For businesses:
A bleak and bright future
By Katherine Garrelt - Cox
The UN's Sustainable Development Goals (SDGs) are a set of 17
high-level, global development targets that address some of our most
pressing concerns, such as ending poverty and providing universal access
to water, sanitation and education.
Launched in September 2015, they build on the eight Millennium
Development Goals (MDGs) established by the UN in 2000 but, critically,
they recognize the pivotal role that companies have to play in global
sustainable development.
Beyond GDP
Today, we typically measure economic progress by looking at changes
in Gross Domestic Product (GDP). I believe that we need to go further
and to do this we need to understand the changing dynamics of that
progress. That is, we need to understand the long-term trends that are
changing the way we do and respond to things - these trends will be
responsible for demonstrating true progress. The SDGs are a means of
identifying these long-term trends while also capturing broader measures
of wealth and prosperity.
I believe that companies that are exposed to these trends will
ultimately be the companies that will benefit from strong growth and
generate profits over the long term. It is simple really - businesses
that seek to benefit society will prosper, relative to those that act
against it. The SDGs identify the needs of our global society and set
out a path to meeting those needs. Companies whose products, services
and operating practices help us to achieve these goals will be at an
advantage.
One example of such a trend is water scarcity (Goal Number Six).
There is clearly a huge challenge to communities and businesses across
the world, as access to usable water is one of the most critical aspects
of both personal and corporate survival. Companies which are willing to
be transparent on this issue and clearly manage a resource, that is so
vital to local communities, the natural environment and gross margins,
are quite simply better investments.
Another example is the impact of climate change (Goal Number 13).
Governments around the world have now agreed that if global warming
increases by more than 2 degrees Celsius above current temperatures,
this could lead to catastrophic and irreversible climate change. In
order to stay below this level, carbon emissions need to be
significantly limited. If we are to meet this target some of the changes
needed are huge, with some estimates suggesting that around 80% of the
world's energy production will need to come from non-fossil fuels by
2035, compared to today's figure which is just 32%.
The author is CEO of Alliance Trust. |