On 25 September 2015, the 193 United Nations Members adopted the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs). Due to the importance and magnitude of this global commitment, different actors are pushing companies to support the sustainable agenda and be accountable about their contributions to the SDGs. In response, a number of companies are now thinking of incorporating the SDGs into their business strategies and reports.
In order to explore the SDGs disclosure approach currently applied by Australian businesses, Think Impact has just released a research report entitled: “ASX 20 Disclosures on the Sustainable Development Goals: Commitment, structure, action and measurement”. This research project aims to provide transparency on the current disclosure of Australian businesses against the SDGs. It assesses the extent to which the top 20 Australian Securities Exchange companies (ASX 20) by market capitalisation are incorporating the SDGs into their business strategies and reporting processes.
Our analysis found that a proportion of the ASX 20 are using the SDG framework as an instrument to improve accountability to stakeholders, and also as an important mechanism to embed sustainability in business strategies and processes to create long-term value and outline new opportunities. However, meaningful disclosure on measurement and transparent reporting of contribution to the SDGs is not yet common practice among the companies assessed.
Reporting on the SDGs should not simply be a tick box exercise for business. Acknowledgement of and alignment with the SDGs must be supported by robust sustainability measurement systems in order to achieve evidence-based change.
The application of the SDGs should be recognised as a clear opportunity for companies to create and share value by embedding sustainability principles into business strategies, practices and decision-making processes.
The following recommendations are offered to support continuous improvement for the companies interested in contributing to and reporting on the SDGs.
- Aligning SDGs, materiality and business strategies: companies reporting on the SDGs should align their material issues not only with SDG goals but also with SDG targets and indicators. Such a process will allow companies to better understand and communicate where their businesses are having impact and revalidate priorities and strategies to maximise positive impacts and value creation.
- Partnerships: encourage suppliers and other business partners to report on the SDGs and foster discussions on the SDGs with peers, industry sectors and governments.
- SDG targets and indicators: referencing the SDGs is important to demonstrate commitment. However, to play a measurable and meaningful role towards achieving the SDGs, we recommend companies to demonstrate impacts and be accountable about their contributions to the SDG targets and indicators as well. Such level of transparency is also important to avoid confusing or misleading stakeholders.
- Measuring and reporting: assess whether programs and strategies are working, and report progress against the SDGs based on evidence, to improve accountability and transparency to stakeholders. Effective measuring mechanisms and a transparent reporting process will form the backbone of monitoring progress towards achieving the SDGs at the local, national, regional and global levels. In adopting such an approach, Australian companies will be better equipped to support the Australian Government to meet its SDG commitments, better understand the challenges and opportunities it faces, and help in implementing strategies and ensuring accountability.