Creating a strategy for a better world - How the Sustainable Development Goals can provide the framework for business to deliver progress on our ...
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SDG Challenge 2019 Creating a strategy for a better world How the Sustainable Development Goals can provide the framework for business to deliver progress on our global challenges Examples from business reporting www.pwc.com/sdgchallenge
2 PwC | SDG Challenge 2019 Examples of how companies are including SDGs into their reporting A few examples taken from the 8% of companies that mentioned the SDGs and provide quantitative reporting against their ambitions (1% of all the companies in our full sample) helps show how companies have started to integrate the SDGs. Colombia’s Cementos Argos provides evidence of how ambition can be explained and quantified. It mentions Sustainable Development Goals in an area of its integrated report1 that deals with material issues. It highlights a specific SDG target 8.2: “Achieve higher levels of economic productivity through diversification, technological upgrading and innovation”. For Cementos Argos this means reaching “15% in the use of alternative materials in [its] cement operations”. It then sets a quantitative ambition for 2025 that is directly relevant to SDG target 8.2 (for Cementos Argos this is $15 million) and it provides quantitative evidence of current year progress against the 2018 quantitative ambition ($9.8 million). 1 Argos, 2018 Integrated Report, https://sostenibilidad.argos.co/Portals/16/Doc/2018/eng/Integrated-report-2018.pdf
3 PwC | SDG Challenge 2019 Then there is Daiwa House Industry of Japan. This construction and real estate company includes the SDGs in the value creation section2 of its integrated report. To further communicate its commitment Daiwa House also explains how the SDGs are integrated into its growth strategy. In the sustainability report3, it highlights a specific SDG target 7.2: “By 2030, increase substantially the share of renewable energy in the global energy mix”. It establishes a quantitative ambition by 2017 that is directly relevant to SDG target 7.2. And it provides evidence of current year quantitative reporting against the 2018 quantitative ambition. South Africa’s Foschini Group provides another example. The clothing retailer’s integrated report4 also has a strategy section that mentions the SDGs. In the sustainability report5 it addresses Responsible Consumption and Production (SDG12) and identifies target 12.5: “By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse”, as a priority. It then sets a quantitative ambition by 2030 that is directly relevant to SDG target 12.5 (achieve 85% recycling across its sites) and produces evidence of current year quantitative reporting against the 2030 quantitative ambition (78% so far). 2 Daiwa House Group, Integrated Report 2018, https://www.daiwahouse.com/English/ir/ar/pdf/ daiwahouse_IR2018E_all.pdf 3 Daiwa House Group, Sustainability Report 2018, https://www.daiwahouse.com/sustainable/csr/ pdfs/2018/2018_csr_en_all.pdf 4 Foschini Group, Integrated Annual Report 2019, https://tfglimited.co.za/wp-content/uploads/ 2020/02/Integrated-Annual-Report-2019.pdf 5 Foschini Group, Sustainability Overview Report 2019, https://www.tfglimited.co.za/wp-content/ uploads/2019/12/TFG_Sustainability_Report_13675_20190715_V8_SLS_10h55.pdf
4 PwC | SDG Challenge 2019 SDG Cementos Argos reporting SUSTAINABLE DEVELOPMENT GOALS (SDG) As a company, we have addressed the 2030 United Nations agenda call related to the SDGs and we are committed to carry out forceful actions that help fulfill the universal purposes of ending poverty, protecting the quality of the planet and ensuring that all Company embeds SDGs examples people have enough opportunities to have a dignified and peaceful life. into business strategy 1 Company mentions ‘Sustainable Development To do so, we have: Goals’ in an area of the Identified and prioritized four SDGs as the Provided different training exercises on the report considered to be way to be more effective in contributing to subject in the organization. 1 the global initiative. strategic (material issues) Reviewed different methodologies and Participated in workshops, forums taken as a framework of reference the Business and referencing sessions that have enabled Reporting on the SDG initiative of the Global us to understand the purpose of the Reporting Initiative and the Global Compact, global initiative and be up to date to identify the goals, initiatives and indicators on local and international ideas that through which the company monitors its are intended to take the objectives and contribution to the SDGs. goals to concrete actions. The following chart shows the four prioritized SDGs and their relationship with the material issues. For their part, the goals defined by the UN that we have selected as a guide for our management and the indicators through which we measure our performance can be seen in the annex “Sustainability Program” on page 158. License from Society Community Engagement to the Industry License from Society to Talent Management the Industry Circular Economy Human Rights Supplier Management Sustainable Construction Innovation in the Business Model Occupational Health and Safety Energy Management Model Community Engagement Water Biodiversity Source: Argos, 2018 Other Emissions Integrated Report, p9, Occupational Health https://sostenibilidad.argos.co/ and Safety Climate Change Portals/16/Doc/2018/eng/Integrated- report-2018.pdf Ethics and Compliance Energy Management Brand Management Model
5 PwC | SDG Challenge 2019 Cementos Argos SUSTAINABILITY PROGRAM AND SDG DASHBOARD Baseline Goal Baseline Target 2018 SDG target implementation Material topic P. SDG Goal Indicator Unit Trend year year value value result score: 3 Obtain revenues of SDG 9 Sustainable USD $ 400 million (A-CS1) Total of for our products with revenues from $ 2015 2025 USD$136 USD$400 USD$147 SDG targets mentioned construction Goals 9ª millions millions millions y 9.5 sustainability properties PSC with quantitative reporting (PSC) against ambitions. SDG 8 Reduce the heat KCal/k Heat consumption 2013 2025 941 846 868 Energy consumption by 10% clínker Company mentions a 1 Management Goal 8.4 GRI (302-1) Reduce the electricity KWh/t specific SDG target (8.2): Model Electricity 2013 2025 116 99 125 Goal 13.2 consumption by 15%. cem “Achieve higher levels of consumption (A-EN1) % economic productivity Achieve an 18% replacement of heat replacement of through diversification, heat consumption % N/A 2025 N/A 18 5.1 consumption from the use technological upgrading and from the use of of alternative fuels. innovation.” alternative fuels (A-EC2) % 2 3 Company has a quantitative Reach 15% in the use of alternative 2 SDG 8 alternative raw materials raw materials % N/A 2025 N/A 15 9.8 ambition by 2025 that is in cement operations. in cement Circular economy 1 Goal 8.2 directly relevant to SDG operations target 8.2 Goal 8.4 (A-EC3) % Reach 15% of alternative alternative raw raw materials in our materials in % N/A 2025 N/A 15 16.3 3 Evidence of current year concrete operations. our concrete quantitative reporting operations against the 2025 quantitative Accumulatively use (A-EC4) Tonnes 216,000 tons of recycled t 2017 2025 0 216,000 12,720 ambition of recycled aggregates. aggregates used SDG 13 kgCO2/t Emit 544 kg CO2/ton of (A-EC1) Specific 735* Climate change material 2006 2025 544 616 cementing material. emissions of CO2 Baseline Goal 13.2 cem Carry out the inventory of our Hg emissions for % inventory of % N/A 2020 N/A 100% 82% 100% of the clinker our Hg emissions Source: Argos, 2018 Integrated production. Report, p158, SDG 8 Reduce our particulate GRI (305-7) https://sostenibilidad.argos.co/ g/t de Emissions matter emissions to 60g/ Particulate matter 2015 2025 173 60 45 Portals/16/Doc/2018/eng/Integrated- clínker report-2018.pdf Goal 8.4 tons of clinker. emissions Reduce NOX emissions to GRI (305-7) NOX g/t de 2015 2025 1,399 1,205 1,311 1,205 g/tons of clinker. emissions clínker
6 PwC | SDG Challenge 2019 1 Daiwa House Group Company embeds SDGs into business strategy 1 The company has a value creation section in the integrated report and it mentions the SDGs 1 Source: Daiwa House Group, Integrated Report 2018, p23, https://www.daiwahouse.com/ English/ir/ar/pdf/daiwahouse_ IR2018E_all.pdf
7 PwC | SDG Challenge 2019 Daiwa House Group SDG integrated into business model 1 Within the value creation section of the report, the company has integrated the SDGs into its growth strategy 1 Source: Daiwa House Group, Integrated Report 2018, p25, https://www.daiwahouse.com/ English/ir/ar/pdf/daiwahouse_ IR2018E_all.pdf
8 PwC | SDG Challenge 2019 Daiwa House Group 1 SDG target implementation score: 3 SDG targets mentioned with quantitative reporting against ambitions. 1 Company mentions a specific SDG target (7.2): “By 2030, increase substantially the share of renewable energy in the global energy mix” 2 Company has a quantitative ambition by 2017 that is directly relevant to SDG target 7.2 (see broken line in chart) 3 Evidence of current year quantitative reporting against the 2017 quantitative ambition (see solid line in chart) 3 2 Source: Daiwa House Group, Sustainability Report 2018, p118, https://www.daiwahouse.com/ sustainable/csr/pdfs/2018/2018_csr_ en_all.pdf
9 PwC | SDG Challenge 2019 ABOUT OUR REPORT WHO WE ARE A MESSAGE FROM OUR CHAIRMAN HOW WE CREATE VALUE OUR PEOPLE OUR STRATEGY OUR PERFORMANCE HOW WE GOVERN TFG APPENDICES COMPANY INFORMATION AND SHAREHOLDERS’ CALENDAR Foschini Group 1 Company embeds SDGs into business strategy SUSTAINABILITY RISK OVERVIEW 1 The company mentions the We recognise that TFG’s success depends on operating The most significant risks to the Group are similar within a sustainable and inclusive society. Investors to those identified in previous years. SDGs in the strategy section around the world are also starting to scrutinise how companies monitor and mitigate their environmental and social impacts. Sustainability is critical for the stable Read more about our risks, risk methodologies and combined assurance process in our Risk Committee of the Integrated Annual long-term growth of TFG. We employ over 29 000 people, directly manufacture c.8,9 million apparel units and have report on page 107. Report. Managing the risk of fashion and ensuring the desirability a footprint that spans 4 085 outlets across 32 countries. of merchandise remain material issues for all retailers. We have a responsibility to prioritise sustainable The Group’s buying processes, in-house design and production and operations and to be transparent about manufacturing capability, and focus on quick response and the impacts arising from our business activities. replenishment, are key differentiators in the mitigation of An important milestone this year was selecting and these issues. onboarding Sedex as a responsible business partner. Read more about our material issues, risks and Sedex is one of the world’s largest collaborative platforms opportunities on page 33. for sharing responsible sourcing data on supply chains. The data is used to monitor TFG’s compliance with OUTLOOK leading labour, health and safety, environmental and We take a measured approach to each of the major business ethics standards. Importantly, this partnership economic and retail environments we operate in and will provide a broader understanding of supply chain risk anticipate that conditions will remain challenging for and how we can mitigate this. the foreseeable future. We are however confident We remain committed to our shared value strategy that our people’s commitment to successful strategy and creating a positive social impact while delivering execution, underpinned by a relentless focus on digital business value for TFG. We strengthened the alignment transformation and our commitment to making decisions between our shared value approach and the four pillars that align with the TFG culture, will continue to produce of our business strategy during the year. This included good results for the Group. identifying financial and non-financial targets and initiatives to evaluate performance, as well as value-add APPRECIATION 1 opportunities within the various elements of our B-BBEE scorecard. I am truly grateful for the guidance, support and encouragement I have received during my first year as Chief Executive Officer. This includes the support of our ALIGNING OUR SUSTAINABILITY Chairman, Supervisory and Operating Boards, as well as APPROACH WITH THE SDGs the various management teams across the business. To further refine our sustainability To our employees – thank you for the ongoing and strategy, we relooked how we engage pivotal role you play in the success of the Group. To with the United Nations Sustainable our customers, shareholders, suppliers and other Development Goals (SDGs). We stakeholders – thank you for your continued support. previously reported against seven SDGs and decided to reduce this to two – with I look forward to building on TFG’s past success as we a primary focus on SDG 8 and SDG 12. look to the future and for innovative and exciting ways to This is underpinned by SDG 17 as there bring new value to our customers. are numerous partners we rely on to effectively execute our sustainability initiatives. We also identified targets Anthony Thunström that are aligned to global targets per Chief Executive Officer goal. This will enable our stakeholders 28 June 2019 to monitor our performance, thereby enhancing the transparency of our sustainability reporting. More information about this is available in our online sustainability overview report, which also includes detail Source: Foschini Group, Integrated on our initiatives, progress and approach. Annual Report, p52, 52 TFG integrated annual report 2019 53 https://tfglimited.co.za/wp-content/ www.tfglimited.co.za uploads/2020/02/Integrated-Annual- Report-2019.pdf
10 PwC | SDG Challenge 2019 Foschini Group PURPOSE Achieving economic growth and sustainable development requires that we reduce our ecological SDG target implementation footprint by changing the way we produce and consume goods and resources. Therefore, the score: 3 efficient management of our shared natural resources is important. This includes encouraging industries, businesses and consumers to recycle and reduce waste while creating more efficient SDG targets mentioned production and supply chains to shift the world towards a more resource efficient economy. with quantitative reporting against ambitions. 1 Company mentions a Global targets TFG’s annual targets and achievements specific SDG target (12.5) Encourage companies, especially large 2 Company has a quantitative Target What we achieved ✓ or ✗ and transnational companies, to adopt ambition by 2030 that is sustainable practices and to integrate 2 x Social and Ethics Committee directly relevant to SDG sustainability information into their meetings 2 ✓ target 12.5 reporting cycle 4 X Sustainability Steering 3 Evidence of current year Committee meetings 4 ✓ quantitative reporting against the 2030 quantitative 4 x Green Committee meetings 3 ✗ ambition 1 2 3 By 2030, substantially reduce waste ✓ or ✗ Target What we achieved generation through prevention, reduction, recycling and reuse Achieve 85% recycling at all our sites 78% ✗ By 2030, achieve the sustainable ✓ or ✗ Target What we achieved management and efficient use of natural resources Electricity consumption at head Source: Foschini Group, office – 20% reduction in kW/h 0,1% ✗ Sustainability Overview Report 2019, p20, Electricity consumption in store – https://www.tfglimited.co.za/ 5% reduction in kW/h per m2 (4,8%) ✗ wp-content/uploads/2019/12/ TFG_Sustainability_ Paper consumption at head office – Report_13675_20190715_V8_ SLS_10h55.pdf 10% reduction in volume (2,2%) ✗ Paper consumption in store –
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