WHAT IS UN SDG
The United Nations (UN) Sustainable Development Goals, also known as The 2030 Agenda for Sustainable Development, comprises 17 Global Goals, 169 associated targets, and 230 individual indicators. This international collaboration between 193 UN Member States and global organizations and agencies is outlined in the UN Resolution A/RES/70/1 established in September 2015.
Before the SDGs, the UN launched the 2015 Millennium Development Goals (MDGs), a set of 8 Global Goals outlined in 2000. There were mixed reactions at the close of the 2015 campaign as to the success of the project. Most agreed that the absence of targets and indicators hindered the actionable and measurable collaborative effort. This aspect was purposefully incorporated in the subsequent SDGs.
The SDGs are seen as a step towards international collective impact efforts, focusing and guiding humanitarian efforts worldwide.
WHY ALIGN WITH SUSTAINABLE DEVELOPMENT GOALS
There are important reasons why companies align with the United Nations’ Sustainable Development Goals (SDG) in their impact reporting.
- Communicate local impact in a global language. While there are multiple impact frameworks, standards, and tools, most organizations still struggle to measure, manage, and communicate the impact. The SDGs offer a shared impact framework and language, making it more accessible worldwide and easier to compare results across the globe.
- Millennials seek transparency when accepting jobs, buying products, and making investments. The corporate impact is much more important to this generation than previous generations. They are asking hard questions beyond surface-level statistics and reporting. How are you creating an impact? What are the externalities? Who are the stakeholders and beneficiaries? Aligning with the SDGs in the right way shows that a company understands the context of its desired impact and its role in the greater global effort for its specific impact area.
- Social impact has become a centerpiece in business strategy. Business needs permission (positive engagement) from people to do well. One of the biggest challenges facing private equity, corporate, impact investors, and other asset owners is how to build a portfolio that defines and generates true impact. This challenge is addressed by groups such as the Impact Management Project (IMP), TONIIC T-100, and OCED.
A global indicator framework for the Sustainable Development Goals and targets of the 2030 Agenda for Sustainable Development
The Partnerships for SDGs online platform is the United Nations’ global registry of voluntary commitments and multi-stakeholder partnerships made in support of sustainable development and the 17 Sustainable Development Goals. The Partnerships for SDGs platform also facilitates sharing knowledge and expertise among multi-stakeholder SDG-related partnerships and voluntary commitments and provides periodic updates on their progress.
Sustainable Development Goal indicators should be disaggregated, where relevant, by income, sex, age, race, ethnicity, migratory status, disability, geographic location, or other characteristics, by the Fundamental Principles of Official Statistics.1
What is SDG washing?
There are two ways to define it:
- When companies make a profit by doing well on one SDG, one situation occurs when companies are harming other SDGs.
- The other involves businesses who talk about their commitment to SDGs yet don’t have any data to back the impact reports. In other words, they’re all bark and no bite...
I know that as a socially conscious company, the last thing you want to do is fall into this SDG-washing category. So here are some tips to avoid falling into the trap:
1. Align your indicators to SDG targets and not just SDG Goals
Everyone knows that there are 17 Global Goals, but did you know that the UN has also defined 169 SDG targets that give us a clear guideline on each goal's impact and context?
For example, goal 4, “Quality Education,” has 10 targets. Target 4.3, as an example, talks about ensuring equal access for all women and men to affordable and quality technical, vocational, and tertiary education, including university. So if you have a program with a high-quality education, but it’s not “affordable” according to your community and context, you can’t claim that you align with SDG 4.
Let me give you another example. Your organization has a program focused on educating students from an underserved community, and you want to report alignment to SDG 1, “No Poverty.” You assume that by providing job-related skills to your students, they will find a job and reduce their poverty level.
So What do you do next to make sure you measure what matters in terms of SDGs? You guessed it! Let’s first examine the list of targets for SDG 1 to understand what poverty reduction means. Target 1.1 talks about eradicating extreme poverty, currently measured as people living on less than $1.25 a day.
First, make sure to know what the poverty level is in the community you are working with; is it $1.25 a day? Has the data been updated recently?
Second, make sure to collect data that indicates how much money your beneficiaries are making in their new job. If their salary doesn’t go above the poverty line, it doesn’t matter that they have a new job; the specific target is not being fulfilled.
2. Measure and report on the actual outcomes, not just the activities
If we go back to our previous example, reporting on activities would mean tracking the number of people enrolled in your program or the graduation rate. While these numbers are important to track your program’s performance, it is more important to understand how the skills learned in your program are useful to the participants in their current jobs. Or how having this additional training improves the participant's chances to getting a job that satisfies them.
3. Measure unintended and negative outcomes too
The main purpose of impact measurement is to identify what we are doing right and improve. You obviously don’t intend to affect your stakeholders in any way, but sometimes it could happen without you noticing.
For example, you could be focusing on providing skills and tools for a community to subsist on fishing. Maybe your community members are using the fish to feed their families, which is great for SDG Zero Hunger. Maybe they are even making good money by selling the fish to other communities, which helps SDG No Poverty. But if you are not careful, you could end up affecting SDG Land underwater, which has a target focused on ending overfishing and implementing plans to restore fish stocks.
4. Collaborate in multi-stakeholder partnerships
Your SDG efforts will be strengthened not only in terms of credibility but also in reach and impact if you partner with experts like UN-based subgroups, NGOs, cause-related organizations, and think tanks.
So, to recap:
When aligning to the Sustainable Development Goals, make sure to understand their underlying targets.
Measure outcomes and collect the appropriate data to make sure that your organization is really improving your beneficiaries' lives according to the SDG targets.
Manage negative outcomes to make sure that you don’t affect your stakeholders in ways that contradict other SDGs.
Collaborate with similar players to increase your reach and impact.
Aligning with SDG Goals and Targets
Businesses cannot thrive in poverty, inequality, unrest, and environmental stress. The SDGs are anticipated to generate at least US$12 trillion worth of market opportunities by 2030, which makes a strong business case for investing in opportunities aligned with the SDGs for investors and businesses.
So if you’re a fund manager, you might want to focus on SDG-aligned companies. And if you’re a social enterprise or nonprofit, it’s in your best interest to demonstrate your impact as part of the efforts to achieve the Sustainable Development Goals.
To help you achieve those goals, here are the 4 actionable tips for selecting the right outcomes, and metrics and aligning them to SDG:
- Social Value International (in short, S-V-I) is changing how society accounts for value through principles, practice, people, and power. Their seven principles guide businesses, investors, and accelerators in aligning social value in decision-making. According to Social Value International’s principles of “Involve Stakeholders” and “Understand what changes,” you should talk to your beneficiaries and identify what they consider material outcomes. Then, explore how the outcomes are linked to each other and develop indicators to measure if the outcome has occurred and how much of the outcome.
- Before you develop your indicators, before creating any bespoke metrics, please take a look at the IRIS+ standard developed by the Global Impact Investing Network. IRIS+ has a catalog with generally accepted output and outcome metrics already aligned to SDG and categorized by impact areas such as Agriculture, Climate, Education, and many more. Chances are 40% to 50% of your metrics needs will be covered by IRIS+, and even if you have to create the rest of the metrics as custom, you will have a better idea of how to define them.
- If you’re still not clear where your impact fits in the 17 SDGs, don’t take a guess; review all the SDG targets in detail. For example, if your organization provides free breakfast to students in rural schools, you might think you fit in SDG 4 - Quality Education. But in reality, this SDG only focuses on equal access to quality education to acquire relevant skills. However, looking at SDG 2 - Zero Hunger, you might find alignment with target 2.2 related to ending malnutrition in children. On the other hand, you could be aligned to more than one SDG at once. For example, suppose you run a program to help smallholder women farmers in a developing country. In that case, you might be hitting the goals “No Poverty,” “Zero Hunger,” “Gender Equality,” and “Decent Work & Economic Growth.”
- Finally, if you’re in the private sector working on private impact investment funds, impact investment bonds, or enterprise, you might want to keep an eye on
This initiative focuses on generating and leveraging private sector capital in delivering Sustainable Development Goals. SDG Impact is in the process of refining the “SDG Impact Practice Assurance Standards for Private Equity Funds,” which include:
- The Practice Assurance Standard for Private Equity
- The Certification Framework
- The Mapping Principals
Although these standards are still in the pilot phase, you can already see that they are pretty much aligned with other frameworks and principles that we have been reviewing in this channel. So, that gives you a good idea of where the market is going.
So, to recap:
- Any organization working to benefit society or the planet can measure impact in alignment with Sustainable Development Goals.
- A large amount of capital is moving towards organizations and initiatives supporting the achievement of the SDG.
- To make the SDG alignment process smoother for your organization, start with the standards, frameworks, and guidelines that are already available.
Step-by-Step SDG Alignment
The UN SDGs consist of 17 goals and 169 targets with 230 agreed-upon indicators. Aligning to the SDGs requires planning and understanding the SDGs framework and many other standards from your industry. SoPact's Impact Cloud can help create and align an organization's theory of change with SDG indicators while also combining other standard metrics (and/or custom metrics) smartly.
- It makes SDG reporting simple, whatever the size of the organization.
- What is Sustainable Development Goals SDG or Global Goals?
- Why is it essential to avoid SDG washing?
How to align
If you are a corporate entity, an impact investor, an international development agency, or a philanthropic organization, and you need to align your metrics to SDG goals and targets, you need metrics mapping. SoPact has built about 4000 metrics, which help make this process seamless and cost-effective.
For example, a business would likely use SDGCompass-based mapping with 10+ standards such as GRI, CDP, etc. Impact investors might use TONIIC T-100 mapping between SDG and IRIS. The Sopact platform includes all these frameworks. Users can also cross-link various other standards such as GRI (which tends to use more qualitative metrics) with IRIS (which tends to have quantitative metrics). By linking them together, different users can create a rich reporting result.
If you are starting the impact measurement process, the first step is to define the goals and targets as per a Theory of Change. Then you'll align with other standards as described above and select appropriate metrics.
The UN's Sustainable Development Goals Report from 2017 cites that "the rate of progress in many areas is far slower than needed to meet the targets by 2030," flagging the urgency to accelerate action. While working hard towards achieving global goals, how can we prevent over-claiming?
Aligning Impact Metrics With SDG
Standard metrics are an essential language to learn and use because they help us communicate with different stakeholders who may be accustomed to using that language because of its relevance to their context. It must be noted that standard metrics have both pros and cons for social impact measurement.
- You’re communicating your impact to a particular audience (within a particular field). Think of standards as languages for communicating with particular audiences (including your funding source(s)). For example, if the stakeholder you are communicating with is an impact investor, 8 out of 10 times, they will prefer to use IRIS metrics. There are many other languages: nonprofit languages, sustainability languages, environment languages, women’s empowerment languages, etc.
- You want to learn the best practices for writing metrics. Extensive research and development have already been completed. Even if you end up tweaking the standard to fit your needs, you can learn lessons from the standards catalogs.
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