Last week we got the bad news that the world has failed to hit a single target designed to help save biodiversity on Earth. This week a group of chief financial officers (CFOs) has given the United Nations a plan for how they and fellow CFOs intend to help alleviate poverty and promote sustainability.
The document, published this week at the UN General Assembly on the occasion of the organisation’s 75th anniversary, sees CFO luminaries from companies such as Tesco, Unilever, Société Générale, Pirelli, Ford, Danone and AB InBev commit themselves to integrate the UN Sustainable Development Goals (SDGs) into their corporate finance strategies.
The SDGs were launched in 2015 and form the foundation of the UN’s effort to “end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030”.
The CFO taskforce’s plan comes in the form of a set of four principles that can be used by companies to “align their sustainable commitments with credible corporate finance strategies”.
According to Alberto De Paoli, co-chair of the CFO taskforce and finance chief at Enel, the Italian energy giant, the principles see the CFOs pledge themselves to stakeholderism. “CFOs play a leading role in establishing clear indications and setting best practices for making corporate finance and investments a real driver of social growth.
“As members of the CFO taskforce, we are all committed to working at the service of a new stakeholder capitalism, creating sustainable value for people and the planet,” he says.
The principles, he adds, are “a solid first step to guide companies in the adoption of credible finance strategies that fully integrate sustainability towards the achievement of SDGs.”
The document sees CFOs call on investors, companies and banks and governments to work towards a “sustainable financial system”.
Sustainable business models
There has been increasing discussion about the role of the SDGs in guiding corporate behaviour as well as potentially forming the basis for corporate reporting.
In June last year the UN Conference on Trade and Development (UNCTAD) signed a memorandum of understanding with the International Integrated Reporting Council (IIRC), agreeing that the two bodies would intensify their activity to persuade companies that the SDGs should provide a framework for building sustainable business models.
Professor Carol Adams from Durham University Business School, writing in a previous article for Board Agenda, said the longevity and sustainability of many industries relies on achieving the goals.
“Therefore, it is in the interests of many organisations to contribute to tackling these challenges not only for the good of the planet, but also the future of the organisation,” she wrote.
Last week’s UN report on biodiversity was a major disappointment for many after it detailed a failure to reach any significant target.
Target four, which requires “governments, business and stakeholders” to take steps to achieve or implement plans for sustainable production and consumption” saw the UN deliver a poor report on the corporate world.
“While an increasing number of governments and business are developing plans for more sustainable production and consumption, these are not being implemented on a scale that eliminates the negative impact of unsustainable human activities on biodiversity,” the report says.
“While natural resources are being used more efficiently, the aggregated demand for resources continues to increase and therefore the impacts of their use remain well above safe ecological limits.”
The CFO taskforce has made a start. Many more companies will need to heed their principles and call before climate and the environment are secure.