February 7, 2023
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Makarova: Businesses must lead on sustainability


Valeria Makarova

By Valeria Makarova

In the world of business, the idea of social and environmental sustainability as corporate responsibility has evolved from an abstract notion into a broadly accepted concept that has started shaping real corporate agendas and business practices.

A tipping point was reached over the last decade. The shifts in demographics, as well as emerging economic and political trends, were behind the changing attitude toward sustainability.

It also coincided with the course of actions the United Nations has been taking to build a global community with a shared vision on how to approach solving the big issues. The Global Green New Deal for Climate, Energy and Development outlined by the U.N. Department of Economic and Social Affairs in 2009, followed by the commitment of the leading rich and developing nations in the G-20 to invest at least 1 percent of their gross domestic product in promoting green economic sectors in hopes of reviving local economies heavily impacted by the global financial crisis, was a remarkable step.

Then, the U.N. Conference on Sustainable Development, or Rio+20, in 2012 emphasized the importance of participation and collaboration of various stakeholders in building the sustainable development agenda.

The journey continued and three years later, in 2015, the U.N. member states adopted the 2030 Agenda for Sustainable Development with the 17 sustainable development goals and an outlined plan to address global challenges.

The goals range from eliminating hunger and providing clean water and sanitation to achieving gender equality and reduced inequalities. They also highlight affordable and clean energy, economic growth, and industry, innovation and infrastructure.

Pursuing important causes outlined in the goals such as ending poverty, improving health and education, and preserving the natural environment require collaboration of all major sectors and forces — governments, civil society and business organizations.

Participation of the private sector is particularly important. Businesses are makers, creators and doers; they are the ones to design, develop and implement solutions to our needs and problems. And yet, corporations are habitually criticized for lack of responsibility, short-term thinking and “skewed” priorities toward profit maximization.

The sustainable development goals provide the business community with a historic chance to lead the efforts in solving these problems by innovating, forming new partnerships and developing new business models. There are global initiatives and networks led by businesses that provide guidance and resources and share best practices to support firms of all sizes in shaping their sustainability strategies.

Thus, the U.N. Global Compact, an initiative based on CEO commitments, equips companies to move from awareness to action by offering toolboxes and platforms for advancing the goals. A CEO-led World Business Council for Sustainable Development calls for radical transformation and encourages firms’ ambitions to innovate and differentiate by integrating sustainable development goals at the strategic level. The SDGs Compass — the result of a collective effort of the U.N. Global Compact, WBCSD and Global Reporting Initiative — outlines the steps big corporations need to take to align their strategies with the goals.

The sustainable development goals are now being translated into the course of action at the level of a business sector. There are programmatic documents that identify the most pertinent industry-specific social and environmental issues, as well as strategic maps with defined business opportunities and risk assessment.

It is critically important that leaders, managers and all decision-makers are aware of them and recognize that pursuing these goals may open new avenues for value creation, which is beneficial for both society and the business organization.

• Valeria Makarova is an assistant professor and director of teaching effectiveness in the School of Management at California Lutheran University.