on the use of UN Sustainable Development Goals in corporate sustainability reporting

The UN Sustainable Development Goals are helpful tools to understand sustainability, and many businesses are starting to use them for both guideposts and reporting on complex sustainability issues. However, if businesses are going to play a meaningful role in achieving the UN Sustainable Development Goals, then any accounting to address alignment to the Goals must include a business’s core products or services.   

Right now, many companies mention their alignment to the UN SDGs in their corporate sustainability reporting. Peep exhibits A, B, and C. However, being aligned doesn’t necessarily lead to those goals getting achieved. Often, when companies report on SDGs, the alignment is a result of the company’s operations. Or, if the company does include its core products or services, only some are included. This reporting is not a lie, and companies expend vast resources to compile corporate sustainability data and reports. They’re a good start. However, excluding the majority of a business’s economic activity from sustainability assessments means that the majority of economic activity goes unaccounted for; we cannot afford so much activity to remain in the shadows. Whether as activists or consumers or investors, we cannot make enough progress on complex sustainability challenges, and in time, with incomplete information. 

For example, Bank of America’s renewable power commitments are aligned with SDG 7 Affordable and Clean Energy. However, the majority of emissions associated with Bank of America come from its core business: lending. Bank of America is one of the top three lenders to the fossil fuel industry. By excluding its core service in its GHG accounting scope, leadership conveys to the public that the bank is creating maximum impact by offsetting its operations. The reality is that the majority of BAC’s impacts are not a result of its operations but a result of its core business. We must include revenue-generating products and services when talking about the Sustainable Development Goals, otherwise the majority of economic activity will be excluded.

Let’s address the key issues with this one by one:

1.      It adheres to industry best practice, using GHG Protocol, GRI reporting, sustainable GHG offsets, etc.

2.      By buying huge quantities of renewable power to fuel its operations, BAC is creating additional demand for renewable power and supporting the entire renewable energy economy, infrastructure.

3.      It should be up to the GHG companies to account for their own operational emissions so everyone else can focus on the much more straightforward task of managing only their own operational impacts