The pandemic strengthens the 2030 Agenda and the role of SMEs as drivers of change towards sustainability
The 2030 Agenda is gaining relevance in the post-pandemic scenario as a coherent element of global policies for social and environmental sustainability. Governments are called upon to play a leading role in the recovery, setting new rules of the game for small and medium-sized enterprises to contribute to wealth creation and take joint responsibility in the transition to a sustainable economic model. This is one of the main conclusions of the fourth Report of the Observatory of Sustainable Development Goals (SDGs), entitled The relevance of Agenda 2030 in the post-COVID scenario, prepared by the Leadership Chair of Esade with the collaboration of the “la Caixa” Foundation, presented at the CaixaForum in Madrid.
This edition assesses the main advances of Agenda 2030 and focuses on the potential of SMEs to participate in EU Next Generation funds and to face ecological transition, digital transformation and social cohesion. Although small and medium-sized businesses continue to face the consequences of the economic crisis caused by COVID, the study highlights opportunities for sustainability in the areas of health, digitization, telework and work-reconciliation. life, as priority areas of action for the company in the short and medium term. For the preparation of the Report, CEPYME participated at the national level, and AMEC, CEA, Cepyme Aragn, Confebask and PIMEC at the territorial and sectoral level. Also with the collaboration of the United Nations Global Compact in Spain.
According to Ángel Castieira, director of the ESADE leadership chair and co-author of the report: “Governments have a unique opportunity to implement a new governance model that gives SMEs the place they deserve and presents the incentives necessary for the full integration of sustainability ”.
For his part, Ángel Pes, director of the ODS Observatory underlines the leadership of public administrations to fight against the ravages of the pandemic: “Unlike what happened after the Great Recession of 2008, the voices that consider the scenario are multiplying as a stepping stone to undertake far-reaching reforms and lay the foundations for a new paradigm of wealth generation linked to sustainability ”.
Opportunity to modernize the productive fabric
Regarding the impact of the crisis, the report indicates that some SMEs have shown a great capacity to adapt their business activity to the scenario caused by COVID. Collaborations between companies and local distribution networks have also been strengthened. Likewise, there is a greater commitment to digitization processes and the introduction of new technologies. Finally, the introduction of telework has proven to be an effective mechanism to enable business activity and guarantee employment.
In Spain, 99.8% of companies are SMEs and generate 64% of the country’s employment. This makes it an essential player to guarantee the good health of the economy and a centerpiece for the construction of a more sustainable economic model. According to the study, business organizations see Next Generation EU funds as a historic opportunity to activate economic recovery, transform the business fabric in Spain and align business activity with the SDGs in the years to come.
Regarding Agenda 2030, the analysis indicates that there is a long way to go. 78% of SMEs consulted know the message of the SDGs, compared to 97% of large companies. Key aspects to foster its adoption include, among others, the need for conviction of CEOs, the development of regulations aligned with sustainable development, the driving effect of large companies or the adoption of more sustainable consumption guidelines by consumers.
More mentions of the SDGs, but few ambitious plans
The SDG Observatory report measures the contribution of listed Spanish companies to the 2030 Agenda and analyzes the integration of the requirements of Law 11/2018 on non-financial information and diversity. In 2020, 106 companies out of the total of 134 listed companies based in Spain presented extra-financial information for the year 2019. This figure represents 79% of companies, or 9 points more than the previous year (70%) .
73% of companies mention the SDGs in their extra-financial reports, 7% more. However, only a small part of these mentions is accompanied by ambitious plans to detail the contribution to Agenda 2030. In this sense, fewer companies report digitization measures (71%) or circular economy policies , which are still mostly limited to recycling. and reuse. On the other hand, the number of companies (89%) which declare to have developed policies of equality between women and men increases. The most notable increases were seen in hiring and compensation policies, standing at 52% and 55% respectively.
The presence of the SDGs is widespread in all sectors. Energy and technology companies remain in the lead. Firms in industry and construction, as well as financial services and consumer goods, also stand out, to a lesser extent. The real estate services sector remains the most lagging behind in integrating the SDGs into extra-financial reporting.
Quality education gains weight and end of poverty is postponed
In 2019, the SDGs that companies highlight the most in their reports are 8 (Decent work and economic growth), 13 (Climate action) and 9 (Industry, innovation and infrastructure). These three SDGs are consolidated as the most cited by companies over the past three years, and exceed 45% of mentions.
The fastest growing SDGs are 4 (Quality education), 10 (Reducing inequalities) and 17 (Partnerships to achieve goals). On the other hand, SDGs 1 (End of poverty), 2 (Zero hunger) and 14 (Underwater life) continue to be postponed, since the percentage of companies that declare measures related to these objectives does not reach 20%.
Materiality analyzes will play a central role
The report analyzes reports from listed Spanish companies and distinguishes between the four dimensions of sustainability: governance, prosperity, people and planet. This edition also includes a fifth key aspect, materiality, understood as the analysis process which allows the company to reorient its strategy towards sustainable development.
According to Ferran Curt, co-author of the report, materiality analyzes will play a central role in extra-financial reporting. In addition to helping to focus the extra-financial disclosure exercise on aspects of sustainable development at the heart of the company, they make it possible to include the different interest groups in the process of strategic reflection around sustainable development, integrating thus sensitivities which transcend the borders of the organization itself. Even so, Spanish companies still have a lot of room for improvement in this area.
Although 80% of the companies studied reflect the sustainable development issues most relevant to their activity in their reports, only 60% identify the social, economic and environmental risks and opportunities that arise from these issues. Just over half of companies (55%) provide information on value chain risk management procedures.
In the area of governance, the number of companies (83%) declaring policies to protect human rights is increasing. In Economy or Prosperity, 71% of companies report digitization, although the practice is more prevalent among technology, energy and consumer services companies. As far as people are concerned, 82% have adopted measures to promote work-family reconciliation, even though few of them specify what these policies consist of. On the other hand, in the environment or the planet, the circular economy has progressed by five points compared to the previous year, reaching 85% of companies that apply it. The number of companies saying they have adopted measures to manage the waste they generate also increased by 5%, reaching 89%.