PwC SDG Reporting Challenge 2019 (Part 1)

2020-06-22

Introduction

In September of 2015 the UN unanimously ratified the Sustainable Development Goals (SDGs). The 17 Goals and the underlying 169 targets set out a bold roadmap for the world to transform into by 2030 ranging from the elimination of poverty and achieving gender equality across the globe to tackling climate change and ensuring we protect the natural habitats both on land and below water through circular and sustainable business models and communities.

Unlike their predecessors, the Millennium Development Goals (MDGs), the development of and the achievement of the SDGs very much involves business and not just national governments. Governments alone cannot take on this formidable task and so businesses, especially major corporations with a global reach, are expected to contribute to achieving the Goals.

What is even more significant to business is perhaps that since the realization of the Goals means transformations of societies on a scale almost never before seen in history, the business environment in which companies operates will also change drastically. For example, just imagine the size of the impact on global sales of consumer goods when more than one billion people leaving extreme poverty behind or how fundamentally global supply chains will transform if the world undertakes the infrastructure investments set out in the SDGs.

In other words, the SDGs provide companies with a roadmap, a worldwide business plan to 2030, against which they can align and future-proof their own business models. Companies that understand the practical impacts of the goals on their own business will be poised to reap the rewards of this transformation while companies who fail to see the changes coming, or whose business models are incompatible with this new 2030 world will face obvious risks.

For three consecutive years, PwC has researched how companies report on the SDGs and the 2019 “SDG Reporting Challenge” is our most extensive study to date. Teams from 31 countries in our global network has collaborated to analyze over 1,100 global corporations and we are very excited about presenting our results in our report “PwC SDG Challenge - Creating a strategy for a better world[PDF 8,778KB]”. Through this report, we hope to contribute to raising awareness around the meaning and impacts of the SDGs for the business community and consequently help companies understand how they can contribute to the SDGs and how this will benefit their business.

Summary of the global results of our research

On a global level the SDGs have clearly made it onto the agenda and into the public reporting of major companies. 72% of the 1,141 companies studied mentions the SDGs in their public reporting, which is a slight increase compared to previous year’s results.

Among those companies that mention the 17 SDGs, a big majority references specific goals (65%) as opposed to mentioning all the 17 goals in their entirety (35%). While no goal is more important than the other and most of them are interlinked, for business to be able to contribute where they can have the most impact PwC believes that a thorough analysis of the goals, their implications and connected risks and opportunities should be done by all major companies to better align their strategies with the SDGs.

In addition, while often mentioned, it appears that the SDGs have still not made it all the way to influencing business strategies in many companies. Only a quarter of all companies studied includes the SDGs in their description of business strategies and only about a fifth (21%) of the CEO statements reference the SDGs.

What is also striking is that very few companies, only 14%, refer to specific SDG targets. The 17 SDGs are broad goals covering overarching topics such as “no poverty”, “affordable and clean energy” and “climate action”. To make the Goals more actionable they include 169 sub-targets, which are much more specific as to what it is that needs to be achieved to accomplish the overall Goal. What is also important to remember is that these targets are also linked to specific KPIs and metrics to help track progress.

At PwC, we believe that this reflects a broader challenge that many companies have yet to overcome: being specific and concrete when communicating their approaches to and priorities on corporate sustainability. Companies need to show the link between their corporate sustainability efforts and ESG (Environment, Social and Governance) data on the one hand and their business objectives on the other, to put the sustainability information in a context that is meaningful to stakeholders. And we believe that the same goes for company reporting on the SDGs. However, as it stands now, many companies miss making this connection, or fail to communicate it in a clear way.

Based on our analysis we have classified the companies studied into four broad groups. The first group are the “Beginners” and consist of companies just starting out on their SDG journey. They represent about a tenth of all large companies. They are aware of the SDGs as a concept, their importance and show this by referencing them in their public reporting. However, a deeper analysis into which specific goals are especially relevant has yet to take place.

PwC SDG Reporting Challenge 2019

Point of Contact

Eric Lindholm
Manager, PricewaterhouseCoopers Aarata LLC