Sustainable Development Goals and civil engineering

Some business leaders are as yet uncertain of the use of the Sustainable Development Goals, and how they could benefit their sector.

From an investment industry perspective, Raechel Kelly, of Ethical Screening, provides a quick overview of what they are, why they're being adopted by investors ,and makes the case that the civil engineering community is crucial to delivering them.

1 Introduction
2 What are the UN SDGs?
3 What are the benefits of the SDGs for business?
4 Sustainable futures
5 Opportunities for the construction and engineering sector
6 Related articles on Designing Buildings

[edit] Introduction

The Sustainable Development Goals (SDGs) are seemingly everywhere at the moment, and are emerging in industry news across most sectors.

However, there are some business leaders who are as yet unconvinced of their utility, who perhaps think they're yet another public relations exercise or corporate responsibility checklist.

[edit] What are the UN SDGs?

The UN Sustainable Development Goals are a set of 17 goals comprising 169 targets launched in 2016 for the world to achieve by 2030.

Spearheaded by the UN through a deliberative process involving its 194 Member States, as well as global civil society, the SDGs build on the Principles agreed upon under a resolution popularly known as ‘The Future We Want’.

Governments are obligated to report on progress against the goals, however there's no legal imperative for companies, investors or other stakeholders to engage with them. Despite this, many companies and investors are engaging, and many examples of best practice are emerging.

The goals are also appearing in training and education programs, hopefully pointing to a highly-aware, sustainability-minded generation joining the workforce globally.

The goals are broad, but the targets are specific, especially when related to engineering and infrastructure. For example, goal 11 ‘Sustainable Cities and Communities’ includes some of the following targets:

11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.

11.3: By 2030, enhance inclusive and sustainable urbanisation and capacity for participatory, integrated and sustainable human settlement planning and management in all countries.

11.4: Strengthen efforts to protect and safeguard the world’s cultural and natural heritage.

11.6: By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.

As is clear from these targets, the goals are not an ineffectual wish list of ‘nice-to-haves’, they're a solid set of instructions for governments, businesses and civil society on how to move from the path we're currently on, to the one which prevents social and environmental collapse.

[edit] What are the benefits of the SDGs for business?

The investment community was never really an intended audience for the goals, however, many investors have recognised the utility of the goals as a blueprint for sustainable investment.

As can be seen from the list of targets above, there's also a significant opportunity for first-mover companies and those demonstrating sector leadership.

Investors are embedding the goals into investment strategies for a number of reasons:

Companies which are reporting on their alignment with and ability to deliver on the goals are demonstrating that they're forward-looking and planning for a sustainable future.

Companies offering solutions to the goals are likely to profit from their implementation, and deliver long-term value creation post-2030 if their products or processes are sustainable.

Many financial institutions are based on long-term strategies, for example, pension funds which are looking for value 50 to 100 years into the future.

Governments worldwide are incorporating delivery of the SDGs into policy making and legislative process. Some are also appraising companies for government contracts based on alignment with the goals. Regulatory and legislative changes, as we have seen for example around single-use plastics, are likely to move in the direction of sustainable, circular economies.

Previous systems for reporting and regulatory compliance have been complicated and fragmented. The SDGs provide a framework which sits across all areas of sustainability and allows easy benchmarking and comparison.

As a single, well-designed and easy to comprehend system, the goals as an investment strategy can be effectively communicated to companies, consumers, shareholders, and governments alike.

[edit] Sustainable futures

One investment manager looking into the SDGs as an investment tool is Mike Appleby at Liontrust Investment Management.

Specifically on alignment with goal 11, Appleby states:

“We have two investment themes aligned with achieving this SDG to make cities and human settlements resilient and sustainable. Making transport more efficient: urban transport systems are improved by reducing congestion as well as transport emissions (which make the local air quality toxic) as the mode of transport shifts from self-driven cars to public transport systems such as trains, tubes and buses. Building better homes: shelter is a basic human requirement and companies that build quality affordable homes are helping to provide this.”

However, engineering firms should not just be focusing on goal 11. Mike Appleby emphasises the interlinked nature of the goals and the holistic approach to reviewing company alignment, stating:

“How companies in which we invest contribute positively to the SDGs is mainly through the products and services they provide. However, we have also identified a number of SDGs that can be met through companies managing their operations better with these goals in mind. The way companies manage their operations and how they treat and pay their staff has an obvious impact on the quality of the work (SDG #8) they provide and is relevant to all the companies we own.

"Which environmental, social or governance challenges are most material varies depending on the industry in question. For example, this can include quality of work (through working conditions, fair pay, working conditions in supply chains) as well as equality and diversity in the workforce and on the board.

"This is an area where our engagement to promote proactive management of the Environmental, Social and Governance issues - and the Sustainable Development Goals they are aligned to - can help achieve the SDGs and we intend to explore and report on this further.”

Appleby added that:

“The SDGs are becoming an increasingly used vocabulary in sustainable development and are enabling more people to understand how broad and far-reaching sustainable development is (it’s not just about environmental technology and climate change – although those are important).

"We believe companies will get questions framed in terms of SDGs and I believe it would be wrong for companies to ignore them. That said, there should be some focus on the most material extra-financial aspects to the business with principles, targets and ways of monitoring and disclosing data against those targets."

Essentially, materiality and measurement are key, some companies may claim to be working towards all the goals, but this raises eyebrows and questions around what's genuinely being achieved. As the adage goes, ‘what gets measured gets managed’ - investors are looking for concrete plans from companies and use of the SDG targets and indicators to benchmark progress.

[edit] Opportunities for the construction and engineering sector

The construction and engineering sectors have a hugely important role to play in delivering the infrastructure for a sustainable future, and companies embracing a problem-solving, forward-facing, solutions-focused, transparent culture can be assured of continued investor support.

This article was originally published on 13 September 2018 by ICE. It was written by Raechel Kelly, Communications Manager, Ethical Screening

--The Institution of Civil Engineers