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Impact Perspective 

The latest global trends in social impact measurement, management

How to Avoid SDG Washing?

  • by: Hetal Sheth
  • On: 10, Feb 2020
10 min read
  • Are you a business with a vision to drive social impact through sustainable development goals?
  • Did you hear that achieving the Global Goals opens up an economic prize of $12 trillion by 2030?
  • Are you trying to map SDG Goals in your business strategy but worried about SDG washing?

    You are not alone!

    As we entered 2020, it has been five years since 17 Global Goals and their 169 targets have been designed from the bottom up to build the kind of future that we all want. A world where there is no poverty, the planet is protected, and all people enjoy peace and prosperity. The Sustainable Development Goals fall into two main areas – social and environmental.
 

We need impact action not just impact reports

Businesses need greater sustainability to grow and deliver trillions in new market value. Why do business leaders need to take action to get their fair share of the prize and set the world on the path to a sustainable, fair, and inclusive economy? On the one hand, businesses have to grow to keep up the growing need for the economy. On the other hand, those losing out either economically or environmentally from smog-choked cities, or socially, through the breakdown of traditional rural communities, are asking hard questions about the benefit of our global economy. It is clear that "Big business and finance need to regain public trust." 
 
 
The 2017 edition of Reporting matters reveals that reporting is more important than ever before. The non-financial reporting landscape is changing at an increasing rate across the voluntary and regulatory reporting space and the globe. Let's start sustainability conversation to the heart of corporate governance, financial management, board responsibility, and risk management. Risk can be the most powerful lever to scale up impact and make more sustainable companies more successful if they all act and not just report.
Sustainability Risk
As per WBCSD Reporting Matters, 2017, 45% of member companies align their sustainability strategy with goal-level criteria in the context of their business strategy. The report is potentially good news, but unfortunately, there are significant gaps between SDG reporting and action! In 2020, we are hopeful that this gap will shrink. Why? “Because Sustainability risks are, at the end of the day, business risks.” as per Robert B. Hirth, Sr. MD at Protiviti, Chairman Emeritus COSO, and Co-Vice Chair of the SASB Standards Board.

How to avoid SDG washing while mapping Outcomes to SDG?

What is SDG washing? One way to define SDG washing is when companies are making a profit by doing well on one SDG but doing harm on the other SDG and reporting only positive outcomes. When businesses are talking about their commitment to the SDGs, yet doing little and not having any data to back their activities. Here are five ways as we see businesses can avoid SDG washing.  

1. Align to SDG targets not just SDG Goals

The key to prevent SDG-washing is in the targets. Two hundred thirty-two measurable indicators support the 169 targets of 17 Global Goals. These targets indicates where the real change happens, and the SDG indicators are the best way to track, measure, and monitor progress.
 
Let us start understanding the difference between impact indicators and outcome metrics (targets). For example, I am a business educating the students from an underserved community. I intend to report alignment with Sustainable Development Goal 1, Poverty reduction and SDG 4, Quality Education. Poverty has many dimensions, and one of the dimensions includes very low income or unemployment. Along with making a profit, I intend to reduce poverty by educating students through job-related skills.
 
I measure how many students I am serving year after year. I am showing my impact as an increased number of students I serve. Is that true? What am I doing wrong? I am sure you will agree that the increased number of students is not an Outcome metric. I need to know how many students found a valuable career post-graduation. If they are not finding well paying, fair, and dignified employment, my mission is not served. We all know that just having a job does not guarantee an income increase or decent living. So, my Outcome should be mapped to Target 1.2: reducing the proportion of people living in poverty according to national definitions. I have to dig dipper to get that information. A well thought out survey to learn income increase is a start.
 
 

2. Measure and report on the actual impact and Outcome, not just activities.

We often see large companies have their Corporate Sustainable Responsibility efforts reports alignment to SDG but fail to show real-world impact as a result. See the article, “Think you know sustainability? Think again.” Corporate social responsibility (CSR) traditionally involves a company’s foundation, its charitable work, employee volunteer, and recycling efforts. While Sustainable Development Goals narrows the focus on business-critical sustainability issues. 
 
It is much easier to talk about money spent or how many people have been 'touched' by a particular initiative. However, outcome-led measurement needs establishing a benchmark from before a program begins and then measuring the lasting impact after. 
Screen Shot 2020-02-06 at 5.13.02 PM
Often many companies look at the 169 targets from 17 Sustainable Goals and then do an inventory of their current activities, match them to some of those targets, and then produce an SDG report on contributions. It's not about CSR or charitable projects; we need to leverage our whole business to create sustainable growth. It is easy to draw some links between the activities you have already doing highlighted by the SDGs. Especially with areas such as Gender Equality or Decent Work and Economic Growth are the areas of corporate governance. We need companies to really drive change in these areas of social, economic, and environmental impact and don't just focus on a false mapping exercise.
 
Many businesses and social purpose organizations have to look hard to change their internal business practices and implement extensive business process change to make a more profound change that aligns with sustainable development goals. SDG is a bottom-up movement, where businesses need to work on the SDG of need in that region instead of choosing them according to their own business interest. Large businesses are asked to stop “cherry-picking SDG” as per UN Global Compact. 

4. Collaborate in multi-stakeholder partnerships!

Your SDG efforts will be effective and credible as well as impactful if you partner with knowledgeable experts to deliver programs of change. Collaborate with UN-based subgroups, a plethora of NGOs, cause-related organizations, and think tanks. 

5. Impact Measurement and Management is must.

There is growing acknowledgment amongst leaders in the sustainability business sector that they have to make a real impact. And for the actual impact, businesses must align their business strategy with the Global Goals but also map and track their metrics to the specific SDG targets. Having a transparent performance data is often the best solution for cleaning up SDG-washing. If the SDGs are adopted by a company's branding department, we should have mechanisms to hold them accountable – with data on hand.
Themes & SDG-05

Key takeaways: 

  1. Align to SDG Targets, not Goals
  2. Measure and report on actual impact, not just activities
  3. Do not retrofit SDG alignment
  4. Partner and Collaborate 
  5. Impact Measurement and Management is must
Now you can make a real, sustainable change, manage reputation risks, and grow your business in 12 Trillion dollars market of SDG with Real Impact Management.
 
 

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