Trucost, part of S&P Global, released an assessment of 500 large US companies’ impact on SDG achievement. The report describes growing investor appetite to benchmark companies against each other in terms of their SDG performance.
The report titled, ‘Sustainable Development Goals (SDGs): Emerging Trends and Analysis of the SDG Impact of Companies in the S&P 500,’ underscores that the SDGs have become a popular means of communicating a company’s sustainability efforts, and that SDG-aligned language in reporting can attract capital. The S&P 500 is an index measuring the stock performance of 500 large companies in the US.
Trucost maps four recent surveys of corporate SDG reporting, conducted by: the World Business Council for Sustainable Development (WBCSD) & DNV GL; GlobeScan – SustainAbility; Oxfam; and KPMG. These studies find that many companies report on SDG 3 (good health and well-being), SDG 8 (decent work and economic growth), SDG 12 (responsible consumption and production), and SDG 13 (climate action).
However, these Goals do not completely align with companies’ “SDG risk.” The Trucost authors define “SDG risk” as the risk that a company may be directly or indirectly causing a negative impact on the Goal in question, or the risk that a company is dependent on a practice or activity that is in conflict with that Goal. The evaluation of companies’ SDG exposure captures a baseline level of risk related to private sector activities in particular industries and countries.
Trucost modelled the risk exposure of companies listed in the S&P 500 using 45 metrics based on the SDGs’ 169 targets. The resulting analysis shows that key risks for these companies lie in issues relating to SDGs 6 (clean water and sanitation), 13 (climate action), 15 (life on land) and 17 (partnerships for the Goals). Three of the four surveys find that SDG 15 is one of the least prioritized by businesses. The only area of alignment between reporting and risk is in SDG 13, as companies are increasingly disclosing data on greenhouse gas (GHG) emissions, as well as their climate change risks and strategies.
In mapping SDG risk for the metals and mining, technology and media, and real estate sectors, as well as the S&P 500 as a whole, the report delineates within each of these sectors the SDG exposure of operations versus first-tier suppliers.
The report suggests that businesses can prioritize action and contribute to the 2030 Agenda through the sale of SDG-aligned products and services, including recycled steel, renewable energy, green building, and natural and organic cosmetics. [Publication: Sustainable Development Goals (SDGs): Emerging Trends and Analysis of the SDG Impact of Companies in the S&P 50o®] [PR Newswire Release]