It seems there is a gap between what Australian companies publicly state they are doing with the United Nations Sustainable Development Goals and what they are actually doing. Our research found that companies are still not meaningfully disclosing the way these goals are measured and reporting their contributions.
These UN goals show business how they can contribute to solving the world’s biggest sustainable development challenges.
There’s a difference between a company having a commitment to support the sustainable development goals and actually being able to effectively demonstrate something is being done. That difference is measurement. Without an effective measuring system companies cannot back up claims, which reduces the credibility and reliability of the information.
Our research explored the extent to which the top Australian Securities Exchange companies (ASX top 20) are disclosing and incorporating the sustainable development goals into their business strategies and reporting processes.
The ASX 20 companies’ disclosures were assessed based on four elements: commitment to, structuring for, action towards and measuring of the sustainable development goals. We also set up thirteen criteria that reflect the maturity of companies’ public commitment and actions in relation to the sustainable development goals.
Across all 20 companies assessed in our sample, we found that these companies score the lowest on meaningful and credible disclosure on their commitment to the goals.
Based on our criteria, the overall average score across all 20 companies was only 38% out of 100%. When it came to commitment to the goals, companies scored 49%.
The extent to which progress against the sustainable development goals has been measured and communicated scored lowest, only 19%. Only one company, (5% of the sample) provided detailed disclosure on the progress made towards the sustainable development goals that considered previous performance or baselines.
This might indicate that companies are spending more energy in publicly disclosing information on their commitments rather than on measuring and reporting. We identified situations where companies have publicly stated they are supporting and contributing to goals without clearly demonstrating these contributions.
For example, 10 out of the 20 companies assessed in our research have a public statement from a company executive about the business’ contribution to the goals. However, only two companies (10% of the sample) had actually quantified their contributions to the sustainable development goals in their sustainability reports.
What reporting of the goals looks like
Actually implementing measurement systems and communicating the results of meeting sustainable development goals is very important in guiding future improvements. It will also enhance transparency.
A good example of a more transparent disclosure on the progress made towards the sustainable development goals is provided by toll road company Transurban. In its 2017 Sustainability Report the company highlights the sustainability development goals that are material to its business. The report provides explanations on the relevance and potential contributions to these goals, as well as describes initiatives in place addressing specific sustainability development goals and targets.
For example, Transurban established a partnership with Neuroscience Research Australia to reduce injuries suffered on roads nationally and conducted research into older drivers and motorcyclists (two road user groups that suffer a disproportionate number of injuries and fatalities). This initiative addressed the sustainable development target to halve the number of global deaths and injuries from road traffic accidents by 2020.
In adopting more effective measurement and disclosure mechanisms, Australian companies will be better equipped to support the government to meet its sustainable development goals. However, governments also need to provide the right conditions to stimulate and support companies’ participation because lack of businesses support can jeopardise any achievements.
Reporting on the sustainable development goals should not simply be a tick box exercise for business. As an international agenda adopted by all the UN countries, the question is not about whether the sustainable development goals will be adopted or not, but whether they are effective in changing companies’ behaviour towards a more sustainable business model.
We believe they can be, but this will require measurement and reporting of performance to become a mainstream practice for business.
Ross Wyatt (Think Impact, Managing Director) and Amanda Nuttall (Think Impact, Director) contributed to this article.