to support the transformation of the high carbon emitting sector looking at current and future action and impact. We will be assessing and comparing the climate action performance of companies across industries among others, oil and gas, electric utilities and automotive. The methodology will encourage engagement from the companies themselves and look at current plans, the action pathway, past and present performance to assess future alignment and action. “The Climate and Energy Benchmark” will rank companies against the ultimate end goal – the Paris Agreement.
Digital transformation: The ICT (Information and Communication) and tech sectors increasingly have the influence and capacity to both accelerate and hold back global sustainable development. WBA’s digital inclusion benchmark will comprehensively assess companies on their contribution to digital inclusion in four dimensions: access, skills, use, and innovation. The benchmark will initially rank and score 100 of the world’s most significant ICT companies, ranging from device manufacturers to telecommunication networks and platform giants, and will define the standard for best practice in this space. The first results are expected next year helping investors better understand how this sector is responding to the SDGs by closing digital divides and creating market opportunities while mitigating risks from digital technologies.
Through our alliance we are calling on the world most influential companies to define their purpose in support of the transformations ahead. Ranking these same companies via free and publicly available benchmarks will pinpoint how these companies are measuring up on the matters that matter most. Transparency and insight in performance will incentivize business to steps up its game. Given the incredible influence these keystone companies exercise over employees, suppliers, customers and the communities and environments in which they operate this could lead to the real and transformative change we all need.
Gerbrand Haverkamp is Executive Director of the World Benchmarking Alliance.