I hope to address this challenging topic at the forthcoming PAI Governance Conference in May. Herewith are a few of the issues I’ll be raising. Comments or counterviews will be warmly welcomed.
Along with 192 other countries, Ireland signed up to the UN 2030 Agenda in 2015. That Agenda is comprised of 17 Sustainable Development Goals (SDGs) and their 169 targets. From the outset, the UN declared that the SDGs could not be achieved without the business community being actively involved on a global scale. Its Global Compact (UNGC) division was appointed to develop the guidelines and roadmaps that would encourage businesses to engage and report their progress on an annual basis up to 2030. To-date over 12,000 companies from 160 countries have enrolled including a modest 13 from Ireland. The question arising is:
Why has Irish business not yet bought into the SDGs and the transformative sustainability revolution currently underway across the commercial world?
The Business Perspective
I conducted a recent round-table discussion on this question among a group of my business clients to determine board member interest in SDGs as change of this nature must be led from the boardroom. The following comments summarise the exchange:
- “What are SDGs?
- “That’s overwhelming – that’s for governments not business”.
- “In Ireland, over 90% of businesses are SMEs. Our priority is survival. The last thing we need are another 169 compliance obligations”.
- SDGs – CSR – KPIs – GRIs – IAEG – ESG – UNGC – EUNFR – TCFD – it’s bewildering.
- “I don’t hear anything from government about SDGs. I hear energy, carbon and climate change but not SDGs”.
- “That’s too big an agenda for SMEs – government agencies must take the lead”.
- “State bodies are not adopting their own SDGs – I see no example being set there”.
- “The State Body Governance Code does not even mention SDGs”.
- “Large corporates are very active in this space through the CSR Forum”.
- We’d have an interest but on a scale we could manage – we’d need help”
The State Body Perspective
I came away from this round-table with the impression that State bodies are perceived to be giving mixed signals to the business community on SDGs. The fact that the Governance Code, which defines how State boards should run their organisations, doesn’t mention SDGs is testimony to that. Initiatives like the SDG Stakeholder Forum are great but all State bodies should be leading by example. Every State body should then be partnering with business groups within their jurisdictions to establish sectoral SDG Networks. The message is clear, all State boards should show leadership in rallying businesses behind the SDGs with particular focus on SMEs. I concluded that the starting point was an SDG addendum to the Code of Practice for the Governance of State Bodies that would give immediate effect to these actions.
The Governance Code
The recent revision of the Code was published in 2016, one year after the signing of the UN 2030 Agenda. There is a lot of noise being correctly made by the DCCAE and its agencies on climate change but the SDGs go much wider than that to cover economic, social and environmental topics. Yet there is potential SDG alignment in the current Code where, in the introduction to Section 8, it defines good governance in these terms…
“Good governance… requires effective arrangements for defining outcomes in terms of sustainable economic, social, and environmental benefits which should be included in the State body’s oversight agreement with their relevant Minister/parent Department”.
So, emerging thinking suggests that the starting point to showing leadership on SDGs is to build on the above principle and insert an immediate addendum to the Code that would encourage State boards to both:
- adopt SDGs relevant to their own State Body and annually report outcomes
- partner with businesses to form Sectoral SDG Networks sharing common targets.
Might that be a runner I wonder?
By: Alan McDonnell, Founder & Principal Good Governance Solutions
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