In the year 2015, September, the United Nations (UN) embraced a set of goals for protecting the planet, ending poverty, and for ensuring prosperity. These set of goals are an integral part of a new sustainable development agenda.
According to the United Nations, for reaching Sustainable Development Goals (SDGs), there should be a contribution from all sectors – private sector, government sector, general people, and civil society.
In the last few years, the reporting and participation of countries are quite good, but lots more need to be done in this regard. It is being said that for achieving the 2030 agenda, accelerated and immediate actions have to be taken by various countries. Not only this, there have to be great collaborative efforts between stakeholders and governments at all levels.
Innumerable corporate companies have embraced sustainability reporting and acknowledgment on SDGs have become extremely popular and well-known.
SDGs have significantly been referenced in corporate reporting. Medium size and small companies or enterprises are not always able to approach the SDGs in the same way as large organizations or corporates or even governments.
However, this does not mean that these companies have nothing to do. Medium size and small enterprises play a significant role in private sector business and also in economic activity. This feature has been noticed in both developed as well as developing countries.
Sustainable Development Goals (SDGs) and Businesses
When Sustainable Development Goals (SDGs) are implemented in businesses (whatever be the dimension of it), there can be many benefits that can be obtained. It has been seen that many companies are facing different kinds of challenges that are limiting their growth potential.
Some of the most common challenges faced include weak financial markets, limited natural resources, scarce local purchasing power, and scarcity of qualified talent for business. With the implementation of SDGs, opportunities can be created for addressing the challenges for four key themes – risk, growth, purpose, and capital.
1. Addressing Risk Factors Associated With Business
It might not be possible for companies to create capital for an extended period if manufactured, natural, financial, and social capital is being spent in some other place. A risk area is represented by each SDG, which is already causing challenges to a business and society.
If the risks are not addressed at the right time and in the proper manner, it might cause larger and graver risks. Supply chains are exposed to various kinds of problems including depletion of natural resources, climate change, geopolitical instability, lack of development in some areas, inequality, etc.
While making any kind of investment decision, investors are paying great attention to social, environmental, and governance risks.
2. Driving Business Growth
It is quite evident that any businessman would want to see growth in his business. In general, business growth is mainly linked to the achievement of sustainable development goals at the macro level. But, for taking action at a local level, the companies need to identify how their contribution can help in meeting goals that boost financial performance in the various markets in which they operate.
There are SDGs which directly has reference to employment, economic growth, innovation, sustainable industrialization, and production. Again there are other SDGs that provide business advantages in various manners.
3. Concentrating Purpose
The SDGs will have a crucial impact on the purpose of various companies all across the globe. When one is contributing to the SDGs, it is a way of creating shared value for all the stakeholders. This will make the businesses a strong driving force for galvanizing stakeholders around an outcome which will be commonly shared.
When the concentration of a company is on purpose, which is kind of creating value for others, the ability to make profits and driving sustainable value is always high. SDGs can help in concentrating on the primary purpose of the company/business for overall growth and development.
4. Attracting Capital
Investment flows can be redirected for both public and private sectors towards various global development challenges, which are framed around SDGs. As per UN estimates, the cost incurred for achieving the SDGs is around US$3.3 to US$4.5 trillion annually. Therefore innovative financial models must be developed with the help of the experience that has been gathered.
For helping various developing countries, The World Bank has committed to giving almost US$23.5 billion via 115 projects which they will launch.
Along with all the things mentioned above, with SDGs in place, the companies will be able to assess, measure, reports, and communicate. Visible growth can be seen in companies and businesses with the use of SDG.
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