In September 2015, global leaders met at the United Nations (UN) headquarters in New York to validate 17 sustainable development goals (SDGs) to reduce poverty, and inequality while ensuring responsible consumption and production by 2030. This was supposed to be the beginning of change for both people and the planet, with the civil population, businesses, and government sharing equal responsibility in making progress. As society loses track of the goals, there has been growing pressure on the private sector to increase action due to their potential to make a substantial impact through improving operations, investments, and practices towards aligning with SDG targets.
Enhanced reputation and brand value
Incorporating SDGs into a business will enhance the reputation and brand of the company, with 86% of US citizens identifying this as a minimum requirement of businesses. This is due to the private sector’s association with negative impacts, including waste production, environmental damage, and partial responsibility for poverty and inadequate working conditions globally. The installment of social, and environmental values across the organization will lead to greener practices, and employees will consider other solutions to reduce their businesses’ impact on the environment. If companies are successful in meeting goals, their reputation and brand will receive positive recognition from the public and media. This will lead to brand loyalty among customers, especially as the general population trusts the private sector to make a positive impact on society more than governments.
Cost reduction and efficiency gains
Another advantage of pursuing SDGs is this provides the opportunity to be less reliant on raw materials, including water and energy, and the associated costs along with the environmental impacts and instead use environmentally friendly resources. Research by Forbes has also shown that consumers from all generations, including baby boomers to Gen Z, are willing to pay higher prices for sustainable products. This includes Gen X consumers who are willing to pay an extra 10% or more for sustainable items, enabling businesses to demand higher fees while maximizing production efficiency.
Access to new markets and business opportunities
Including sustainable development goals in the business plan will attract capital from governments and the private sector towards innovative climate-focused projects, with the UN estimating that $3.3 to $4.4 trillion will be dedicated to achieving the goals per year. The inclusion of sustainable development goals will improve the planet and inspire the workforce, providing the company with a further purpose while tapping into new markets that may protect the company against future risks. Supply chains are a particular concern, especially those that are impacted by climate change and a reduction in natural resources, with investors paying greater attention to environmental, social, and governance (ESG) risks when considering investment.
In summary, businesses will be greatly rewarded if they pursue sustainable development goals that address social and environmental issues. By integrating sustainable practices into their core operations, companies will gain an advantage over their competitors by receiving crucial opportunities for growth, and innovation that reduce the risk of the companies’ long-term success. Innovative, and sustainable approaches will also reduce costs while improving businesses’ reputation, profits, and efficiency.