How the UN Sustainable Development Goals can empower companies through better innovation
by Dr Monika Hestad
2020 is finally here and marks the beginning of a new decade. We will see another decade of change and transformation. However, as we have found through the research here at Brand Valley, it is possible to look at development around us and through that be better prepared for what will impact us as individuals and companies from the outside in the next ten years.
We see an increasing interest among our clients in the United Nations’ Sustainable Development Goals (SDG). These were agreed in 2015 and have set the next decade, until 2030, before the goals should be reached.
It is particularly interesting to see how businesses are leading the way and making the Sustainable Development Goals part of their own strategies. We have found that applying a design approach traditionally used over the years in designing new products and services, our clients can develop their organisations strategically. Several companies and organisations have used our design methodology, and then investigated what the SDGs mean for them and how they innovate and adapt to the future. The results we have seen so far are companies and organisations who are more relevant and have meaningful brands for their customers and employees, and are better adapted to tackle the external impacts they will face in the next decade.
UN Sustainable Development Goals, credit United Nations
Building a brand that is sustainable for environment, climate, socially and economically
Entering into a new decade has meant that New Year’s Resolutions sometimes take a longer view. Several political New Year’s speeches have this time been built around the SDGs, and what should be achieved for the next decade, but many businesses are already fast on their way and have embraced the SDGs in their own strategy work.
The philosophy behind the UN Sustainable Development Goals is based on growth, but the growth is not based on an old-fashioned negative exploitation of resources. It is rather based on a growth philosophy where humans have opportunity to develop their skills and improve their well-being, at the same time as the biosphere is not harmed. The goals recognise that companies have a key role in creating a more sustainable future. Sustainable and inclusive jobs are important to bring people out of poverty.
Building a sustainable brand in 2020 means looking at sustainability from different aspects of your company. The companies need to have concern for the environment and climate in all actions they are doing. How does the business activity affect SDG no. 15 “Life on Land”, no. 14 “Life Below Water”, no. 6 “Clean Water and Sanitation”, and no. 13 “Climate Action”?
How companies develop products and services, and what they deliver, need to contribute to sustainable production and consumption, which can be found in SDG no. 13 “Responsible Consumption and Production. They also need to care for the employees and work for just distribution and inclusive workplaces, reflected in SDG no. 12 “Decent Work and Economic Growth, no. 10 “Reduced Inequalities”, no. 5 “Gender Equality”, and no. 3 “Good Health and Wellbeing.”
In addition, companies should continue to innovate and be profitable, as shown in SDG no. 8 “Decent Work and Economic Growth and no. 9 “Industry, Innovation and infrastructure.” As an overarching tool, which we in Brand Valley also see as essential to creating sustainable brands, collaboration is needed internally as well as externally, which is the theme for the last SDG, no. 17 “Partnership for the Goals.”
This might all sound like a mouthful, but as mentioned we already see companies delivering on this and finding that it makes sense for them in business. From a business perspective we have distilled the 17 UN Sustainable Development Goals into six aspects every business need.
How sustainable are your actions?
The companies we work with are not resisting change that is needed to be more sustainable, but several are stuck with structures in the market or in regulations that needs to be removed or changed before they can develop more sustainable practice. For example, there is a jungle of multiple standards for environment nationally, in the EU, in the various industries and set by international organisations. Each standard might foster sustainable practices, however, for a small company to enter into this jungle is demanding. We have seen several examples of well-intentioned regulations, required by large customers – particularly in the public sector, that hinder development of innovative sustainable products and services because they are based around existing solutions.
One company alone will find it too demanding to change legislation, industry standards or consumption patterns. The answer is collaboration if we are going to change practices which is why we welcome the emphasis the United Nations puts in SDG no. 17 “Partnership for the Goals.”
Strong sustainability drive in the marketplace
In Brand Valley we have looked at sustainability through the lenses of the Brand Valley Drivers’ Framework. With the framework we aim to see how an organisation can use innovation drivers from four different perspectives in their effort of building a meaningful and coherent brand.
Simply explained: A driver is a force that in one way or another will change the market. It can be external drivers such as a new competitor or change in regulations. In the framework we divide the drivers into four different perspectives: organisation, market, people and society. In branding terms these four perspectives can be explained into who you are, how you differentiate in the market, what people think about you and why you are relevant. Drivers in all of these perspectives will change what your brand is about (see illustration).
The company’s innovation effort will thereby define whether they become a brand that is perceived as a driver in the market, or if the market is defining and the company becomes a follower. By actively using new activities and initiatives the company can over time build a brand that is strong, meaningful and coherent across all of their actions.
Brand Valley Drivers’ Framework
One of the major changes the last five years is that sustainability has moved from being a strong driver in society, to becoming a serious driver in the market across industry categories and that “everybody” talks about it. This is an interesting development. One might think that people get fed up and tired about the topic, and that this is a wave that will soon pass. However, it seems to have taken another change. Many organisations embed this topic not only as a marketing tool to promote their products, but a strong driver of change in the innovation process. Companies are systematically going deeper and deeper into issues that will build more sustainable practices and integrate this into their products and services as well as the way they do business. Additionally, customers and employees increasingly expect sustainable practices, making this a “hygiene factor” – something just expected that the company does. This means that for a company it is not a question if they should develop a sustainable practice but rather how they should do it.
By using the SDGs as a source for new ideas in the company, the companies can power new sustainable initiatives that are benefitting society at large but is also good for business and their brand. The SDGs is then not just a pure communication tool, but an inspiration for innovation that creates positive change internally and externally.
CSR, shared values and branding
I will not go into detail in the discussion about whether businesses should do social good but will try to summarise some of the key points that are relevant when choosing the right approach for your brand.
Companies have long felt a need to share their wealth creation beyond sharing profit with owners. The concept “corporate social responsibility” (CSR) seems to have its origin in the 1950s, but there are older examples of companies sharing with wider society based on the owners’ religious or philosophical beliefs. Milton Friedman critiqued this in an essay in The New York Times Magazine already in 1970, and stated that the only social responsibility a business has is profit. This essay, “The Social Responsibility of Business is to Increase its Profits,” has had an important role in management education. Nevertheless, businesses continued to conduct “Corporate Social Responsibility projects.” Particularly at the end of 1990s, after Naomi Klein’s book “No Logo” (1999) revealed that major players in the sportswear industry had sweatshops, there was a wave of business initiatives to “do good.” This was criticised as “greenwashing,” as many companies did CSR projects as a side activity, while continuing to conduct business in a way that hurt the same ideals.
In 2006, Harvard Business School researchers Michael Porter and Mark R. Kramer wrote an article in Harvard Business Review where they critiqued the CSR agenda but they also critiqued Friedman’s thesis that businesses should only provide profit. Porter and Kramer wanted to link business intent with social good. Their approach is called “creating shared value.” The big idea behind the concept of “creating shared values” is that if companies have linked the mission and values of the company to society, both the society and the company will grow.
The general current recommendation in both CSR and Creating shared values is to align business purposes with the social agenda. My experience is that this is also what makes sense from a brand and innovation perspective. The lesson learned from two decades ago, when Naomi Klein published No Logo, was that social projects disjointed from the rest of the business or even in conflict with core business, purely to create “brand awareness” is a trap of “greenwashing.” Sooner or later this approach can backfire, and the company is seen as dishonest and even less “sustainable” than if they had only done business as usual.
Another risk is that CSR projects can take the focus away from the real issues that your company should be working with. Innovation and sustainability projects are challenging, so it is important to use the resources on the projects that matter to keep your business sustainable over time, rather than projects that are important – but yet will not help your business in any way.
Applying this line of thinking to the United Nations Sustainable Development Goals means avoiding initiatives that are not building the business and the brand in a way that is intended. Looking at the 17 SDGs and what they cover, you should have a particularly narrow business intent if you are not touching upon at least five of them. So, there is plenty to work with, even if you are narrowing it down to what is at the core of what you are doing as a business.
Choosing the right approach for your context
Two inspiring, yet different, approaches we have come across in our research is the Danish logistics company Maersk and the Norwegian medical equipment company Laerdal. Both of these are global players in their lines of business, and both have embraced the SDGs in their work. They are reporting the progress on how they contribute to global sustainability challenges.
A.P. Moller – Maersk is a global logistics company founded in 1904, and the world’s largest container shipping company. They say that they “carry millions of tons of cargo every single day.” Maersk have a shared values approach in their sustainability strategy. Their innovation effort goes into different projects where all are aligned with core business. One of the projects is to decarbonize logistics, where their ambition is to have net-zero CO2 emissions from all of their activities by 2050. Considering the scale of Maersk’s business, it is no doubt that they will make a major contribution when they succeed in this initiative. Also, given the 30 years until Maersk’s target, and 27 years average lifespan of a container vessel, Maersk will need considerable investments in the near term to reach their target.
Maersk’s project-based approach allows them to continue with business as usual, and at the same time develop what might change practices in their line of business in the future.
Laerdal has a different take on the SDGs than Maersk. Today they are providing medical equipment and training courses worldwide, but Laerdal started out as a toy company. They launched into the medical field with the lifelike manikin “Resusci Anne,” for training of cardiopulmonary resuscitation (CPR), in 1960. Their mission is not to earn money, but helping save lives. Looking at their history and why they are set up this makes sense. Early on, long time before Porter and Kramer formed the concept of “creating shared value, the founder of Laerdal, Åsmund S. Lærdal (1914-1981), stated “If we can create value to the society at large, and do our job well, satisfactory financial results will follow - and allow us to build a stronger company with time.” For Laerdal, social responsibility is at the core of their business model. The SDGs are therefore embedded as key performance indicators (KPIs) on what they already are doing, and the United Nations have therefore through the Sustainable Development Goals provided Laerdal with a new platform to engage with others on social issues.
There are many ways for a company to use the Sustainable Development Goals to further their own business. The two we have looked into here show:
A project-based approach, where the shared value projects can change industry standards and show how you are a leading innovator within your field.
A business model where mission-driven leaders have set up the whole organisation to solve social issues.
Which approach is right for your company depends on which context you are part of and often who the founder of the company was or is. Equally important it is based on the ambition of who the company would like to be perceived as, and how willing the company is to walk an extra distance to fulfil their mission.
The UN Sustainable Development Goals can help you understand the diversity of topics where companies and organisations can contribute to positive social development, locally and globally. As mentioned earlier it is not realistic for any company to address all 17 SDGs, but most companies probably address some already. By being aware of how the SDGs align with your core business, you can use these as a tool to clarify your own purpose and make sure that what you are developing is relevant not only for the market you are in today, but for a wider audience in some years’ time. It has the added benefit of being a tool to inspire both employees and customers by showing how sustainable development is part of the core of your business, and that you will be in business for the long run.
A first important step to using the SDGs as a business strategy tool, would be to understand your context. Who you are, how you would like to make an impact, and if any of your current activities go against any of the goals that are set. The next step would be to set your ambitions and explore possibilities for your company and your brand.
So, who are you and where do you see the brand you are working for heading in the next decade?
The (triple) bottom line is that your company can use the UN Sustainable Development Goals to:
adapt to changes in society and market that inevitably will affect you anyway,
cultivate an inspiring brand for your employees and customers,
contribute to the local and global greater good,
at the same time as you achieve what is good for business in the short term.
Get in touch and help us continue to develop our thinking on how a design-driven and innovation-led branding strategy can help us reach global goals for a sustainable future.
UN Sustainable Development Goals to inspire business development
Dr Monika Hestad is the founder of Brand Valley, the design-driven strategy company, and author of the best-selling bookBranding and Product Design: An integrated perspective (Routledge). She is a Master of Industrial Design from the Oslo School of Architecture and Design (AHO), and has a PhD in product development and branding from the same institution. For the past two decades she has advised clients on design-driven innovation, branding and the development of products, services and organisations. She has also taught design-thinking to postgraduate students at Central Saint Martins in London, one of the world’s top 5 design universities, for more than ten years. Dr Hestad serves on the board of Helland Møbler, a company specialising in high quality furniture for institutions.