The pandemic has forced businesses to look inwards at the relationship between purpose and profit. There is a critical opportunity now for all businesses, irrespective of size or industry, to put sustainability at the core of their strategy and operations. For companies that want to achieve a triple bottom line return (people, planet, profit), the United Nations Sustainable Development Goals (SDG) provide guidance and motivation for solving the ‘wicked problems’—difficult or impossible to solve because of their complex and interconnected nature, such as terrorism, poverty and environmental degradation—often beyond the scope of government and private philanthropy. As businesses focus on operational adaptability in the wake of the pandemic, the importance of long-term sustainability and a robust framework for ethical decision-making cannot be understated.
If we look at SDG 7 ‘Affordable and Clean Energy’ as an example, it is centred around the accessibility of affordable, reliable, sustainable and modern energy. Current UN targets are focused on substantially increasing the share of renewable energy in the global energy mix by 2030, with modern renewables currently representing around 11% of total final energy production. Additionally, with 759 million people lacking access to electricity, the UN perceives investment in energy infrastructure and clean energy technology as being critical over the next decade. Indeed, with an ever-increasing consumption of energy for electricity, heat and transportation, significant measures must be taken within the private sector to both preserve energy security and eliminate the use of fossil fuels.
Heliogen, a Pasadena-based renewable energy technology start-up backed by Bill Gates, is committed to accelerating global adoption of renewables through concentrated solar power (CSP). CSP involves the use of revolving mirrors that change position with the sunlight through AI, before reflecting the sunlight back at a solar receiver. As Heliogen plans its first commercial project this year cost-effectiveness is paramount; the only way to generate global adoption is through beating the price of fossil fuels. Recently, Heliogen announced that it will be going public by merging with a special-purpose acquisition company (SPAC) in a $2bn deal, providing $415m in funds for the company to expand. For start-ups like Heliogen, the SDGs provide a roadmap for sustainable development efforts and present a market in which to bring innovative solutions.
The SDGs are not only a vehicle for identifying future business opportunities for start-ups, but can aid mature companies in much the same way. Fortescue Metals Group have explicitly aligned their sustainability strategy with the SDGs, which is evidenced by the transparency around the progress towards their targets and pursuit of renewable green hydrogen and ammonia through Fortescue Future Industries (FFI). According to the think tank Beyond Zero Emissions, Australia’s green exports could reach almost triple the value of our existing fossil fuel exports by 2050. Fortescue recognises that the same exponential growth in iron ore exports, which grew from contributing only 4% of Australia’s total exports in 2000 to 39% in March 2021, can be replicated for green energy opportunities. The heavy industries with large scale energy infrastructure experience are well positioned to facilitate the decarbonisation of the global economy, highlighting the all-encompassing nature of business sustainability. In this way, the SDGs can redirect capital flows and align stakeholders towards specific shared outcomes.
In the face of changing societal expectations and ethical challenges, the businesses that embrace the SDGs and undertake transformational change will see a powerful flywheel effect that will drive innovation and unlock new opportunities. The question is not so much whether it is possible for businesses to be sustainable, as whether it is the businesses without a sustainable competitive advantage will survive.