Creating a strategy for a better world - How the Sustainable Development Goals can provide the framework for business to deliver progress on our ...

Page created by Gail Wise
 
CONTINUE READING
Creating a strategy for a better world - How the Sustainable Development Goals can provide the framework for business to deliver progress on our ...
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
Creating a strategy for a better world - How the Sustainable Development Goals can provide the framework for business to deliver progress on our ...
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
Creating a strategy for a better world - How the Sustainable Development Goals can provide the framework for business to deliver progress on our ...
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
Creating a strategy for a better world - How the Sustainable Development Goals can provide the framework for business to deliver progress on our ...
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
Creating a strategy for a better world - How the Sustainable Development Goals can provide the framework for business to deliver progress on our ...
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
Creating a strategy for a better world - How the Sustainable Development Goals can provide the framework for business to deliver progress on our ...
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
Creating a strategy for a better world - How the Sustainable Development Goals can provide the framework for business to deliver progress on our ...
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 –
www.pwc.com/sdgchallenge
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with over 276,000 people who are
committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the
information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the
accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC does not accept or assume any liability,
responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or
for any decision based on it.
© 2020 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity.
Please see www.pwc.com/structure for further details.
You can also read