ESG: Let’s talk about goals
Why it’s high time to add one more UN Sustainable Development Goal
As many of you already know, I’ve had a 20-year career in finance and investor engagement*.
If, like me, you deal with institutional investors on a regular (or even occasional) basis, you can’t possibly have missed how important Environmental, Social and Governance — or ESG — factors have become in the overall consideration of where and how investors deploy capital.
There are a variety of frameworks used to measure how ESG considerations are applied in investing and corporate reporting. SASB and TCFD are the most popular among investors, but PRI, CDP and CDSB — among many others — also feature. There is frequent, sometimes heated debate over which of these frameworks should become a much-needed global industry standard.
However, one thing that both investors and corporate reporters appear to agree on is the importance of the UN Sustainable Development Goals (SDGs) in focusing everyone’s efforts in the ESG arena.
“Companies want harmonised metrics for the UN goals ‘so we don’t have to argue with everybody.’” — Financial Times, 14 January 2020
But the question is, are the UN SDGs in their current form sufficient to get the world where it needs to be on ESG?
A blank space
There are 17 UN SDGs, all of them incredibly worthy goals and all shown below.
These SDGs certainly help point people’s efforts in the right direction, and were definitely drawn up by people with their hearts in the right place. But taking a look at the way the goals are laid out in official communications, it’s almost as if there’s one that’s conspicuous by its absence. That bottom right corner looks unfinished.
You could say, when it comes to the UN SDGs, there’s a blank space.
Filling in the blank
The events of the last six weeks or so — of course, coupled with the events of the 400 years prior to that — have convinced me that there certainly is a missing SDG.
So how should we fill that blank space. I’ll spell it out…
The missing SDG is: End racism.
At a time when it’s never been so clear that the world needs to change — such that ‘Black Lives Matter’ becomes a statement of the obvious rather than a statement of protest — it’s hard to to see how the UN SDGs can continue to make no reference to the scourge of systemic racism.
Furthermore, most of the world’s largest companies and investors have spent the last month or so lining up to one-by-one denounce racial inequality and commit to addressing it. In light of this, the new SDG would not be a difficult one for these organisations to support.
I’m not arguing that ‘End racism’ should be the 18th SDG, such that it should be shoved conveniently in the bottom right corner. No, I’d argue that its rightful place is in the top 3: several of the other SDGs simply cannot be achieved without ending racism. For example…
- You cannot end poverty or hunger without also ending the entrenched racism that helps perpetuate those experiences for so many. (Goals 1 and 2)
- You cannot have gender equality for as long as different groups within the same gender are themselves unequal. (Goal 5)
- You cannot reduce inequalities while systemic racism continues to entrench those same inequalities. (Goal 10)
- You cannot have justice and strong institutions while so many of those institutions remain institutionally racist. (Goal 16)
Additionally, the SDGs that cover what economists like to call ‘public goods’ — healthcare, education, water and sanitation, energy, and infrastructure — can only be delivered with guarantees of fair access for all, which in turn can only be achieved in a world without racism. (Goals 3, 4, 6, 7, 9 and 11)
The UN SDGs turn five years old in September of this year. With only ten years remaining to achieve their agenda for 2030, let’s celebrate their fifth birthday by filling in that blank space.
* For the avoidance of doubt, this article is written in a personal capacity.
