Reflections on the year: Global Goals
The last couple of years has been tough. “Unprecedented” and “exacerbated” have become common parlance, describing our times and their effect on society.
While the world stopped to deal with the pandemic, the Earth carried on around us. UN Secretary General António Guterres declared a ‘code red for humanity’1. Extreme poverty has risen, inequalities within and between countries have expanded and the climate crisis persists. The United Nation’s (UN) Sustainable Development Goals 2021 progress report shows that this is the first year that progress against the UN Sustainable Development Goals (SDGs) also known as the Global Goals, has been reversed. A recent Intergovernmental Panel on Climate Change (IPCC) report declared that natural catastrophe has become the new normal. While a notable aspect of COP26 was the widespread presence of business, Business in the Community (BITC) research showed that two-thirds of the public fear that business commitments won’t be translated into action2.
In 2022, BITC’s 40th Anniversary Year, it has never been clearer that business will need to do more.
With ESG (environmental, social and governance) assets on track to exceed $50 trillion3 by 2025, can the huge interest in ESG help to keep the promise of the Global Goals alive? Our briefing paper on ESG (available to BITC members only) details how companies with high ESG scores are not only outperforming their peers financially, they are also more resilient and prepared for long term challenges such as climate and policy change. This means they have been outperforming throughout the pandemic too.
esg SCORES SHOULD HELP PROGRESS YOUR RESPONSIBLE BUSINESS JOURNEY, NOT BE AN END IN THEMSELVES.
For many, ESG is a potential distraction, an alphabet soup of metrics and indices. The focus on data means looking in the rear view mirror and the nuance of context, materiality and progress can get lost. Fortunately as the SustainAbility Institute’s Rate the Raters 2020 report shows many investment firms and asset managers only use ESG ratings as a starting point, and are actually more interested in the data underlying the scores than the scores themselves.
The frequency and intensity of the questions that are asked of companies is increasing, and businesses must be prepared with the answers. As part of new research we will be publishing next year on embedding purpose, I have been privy to some fascinating conversations. Companies are changing how they allocate accountability for responsible business across their organisations, and how they drive performance using various levers for success. They are working hard to engage different stakeholders, particularly employees. Linking responsible business targets to pay across senior teams is a live topic. This presents opportunities for everyone who works in or with business.
So, while ESG is driving increased corporate attention and action, we all need to help ensure this translates into meaningful progress on the right things. Having a clear purpose and responsible business strategy aligned to the Global Goals are the best foundations. But for these commitments to translate into practical outcomes, they need to be reach right into the core business decisions including capital allocation to show that they really do mean business.
WE CAN TAKE YOU FURTHER ON YOUR RESPONSIBLE BUSINESS JOURNEY
Embedding Purpose: lessons from business
Embedding Purpose: lessons from business, outlines actions that are helping Business in the Community’s (BITC) member companies in their purpose journeys.
Reflections on the year: Global Goals
Will ESG be the catalyst we need to meet the Global Goals?
Is purpose-led business leading to purpose-led law?
This factsheet highlights a selection of UK developments in legislation and regulation related to ESG in the private sector.
- United Nations (2021) Secretary-General Calls Latest IPCC Climate Report ‘Code Red for Humanity’, Stressing ‘Irrefutable’ Evidence of Human Influence, Press Release, 9 August.
- Business in the Community (2021) What climate action does the public want from business? 2 November.
- Bloomberg Intelligence (2021) ESG Assets Rising to $50 Trillion Will Reshape $140.5 Trillion of Global AUM by 2025, Finds Bloomberg Intelligence, 21 July.