The most valuable quality that a responsible and socially conscious business can demonstrate to stakeholders is that it understands that profits cannot be achieved without integrating people and planet into its purpose.
A rise in this approach can be seen in how organizations are rethinking their approach to traditional CSR. They seek to inculcate sustainability in their strategic objectives, thereby improving environmental, social and governance (ESG) reporting.
Due to pressure from investors, regulators, and consumers, companies are transforming their products and operations to become more sustainable and inclusive, and to measurably reflect how they contribute to achieving the Sustainable Development Goals (SDGs).
The SDGs urge governments, the public sector and society at large to place pressing ethical issues at the center of policy, operations and decision-making. The goals serve as a set of guidelines for companies to consider their operations and impact on communities through the lens of sustainability so that they can effectively contribute to the development of a thriving society.
This approach is welcomed by the corporate sector which is making strides to align business activities with global efforts that are ethical and sustainable in nature. As such, this can be understood as the humanization of company values.
Companies rigorously evaluate the direct or indirect damage they cause to the communities and environment in which they operate. It is no wonder that with the awareness creation currently underway, clients and potential customers are leaning towards organizations committed to promoting and achieving sustainability.
The role of government and policy makers is equally required and required for the successful integration and implementation of sustainable practices across larger societies.
Companies internationally are exploring alternative mechanisms to sustainably achieve the SDGs through their operations and products. However, effective embedding of these mechanisms in business practices is not possible without regulatory support.
This is evident in the shift from fossil fuels to solar energy. With supportive policies, regulations and incentives in countries such as Germany, China, India, Spain and Italy, we are seeing the adoption of solar power by both businesses and consumers.
Another example is how governments in a few developed countries, including the United Kingdom, Italy, France, Germany, Spain, Sweden, Japan, and New Zealand, have legislated in favor of smoking preferences. This is a huge step towards encouraging consumers to adopt lower-risk alternatives.
While regulators and companies are essential to the transition to better alternatives, the movement remains incomplete without structured discourse and dialogue on the subject.
There is a need to amplify the clarity of practices across industries that are occurring around the world. This will also encourage collaboration and synergy. In this regard, a more targeted and focused effort is required through a united front where individuals, communities and institutions can come forward and share what and how they believe alternative mechanisms contribute to the SDGs.
Apart from favorable regulatory environments, there is an urgent need to develop the capacity to understand integrated financial instruments and transactions for the SDGs and climate. We need to build that capacity so that it can be shaped across sectors.
What is required is that we move the needle from peripheral corporate social responsibility practices to sustainable investments and enterprising models with institutional impact across the regulatory supply and distribution communities.
The introduction and initiation of new forms of influence and mixed capital are seeing the light of day. While this is an encouraging sign, the pace of adoption needs to be fast-tracked because climate-induced disasters will not wait.
To meet the challenges of the future, it is necessary for us to rethink the role of regulators, businesses, investors and consumers. We must get rid of outdated beliefs and traditional methodologies and devise alternatives to help us achieve the SDGs sustainably.
The writer is the founder and principal of SEED Ventures
Published in The Express Tribune, Jan 30y2023.
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