Sustainability is firmly on the global business agenda, but there is an urgent need to turn words into action says the United Nations (UN).
This conclusion comes from the independent report ‘Impact – Transforming Business, Changing the World’, prepared by the international certification body DNV GL on behalf of the UN Global Compact.
The report identities the UN Global Compact, as the world’s largest corporate sustainability initiative, which together with the business community has had an impact on the development of sustainability over the past 15 years. It also highlights recommendations that must be implemented to accelerate progress towards a more sustainable future.
“Our assessment shows there has been a clear shift in sustainability development, but in the future the necessary transformative change will only become a reality if we are all able to speed up, scale and strengthen our efforts,” said Dr Henrik O Madsen, group president and chief executive officer (CEO) at DNV GL.
“It’s not sufficient that business alone is mobilising. We must therefore offer arenas for collaboration, including for policy makers, science professionals and society at large,
“This report confirms that the tide is turning in corporate practices,” added Georg Kell, UN global compact executive director. “Over the past 15 years, companies around the world have been awakening to their role in society and starting to make important strides to operate more responsibly and innovate for a greener, more sustainable future.
“But there is still a long way to go, and the UN Global Compact remains strongly committed to mobilising business everywhere to be a force for good.”
The report highlights the following significant changes seen over the past 15 years:
- Sustainability is gradually penetrating deeper into markets and sectors all around the world. Global Compact signatories are present in 156 countries, and 25% of the world’s largest companies have joined.
- A deeper understanding of the complexity and interdependence of global challenges has emerged. Partnership and collaboration are the new norm.
- More sustainability issues – equality, climate change and corruption – are now on the corporate agenda because they impact performance.
- Business has become more strategic, systematic, integrated, transparent and collaborative regarding sustainability.
- Leading companies are ahead of regulation and drive the debate to make regulations smarter. Yet these companies are in the minority, and less progressive companies are blocking positive change.
- The financial sector shows positive developments – through its support for the Principles for Responsible Investment (PRI), rapid development of green bonds and Sustainable Stock Exchanges (SSE) initiatives.
- Local Global Compact networks are very effective in engaging local businesses around the issues that are important for that particular country or region.
- While the jury is still out on whether a sustainable and inclusive economy will be achieved, the UN Global Compact has undoubtedly helped to change the understanding of corporate responsibility all around the world.
- Some companies are talking about a ‘net zero footprint’ in terms of carbon, water and waste, and some leaders have established concrete goals for reaching zero footprint levels. This is highly promising and such companies will get many followers.
- Leading companies are also beginning to look for ways to turn sustainability risks into new business opportunities.
Dr Madsen continues “If we want to see radical transformation, probably even creative destruction, change will need to happen simultaneously across all of three interconnected pathways towards 2030.”
- “Sustainability is the business of business” – we need to mobilise the vast majority of companies. Sustainability must be part of daily business – embedded in our business models and long-term goals and making sure we add value to society.
- “Breaking down barriers, energising positive drivers” – how we can enable conditions to speed up change. It is a matter of better and smarter governance and regulations. Providing the right directional support and shifting investor practices.
- “New thinking for a new reality” – changes will come. We should inspire change by showcasing new business opportunities and sustainable solutions and also demonstrate that business is ready for the transformation.