Millennials make up a significant portion of today’s target business audience. Millennials are the 2 billion people born between the early 1980s and 2000. 81% of millennials believe business has a key role to play in achieving the Sustainable Development Goals (SDGs), the guiding business practices shaped by world leaders from 193 nations as outcome from the COP21 summit in Paris.
That’s according to findings in a report called “Advancing the Sustainable Development Goals: Business Action and Millennials’ Views.” Millennials desire brands that have a social purpose and jobs that provide fulfilling work. They understand that business exists to create wealth. Millennials are also interested in how businesses share that wealth: how they ensure different groups benefit fairly.
And the millennials perceive a gap between their hopes and the reality of what business is doing today.
- Eight in ten millennials say the private sector has a very important role in achieving the SDG.
- Fewer than three in ten think business will do anything other than put short-term profit maximiation ahead of sustainability.
Millennials’ fears seem well founded. Awareness among companies about the importance of SDGs is growing, but action to change their business practices is still minimal.
The Beliefs about Sustainable Development Goals: Some Statistics
According to the State of Responsible Business 2016 Report, there has never been more of an imperative for global brands to take stock of their contributions to sustainable development. Respondents from a range of businesses, NGOs, government, and academic backgrounds answered a series of questions. The questions concerned the meaning of sustainability to their organizations, the way sustainability is organized throughout their businesses, and their verdict on the language used to describe responsible business practice.
- 71% say that their CEO is convinced of the value of sustainability.
- 86%, say sustainability is increasingly becoming an important part of their companies’ overall business strategy.
- 51% of corporate respondents say sustainability is driving revenue for their business.
- 70% say it is driving savings.
- 78.5% say that their corporate sustainability strategy is having an impact on internal structures, departmental organization and responsibilities, an increase of more than 5 points from our 2015 report.
- 74% claiming that their sustainability strategy directly affects these departments.
- Fewer than half of corporate respondents agreed when asked if they felt confident they were accurately measuring the impact and return-on-investment of their sustainability activities.
These responses indicate that businesses have yet to establish foolproof ways of determining exactly how, where, and why sustainability is transforming the way the entire business operates.
Why Sustainable Development Goals Are Essential to our World
The SDGs must become central to core business goals and investment decisions, according to Unilever CEO Paul Polman, who believes that the SDGs offer the “greatest economic opportunity of a lifetime.” He says Unilever’s “sustainable living” brands (which it defines as those that have integrated sustainability into their purpose and products) are growing 30% faster than the rest of the company.
Polman, a commissioner in the Business and Sustainable Development Commission, said, ‘The Sustainable Development Goals are the fundamental cornerstone to secure future economic and business growth… It is not possible to have a strong, functioning business in a world of increasing inequality, poverty and climate change.”
Which Businesses are Evolving, and Which are Still, Um, Planning?
Regionally, respondents in Africa, Latin America, and the Middle East are engaging most with the goals, according to Ethical Corporation’s research, with the lowest level of engagement (37%) in North America.
U.S.-headquartered businesses are sometimes slower than European businesses to join into UN-sponsored initiatives. So says Aron Cramer, CEO of Business for Social Responsibility, as reported by Katherine Earley in The Guardian. He offers that U.S. businesses “have a cultural preference to do first and talk later… That said, we see a great many [US] companies, such as Microsoft and others, embracing the goals and working towards integrating them into their business strategies.”
A report by risk management firm DNV GL highlights 17 companies (including Unilever, Siemens, Marks & Spencer and Danone) taking action on specific SDGs, and concludes that businesses of this kind are ready to take “extraordinary action” to help achieve the goals.
The report says these firms are characterized by their ability to see the potential of combining growth and sustainability, form collaborations, use technology to achieve scale and reach, and see the SDGs as a way to achieve competitive advantage.
What’s Needed to Implement Sustainable Development Goals
A white paper from Volans for the Business and Sustainable Development Commission offers a practical guide to create new forms of financial and extra-financial value for healthier, safer, and better-educated populations. It argues that many business leaders were not fully aware of the extent of the SDGs. The Breakthrough Business Models paper describes the SDGs as “a purchase order from the future,” aimed at global business leaders to understand the potential the SDGs present. The authors argue the SDGs are “probably our best guide to what the world of 2030 needs us to invest in and vote for today.”
The paper argues that the sustainability focus needs to shift from the business case for action to new types of business models that can enable novel forms of financial and extra-financial value creation. It identifies four key characteristics of breakthrough business models. They should be:
- integrated. and
Crucially, the paper urges companies to apply an exponential mindset to each of these four characteristics. They argue that businesses should aim not simply for a 1% or even 10% improvement but for 10-fold or greater benefit.
Reinvention is the Business Model of the Future
An interesting example of the mindsets behind stagnant evolution toward the SDGs is cited by in the report, Breakthrough Business Models. In 2014, Lyft president and co-founder John Zimmer spoke to car industry veterans. “You can fight [the end of car ownership],” he warned, “and that will probably not turn out well. Or you can acknowledge that this is happening. This is real, serious, and going to change your world.”
The crowd’s reaction was lukewarm at best.
Now, in 2016, however, changes are taking place, and some of these shifts are occurring at a rapid pace. GM has made major strategic investments in both Lyft and Cruise, a startup building software for autonomous vehicles. Meanwhile, Uber, founded just eight years ago, now has a market valuation higher than major occupiers of the trade like Ford, Honda, and GM.
“What’s happening to the car industry is a striking example of the way disruption happens,” says report co-author John Elkington. “What seemed impossible two or three years ago now seems virtually inevitable. Many other industries are facing a similar imperative to reinvent themselves. And business models are key to whether or not all of this proves to be sustainable.”
The Future and Sustainable Development Goals
The SDG process, which began in 2012, involved 83 national surveys and over 7 million people, making it the biggest consultation process in UN history. With the decisions around the SDGs, we must be on our way to a more financially flourishing, egalitarian, and conflict-free globe, right? A world that’s nearly carbon neutral? That was the rationale behind the SDGs.
Now it is up to companies and their governments through legislation to respond to the challenge of these global goals. For companies to succeed in tomorrow’s world, mindsets, technologies, and business models will need to rethink what it means to offer goods and service to a consumer marketplace. Especially when that market will be driven by Millennials.
Photo Credit: COPYRIGHT © UNITED NATIONS 2016