PwC’s SDG Reporting Challenge 2018 report seeks to determine the extent to which companies are embedding the SDGs within core business strategies.
The report finds a gap between mentions of the SDGs in companies’ reports and actions taken to implement or measure them.
PwC outlines a four-step “blueprint for SDG success” and provides 20 commonly-used SDG-relevant indicators to help companies move beyond superficial engagement.
4 December 2018: A survey and analysis of 729 companies finds that nearly three quarters (72%) mention the SDGs in their annual corporate or sustainability reports, but only 23% disclose “meaningful” key performance indicators (KPIs) and targets relating to the Goals. The report by PricewaterhouseCoopers (PwC) collects performance data on 20 commonly-reported KPIs, enabling businesses to benchmark performance relative to their peers.
The SDG Reporting Challenge 2018 report titled, ‘From Promise to Reality: Does business really care about the SDGs? And what needs to happen to turn words into action,’ assesses the extent to which companies are embedding the SDGs within core business strategies. It reveals that a gap remains between intention and integration.
The report offers a four-step “blueprint for SDG success”:
- Recognize that every part of the organization has a role to play, and sustainability it is not just a corporate social responsibility (CSR) issue;
- Understand that leadership is key, and CEOs and senior executives need to take an active interest in driving progress;
- Establish meaningful KPIs to use to drive action and report on progress; and
- Aim for the same level of quality of reporting on both financial and non-financial information.
These steps aim to foster the strategy, tools and culture needed to transform commitments on the SDGs into tangible actions. According to the report’s assessment, reporting on these actions is key—and currently lacking—with companies scoring an average of 2.71 out of five possible points. To determine the depth in which companies are reporting, PwC evaluated data from corporate and non-financial reports and assessed the quality of the disclosures made on two business indicators for each of the stated SDGs they had prioritized.
Companies should identify specific SDG targets that directly relate to their work, in order to go beyond superficial engagement.
The low reporting scores, PwC postulates, stem from several areas: a need for guidance measuring positive and negative impacts, as well as the linkages between the SDGs and established reporting frameworks; slow uptake at the sector level; and uneven or unclear policies from governments that have yet to align national objectives with the SDGs, which has impacted or delayed businesses’ decision-making.
To move beyond “superficial engagement,” PwC recommends that companies look at the Goals on which they can have the greatest impact, then identify the targets that most directly relate to the issues on which they work. For example, companies could focus on SDG target 6.4 on water use efficiency, rather than SDG 6 overall, with its broader take on clean water and sanitation. Doing so enables identification of market opportunities and/or actions that can mitigate negative impacts.
On measuring progress, PwC emphasizes the importance of SDG-relevant KPIs to bridge goal prioritization, business strategy and the reporting process. Selecting measurable targets that demonstrate action and link to the SDG indicators is critical. The report does this for gender equality (SDG 5), for which one of the indicators is “representation of women in management positions” (indicator 5.5.2 in the official framework). By utilizing common indicators, PwC shows that “companies can demonstrate in their reporting how they are taking action towards the SDGs rather than just talking about them in a non specific way.”
The Goals identified by companies as being their top priorities are SDG 8 (decent work and economic growth), 13 (climate action) and 12 (responsible consumption and production), which match the priorities found in the 2017 study. The least prioritized Goals are 1 (no poverty), 2 (zero hunger) and 14 (life below water). [Publication: SDG Reporting Challenge 2018] [PwC News Release] [Sustainable Brands Article]