This week, we want to talk about how companies and investors can map their contributions to the UN’s Sustainable Development Goals (SDGs).
You’ve probably seen this mapping on integrated and ESG reports many times, and you will see it even more in the future now that the green bond market has opened up more to SDG-linked bonds (the Mexican homebuilder Vinte was actually the first company to issue this kind of bond in LatAm, and Mexico was the first sovereign to issue an SDG bond globally) and investors with responsible investment policies are moving forward with SDG-oriented mandates (read about recent trends on SDG investing here).
So, how do you do it?
First, you need to know and understand the SDGs (you can find a quick intro video here, and much more detailed information on each goal here). Sounds pretty obvious, but SDGs cover much more than some people think when they see the headlines. By reading in detail what the goals intend to achieve, you can think about how your business or investment strategy aligns with them (or even how you can change some of your current strategies to contribute more towards them).
It is important to say that SDGs are in many ways interconnected, so it is common to see that your actions contribute to more than one goal at the same time.
Once you have identified which goals you are contributing to (or want to contribute to), you can start to think about performance indicators and their targets. We are big fans of setting targets because we believe they help incentivize organizations to move towards a given direction when they have the choice to do so, and then measure their progress month by month. So, while some of these targets may not be completely quantitative, they still make organizations think of how many additional resources they want to dedicate to something.
After deciding on KPIs and targets, the next steps are obviously tracking those KPIs and reporting on them. This can be done on your annual reports, or separately, but it is important to be consistent to make sure that the data is robust and the contribution to SDGs is actively managed.
As you can see, the process of mapping contributions to SDGs sounds similar to what we usually suggest doing regarding the overall ESG strategy. This is obviously not a coincidence, since SDGs could be considered material topics in a way and as anyone who has read our blog before knows, we believe measuring (KPIs, targets) and reporting are the keys to successful material topic management.
I hope you found this interesting. As usual, if there is anything we can help you with, please reach out.
Partner, Miranda ESG
Contacts in Miranda Partners