Why SMEs Should be Reporting on the Sustainable Development Goals
According to a 2018 update from the United Nations (UN), participation and reporting on the 17 Sustainable Development Goals (SDGs) is hopeful on a country level, but progress not been rapid enough. The global goals will only be reached when small and medium-sized enterprises (SMEs) are fully onboard. Here we look at why SMEs should be reporting, where to start, and how the SDGs can create value for SMEs as well as their stakeholders.
Why reporting is essential
The Sustainable Development Goals (SDGs) represent a vital framework for addressing the world’s most urgent challenges, and the private sector will play a necessary role in any solution. It represents a significant source of jobs across all economic sectors and geographical areas via both large corporate organizations and small and medium-sized enterprises (SMEs).
Defined as any business with fewer than 250 employees, SMEs provide regular income and access to public services to millions of people living in both developed and emerging economies. A 2015 World Bank brief reported that formal SMEs contribute up to 60% of total employment and up to 40% of GDP in emerging economies. “SMEs account for an overwhelming majority of private sector business and economic activity in both developed and developing countries,” writes Carlyann Edwards. “This means they are well-positioned to have a significant impact on reaching the global goals,” she adds.
The size of SMEs makes it much easier to implement new principles than at large corporates. This is because the are more agile and able to quickly adopt new ways of doing things and measure impact.
Where to start
Small steps are the way forward when it comes to reporting on the SDGs. “A first step for a small business may be as simple as looking at the 17 goals and identifying the top two or three that really resonate and can be used to engage staff and other stakeholders in discussions, to create buy-in from the beginning,” according to Carolina Karlstrom.
KPMG’s 2018 report, How to report on the SDGs: What looks good and why it matters, features several useful tips on SDG reporting, which readers can use as a guide for their own reporting. It analyzes how the world's 250 largest companies measure up to help readers benchmark their efforts. The authors established a set of nine criteria to consider when reporting on the SDGs, grouped into three broader categories:
Understanding: This covers why internal support and alignment over why reporting is not only needed but also supports strategic business aims.
Prioritisation: Here, companies are encouraged to focus their action on the goals on which they can have the most actual and potential impact.
Measurement: Measuring and managing contribution to the realization of the SDGs.
Elsewhere, the SDG Accelerator is a UNDP programme funded by the Danish Industry Foundation aiming to accelerate business solutions with the SDGs. 30 Danish SMEs are currently onboard and the plan is to roll out the initiative first across the Nordics and then globally: “Participating companies will receive guidance and a comprehensive method to develop new products, services or business models that address the challenges embedded in the SDGs. In addition, companies will be assisted in communicating and engaging their employees in their work with the SDGs through internal campaigns and activities.”
Another useful resource is The SDG Compass, which provides guidance for companies on how they can align their strategies as well as measure and manage their contribution to the realization of the SDGs.
Choosing the right platform for your reporting is an important step. Pick the one that enables you to report any sustainability and compliance information about your company that your customers or other partners request.
How reporting can create value for you can your stakeholders
The SDGs can be catalysts for creating shared value through innovation, growth and better competitive performance but reporting requires company-wide buy-in. One way to achieve this is through efficient reporting and communication.
Many businesses will already report on and communicate on topics covered by the SDGs, such as climate change or diversity and empowerment in the workplace. Aligning your reporting and communication in the context of the expectations and language of the SDGs will give your stakeholders valuable tools to align with and share progress in a widely understandable way. Stakeholders can also provide relevant information and inspiration for exploring business opportunities related to the SDGs.
Whatever the size of the business, we all have an important contribution to make to the aims of the Sustainable Development Goals: “Foster peace and prosperity for people and the planet, now and into the future”. By reporting on the SDGs, you’ll be able to not only measure the contribution your business is making, accelerate growth and better competitive performance, but also set your own targets and share information with suppliers, clients and regulatory authorities. Wouldn’t that be a good thing?
Want to know how Worldfavor’s digital platform can help you get a systematic and stress-free sustainability reporting process?