Thursday, December 12, 2019

Robert Eccles Says the UN SDGs Are Influencing Business in Terms of Rhetoric, but not Much Else

Robert Eccles
Many companies have conducted materiality assessments to understand the issues most important to their business and stakeholders. But, as I heard during a webinar this week sponsored by SustainAbility, the Swiss pharmaceutical giant Novartis has taken a much different, deeper approach. The webinar was the fifth in a series to explore how Novartis conducts and uses its materiality assessments. All are available on the SustainAbility site. This week’s webinar looked specifically at the company’s materiality assessment and the UN Sustainable Development Goals (SDGs).

In this week’s blog, I share perspectives from well-known ESG expert Robert Eccles, currently a visiting professor at the Harvard Business School and Said Business School at Oxford University, who kicked off the webinar. In typical fashion, Eccles didn’t hold anything back.

“The SDGs are influencing business in terms of rhetoric, but not too much else, especially in terms of action,” he said. “All this talk about the SDGs and the private sector …. I’m dubious how much will happen. The tension is that the SDGs are about achieving positive externalities, and materiality assessments are about financial materiality.”

He shared results of an analysis he worked on with other academics looking at the SASB materiality framework and the SDGs. Mapping the 77 industries in the SASB standard to the SDGs, he found some financial material issues touch most of the SDGs. An example is supply chain. Others not so much, such as data privacy. His analysis also found some industries – such as health care and natural resources – have the ability to make greater contributions to the SDGs than others, such as financial services.

The biggest challenge however facing companies he said is the lack of metrics to measure true impact of corporate performance on the SDGs.  He cited three multi-stakeholder groups now working to develop impact metrics that would show how companies are positively contributing to the SDGs: The Impact Management Project, the Value Balancing Alliance, and the Impact-Weighted Accounts Project.

He believes these three efforts need to come together and reach consensus on standards and methodology for impact reporting, together with the private sector and investors. Only then will the clear impact be understood.

Stay tuned for my next blog with insights from Denise Weger, Senior Manager Strategic Initiatives Global Health & Corporate Responsibility, at Novartis.

1 comment:

  1. We at the Tata group collaborated with the UNDP in 2002 to develop an assessment tool which was based on consensus to link business model and practice to see how to address human development goals. If a corporate model has a process it can do what is possible towards managing development. But later when MDGs and SDGs came, they were at macro levels. That makes it difficult for corporations.