The Sustainable Development Goals (SDGs) offer an inspiring vision of a world in which no one lives in poverty and no one is left behind. They also bestow a key role on businesses of all forms and sizes, to contribute to achieving that vision. What the SDGs don’t provide is a mechanism to track businesses’ SDG performance.
The World Benchmarking Alliance arrives just in time to provide some much-needed consolidation of data to track businesses’ progress around the SDGs. The global SDG community will only be able to assess, direct and adjust business’ SDG contributions if we have at our disposal data that is standardised, comparable, reliable and clear. And, this data must remain accessible to all stakeholders, at all times. We are happy to see that the WBA will create industry specific benchmarks, which can raise ambition on the SDGs through sparking a race to the top among companies based on measurable performance.
Oxfam has considerable experience in developing benchmarks and indices which assess business performance. Our Behind the Brands scorecard has contributed to key advances in the way the world’s largest food companies are engaging with their supply chains. Oxfam has also participated in (and learned from) a range of multi-stakeholder-driven standard setting initiatives. What we have learned, is that benchmarks are not automatically effective tools for triggering progress. Instead, their success and impact is contingent on how they are designed and implemented.
At a general level, any benchmark’s success will in part be determined by its ability to not only highlight the leadership of some companies in advancing the SDGs but to also prompt a wider number of industry peers to step up their performance.
More specifically, we have seen how benchmark’s success is affected by a set of key factors:
For any multi-stakeholder benchmark to gain legitimacy, consultations need to be representative and ensure a diversity of input; particularly local civil society and representatives of vulnerable and affected groups.
For consultations to be meaningful, participants require sufficient time and opportunities to engage with and give feedback. The consultation processes should resemble listening exercises and aim to build broad-based support.
Rethinking business leadership
The standards agreed upon by the WBA have to articulate a new ambition for business. ‘Business as usual’ won’t enable us to achieve the SDGs. It is critical that we are elevating the expectations and standards for what SDG leadership by business looks like.
Transparency is key
This includes how decisions are made but also how scores are determined. Benchmarks’ potential to trigger change is ultimately determined by stakeholders’ ability (including the ranked companies) to use the information.
The organisational set up of any effective multi-stakeholder benchmark requires a governance structure that includes different stakeholder groups to ensure that scores reflect the perspectives of all affected groups.
A last consideration we as Oxfam want to convey is how the information generated by this new benchmark will be utilized. We must recognise that the shortcomings we see when it comes to businesses’ SDG engagement are not only due to a lack of information but that many companies simply lack the incentives to overcome the short-term pressures generated by investors and their own business models. A key task ahead of the WBA will thus be to mobilize the investor community to pay attention to and incorporate social and environmental aspects in their decision on where investments are made. The WBA has the potential to deliver this, and be a transformative new tool to guide the trillions of dollars being invested across the world every year into businesses that really contribute and give back to people and planet.
The SDG framework is an opportunity for all business to do better. We hope that the WBA can be an important part of helping to make this opportunity a reality.
Private Sector Policy Advisor, Oxfam GB