Adoption of Sustainable Development Goals (SDG) implementation targets by South African companies

M (Environmental Management), North-West University, Potchefstroom Campus Sustainable development is defined as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (Brundtland, 1987). In 2015 a suite of seventeen international Sustainable Development Goals (SDGs) were developed and agreed upon by 193 countries to form The Agenda 2030 for Sustainable Development (Pedersen, 2018) and included 169 implementation targets and 231 indicators. The SDGs were born on the back of the eight Millennium Development Goals (MDGs) which spanned a period of fifteen years from 2000 until 2015 in which global leaders came together to shape a broad vision of fighting poverty in its many dimensions (United Nations, 2015). The aim of this research was based on the perceived problem facing the successful adoption of the SDGs (in particular the implementation targets) by South African companies which lay in the strategic integration, alignment and effective reporting (PwC, 2019). Private sector companies are increasingly becoming a key player in the global achievement of the SDGs (Pedersen, 2018) and whom could capitalise on an estimated $12 trillion per annum market that is linked to the SDGs (Scott & McGill, 2018). Therefore, this dissertation set out to answer the following research question: “To what degree are South African companies adopting the SDG implementation targets, and what are some of the drivers and/or barriers they face?” To answer this research question, an in-depth literature review was conducted on the SDG implementation targets, their varying degrees of adoption and the role they play in achieving the SDGs within the private sector. This was followed by identifying and outlining the research methodology which considered, by way of documents analysis, the degree to which South Africa’s Johannesburg Stock Exchange (JSE) Top 40 listed companies are reporting their adoption of the SDG implementation targets; and to understand through a qualitative survey, the drivers and/or barriers that these organizations face with regards to adopting and reporting on the SDG implementation targets. The results revealed a similar trend of adoption outcomes to that of PwC (2019) in that an impressive 80% of the JSE Top 40 companies mentioned the SDG goals in their Annual Reports; however a dramatic decline in the degree of SDG adoption was discovered thereafter with only 10% of the companies mentioning the SDG implementation targets; and a further 2.5% mentioning the SDG indicators in their annual reporting. Furthermore, the quality of the SDG implementation target adoption was evaluated with 7.5% of the companies mentioning the implementation targets with no ambition, and the remaining 2.5% with quantitative reporting against ambitions. The top three drivers (opportunities) facing these companies with regards to SDG adoption were meeting investor and/or stakeholder expectations (50%), environmental and social risk mitigation (40%), and achieving resilience and long-term success (40%); whilst the top three barriers (challenges) were that the companies were financially focused, in other words the cost of investing in environmental and social sustainability (such as the SDGs) was a key barrier (60%), lack of leadership understanding of the SDGs (40%), and a mis-aligned of the company’s corporate strategy with regards to the SDGs (30%). In light of the above, it can be concluded that the degree (and quality) of SDG implementation target adoption, by South African companies, namely in this case the JSE Top 40, is minimal, and leaves significant room for improvement over the next ten years. From the literature review, it is evident that many SDG adoption tools, frameworks and guidelines exist with which to support private sector companies in adopting, achieving and reporting on the SDGs, therefore in order for South African companies to significantly contribute to achieving the SDGs, it is paramount that they do more than just mention the SDGs in their annual reporting, and instead integrate the SDGs into their corporate strategy, include specific SDG implementation targets and indicators into their performance scorecards, implement the required actions and report against the SDG implementation targets and indicators (GRI, UN Global Compact and the WBCSD, 2015). Further research could be done to understand why South African companies are struggling to achieve the above components of SDG adoption and thereby contributing towards achieving the SDGs. Whilst global progress in achieving the SDGs was already lagging prior to COVID-19, the global pandemic over the course of 2020 has unfortunately halted much of the progress to date, even calling for a post COVID-19 review of the SDGs in their current form (Nature, 2020), however on a positive note, there is still time to achieve the SDGs as humanity is poised on what the United Nations (2020) describes as the start of a ‘Decade of Action’, and while this research primarily focused on the degree of SDG implementation target adoption, the majority of the JSE Top 40 companies have adopted other sustainability frameworks such as the Global Reporting Initiative (GRI) in which they include and report on numerous targets and indicators under the auspices of environmental and social governance. Masters