Changing expectations among customers, employees and investors are among the key drivers of that change. Last June, amid the first economic shock wave caused by the pandemic, Accenture published COVID-19 Consumer Research surveying 8,529 consumers across 19 countries, finding two thirds of consumers (67%) expected companies to invest in longer-term, sustainable and fair solutions post-crisis.
Investors also said they expected concrete action, with 71% agreeing that COVID-19 would increase awareness and actions to tackle risks related to climate change and biodiversity losses.
This is perhaps not surprising. Between 2013 and 2020, companies with consistently high ratings for environmental, social and governance (ESG) performance have outperformed their peers, achieving operating margins more than three and a half times higher than lower ESG performers and generating 2.6 times higher annual total returns to shareholders.
This week, as we mark the second UN World Environment Day since the pandemic began, it’s clear that leading organisations will continue to be driven by sustainability goals to deliver greater resilience, reduce costs and risks, build brand trust and create new opportunities for growth.
Emerging from the COVID-crisis, companies are also realising that collectively they have a role to play in proactively mitigating future crises, potential disruptions to the economy and symptoms of change like growing economic equality, if they play a part in addressing these issues head-on.
Yet tracking what that means in practice for organisations setting out on the journey to fully embrace sustainability, whether in local markets or globally, can be a significant challenge.
Accenture’s recent report, Delivering on the Promise of Sustainability, outlines how the UN’s Sustainable Development Goals (SDGs) can be used as the ‘north star’ to guide action, as well as benchmark both business progress and value. SDG Ambition, an initiative launched by the UN Global Compact, Accenture, 3M and SAP, is driving adoption amongst more than 600 companies across 65 countries – by providing specific guidance for business leaders to implement business benchmarks into decision making and reporting. The latest guidance, released during the UN General Assembly in September 2020, makes it easier for companies to set ambitious goals and measure SDG progress holistically alongside traditional business indicators.
For instance, it shows that the banking and capital markets industry can support financial inclusion by innovating and expanding their product and service offerings to reach a more diverse set of customers, thus helping to meet the goals for ‘no poverty’ and ‘reduced inequalities’. Both measures can be shown to improve growth and brand trust.
If the sector works across industries to identify greater areas of opportunity to finance the global sustainability agenda, it is operating to reduce risk and enable growth.
The sustainable pathway for the consumer goods and retail sector is equally robust. By adopting water recycling and grey water utilisation, by implementing net zero goals and by understanding product disposal impacts, it addresses the SDGs for climate action and clean water sanitation.
By implementing circular business models to reduce product and packaging waste, it not only promotes responsible consumption and production but also opens up access to a US$4.5 trillion marketplace.
And by building robust and inclusive value chains through the implementation of equal opportunity practices and protecting human rights, it impacts the global targets for economic growth and reduced inequalities. All at the same time as reducing costs and risk while increasing trust and brand value.
Scotland, which became one of the first countries to adopt the Global Goals for Sustainable Development in 2015, can show that environmental, ecological and economic success are one and the same – especially as we look forward to hosting COP26. Our companies can play their part by leveraging the SDGs to identify their own journeys to sustainability, driving value both for their business and broader society.
The framework promises to be a powerful tool, which can be applied across all sectors and industries. But what remains true across the board is that shared action, collaboration and purpose-led leadership will be critical for a more sustainable future.
Michelle Hawkins, managing director for Accenture, Scotland