Small Businesses Can (and Should) Do More to Align with the SDGs

Launched by the United Nations in 2015, the Sustainable Development Goals (SDGs) are a roadmap for solving the world’s most pressing challenges by 2030. The 17 goals and 169 targets include lofty ambitions such as ending poverty, achieving universal access to energy, and eliminating inequality in education. Along with UN member states that will use the goals to frame their public policies, the SDGs explicitly call on businesses to play an active role—and many are already stepping up.

As of February, four in 10 of the world's largest firms referenced the SDGs in their corporate reporting, according to a study by KPMG, but many smaller companies remain unsure of how they fit in.

Small- to medium-sized enterprises (SMEs) represent roughly half of all private-sector employment in the United States, according to the US Small Business Administration. In developing markets, up to 90 percent of all workers are employed by small businesses, so it’s not hard to see how important it is for growing companies to get on board with the agenda.

“We’re not going to solve the SDGs unless we’re able to unlock the power of entrepreneurs,” Ben Powell of Agora Partnerships told Silicon Valley Community Foundation in its 2017 report on business SDG alignment, which includes tips for both large companies and SMEs. As founder of the nonprofit behind the lauded Agora Accelerator, Powell helped more than 150 impact entrepreneurs build their businesses—and he knows what it takes to grow a company with impact at its core.

Though Fortune 500 firms often have entire teams devoted to mapping their operations against the SDGs, Powell says the process will likely be much simpler for small businesses. “As a social entrepreneur, just ask yourself: ‘What is my purpose?’ You knew what your purpose as a company was before the agenda, and your purpose is probably expressed in one of the SDGs.”

Tracy Triggs-Matthews, associate director of UNC Kenan-Flagler's Center for Sustainable Enterprise, agrees. "I think many SMEs would be surprised to see how 'good' their company already is and how small tweaks can make them even better," she told Business.com this month. Even further, taking the time to see how they align with the SDGs can help growing companies stand out from the pack. "Consumers are looking for brands that are making a big difference, and being able to tell that story will only help differentiate an SME among competitors,” Triggs-Matthews said.

By now, most large firms are familiar with how their operations affect people and the planet—more than 80 percent of the S&P 500 published sustainability reports in 2016—but SMEs are often less familiar with assessing and improving their supply chains. Still, more than 5,300 SMEs have already partnered with the UN Global Compact to track their alignment with the goals, and a growing number of early adopters are proving that the SDGs can help small businesses thrive.

Two small businesses make SDG alignment work for them

Founded in 2010, Uncommon Cacao connects small farmers in Central America and the Caribbean with chocolate companies looking for traceable ingredients. By working closely with farming communities on transparency, efficiency and quality, the Berkeley-based startup is able to offer growers a highly competitive price for their cacao—outpacing even local fair trade collectives—and it provides premium product to cult-favorite labels like Videri Chocolate Factory and Dandelion Chocolate.  

With a core team of fewer than 10 people, Uncommon Cacao is an early mover on the SDGs. It was among the first group of 16 startups to participate in Unreasonable Goals, an SDG mentorship network spearheaded by the impact entrepreneurship accelerator Unreasonable Group. “SDG alignment was a natural decision for us,” Emily Stone, co-founder and CEO of Uncommon Cacao, told Silicon Valley Community Foundation. “We are a registered public benefit corporation and have a clear mission-driven focus to our business.”

To avoid overextending its lean team, Uncommon Cacao focused on two SDGS that are a clear and natural fit for the business: eliminating poverty (SDG 1) and decent work (SDG 8). The company committed to publish all pricing across its supply chain to further align with these goals and boost transparency. “We believe transparent pricing is a first, big step toward greater equity,” co-founder Maya Granit said in a statement last year.

Similarly, United Kingdom startup Globechain keeps its focus tight—targeting three of the 17 SDGs—in order to maximize impact. Founded in 2013, Globechain is a digital platform that helps large corporates, SMEs and nonprofits share reused items. Rather than send unwanted building materials, stock and other goods to landfills, larger firms can share them with charities, smaller businesses and other members of the Globechain network.

The platform helped nonprofits and small businesses save more than $500,000 in 2016 while diverting 700 tons of material from landfills. Connections made through the platform also furnished two hospitals and sent medical equipment to developing markets like Kenya, Ghana and Sierra Leone.  

Globechain founder May Al-Karooni showcased the company’s SDG plan at the 2017 World Circular Economy Forum in Helsinki, Finland. The company hopes to further goals like building sustainable communities (SDG 11), ensuring responsible consumption and production (SDG 12), and acting on climate (SDG 13) by expanding its network that turns waste into resource, she explained.

“Globechain's vision was to prove a business can be commercial with a conscience,” Al-Karooni told the U.K. National Advisory Board on Impact Investing last year. “We created a model that has quickly become profitable, while also having a substantial social impact.”

The bottom line

Achieving the SDGs will unlock at least $12 trillion in new market opportunities and create 380 million new jobs by 2030, according to a 2017 report from the Business and Sustainable Development Commission. Both small and large businesses will reap the benefits, but we’ll never realize them unless we have all hands on deck. By aligning their core purpose with the shared SDG roadmap, small businesses can be a part of the solution and help forge a future of equality and economic opportunity.

“With just 12 years left to the 2030 deadline, we must inject a sense of urgency,” António Guterres, Secretary-General of the United Nations, wrote in the 2018 SDGs progress report. “Achieving the 2030 agenda requires immediate and accelerated actions by countries, along with collaborative partnerships among governments and stakeholders at all levels. This ambitious agenda necessitates profound change that goes beyond business as usual.”

Image credit: UN Foundation