Translating the UN's Sustainable Development Goals

Management accountants have a practical role in helping businesses navigate the 17 UN SDGs.
Translating the UN's Sustainable Development Goals

In September 2015 at the United Nations' New York headquarters its member states set out "a supremely ambitious and transformational vision" — a plan of action for "people, planet, and prosperity" over the next 15 years.

A series of 17 Sustainable Development Goals (SDGs) with their associated 169 targets were agreed in hope of shifting the planet to a "sustainable and resilient path" towards 2030. They were designed for all to embrace them — governments, the private sector, and civil society. The goals, which include "Climate Action" and "Responsible Consumption and Production", range from "No Poverty" (Goal 1) to "Affordable and Clean Energy" (Goal 7) to "Peace, Justice, and Strong Institutions" (Goal 16). Collaboration is also important, with "Partnerships for the Goals" being the final in the list (see the graphic, "What Are the 17 Sustainable Development Goals?").

The SDGs were an "upgrade" from the UN's eight Millennium Development Goals (MDGs), which launched in September 2000 with a 2015 target date. The SDGs sought to achieve similar outcomes to the earlier goals but by taking a fundamentally different approach, said Ian Thomson, ACMA, CGMA, professor of accounting and sustainability and director of the Lloyds Banking Group Centre for Responsible Business at the University of Birmingham in the UK. He said: "[The MDGs] would seem to be reasonably successful, but they were also seen as particularly driven in silos." They fit well with existing initiatives such as the UN World Food Programme, but "the world's problems are not neatly partitioned into programmes" and instead intersect, he explained. The MDGs failed to capture the "more holistic view of what was actually going on", he added.

And while conceived in a pre-coronavirus crisis era, the SDGs continue to be relevant. However, the pandemic may have changed the main direction of approach to the goals — from a focus on preventing climate change (Goal 13) to the importance of communities (Goal 11), Thomson suggested.

According to Thomson, the SDGs are deliberately aspirational but provide a checklist for reasonable or responsible practice by governments, business, and other organisations. However, what is difficult is the translation from "things which are designed for international treaties, international governments ... into different contexts, different institutions, businesses, communities, regions".


Management accountants' role

Thomson sees management accountants, with their ability to ask questions across the business, as "translators" for the SDGs — they can take evidence from different disciplines and sources and coordinate them into sustainable scorecards, key performance indicators (KPIs), or investment appraisal tools, for example (see the sidebar, "A Practical Tool").

He said: "The tools of management accounting are actually ... easily transferrable into the SDG space." SDGs are a natural evolution of management accounting in moving from "the one-dimensional costing to the triple-bottom line to the balanced scorecard to the strategic scorecard".

In relation to the SDGs, management accountants are also able to identify "some of the negative unintentional consequences of decisions where the consequences fall outside the things which are measured", Thomson said.

He also welcomed how the SDGs have led to new, "sustainable development-management accounting hybrids", such as water accounting, biodiversity accounting, natural gas accounting, and carbon accounting.

Paul Druckman is chair of the World Benchmarking Alliance, an Amsterdam-based not-for-profit organisation that works to incentivise and accelerate companies' efforts towards achieving the SDGs. He said that reporting on the SDGs and embedding them in businesses has largely focused on risk, which in itself can cause a problem. "The danger is that [the SDGs] are not embedded in [the] strategy of a business, and [they] are seen as something you need to overcome rather than something you need to use and be part of the whole business process."

Businesses, Druckman said, need to take a holistic view of the SDGs — "not SDG by SDG", but by looking overall at what the SDGs are trying to achieve.

Integrated reporting and the SDGs

Carol Adams, Ph.D., a chartered accountant and professor of accounting at Durham University Business School in the UK, was the lead author of the Sustainable Development Goals Disclosure (SDGD) Recommendations in January with Druckman and Russell Picot, both honorary professors at the business school.

Adams suggested that corporate reporting on SDGs should be mandatory and that the goals can be addressed through Integrated Reporting, but that IR "is only part of the story".

She said that integrated thinking can work "more neatly" for small businesses than for larger organisations, which can have functional silos.

"The key reporting frameworks that a lot of large organisations are using are the GRI [Global Reporting Initiative] Standards and the TCFD [Task Force on Climate-related Financial Disclosures] recommendations. ... You have to combine both a value-creation approach for the organisation and think about impact on achievement of the SDGs," Adams said.

The SDG recommendations help in doing this, she said. "They cover disclosures on strategy, management approach, and governance oversight. They are designed to ensure boards have the right information on sustainable development risks, opportunities, and performance to make decisions. That is the domain of management accountants," Adams explained.

"The way business is done needs to change to achieve the SDGs, and strategy disclosures are critical in getting organisations to start to think about that," she added.

"The strategic report does require organisations to look at risks, but they are not looking at sustainable development risks to the extent that they should. [In their] plans to mitigate them, they are not doing any scenario analysis over them other than perhaps climate change," she said.

Druckman said the SDGs "are not indicators for a business, but that doesn't mean a business can ignore them — quite the opposite. ... It is a board-level conversation which needs to be supported by real KPIs". The management accountant's role is in producing and controlling the systems, data, and reports used by management to support its decision-making, he said. "[Management accountants] provide the substance to know whether [the SDGs] are being achieved."

Druckman highlighted the ethical dimension of the SDGs for accountants. "[The] accounting profession has a duty to make sure that what we do is in the public interest. A lot of that is thought of as ethics, but it is more than ethics," he said. While increasing the overall wellbeing of a company is in harmony with taking a holistic view of the SDGs, "where it can come out of harmony is if doing the right thing leads to lack of profitability and that's the choice and there is a conflict there". He added: "What we must ensure is that hurdles [to achieving the SDGs] don't turn into barriers."

A practical tool

One tool that can help organisations look at their vulnerabilities in the context of the Sustainable Development Goals (SDGs) is the Responsible Business Tracker — created by Business in the Community (BITC), a UK membership organisation for responsible businesses, in collaboration with Thomson and staff at the Lloyds Banking Group Centre for Responsible Business.

BITC created a “responsible business map”, which is underpinned by the SDGs and translates them into business-friendly language. The circular, segmented “map” focuses on the two broad areas of “healthy communities” and a “healthy environment”, as well as “purposeful leaders” and “leadership at every level”, with the 17 separate SDGs mapped to 15 sub areas.

The tracker allows BITC member companies to track their performance by answering between 70 and 100 questions that are also mapped to the SDGs. The tracker is both a measurement and improvement tool, said Anna Jakobsen, BITC’s director of strategy and products. “Some questions in the tracker [relate] to the manager’s role, and some … are more sector- or business model-specific, and then there are some questions that companies can choose to do more in-depth exploration of if they are highly material to their business,” she said.

The rationale behind the tracker, she said, is that participating companies can identify the areas where they can have the highest impact and make the most meaningful contribution to the SDGs. Their answers are backed up by evidence such as businesses’ annual report and accounts, sustainability reports, or simply data points.

BITC then works with companies to improve their performance. “Crucially … [companies] use that individual report to map out actions that they need to take to reach that higher level of maturity and performance,” Jakobsen said.

A 2019 pilot involving 64 companies was scaled up, with 94 large and medium-size businesses taking part earlier this year. “We’ve also received feedback that the process itself is really useful for flagging and raising the importance and relevance of responsible business to functions outside the CSR [corporate social responsibility] function that tends to fill in the survey. They’ve used it also as an internal engagement tool,” Jakobsen said.

The data will be used to understand participating companies’ resilience and how they were able to change and respond to the coronavirus challenge.

BITC published in May its Responsible Business Tracker 2019/20 Insights Report: An Opportunity to Build Back Better. It revealed that 33% of participants have only limited knowledge of the SDGs and only 50% are considering how climate change will affect their ability to deliver core products and services. On digital transformation, the report found that 53% have identified opportunities to use digital transformation to advance their responsible business strategy.



CGMA report

Oliver Rowe is an FM magazine senior editor. To comment on this article or to suggest an idea for another article, contact him at