The SDGs are 17 objectives for improving human society and ecological sustainability adopted by the United Nations in 2015. They cover a broad spectrum of sustainability topics, ranging from eliminating hunger and combating climate change to promoting responsible consumption and making cities more sustainable.
The economic activities of companies can both positively and negatively impact any one of the 17 SDGs and their 169 targets. Investors including Robeco have developed strategies that target those companies that can make a net contribution, depending on their business activities.
But how do individual economic activities ranging from manufacturing consumer goods to providing financial services make a difference? This was studied in a research paper by Jan Anton van Zanten, SDG Strategist with Robeco’s SI Center of Expertise, and Rob van Tulder, Professor of International Business and Society Management at the Rotterdam School of Management, Erasmus University.
Types of economic activities
“In societies, companies undertake numerous types of economic activities,” says Van Zanten, who is writing a PhD on the role of the private sector in contributing to sustainable development in general, and the SDGs in particular. “These activities sustain livelihoods and produce goods and services that help people attain a better life, but they can also have negative consequences.”
“Different types of economic activities thereby impact different SDGs. However, there is insufficient evidence on how individual economic activities interact with the SDGs. This lack of evidence complicates companies, governments, and investors in creating smart SDG strategies that steer towards net positive impacts. We hope that our research will help to fill this gap.”
Van Zanten and Van Tulder systematically reviewed 876 articles, published between 2005 and 2019 and covering 420 economic activities, to try to better understand the nexus, or connections, with the SDGs and sub-targets. The paper, entitled ‘Towards nexus-based governance: Defining interactions between economic activities and Sustainable Development Goals’ summarizes the positive and negative interactions that were uncovered.
“At an overarching level, the findings reveal that economic activities bring ample opportunities for advancing the SDGs,” Van Zanten says. “Most are sources of economic productivity, which directly benefits SDG 8 (decent work and economic growth) or SDG 9 (industry, innovation and infrastructure).”
“However, negative impacts are widespread, most prominently afflicting ecosystems reflected by SDG 14 (life below water) and SDG 15 (life on land). Others are bad for global warming, adversely impacting SDG 13 (climate action), or they harm human health SDG 3 (good health and well-being).”
These opportunities vary across individual economic activities. “Agriculture activities, for instance, feed the world, thereby having clear potential to help achieve SDG 2 (zero hunger),” he says. “However, they also account for 70% of water withdrawals globally which raises concerns for SDG 6 (water and sanitation), and the use of fertilizers and pesticides threatens SDGs 14 and 15 (life on land and below water).”
“As another example, electricity generation promotes SDG 9 (industry, innovation and infrastructure). But if electricity is generated through non-renewable sources, SDG 13 (climate action) is at risk, while SDG 3 (health and well-being) may be harmed due to air pollution. Estimates suggest that in China, 15 million years of life that is lost through pollution from power generation could be avoided.”
Using the nexus approach
Van Zanten says the findings can help to improve strategies for investing in, and contributing to, the goals. “Scientists and policymakers increasingly recognize that progress on the SDGs can be accelerated through a ‘nexus approach’” he says.
“Recognizing that progress on one SDG can promote, but also be detrimental to, progress on another SDG, a nexus approach aims to manage the interactions between SDGs in order to advance multiple SDGs simultaneously and reduce the risk that contributions to one SDG undermine progress on another.”
“For example, eradicating hunger (SDG 2) improves health and well-being (SDG 3) and can help people escape poverty (SDG 1). Targeting these SDGs together, instead of treating them as isolated silos, brings opportunities for bigger impacts”
“By defining the positive and negative impacts of economic activities on the SDGs, our research helps define which economic activities can help advance multiple SDGs, and which can offset the negative impacts of other activities. This yields potential for creating co-benefits between SDGs and lowering the risk of trade-offs, thus increasing net-impacts.”
This article fist appeared on the website of Robeco