E NG IN T O : TI G s IN EG T D R CO A T E RS H R P O I N G T R E P OUID A P R ATE AL G R A C TIC Developed by With expert input from Technical support from Supported by Setting the scene Step-by-step guidance Appendices Table of contents Contents 2 Foreword 3 Setting the scene 4 The Sustainable Development Goals (SDGs) and corporate sustainability reporting 4 The business case for engaging with the SDGs 5 About this guide 7 Principled prioritization for reporting on the SDGs 8 Step-by-step guidance 9 Step 1: Define priority SDG targets 10 Step 1.1: Understand the SDGs and their targets 11 Step 1.2: Conduct principled prioritization of SDG targets 16 Step 1.3: Define your SDG-related report content 18 Step 2: Measure and analyze 19 Step 2.1. Set business objectives 20 Step 2.2. Select appropriate disclosures 21 Step 2.3. Collect and analyze data 22 Step 3: Report, integrate and implement change 23 Step 3.1. Consider general features of good practice when reporting on the SDGs 25 Step 3.2. Consider data users’ information needs 26 Step 3.3. Report and implement change 27 Appendices 28 List of international reporting frameworks and indicators 28 Contributors 30 Copyright 1 Table of contents Setting the scene Step-by-step guidance Appendices Foreword Transparency of business conduct has long been a primary collaboration with partner organizations and businesses, and engine of improvement and will remain critical as stakeholders we would like to extend our special thanks to Shift and PwC across the world continue to advance the shared goals of the for their support throughout the project. 2030 Agenda for Sustainable Development. Businesses – big We look forward to working together with businesses around and small – are essential actors in the journey to advance the the world as they apply our tools and refine best practices. Sustainable Development Goals (SDGs). By working together we can – and we must – achieve the This is the moment to take sustainability reporting to the Sustainable Development Goals. next level. The SDGs foster corporate transparency and accountability. With this practical guide on integrating the SDGs into corporate reporting, we aim to help companies of all types in all countries to tackle the world’s most pressing issues. This guide helps businesses move beyond the current trend of simply mapping activities and programs against the SDGs to driving change. The contents of this publication are aligned with the United Nations Guiding Principles on Business and Human Rights, the Ten Principles of the UN Global Compact and the GRI (Global Reporting Initiative) Reporting Framework. The publication outlines a process of ‘principled prioritization’ aimed at helping companies to identify and prioritize their SDG targets, take action and report on their progress. This approach assists companies in integrating the SDGs into existing corporate responsibility and sustainability reporting programs. It also weaves together risk management and new business models that can contribute to the advancement of the SDGs. This document is meant to be used together with other relevant tools released by GRI, the UN Global Compact and their partners, in particular Business Reporting on the SDGs: An Analysis of the Goals and Targets, In Focus: Addressing Lise Kingo Tim Mohin Investors Needs in Business Reporting on the SDGs and CEO & Executive Director Chief Executive the SDG Compass. This guide was developed in close United Nations Global Compact GRI 2 G THE S IN C T EN T SE E Table of contents Step-by-step guidance Appendices Setting the scene Setting the scene The Sustainable Development Goals The business case for engaging with (SDGs) and corporate sustainability the SDGs reporting Endorsed by all 193 United Nations Member States in 2015, the 2030 Agenda and its Sustainable Development Goals Business cannot thrive in a world of poverty, inequality, unrest focus global efforts and attention on 17 pressing issues. and environmental stress, and so it has a vital interest in The private sector plays a critical role in providing solutions ensuring that the 2030 Agenda for Sustainable Development that can contribute to solving these challenges, while also and its 17 Sustainable Development Goals (SDGs or Global generating new business opportunities. Goals) are delivered. By upholding recognized standards and principles on human rights, labour, the environment and The SDGs are anticipated to generate at least US$12 trillion anti-corruption, business makes an essential contribution to worth of market opportunities by 20301. By identifying the SDGs. and mitigating risks to people and the environment and by providing new products and services that support sustainable Many companies already act and report on topics covered by development, businesses can reap benefits for themselves the SDGs, such as climate change, water management and and for the markets they depend upon. working conditions. This guide will help companies take stock of their current actions and discover additional priorities to The SDGs are becoming increasingly important also for contribute to achieving the SDGs. investors, as they are ‘an articulation of the world’s most pressing environmental, social and economic issues Going beyond regular communication to stakeholders, and, as such, act as a definitive list of the material ESG effective corporate reporting is key to building trust and (environmental, social and governance) perspectives aligning investment through transparency and accountability. that should be taken into account as part of an investor’s In addition to informing external stakeholders – including fiduciary duty.’2 There is a strong business case for investing investors – corporate sustainability reporting is a powerful in opportunities aligned with the SDGs, including helping stimulus for internal conversation and decision-making with investors secure stable returns, better represent the values regard to contributing to the SDGs at all levels within a of their clients and offer sustainable financial products that company. Reporting, however, is neither the start nor the end differentiate them in the marketplace.3 of a company’s sustainability strategy and implementation – it’s a strategic tool that: • engages stakeholders • supports sustainable decision-making processes at all levels within a company • shapes business strategy • guides innovation and drives better performance and value creation • attracts investments 1) See the report Better Business, Better World of the Business And Sustainable Development Commission, report.businesscommission.org/ 2) See The SDG Investment Case, www.unpri.org/download?ac=1436 3) See In Focus: Addressing Investor Needs in Business Reporting on the SDGs, www.globalreporting.org/resourcelibrary/addressing-investor-needs-SDGs- reporting.pdf 4 Table of contents Step-by-step guidance Appendices Setting the scene About this guide This Practical Guide does not create a new reporting the World Business Council for Sustainable Development framework. Rather, it outlines a three-step process to embed (WBCSD), which offers a starting point for companies the SDGs in existing business and reporting processes. approaching the SDGs, including resources4. It provides a more detailed approach to defining priorities. Step 1 addresses the process of prioritization of impacts and the identification of SDGs for a company to act and report The guide and the publication Business Reporting on the on. Step 2 looks at how to set business objectives, select SDGs: An Analysis of the Goals and Targets5 (the Analysis) disclosures and analyze performance. Step 3 offers tips and are meant to be used together as part of a company’s guidance on reporting and improving SDG performance. regular reporting cycle. The Analysis, among other things, These steps are not necessarily meant to be sequential; they lists qualitative and quantitative disclosures for SDG targets can be adapted to specific circumstances. that are likely to be relevant to businesses regardless of size, sector or operating location. It also lists illustrative actions The guide aims to provide guidance for all businesses, that businesses can take to contribute to the achievement of regardless of size, sector or operating location. It targets each target. The publication In Focus: Addressing Investors reporting practitioners specifically, but is also relevant for Needs in Business Reporting on the SDGs 6 provides other professionals involved in corporate sustainability. additional information about investor-relevant aspects. The guide builds on earlier work, in particular the SDG Compass developed by the UN Global Compact, GRI and The steps outlined in this guide 3.3 1.1 Report and Understand implement the SDGs and change their targets 3.2 1.2 Consider data Conduct users' information principled needs prioritization of SDG targets Step 3 Step 1 Report, integrate Define priority 3.1 and implement SDG targets Consider general change 1.3 features of good Define your practice when SDG-related reporting on the report content SDGs Step 2 Measure and analyze 2.3 Collect and 2.1 analyze data Set business objectives 2.2 Select appropriate disclosures 4) For more information, see the SDG Compass online platform, www.sdgcompass.org 5) For more information, see An Analysis of the Goals and Targets, www.globalreporting.org/resourcelibrary/GRI_UNGC_Business-Reporting-on-SDGs_ Analysis-of-Goals-and-Targets.pdf 6) For more information, see In Focus: Addressing Investor Needs in Business Reporting on the SDGs, www.globalreporting.org/resourcelibrary/ addressing-investor-needs-SDGs-reporting.pdf 5 Table of contents Step-by-step guidance Appendices Setting the scene How the “Analysis” and this “Practical Guide” link and are Refer to: connected to the SDG Compass An Analysis Integrating the SDGs of the Goals into Corporate Reporting: and Targets A Practical Guide HE F T ND TARGET O SA S AL GO IS YS E IN G I N T O AN ANAL : T Gs IN EG T D CO R A T S HE R R P I N G T E P OUID A P O R A T E RA L G R A C TIC Developed by Developed by With expert input from Technical support from Supported by Supported by Reference Step 1: Understanding the SDGs Refer to the SDG Compass Step 2: Defining priorities – further guidance Refer to the SDG Compass Step 3: Setting goals Refer to the SDG Compass Step 4: Integrating Refer to the SDG Compass Step 5: Reporting and communicating – further guidance Refer to the SDG Compass 6 Table of contents Step-by-step guidance Appendices Setting the scene Principled prioritization for reporting on the SDGs This guide follows an approach that aligns with the UN • Identify new actions necessary to contribute to the Guiding Principles on Business and Human Rights7, the Ten SDGs. It is important to disclose existing efforts that are Principles of the UN Global Compact8, the OECD Guidelines demonstrably driving positive change. But simply relabeling for Multinational Enterprises9 and the related OECD Due these efforts in SDG terms is likely to be insufficient to Diligence Guidance for Responsible Business Conduct10. contribute to achieving the SDGs. Achieving the SDGs It sets out the process of principled prioritization through requires new and additional efforts. The SDGs have the which a company can identify the priority SDG targets to potential to challenge commonly-held paradigms and focus on within the overall context of the Global Goals. change current business models towards more sustainable This approach assists in integrating the SDGs into reporting ones. To implement change at the scale that is necessary processes, particularly those based on the GRI Sustainability to achieve the SDGs, companies will need to alter their Reporting Standards (GRI Standards). strategies to make alignment with the SDGs a core part of their products and services — it has been shown that there Principled prioritization is a process that includes are massive opportunities for companies that do so. consideration of: • Avoid ‘cherry-picking’ and ‘SDG-washing’. ‘Cherry-picking’ • risks to people and the environment (entry point A): refers to selecting goals and targets based on what is the contribution every company can make to achieving the easiest for companies rather than what accounts for the SDGs by meeting its responsibility to address potential and highest priorities. ‘SDG-washing’ means reporting on actual negative impacts to people and the environment that positive contributions to the Global Goals and ignoring are linked to its operations and value chains; important negative impacts. While easy wins and profit- • beneficial SDG-related products, services and making are part of a coherent strategy, it is essential that investments (entry point B): the additional contribution companies also identify and act on the full range of priority that companies can make to achieving the SDGs by SDG targets that intersect with their operations and applying their knowledge, skills and other capabilities to value chains. benefit people and the environment. Principled prioritization is designed to help companies achieve the following: • Align company strategy, efforts and allocation of resources with SDG targets that reflect their significant impacts, as informed by assessing risks to people and the environment and exploring beneficial products, services and investments. Disclosures in a sustainability report should be a true reflection of the significant impacts that are prioritized internally and that shape how senior management defines company strategy and allocates resources. BOX 1 About the ‘Action Platform Reporting on the SDGs’ This Practical Guide has been developed as part of the participate in (online) workshops enabling peer learning. work of the ‘Action Platform Reporting on the SDGs’, Currently, more than 40 companies are actively engaged which is led by the UN Global Compact and GRI and with the platform and around 35 representatives from aims to promote and facilitate corporate reporting on a variety of organizations, including Governments, civil the SDGs. As part of the platform’s work, participating society and UN institutions, are part of the platform’s companies across the globe are invited to provide advisory committee. substantive input, share emerging best practices and 7) For more information, see https://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf 8) For more information, see https://www.unglobalcompact.org/what-is-gc/mission/principles 9) For more information, see http://mneguidelines.oecd.org/guidelines/ 10) For more information, see http://www.oecd.org/investment/due-diligence-guidance-for-responsible-business-conduct.htm 7 STE P GU Y- ID B AN - STEP CE Table of contents Setting the scene Appendices Step-by-step guidance ST E PRIOR 1:P I TY D EF SD INE G TARGETS 1.1: U  nderstand the SDGs and their targets 1.2: Conduct principled prioritization of SDG targets 1.3: D  efine your SDG-related report content 9 Table of contents Setting the scene Appendices Step 1: Define priority SDG targets Step 1.1: Understand the SDGs and their targets Step 1: Define priority SDG targets Principled prioritization is a process by which you, as a company, can prioritize SDG targets based on an assessment of risks and benefits to people and the environment. The steps below describe the process of principled prioritization. Step 1.1: Understand the SDGs and their targets  First, review all the SDGs and their targets. Consider how  Consider the interconnected nature of the SDGs and their the issues they raise might relate to your business. Reflect on targets: your actions might contribute to more than one target risks to people and the environment, as well as on beneficial or SDG. products, services and investments. While doing so, consider  For example, renewable energy companies would most both your own operations and your value chain. likely identify SDG target 7.1: ‘ensuring universal access to  Consider targets you had not foreseen under certain SDGs affordable, reliable and modern energy services’, as a priority. and to which your company could make a critical difference by This in turn is linked to SDG target 13.1 to strengthen climate- tackling risks associated with your operations and value chain. related resilience and SDG target 1.4 to ensure access to basic services, among others.  For example, SDG 3 on good health and wellbeing includes a target to halve the number of global deaths and  With this overview of the SDGs and their targets in mind, injuries from road traffic accidents. Road accidents might you are ready to identify the priority SDG targets for your be a high risk for people working for extractive companies company based on the two entry points: risks to people and the or companies with large distribution networks; reducing environment and beneficial products, services or investments. deaths and injuries from road accidents could therefore be a legitimate priority SDG target for these companies.  Identify other unanticipated targets that you could advance by applying your company’s skills and capabilities in new ways.  For example, SDG 9 on industry, innovation and infrastructure includes a target to increase the access of small-scale industrial and other enterprises to financial services, particularly in developing countries. This might offer beneficial product and service opportunities for banks and technology companies. Iberdrola is aware that the SDGs offer a new vision that allows us to translate global needs and ambitions into solutions. They are a viable model for long-term growth and will help companies to develop more solid strategies. The integration of SDGs in business plans strengthens identification and management of material risks and costs, creation and access to new markets, and innovation in business models making them more efficient, thus aligning the strategy and expectations of the company with its employees, customers, investors and the communities in which it operates. Agustín Delgado, Chief Sustainability Officer, Iberdrola 10 Table of contents Setting the scene Appendices Step 1: Define priority SDG targets Step 1.2: Conduct principled prioritization of SDG targets Step 1.2: Conduct principled prioritization of SDG targets  As explained in the introduction, principled prioritization is a  Entry point B: Identify SDG targets you can best contribute process to identify the priority SDG targets for a company to to through beneficial products, services or investments. focus on to contribute to achieving the SDGs. Below are the • The focus here is on how the company can apply its two entry points through which a company can identify priority skills and capabilities to develop products, services or SDG targets by assessing the significant impacts linked to its investments that contribute to the achievement of the operations and value chain. SDGs. While this might not be immediately possible for  Entry point A: Assess how priority risks to people and the some companies, the exercise could highlight ideas to make environment relate to SDG targets. this possible in the future. • The focus here is on identifying the most severe negative • The objective is to ensure that these beneficial products, impacts on people and the environment that are linked to services or investments are also developed and delivered the company’s operations and value chain and the SDG in ways that minimize any negative impacts and therefore targets to which these impacts relate. These impacts reinforce the viability of the company in the long term. include the ‘salient’ human rights risks or issues (see Box 4). • The objective is to identify opportunities to tackle these risks in ways that maximize positive outcomes for people and the environment and therefore for the SDGs. BOX 2 The role of stakeholder engagement in informing reporting on SDGs Stakeholder engagement is especially crucial for the speak for the groups concerned. They may include local responsibility to respect human rights as set out in the NGOs, academics and other experts. Engagement with UN Guiding Principles on Business and Human Rights. proxy stakeholders can be a valuable alternative where it It is also a pivotal element of the OECD Due Diligence is not possible to talk directly with affected stakeholders Guidance for Responsible Business Conduct. As outlined or their representatives. This may be because the in GRI’s Stakeholder Inclusiveness principle, engagement company is remote from the risks it is considering — for with stakeholders is essential for a company to identify example, risks in its extended supply chain — or because material topics to report on. resource limitations (time, money, language, etc.) make it particularly challenging for the company to engage with Engagement with affected stakeholders or – where affected stakeholders directly. that is not possible– with proxy stakeholders who have knowledge of stakeholder interests and perspectives, is Engagement with expert stakeholders can serve critical to understanding the nature of actual and potential multiple purposes for the company. In the context of impacts on people linked to the company’s operations SDG/sustainability reporting, consultation with expert and value chain and assessing the severity and likelihood stakeholders is particularly important for developing of these impacts. It is part of the company’s ongoing priorities — or material topics — for both action due diligence. and reporting. Who are affected stakeholders? While stakeholders Who are expert stakeholders? These are people who can be positively or negatively affected through the understand the business or its industry and have insight company’s operations or value chain, the focus here into one or more aspects of sustainability (e.g., water, is on stakeholders who could be negatively affected. human rights, anti-corruption). They are well placed to Engagement with these stakeholder groups may take review company plans and add thoughtful suggestions place directly with members of the concerned group or identify any gaps. These stakeholders may include — employees, contract workers, supply chain workers, national or international NGOs, national or international affected communities and consumers — or through trade union federations, academics, representatives of their legitimate representatives, such as trade unions, other companies, consultants, lawyers and investors with community leaders or others. These engagement sustainability expertise. processes pay attention to people who might be Engagement with internal stakeholders can facilitate particularly vulnerable within the broader stakeholder collaboration between various departments and levels of groups, such as migrant workers, women, young people, operations in a company to ensure an effective reporting persons with disabilities and indigenous peoples. process. For example, creating a cross-departmental task Who are proxy stakeholders? These are people who force that consists of knowledgeable staff or managers have substantial knowledge of the affected stakeholder from relevant areas of company operations can ensure groups and their perspectives, interests and concerns, that information is shared, compared and integrated and who can bring those insights into a conversation effectively in the overall company strategy. with the company. This said, proxy stakeholders cannot 11 Table of contents Setting the scene Appendices Step 1: Define priority SDG targets Step 1.2: Conduct principled prioritization of SDG targets  The process of prioritizing your SDG targets is not intended Entry point A: Assess how priority risks to people and the to imply that certain SDGs are more important than others. environment relate to SDG targets Rather, it recognizes that your company will have particularly significant impacts on certain SDGs, and these should Build a broad picture of actual and potential negative therefore be the priority SDGs for integration into your impacts or risks related to the SDGs company strategy and reporting.  First, identify a full picture of risks to people and the  It is important to highlight that a company can have environment linked to your company’s operations and positive impacts towards the achievement of the SDGs value chain. through tackling the risks of negative actual and potential  Include both actual and potential negative impacts: look impacts as well as through its beneficial products, services for past or existing negative impacts that you have seen in or investments. your company or industry, as well as for new types of negative  The sub-steps below address each of the two entry points impacts that could arise in the future based on what the for identifying priority SDG targets: assessing risks to people company does; where it operates, sources or sells; and its and the environment and exploring beneficial products, value chain. In the context of risks to people, focus on human services and investments. rights, which include labour rights. Negative impacts on human rights are the most acute kinds of impact on people, since they can undermine basic dignity.  At this stage, avoid filtering out impacts based on their likelihood or how easy they would be to address. Include impacts that your company is not at risk of contributing to directly, but which could be linked to your company’s operations, products or services through a business relationship. Account for impacts on employees, workers and the environment linked to your operations and value chain.11  Engage people from across your business — your internal stakeholders — in this risk-mapping exercise.  Draw insights from your external stakeholders, in particular potentially affected stakeholders, and from other external sources such as news channels and social media.  It will typically take several iterations to arrive at a full picture of risks. Use this process to help identify gaps in the company’s knowledge that require further investigation and add to the emerging risk picture over time. BOX 3 How these steps relate to the GRI Standards (1/2) These steps are in line with expectations set out in the GRI The definition of materiality in the GRI Standards requires Standards and generate input for the process of defining that the report cover topics that reflect the reporting report content based on the GRI Reporting Principles, organization’s significant economic, environmental, including the application of the GRI Materiality principle. or social impacts, or that substantively influence the As such, they do not represent a separate or additional assessments and decisions of stakeholders. A topic process, but assist companies in integrating connections can be material based on any one of these dimensions. to SDG targets in their existing reporting process based The most severe potential and actual negative SDG- on the GRI Standards. related impacts will typically be considered ‘significant impacts’ in a materiality assessment in line with the GRI Standards. 12 Table of contents Setting the scene Appendices Step 1: Define priority SDG targets Step 1.2: Conduct principled prioritization of SDG targets  This review of risks to people and the environment linked to  This review of risks to people and the environment linked to your company’s operations and value chain provides you with your company’s operations and value chain provides you with a basis to identify significant impacts, which form an input to a basis to identify significant impacts, which form an input the process for defining report content in line with the GRI to the process for defining report content based on the GRI Reporting Principles. Reporting Principles. Prioritize risks to people and the environment Link to relevant SDG targets  Once you have a broad picture of the risks to people  After having identified the priority risks to people and the and the environment linked to your company’s operations environment linked to your company’s operations and value and value chain, you can start identifying priority risks by chain, you can link them back to the SDGs and their targets. considering the following two factors:  The link to SDGs might be more obvious in some cases Severity: The first factor to consider in prioritization is than others. the severity of the potential negative impacts on people  For example, a priority risk of discrimination against and the environment. Severity includes three, potentially women in your company’s workplace relates to SDG overlapping factors: target 5.1: ‘end all forms of discrimination against women • How grave an impact is or could be; and girls everywhere’. Other risks might be related to the SDGs more indirectly. • How widespread an impact is or could be;  For example, since freedom of association is an enabling • How hard it is or would be to put right (or remedy) right for workers’ labour rights in general, limits on this an impact. right will be relevant to SDG target 8.5: ‘achieve full and Likelihood: The second factor to consider in prioritization productive employment and decent work for all women is the likelihood or probability of occurrence for each and men, including for young people and persons with potential impact. disabilities, and equal pay for work of equal value’. Also, some risks might be linked to more than one SDG.  Prioritize the impacts that are most severe and are of high likelihood. But note that your most severe impacts should also  For example, risks related to climate change are linked be prioritized even when these are of low likelihood. to targets under SDG 13 on climate action, but can also be related to targets under SDG 2 on hunger eradication  For example, nuclear power has a low likelihood of major (through sustainable agriculture), SDG 3 on good health accidents, but if such accidents happen, the severity and wellbeing, and SDG 7 on affordable and clean of the resulting impacts is immense. For more on the energy, among others. severity and likelihood of negative impacts, see the UN publication The Corporate Responsibility to Respect  When you develop strategies to address your risks under Human Rights: An Interpretive Guide12 (question 88) and steps 2.1 (setting business objectives) and 3.3 (learning and the OECD Due Diligence Guidance for Responsible implementing change), you will have opportunities to consider Business Conduct13. how those strategies might benefit additional SDGs. BOX 4 Salient human rights issues The UN Guiding Principles on Business and Human severe, recognizing that a delayed response may affect Rights set out the responsibility of all companies, remediability. Severity is not an absolute concept in this regardless of their size and sector, to respect human context, but is relative to the other human rights impacts rights across their operations and value chains. the business enterprise has identified.’ They state that: ‘While business enterprises should The UN’s interpretive guide The Corporate Responsibility address all their adverse human rights impacts, it may to Respect Human Rights refers to these most severe not always be possible to address them simultaneously. human rights risks as the company’s salient human In the absence of specific legal guidance, if prioritization rights — a concept popularized through the UNGP is necessary, business enterprises should begin Reporting Framework. with those human rights impacts that would be most 11) T  his includes, for example, impacts on people contracted by third parties carrying out services in your business facilities (e.g., security, cleaning, catering), and impacts on people and the environment across the supply chain of your products both upstream (e.g., commodities, manufacturing, packaging) and downstream (e.g. distribution, sales, customer usage, recycling) 12) For more information, see: www.ohchr.org/Documents/Publications/HR.PUB.12.2_En.pdf 13) For more information, see: http://mneguidelines.oecd.org/OECD-Due-Diligence-Guidance-for-Responsible-Business-Conduct.pdf 13 Table of contents Setting the scene Appendices Step 1: Define priority SDG targets Step 1.2: Conduct principled prioritization of SDG targets F  or example, low wages for workers in your supply chain Entry point B: Explore SDG targets you can best relate directly to SDG 1 on ending poverty and target contribute to through beneficial products, services 1.2 to reduce poverty at least by half, as well as to SDG or investments 10 on reducing inequalities and target 10.1 to sustain income growth of the bottom 40 percent at a rate higher Build a broad picture of actual and potential positive than the national average. Your strategy to advance living impacts or benefits of products, services and investments wages in turn could have benefits for targets under SDG related to the SDGs 3 on good health and wellbeing and SDG 4 on quality  In this step the focus is on how your company applies or education, among others. could apply its skills and capabilities to provide products,  The results from this exercise are the first set of priority services or investments that contribute towards achieving SDG targets to which your company can contribute. the SDGs. You might already have an overview of how you These are based on the priority risks to people and the are applying your company’s skills and capabilities to provide environment linked to your company’s operations and value products, services or investments that benefit certain SDG chain (See illustration 1 below). targets. Explore whether you can scale these existing benefits to increase your contribution to the SDGs, or whether you  This set of priority SDG targets and the related impacts could develop new products, services or investments to form an input to the process for defining report content, in line address additional SDG targets in ways that also create value with the GRI Reporting Principles (Stakeholder Inclusiveness, for the company. Sustainability Context, Materiality and Completeness). ILLUSTRATION 1 Example outlining the identification of risk and interconnectedness of SDGs across an apparel value chain Company identifies a priority to reduce its negative impact on SDG 8 in its operations by providing a living wage to all employees Company identifies a priority to reduce its negative impact on SDG 12 through offering increased opportunities for consumer to recycle used apparel Increasing Positive Impact Inbound Company Product Raw materials Suppliers Distribution Product use logistics operations end life Minimizing Negative Impact Company identifies a priority to Company identifies a priority to reduce its negative impact on reduce its negative impact on SDG 3 by ensuring safe working SDG 6 in the supply chain by environments in its operations reducing waste water Company identifies a priority to reduce its negative impact on SDG 15 by reducing soil degradation 14 Table of contents Setting the scene Appendices Step 1: Defineguidance Step-by-step priority SDG targets Step 1.2: Conduct principled prioritization of SDG targets At Danone we have recently published our first SDG reporting at the end of 2017, which makes an integral part of our annual Integrated Report. When preparing it, not only have we taken into account the specific definition of the SDG targets as input for our materiality analysis and stakeholders’ consultation, but we have also made sure we used key performance indicators that were relevant to reflect the link between Danone´s 9 Company Goals, the results of our actions and each target that emerged as being material to our operations. Being specific on the exact way business actions link to the SDGs at the targets’ level is key to concretely demonstrate and valorize our company’s contribution to this global agenda. Emmanuelle Wargon, Senior Vice President, Corporate Affairs & Business Sustainability Integration, Danone F  or example, explore if there are particular groups of  Measures of the significance of positive sustainability people who are marginalized and discriminated against impacts from beneficial products, services or investments may and whose needs you can help meet. Or if you are in part be financial (for example, the reduced cost of drinking a provider of finance, explore if there are innovative water for poor populations, or lowered cost of bringing financing models you could develop to help businesses clean energy to consumers). Financial measures are typically bring environmentally-friendly or socially-beneficial combined with social and environmental measures, such as products and services to new markets. the number of poor people reached with a beneficial product, or the percentage of households reached with recycling T  here might be ways, for example, that you can tailor services. Although different measures cannot always be easily existing products, services or investments to meet the compared, having more clarity on the benefits delivered will needs of the poorest people in societies, who face help you to identify those products, services and investments particular barriers to accessing education, jobs, basic that (potentially) have the most significant positive impacts on services or other benefits – doing so will help decrease the SDGs, and to prioritize them in your reporting. inequalities and increase social and economic inclusion, in line with SDG 10 on reducing inequalities. Or if you  If your company is considering any new products, services are looking to develop products that would support the or investments through which it could increase its contribution sustainable management of forests, in line with SDG 15 to the SDGs, you should also factor in their relative costs and on life on land, for example, consider whether you could opportunities to the business. partner with and empower local indigenous peoples in  Take account of any risks to people or the environment the process, or whether you could use renewable energy that are likely to arise in the development or delivery of new to process timber. products, services or investments, and take action to prevent  When thinking about how your company’s skills and or mitigate resulting actual negative impacts. capabilities might be able to provide benefits through  This review of the extent of your company’s positive targeted products or services, look also beyond those SDGs impacts on people and the environment through beneficial that might seem closest to your company’s core business. products, services or investments provides you with a basis F  or example, an ICT company could apply its to identify the significant impacts, which form an input to technologies in ways that advance SDG 4 on quality the process for defining report content based on the GRI education, or a sporting organization could make a Reporting Principles. critical contribution to SDG 5 on gender equality. Link to relevant SDG targets Prioritize beneficial SDG-related products, services  Look beyond the most obvious links to SDGs, also taking and investments into consideration SDGs and targets you might be able to  Once you have a broad picture of the beneficial products, contribute to indirectly. services and investments your company could provide, you  For example, technologies that enable children in remote can test and refine your priorities among these existing or communities to access education might contribute not potential innovations by considering the following two criteria: just to SDG 4 on education, but also to SDG target 8.7 • The significance of the benefits they could bring to society to eradicate child labour, and to possible reduction in poverty, relating to SDG 1, as those children enter the • The significance of the benefits they could bring to workforce in later life and are able to earn higher wages. your business 15 Table of contents Setting the scene Appendices Step 1: Defineguidance Step-by-step priority SDG targets Step 1.3: Define your SDG-related report content BOX 5 How these steps relate to the GRI Standards (2/2) If you have, in prior reporting cycles, gone through a It is important to note that the SDGs are likely to introduce process of defining report content based on the GRI additional considerations and expectations, even for Reporting Principles (GRI 101: Foundation) and identified experienced reporters. In this regard, the introduction material topics accordingly, you can use these outcomes of the SDGs is an opportunity to review earlier as valuable input for identifying risks to people and materiality assessments and ensure that your report the environment linked to your company’s operations content is aligned with the 2030 Agenda for Sustainable and value chain, to subsequently identify your priority Development and the SDGs. SDG targets.  This results in the second set of priority SDG targets to  This set of priority SDG targets and the related impacts which your company can contribute. These are based on the form an input to the process for defining report content, in line positive impacts that flow from beneficial products, services with the GRI Reporting Principles (Stakeholder Inclusiveness, or investments your company could provide. Sustainability Context, Materiality and Completeness). Step 1.3: Define your SDG-related report content  You have now identified two sets of priority SDG targets:  Another example is when a technology company develops a hotline service for workers suffering abuse, • Entry point A: Set of priority SDG targets based on an and it brings this to the attention of authorities or assessment of risks to people and the environment. companies whose supply chains it is part of, while at the • Entry point B: Set of priority SDG targets based on an same time addressing the risk of poor working conditions exploration of beneficial products, services or investments. in its own supply chain. Both the risk and the hotline service relate to SDG 8 on decent work, and in particular  The two sets of SDG targets you have prioritized will to target 8.8 to protect labour rights and promote safe typically differ, but they may also overlap. and secure working environments for all workers. F  or example, a water service provider might face the  In the process for defining report content in line with risk that a municipality makes the provider’s services the GRI Standards, also consult with stakeholders to available to local populations in discriminatory determine any additional SDG-related topics that influence ways, but it might also encounter opportunities to their decisions and assessments. Omission of this would develop new ways to bring water services to formerly lead to an incomplete account of the significant economic, marginalized communities. Addressing both the risk and environmental and social impacts; it should therefore be opportunities would contribute to SDG 6 on clean water covered in the report. and sanitation, and in particular to target 6.1 to achieve universal and equitable access to safe and affordable  Discuss with your expert stakeholders the process through drinking water for all. which you arrived at your priority SDG targets, and make any adjustments needed. Our reporting on material sustainability issues, targets, and progress is validated with relevant internal stakeholders across our organization, as well as anchored and reviewed by members of executive management to ensure relevant broad and high-level engagement. Annette Stube, Head of Sustainability, A.P. Moller - Maersk 16 Table of contents Setting the scene Appendices Step 1: Defineguidance Step-by-step priority SDG targets Step 1.3: Define your SDG-related report content  With these sets of priority SDG targets related to your significant impacts and stakeholder inputs, your company can complete the process of defining report content, including an assessment of materiality in line with the GRI Standards. Final decisions on material topics should remain in line with the company’s responsibility to respect human rights as well as with other relevant principles and standards for responsible business conduct, such as the Ten Principles of the UN Global Compact and the OECD Guidelines for Multinational Enterprises.  You now have a confirmed set of priority SDG targets to be included in your report and to which your company can make its most important contribution, from the two entry points of tackling risks to people and the environment and developing beneficial products, services or investments. When we first started we went from 17 SDGs, to support and act upon 14 SDGs where we identified impacts — either positive or negative — throughout our value chain. At Pernod Ricard, we believe that any negative impact can be transformed into a positive impact! This prioritization process was made possible by reviewing the 834 business indicators of the SDG Compass guide for business and getting key internal departments involved. Today, we are going even further by building a new sustainability strategy based on the SDGs and prioritizing even further the SDGs where we have the most impact. Noemie Bauer, Head of Sustainable Business, Pernod-Ricard BOX 6 Consider risks to business When finalizing your priority SDG targets, the risks to your employer, partner, supplier, customer, brand or investment business will be an element you will consider. These will of choice. For example, a company relying on water most likely already be reflected in your priority SDG supply as raw material, will have to consider water scarcity targets. These could be reputational risks, financial, legal in different regions of the world. Under step 1.2.1, this risk or regulatory risks, risks to business continuity or risks may already have been identified as having a significant related to the recruitment, retention and productivity of impact on the environment and people in the given employees, among others. Conversely, you may also have region. Likewise, a risk to business might be the lack of considered the opportunity to reduce these business risks innovation. This links directly to the second entry point of by tackling risks to people and the environment as a way developing beneficial products and services. to protect and create value by making the company an 17 Table of contents Setting the scene Appendices Step-by-step guidance ST E P 2 AN D : M AN EA YZE AL SU Step 2.1: Set business objectives RE Step 2.2: Select appropriate disclosures Step 2.3: Collect and analyze data 18 Table of contents Setting the scene Appendices Step 2: Measure Step-by-step and analyze guidance Step 2.1. Set business objectives Step 2: Measure and analyze Based on the outcomes of step 1, you can now identify and align your objectives and strategies to contribute to your priority SDG targets. This step provides guidance on setting objectives, selecting indicators to measure your impacts and analyzing your performance against the SDGs. Step 2.1. Set business objectives  Define objectives to contribute to the SDG priority targets.  Trade-offs between positive and negative impacts can be When doing so, and in order to maximize the impact of and problematic if the impacts are not comparable. In particular, clarity in both your company’s actions and reporting, consider negative human rights impacts cannot be offset by other the following: positive impacts.  When addressing the priority SDG targets based on priority  For example, a renewable energy installation might risks to people and the environment, identify strategies and reduce a region’s dependence on fossil fuels and bring specific objectives that go beyond just avoiding harm, to find energy to underserved communities. But if it displaces opportunities to maximize positive outcomes. This will support local indigenous communities from their historical systemic and durable change and will help the company and cultural lands without their consent, the positive secure its license to operate. and negative impacts cannot be offset; they must be addressed in their own right.  For example, an apparel company seeking to tackle harassment and health risks to women in its supply  If applicable, consider setting corporate objectives that factories might work with local organizations to train take into account planetary boundaries and other thresholds. women workers on health issues, and build managers’  For example, the Science Based Targets initiative helps capacity to tackle harassment and ensure access to companies determine by how much they must cut their complaints mechanisms and supporting resources, greenhouse gas emissions to prevent the worst impacts resulting in positive impacts on SDG targets 5.1 and 5.2 on climate change15. Similarly, corporate context-based on discrimination and violence against women, as well as target setting methodologies are being developed for SDG 2 targets related to women’s health.14 water16 and other SDG-related areas. The Future-Fit F  or example, a mining company aiming to rehabilitate Business Benchmarks also provide a set of absolute areas no longer in use by restoring forests (SDG target goals that are based on social and natural science. 15.2), could also actively reinsert threatened plants and  Consult stakeholders when setting objectives. species in these areas, turn them into nature sanctuaries (halt the loss of biodiversity, SDG target 15.5), and, by engaging local communities, promote opportunities around community-based ecotourism (SDG target 8.9).  As you identify new or adapted products, services or investments that can contribute to one or more SDGs, ensure that they can be produced and delivered with minimum negative impacts. F  or example, a product that supports access to electricity for poor populations but has a high environmental footprint in its production processes, has limited value for sustainable development. 14) For more examples on how addressing human rights impacts can help contribute to the SDGs, see The Human Rights Opportunity: www.shiftproject.org/sdgs/ 15) For more information on the Science Based Targets initiative, see https://sciencebasedtargets.org/ 16) For more information on corporate context-based water targets see, for instance, www.ceowatermandate.org/files/context-based-targets.pdf 19 Table of contents Setting the scene Appendices Step 2: Measure Step-by-step guidance and analyze Step 2.2. Select appropriate disclosures Step 2.2. Select appropriate disclosures  Once you have established objectives to contribute to each of your priority SDG targets, identify the indicators you will use to measure progress against them.  To adequately report impacts, combine qualitative and quantitative (e.g., numerical metric, ratio or percentage) disclosures17. Qualitative disclosures provide narrative information on how and why a company identifies, analyzes and responds to its actual and potential impacts.  Use the publication An Analysis of the Goals and Targets18 as a reference to find relevant disclosure standards and guidelines from different reporting frameworks to measure and report on your company’s progress in relation to specific SDG targets (also included in the SDG Compass online inventory of business disclosures19 ). Where the Analysis indicates that for certain topics there are no existing or established disclosures available, you can report on the management approach for those topics (see GRI 103: Management Approach for more guidance). Alternatively, you may wish to develop your own disclosures or rely on other sources to fill gaps in existing indicators (see illustration 2). ILLUSTRATION 2 Example of indictors relating to water purification at different levels of a company’s operations Inputs Activities Outputs Outcomes Impacts What resources that go What activities are What is generated What changes have What are the changes in could positively or undertaken? through those activities occurred in the target as a result of those negatively affect the population? outputs? SDG targets? Money spent on Water purification Number of water Purified water Reduction in the manufacturing and tablet sales (qualitative purification tablets consumed in incidence of R&D description) sold and consumer percentage water-borne diseases information provided in percentage 17) For examples on both types of disclosure, see https://www.unglobalcompact.org/library/5361 18) F or more information, see: www.unglobalcompact.org/library/5361 19) F or more information, see sdgcompass.org/business-indicators/ 20 Table of contents Setting the scene Appendices Step 2: Measure Step-by-step guidance and analyze Step 2.3. Collect and analyze data Step 2.3. Collect and analyze data  After you have selected indicators for measuring and  For example, in areas with disadvantaged, marginalized reporting on your priority SDG targets, the next step is to or vulnerable groups, regional data will be important identify and collect quantitative and qualitative data in relation to understand your company’s specific impact or to each indicator on a regular basis. Data relevant to your benefit by socio-economic criteria such as gender, performance on priority SDG targets might already exist age, ethnicity, disability, migration status and other within your company. As always, stakeholder engagement, relevant characteristics. including engagement with internal stakeholders, can be  There is, for example, an increasing demand for tracing helpful in this process. workforce standards in the production of raw materials in  Rely on existing data if it is relevant to company order to monitor and mitigate the risk of modern slavery performance on the objectives set in relation to the priority within your supply chain which may cover different SDG targets. regions. For more guidance, see the Office of the High Commissioner of Human Rights Guidance Note ‘A  For example, data on SDG target 15.2 on sustainable Human Rights-Based Approach to Data’20. management of all types of forests can be linked to the traceability of raw materials, which may be found in your  Regularly measure your company’s progress against the existing purchasing systems or in disclosures relating objectives you have established for each priority SDG target. to conflict minerals or ethical sourcing. See Illustration  When analyzing the data, reflect on whether the selected 4 for an example of data collection and assessment of disclosures adequately reflect your company’s contribution to data sources. your priority SDG targets. Conclusions from this assessment  Where data is not available for evaluating whether the should drive management decisions on resource allocation company is achieving its objectives in relation to SDG and be included in your external report. Adjust your data priorities, establish new indicators. Indicators should be management strategy as your business changes, to assure specific, measurable, achievable, relevant and time-bound optimal measurement and reporting (see illustration 3). (SMART). It is best practice to assign indicators to a single owner and have appropriate management to monitor progress towards the established objectives on a regular basis.  If applicable, disclose your data both as an aggregate and by region to reflect the diversity of impacts in different contexts. Regional data will enable measurement of impacts on specific populations or within particular environmental contexts. ILLUSTRATION 3 Example of data collection in relation to SDG 8 on decent work and economic growth, including an assessment of data sources and follow-up of actions planned Disclosure for SDG target 8.5 Management Extra ambition Stop/Start/ Disclosure Data Data resources related to Improve/ Disclosure unit availability quality requitred data quality No action Total number and rate of Number Yes Medium Improve High Improve new employees hires during and % data specificity the reporting period, by age group, gender and region Total number of employees, Number Yes High Monitor High No action disaggregated by female and % process and set and male employees up controls Explicit recognition of living $ currency No N/A Start measuring High Start wage payment and monitoring 20) For more information, see www.ohchr.org/Documents/Issues/HRIndicators/GuidanceNoteonApproachtoData.pdf 21 Table of contents Setting the scene Appendices Step-by-step guidance STEP 3: RE A N D P IMP OR LE T, M IN EN TEG T CH GE Step 3.1: C  onsider general features of good practice when reporting on the SDGs Step 3.2: C  onsider data users’ information RAT E needs AN Step 3.3: Report and implement change 22 Table of contents Setting the scene Step 3: Report, integrate and implement Appendices change Step-by-step guidance Step 3.1. Consider general features of good practice when reporting on the SDGs Step 3. Report, integrate and implement change Based on the outcomes of step 2, this step sets out what is needed for putting together the content of your external report and reflecting internally on implementing change. Step 3.1. Consider general features of good practice when reporting on the SDGs  Reporting on SDGs should be based on established  Include SDG-related information in your reporting cycle as international reporting frameworks whenever practical. appropriate, to demonstrate how the SDGs are integrated into You can find examples of relevant standards and reporting your company’s priorities and objectives (business strategy). frameworks in the publication An Analysis of the Goals  Present your priority SDG targets and your overall and Targets. performance in the broader context of sustainability,  Internal reporting to management and the board is useful particularly if you are operating in different locations (see GRI for resource allocation and integration of your SDG strategy 101: Foundation for guidance; see also step 2.1 on setting into your company’s business model. External reporting to objectives that take into account planetary boundaries). your shareholders and stakeholders fosters their constructive This could require distinguishing between perspectives that engagement in your company’s overall performance and areas drive global impacts, such as climate change, and those for improvement. that have regional or local impacts, such as community development. When reporting on topics that have local impacts, provide insight into how the organization affects communities in different locations. BOX 7 Effective reporting – 4 Cs Concise Consistent Current Comparable Concise reporting focuses Consistent reporting allows Current reporting presents Comparable reporting on the priorities and most for an assessment of a useful window that gives allows information users to material information, and performance trends over insights into the operations, benchmark performance avoids clutter and time; it enables managing impacts and potential of against peers. It enables information overload. and understanding the business opportunities, businesses to track and insights delivered by the rather than a rear-view assess their impacts, and reported data. mirror showing what then make decisions that happened in the past. will improve these over time. BOX 8 Checklist – What to set out in your report?  Y  our company’s significant impacts, whether based systems and processes, including your engagement on risks to people or environment or on beneficial with stakeholders. products, services and investments.  Instances where your company has caused or  H  ow your analysis of these impacts has informed your contributed to actual negative impacts, and the identification of priority SDG targets. action(s) you have taken to enable effective remedy to anyone whose human rights were harmed.  H  ow stakeholder feedback informed your conclusions.  Indicators and data that demonstrate how your  Y  our strategy, including objectives (goals) and company is progressing towards its objectives for measurement (indicators) for contributing to the contributing to its priority SDG targets and any priority SDG targets, recognizing that positive setbacks it has encountered. contributions can result from both tackling risks and providing beneficial products or services. This may  Your future plans for achieving further progress. include a description of relevant company policies, 23 Table of contents Setting the scene Step 3: Report, integrate and implement Appendices change Step-by-step guidance Step 3.1. Consider general features of good practice when reporting on the SDGs F  or example, a context-based approach to corporate  Include explanations for any topics linked to the SDGs that water stewardship can provide meaningful risk reduction stakeholders might expect to see, but that you have chosen to by addressing multiple dimensions of water risk and can omit from your reporting. The explanation should include the contribute to long-term water security by ensuring that reasons why you concluded that these topics are less material your company’s water strategies are aligned with local for your company. and state water policy, and ultimately connected to the  If you have identified existing negative impacts, include a global SDG indicators21. description of the remedy you are or will be implementing in  When disclosing information on your company’s your report. contribution to your priority SDG targets, seek to link this to  Apply both internal controls and external assurance to other relevant international agreements or commitments. enhance accuracy, credibility and overall reporting quality.  For example, your efforts to help mitigate climate change These might also be required by some stakeholders, e.g., could contribute to the Paris Agreement and the climate- investors. related intended National Determined Contribution22  In addition to formal reports, use other relevant channels (NDC) and can be linked to your disclosures on SDG 13 to communicate your sustainability strategy and SDG on climate action. performance, such as company website, social media  Report your progress against the objectives you channels, podcasts, events, product and service labeling, established for each priority SDG target on a regular marketing and advertising. basis. Disclosures in your report may be repurposed for reporting requirements mandated by regulations, such as listing requirements mandated by certain stock exchanges. Information on reporting policies, both voluntary and mandatory, can be found on the Carrots and Sticks online platform23. BOX 9 The recommendations of the Task Force on Climate-related Finance Disclosures and reporting on SDG 13 on climate action In 2017, the Task Force on Climate-Related Financial not only report on the financial implications of climate Disclosures (TCFD) issued widely considered change on the business, but also on the impact that the recommendations on climate-related disclosures that business may have on climate change and related risks businesses and financial organizations should provide to people and the environment. For instance, as part of in their mainstream annual filings and that primarily the areas of ‘strategy’ and ‘risk management’ identified address investors, lenders and insurance companies. by the TCFD, reporting on SDG 13 can include a scenario The recommended disclosures focus on the areas of analysis, the likelihood and probability of the company’s governance, strategy, risk management and metrics and impact on climate change, the disclosure of greenhouse targets, and they provide useful guidance for businesses gas emissions and a description of the measures the reporting on the financial impacts of climate change risks company has taken or plans to take to mitigate its impact. and opportunities. The recommendations can also be If relevant, companies should also disclose how their helpful in reporting on issues related to SDG 13 on climate operations may affect the capacity of local communities action and the Paris Agreement. to adapt to the effects of climate change and how the companies are supporting local resilience in the areas In order to be aligned with the principled prioritization they operate (this is relevant in connection with target approach outlined in this document and with the GRI SDG 13.1). Standards, businesses reporting on SDG 13 should 21) F  or more information on corporate context-based water targets see, for instance: https://www.ceowatermandate.org/files/context-based-targets.pdf 22) See https://unfccc.int/process-and-meetings/the-paris-agreement/nationally-determined-contributions-ndcs and https://unfccc.int/files/essential_ background/convention/application/pdf/english_paris_agreement.pdf 23) See www.carrotsandsticks.net 24 Table of contents Setting the scene Step 3: Report, integrate and implement Appendices change Step-by-step guidance Step 3.2. Consider data users’ information needs Step 3.2. Consider data users’ information needs  SDG reporting should provide shareholders and other represent the values of their clients and offer differentiated stakeholders a basis for informing their insights and decisions. sustainable financial products, while understanding their Engage regularly with a broad range of stakeholders own SDG impacts across their portfolios. To inform their throughout the reporting process to stress-test the value of decision-making, investors are seeking information on how the information you are reporting. companies are transforming their competitive advantage in relation to the SDGs into business results and on how relevant  Consider the information needs of Governments: the SDGs are to overall company strategies. Also, though National Governments lead the implementation of the SDGs understanding past progress and trends helps investors in their countries and voluntarily present their progress at assess future business performance, they are increasingly the United Nations High-level Political Forum on Sustainable looking for scenario planning and other forward-looking Development (HLPF) 24. To measure their progress, disclosures. For more information on this, check the report In Governments have established data collection systems25. Focus: Addressing Investors Needs in Business Reporting on Many Governments are now exploring how private sector the SDGs27. contributions to the SDGs can be analyzed to inform the national review process. Business disclosures can support  Consider the information needs of civil society: data availability and quality of such reviews, particularly if Civil society organizations assess SDG performance and they are based on internationally agreed standards and are, hold companies accountable as well as press for more therefore, more comparable. Engaging in national multi- transparency. These organizations can help improve your stakeholder dialogues can facilitate a better understanding SDG performance by providing expertise, becoming of Governmental expectations and how your business valuable partners in liaising with affected communities and can contribute to and report on the national SDG agenda, when engaging in relevant multi-stakeholder dialogues on as well as other UN processes26. In this context, explore the SDGs. with Governments how you can make your disclosures  Consider the information needs of consumers and more relevant and accessible (e.g., by uploading them on academia: Consumers might increasingly demand more public platforms). sustainable products and services and base their choices  Consider the information needs of investors: Investors on the assessment of corporate sustainability information, have an increasing interest in SDG-related data to assess including information on performance on the SDGs. risks, including risks related to companies, and new business Academia can use corporate sustainability disclosures for opportunities. The assessment of business impacts on the their research and analysis. SDGs can inform investors’ decisions to help them better 24) For more information about the HLPF review process, see https://sustainabledevelopment.un.org/hlpf 25) For more information, see The Sustainable Development Goals Report 2018, p. 16 -17 on data: https://unstats.un.org/sdgs/files/report/2018/TheSustai nableDevelopmentGoalsReport2018-EN.pdf 26) For examples about the value of engaging in SDG-related policy-dialogues at the country level, see Accelerating National SDG Implementation, p. 22: www.unglobalcompact.org/library/5627 27) See www.unglobalcompact.org/library/5625 25 Table of contents Setting the scene Step 3: Report, integrate and implement Appendices change Step-by-step guidance Step 3.3. Report and implement change Step 3.3. Report and implement change  Assess if you are meeting the objectives you set in relation employee engagement and leadership. Ideally, accompany to your priority SDG targets, anticipate performance gaps, this with relevant training. reflect on your improvements and include this information in  Look for strategic opportunities to collaborate with your reports. Internal coordination and distributed ownership peers and others to leverage resources, advocate business for the set objectives is essential. responsibility, establish sectoral objectives and initiatives or  For example, objectives set in relation to priority SDG spread the implementation costs of actions to advance the targets related to suppliers have a better chance SDGs.29 of success if they are ‘owned’ by the department responsible for engaging with and managing suppliers. In all cases, individual accountability for progress on objectives will help drive success.  Review and assess your reporting cycle. The UN Sustainable Development  For example, synchronize your internal reporting processes with public disclosure to minimize workload Goals sit at the heart of our growth and maximize the relevance of your company’s strategy, and reporting on our performance in relation to your priority SDG targets. You could also periodically review your list of progress in delivering towards them stakeholders to ensure that you have full coverage and allows us to increase transparency consultations on your priority SDG targets. for our stakeholders and, in  Use your SDG reporting as a basis for driving informed particular, our investors. This form decision-making and integrating the SDGs into your company strategy. This can stimulate innovation and help your of reporting also stimulates greater company design products and services that will contribute to interest in the SDGs and generates achieving the SDGs. The Blueprint for Business Leadership on the SDGs28, An Analysis of the Goal and Targets and motivation and creativity throughout other tools and publications developed by the UN Global the Covestro organization, Compact together with partners provide relevant guidance and inspiration. further cementing the SDGs in  Internal communication is as important as external all our activities. Eric Bischof, reporting to support the successful integration of the SDGs in VP Corporate Sustainability, your company strategy and to promote ownership by relevant Covestro company decision-makers. Consider communicating your strategy and progress to the broader workforce to encourage We define our priority SDGs according to our business plan, materiality and stakeholder expectations. Enel has not developed new planning and reporting processes to monitor its SDG performance: we prefer to adopt an integrated approach. SDGs became business as usual for our company, rather than being classified in separate ESG targets and measures. The strategic plan, the sustainability plan and the report clearly show the deployment, across the board, of the 17 United Nations Sustainable Development Goals, and of Enel’s sustainable business model throughout its value chain. This approach makes it easier for the whole group to understand, manage and evaluate SDG-related data and performance and to share our CEO’s commitment to the SDGs. Giulia Genuardi , Head of Sustainability Planning and Performance Management, Enel 28) See www.unglobalcompact.org/library/5461. 29) For more information, see Transforming partnerships for the SDGs, www.unglobalcompact.org/library/5614; Private-Sector Collaboration for Sustainable Development, www.bsr.org/reports/BSR_Rockefeller_Private-Sector_Collaboration_for_Sustainable_Development.pdf; and Partnerships for Sustainable Development: Collective action by business, governments and civil society to achieve scale and transform markets, www.hks.harvard. edu/sites/default/files/centers/mrcbg/programs/cri/files/PforSD(Exec_Summary).pdf. 26 PE NDICE AP S Table of contents Setting the scene Step-by-step guidance Appendices Appendices List of international reporting Select reporting frameworks frameworks and indicators • Climate Disclosure Standards Board Framework • GRI Sustainability Reporting Standards Sources of business disclosures • SASB Accounting Standards • BIO Intelligence Service Development of Guidance on • Taskforce on Climate-related Financial Disclosures Extended Producer Responsibility Final Recommendations • Business Call to Action indicators • The IIRC Framework • Convention on Biological Diversity Quick guide to the Aichi • UN Guiding Principles Reporting Framework Biodiversity Targets • CDP 2017 Climate Change Information Request • CDP 2017 Forests Information Request Contributors • CDP 2017 Water Information Request Integrating the SDGs into Corporate Reporting: a Practical • CEO Water Mandate’s Corporate Water Guide is a key deliverable from the partnership between Disclosure Guidelines GRI and the UN Global Compact. Technical and strategic support has been provided by PwC and Shift. This document • Danish Institute of Human Rights AAAQ Framework incorporates input from a multi-stakeholder advisory Generic Indicator committee (MAC) of the Action Platform Reporting on the • Food and Agriculture Organisation Aquastat SDGs and a variety of stakeholders comprising business (including SMEs), academia, international institutions, • Global Innovation Index GII Framework national statistical offices, Governments, civil society • GRI Sustainability Reporting Standards organizations, investors, data users, statistical offices, and regional presences of GRI and the UN Global Compact • IUCN Red List organizations worldwide. Provision of input by stakeholders • International Centre for Research on Women Understanding does not equal endorsement of the final product. and Measuring Women’s Economic Empowerment - Definition, Framework and Indicators About the United Nations Global Compact • International Labour Organisation Decent Work Indicators The United Nations Global Compact is a call to companies everywhere to align their operations and strategies with ten • International Trade Union Confederation Global universally accepted principles in the areas of human rights, Rights Index labour, environment and anti-corruption, and to take action in • Kepler Cheuvreux Inequality Footprint: An investor guide support of UN goals and issues embodied in the Sustainable Social & Business Ethics Development Goals. The UN Global Compact is a leadership platform for the development, implementation and disclosure • Oxfam Behind the Brands scorecard indicator of responsible corporate practices. Launched in 2000, it is • UNCTAD Enhancing the role of reporting in attaining the largest corporate sustainability initiative in the world, the Sustainable Development Goals: Integration of with more than 9,500 companies and 3,000 non-business environmental, social and governance information into signatories based in over 160 countries, and more than 65 company reporting Local Networks. www.unglobalcompact.org • UNSDSN U.S. Cities SDG Index • UN Global Compact-Oxfam Poverty Footprint About GRI GRI is an international independent organization that has • UN Global Compact Reporting Guidance on the 10th pioneered corporate sustainability reporting since 1997. GRI’s Principle against corruption mission is to empower decision-makers everywhere, through • WBCSD WASH Pledge and Guiding Principles its sustainability reporting standards and multi-stakeholder for Implementation network, to take action towards a more sustainable economy and world. There are over 100 countries communicating the • WHO Global Health Observatory indicator impact of business on critical sustainability issues with GRI. • Women’s Empowerment Principles: Reporting on Progress www.globalreporting.org • World Bank World Development Indicators • Yale University Environmental Performance Index 28 Table of contents Setting the scene Step-by-step guidance Appendices About PwC College Center for Corporate Citizenship); Rutger Hoekstra PwC’s purpose is to build trust in society and solve important (CBS, Netherlands Statistical Office); Kate Levick (CDP); problems. Our Sustainability team advises and supports Jennie Gleed (CDP); Philipp Schönrock (Cepei, Centro business and Government to introduce, maintain and expand de Pensamiento Estratégico Internacional); Seema Arora sustainable practices that make sound commercial sense and (Confederation of Indian Industry (CII) ITC, Centre of deliver positive societal impact. Our Sustainability team sits Excellence for Sustainable Development); Carina Lundberg within a broader network of firms in 157 countries with more Markow (Folksam); Barbara Dunin (Global Compact Network than 223,000 people who are committed to delivering quality Brazil); Daniela Patiño (Global Compact Network Colombia); in assurance, advisory and tax services. www.pwc.com/ Vali Marszalek (Global Compact Network Croatia); Morgane sustainability Graffion (Global Compact Network France); Ayman Cherkaoui (Global Compact Network Morocco); Eppy Boschma (Global Compact Network Netherlands); Claire About Shift Melamed (Global Partnership for Sustainable Development Shift is the leading center of expertise on the UN Guiding Data); Felipe Castro, Natalia Currea Dereser (Government Principles on Business and Human Rights. Shift’s founders of Colombia); Aditi Haldar (GRI India); Linda Kromjong were part of Professor John Ruggie’s core advisory team (International Organisation of Employers); Antonio Javierre that helped develop the Guiding Principles. Shift’s global (JAVIERRE,SL); Hugo von Meijenfeldt (Netherlands Ministry team facilitates dialogue, builds capacity and develops of Foreign Affairs); Jos Reinhoudt (Netherlands National CSR new approaches with companies, Government, civil society Center); Lies Craeynest (Oxfam International); Nisha Agrawal organizations and international institutions to bring about a (Oxfam India); Lisa Bersales (Philippines National Statistical world in which business gets done with respect for people’s Office); Kris Douma (PRI); Mandy Kirby (PRI); Jacob Messina fundamental welfare and dignity. Shift is a non-profit, (RobecoSAM); Pipat Yodprudtikan (Thaipat Institute); Oliver mission-driven organization. www.shiftproject.org Greenfield (The Green Economy Coalition); Camilla de Ste Croix (The International Integrated Reporting Council (IIRC)); Richard Howitt (The International Integrated Reporting Acknowledgements Council (IIRC)); Karin Svensson (SIDA); Vishal Kapadia (The This publication is the result of a collective effort involving WikiRate Project); Roberto Tarallo (The World Bank Group); many colleagues from GRI, the UN Global Compact, PwC Katja Bechtel (Transparency International); Angela McClellan and Shift, including: (Transparency International); Tatiana Krylova (United Nations Conference on Trade and Development (UNCTAD)); GRI: Paula Pelaez (UN Development Programme (UNDP)); Elisa Charlotte Portier (Lead), Pietro Bertazzi, Bastian Buck, Tim Tonda (UN Environment); Beatriz Martins Carneiro (UN Mohin, Sabine Content, Francesca Palamidessi Environment); Filippo Veglio (World Business Council for UN Global Compact: Sustainable Development (WBCSD). Bernhard Frey (Lead), Lila Karbassi, Nessa Whelan Corporate Action Group (business participants of the Action PwC: Platform Reporting on the SDGs): Linda Midgley (Lead), Louise Scott, Hans Schoolderman Lene Serpa (A.P. Moller – Maersk); Bianca Nijhof (Arcadis); Shift: Fiona Riggall (ARM); Tanja Castor (BASF); Ute Menke Caroline Rees (Bayer); Martha Patricia Herrera Gonzalez (Cemex); Qing Tian (China Development Bank); Esther An (City Developments GRI and the UN Global Compact would like to thank the many Limited); Panagiotis Vergis (Coca ColaHellenic); Eric Bischof individuals, companies and organizations that contributed (Covestro); Hiroshi Tomita (Cre-en Inc.); Karsten Schroeder to this publication with the recommendations and feedback (Daimler); Laura Palmeiro (Danone); Silke Thomas (Deutsche they provided during the consultation periods. Particularly, Telekom AG); John Edelman (Edelman); Marina Migliorato the two organizations greatly appreciate the support by (Enel); Cristina Saporetti (ENI); Claudia Millo (Ferrero the Government of Sweden, who financed this publication International); Carina Lundberg Markow (Folksam); Araki through the Swedish International Development Agency Yuko (Fuji Xerox); Francisco Chavez Visovo (Grupo Bimbo); (Sida) and also thank Kriti Toshniwal for messaging and Sol Beatriz Arango (Grupo Nutresa); Rebecca Self (HSBC); Mark Bakker for design. Monica Oviedo Cespedes (Iberdrola); Berta Alonso Martínez (Industria de Diseño Textil S.A.); Luciana C. Lobo C. Teixeira Thank you to the following organizations and individuals (ITAIPU Binacional); Paul Arsac (L’Oreal); Mark Harper (John who have provided valuable feedback to shape Swire & Sons); Romain Bentz (Michelin); Helen Medina this deliverable. (Nestle); Anne Gadegaard (Novo Nordisk); Justin Perrettson (Novozymes); Noemie Bauer (Pernod Ricard); Francesca Members of the Multi-Stakeholder Advisory Committee Martucci (Pirelli & C.); Apinya Synsatayakul (PTT Global The members of the Multi-stakeholder Advisory Committee Chemical); Betina Del Valle Azugna (Sancor Seguros); Isaac (MAC) of the Action Platform Reporting on the SDGs were Ruiz (Siemens Gamesa); Thomas Andro (Solvay); Giacomo asked for their input in the process of writing this publication, Cosimo Befo (TIM); Sandra Dante (Total); James Niven however, membership of the MAC does not equal (Triodos Bank); Gabriele Wende (UPM); Emanuelle Stein endorsement of the final product. (Vale); Douglas Sabo (Visa); Richard Ellis (Walgreen Boots). Joris-Johann Lenssen (ABIS – The Academy of Business in Society); Carina Silberg (Alecta); Katherine Smith (Boston 29 Table of contents Setting the scene Step-by-step guidance Appendices Disclaimer This publication is released by GRI and the UN Global Compact. This publication has been prepared for general guidance on matters of interest only, and does not constitute 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, GRI and the UN Global Compact, their members (if applicable), employees, partners and agents do not accept or assume any liability, responsibility or duty of care for any consequence 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. The members of the Multi-stakeholder Advisory Committee (MAC) and other stakeholders were asked for their views in the process of writing this publication; however, membership of the MAC does not equal endorsement of the final product. Copyright This document is copyright-protected by Stichting Global Reporting Initiative (GRI) and the UN Global Compact. The reproduction and distribution of this document for information is permitted without prior permission from GRI and the UN Global Compact. However, neither this document nor any extract from it may be reproduced, stored, translated, or transferred in any form or by any means (electronic, mechanical, photocopies, recorded, or otherwise) for any other purpose without prior written permission from GRI and the UN Global Compact. Published August 2018 30 E NG IN T O : TI G s IN EG T D CO R A T E RS I N G T H O I D RPO E P U AP R A T E R G R A C TIC A L Developed by With expert input from Technical support from Supported by