(This blog was originally posted on the Sustainable Brands website.)
The 17 Sustainable Development Goals (SDGs) define a world that promises a flourishing future for human civilization on spaceship Earth. Some companies already embrace the SDGs as their aspirational environmental and social goals. Other companies hesitate, in case attaining some or all the goals’ 169 associated targets by 2030 would be at the expense of company success. There are 12 trillion reasons why their hesitation is unjustified.
In January, the Business and Sustainable Development Commission released its “Better Business, Better World” report. After a year of intense analysis by over 35 global business leaders and civil society representatives, the verdict is in. Attaining the SDG-related targets by 2030 would open up at least 60 market “hot spots” worth up to $12 trillion a year in business savings and revenue opportunities in four economic systems: food and agriculture; cities; energy and materials; and health and well-being. The total economic prize from implementing the SDGs could be 2-3 times bigger if higher labor and resource productivity were taken into account. Plus, this economic engine would create 380 million good new jobs by 2030. This doesn’t smell like a sustainability sacrifice; the world described by the SDGs would be good for people, planet, and profits.
But could a particular company get a piece of this global action, here, now? What’s in it for a single company to embrace SDG’s goals, or even go further and aspire to the level of performance defined by the 21 Future-Fit Business Benchmark environmental and social goals? How could a company find out whether this would be a good thing or a bad thing for its financial success?
We need a tool that supports a comprehensive cost-benefit analysis to determine whether the business case for improving sustainability performance is compelling enough for executives to throw their weight behind initiatives that accelerate our collective journey toward the SDG targets. Why? Because there is a high probability that the sustainability initiative will fail without strong senior leadership support. A January 2017 report by Bain & Company, “Achieving Breakthrough Results in Sustainability,” found that 98% of sustainability initiatives fail because they do not have senior leadership support to ensure that the project has adequate resources, that employees are engaged and supportive, that other priorities don’t get in the way, and that there are clear metrics for success. And why don’t senior leaders support sustainability projects? Because they have not seen a compelling business case for why they should. If we are to reverse the numbers and ensure that 98% of sustainability projects succeed, we need a tool that facilitates a comprehensive and compelling justification for executives to support them.
In order to approve and support any sustainability initiative, executives require relevant and credible assurance that it will be good for the company, as well as for the environment and society. There are three overarching justifications for any business decision: do the right thing, capture opportunities, and mitigate risks. To flesh out those justifications, a new tool – the Sustainability ROI Workbook – helps quantify a complete portfolio of possible benefit and cost elements, as well as the risks of inaction or failure.
Sustainability ROI Workbook is a “book” cleverly disguised as an Excel workbook. The comprehensive, fill-in-the-blanks Excel workbook is the e-book. To expedite its use by global legions of sustainability champions, it is a self-published, free, open-source resource. Others are encouraged to use it as a foundation on which to create additional tailored versions for specific sectors or users, for other technology platforms, in other languages, and in simpler formats.
The workbook synthesizes elements from over 15 leading sustainability business case frameworks. It contains tailored business cases for five categories of sustainability / SDG-related initiatives that help companies mitigate environmental and social risks and capture associated opportunities in their pursuit of their fair share of the $12 trillion global opportunity.
The Sustainability ROI Workbook starts with a clean slate of data and assumptions. Users provide a starting company data profile and then fill in the blanks with help from senior managers and from the cells’ pop-up, just-in-time guidance. Onetime and on-going costs provided by the user are factored into the cost-benefit analysis. Payback period and other return on investment (ROI) calculations are done automatically, based on that input. It frames the business case in the normal way that CEOs and CFOs look any investment opportunity, to gain their enthusiastic support for creaming off some of the global treasure trove of $12 trillion of savings and revenue opportunities.
A beta / draft version of Sustainability ROI Workbook was announced at New Metrics ’16 in Boston last November. After incorporating helpful feedback and suggestions, it is now freely downloadable from my website now. The final version will be officially released in conjunction with Sustainable Brands ’17 where a workshop on how to use it will be held on May 22. I hope to see you there. Who knows? Maybe some of those 12 trillion reasons apply to your organization.
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