Corporate responsibility related to sustainable development is a complex area as a number of confusing initiatives intended to help companies incorporate sustainability have emerged. From an international perspective, the international UN initiatives have had the most impact. I will give a short introduction to the history of key UN initiatives associated with environmental and social issues, but the main focus will be on the antecedents to the UN SDGs. Thereafter, I will present relevant initiatives and tools developed by corporations’ and their tools and initiatives to approach environmental and social challenges. Well-known and widely applied certifications will be included.

4.1 UN Global Compact, 2000

The UN Global Compact (UNGC) is the UN organization for sustainable business. It was announced in 1999 at the annual World Economic Forum in Davos with the purpose to promote sustainable business. The UNGC (Box 4.1) initiative started with a call to business representatives for around the world from UN Secretary-General to participate in setting up environmental and social cornerstones to support a global solution to global challenges. The development of the UNGC principles included UN labor organizations, the private sector, and civil society.

Box 4.1 The Ten Principles of the UN Global Compact

Human Rights

  • Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

  • Principle 2: make sure that they are not complicit in human rights abuses.


  • Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

  • Principle 4: the elimination of all forms of forced and compulsory labor;

  • Principle 5: the effective abolition of child labor; and

  • Principle 6: the elimination of discrimination in respect of employment and occupation.


  • Principle 7: Businesses should support a precautionary approach to environmental challenges;

  • Principle 8: undertake initiatives to promote greater environmental responsibility; and

  • Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti -Corruption

  • Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

The UN Global Compact (UNGC) aim is to “mobilize a global movement of sustainable companies and stakeholders to create the world we want”. Aligning business with the ten principles and taking actions to advance the UN SDGs are ways that the UNGC supports companies’ work.

Today, the UNGC has 12,452 member companies from 160 countries. The ten principles of the UNGC are mainly based on already existing declarations, principles, and conventions, like, for example, the UN Declaration of Human Rights, the ILO Declaration on Principles and Rights at Work, the Rio Declaration and the UN Convention Against Corruption.

Both companies and organizations can join the UNGC, regardless of their size, complexity, or location. These companies are divided in two types: Company; at least 250 full-time employees and SME (Small and Medium Enterprise), with less than 250 employees—but minimum one direct employee (prior to 2020, the minimum number of employees was ten). All companies can become members, except some limitations associated with production of antipersonnel, landmines, cluster bombs, and tobacco among others.

What is required to join the UNGC is that the CEO fills in the draft letter posted on the UNGC website that declares support for the ten principles and signs up for annual submission of a Communication on Progress (CoP). The CoP describes how the company works on implementing the ten principles. The application has to include the signature of the CEO/Managing Director and attached information about how the company has or plans to integrate the ten principles and expected outcomes. The UNGC is a voluntary initiative not a formal membership organization. Large corporations joining the UNGC have to contribute to support their engagement based on their annual gross sales/revenues (United Nations Global Compact, 2021).

The UNGC provides an encompassing library of information and tools on how to integrate sustainability in practice. Having signed up for annual reporting, Communication on Progress (CoP) serves as a good reminder on follow-up and sustainability integration. There are different levels of CoPs; Advanced, Active, and Learner (United Nations Global Compact, 2017).

For a small, Learner, company the CoP with regard to the Ten principles can be very simple. In text below is an example of content in a Learner CoP (Fig. 4.1):

Fig. 4.1
figure 1

Example of simple UNGC CoP for a small company

4.1.1 Why and How Is the UN Global Compact Relevant for Businesses in Practice?

The main contribution of the UNGC is a set of common issues for companies to reference. Many companies are struggling on deciding what sustainable development implies for their business. The ten principles pick up the key challenges regarding sustainable development and reflection on these as a checklist can be very useful. At the same time, not all ten principles are relevant for all companies.

For many companies applying the ten principles has helped advance sustainability within the company. A positive element in the UNGC, contrary to most UN initiatives, is that it is clear and concise. The UNGC has made positive contributions to many companies in terms of reputation and customer loyalty, employee loyalty, reducing costs, increasing innovation, and so on.

4.2 UN Millennium Development Goals, 2000

The UN Millennium Development Goals (MDGs) were developed by UN member states with the purpose of fighting poverty across the world, using different approaches. The goals were launched in 2000 and were set to be achieved by 2015. As for the UNGC, these principles were concrete and contributed with a common framework for global focus and work.

Whereas the UNGC principles focused on how and what corporations can contribute with both locally and internationally, the UN MDG’s main focus was on activities related to issues in the developing word. Even though the UN MDG is not legally binding, the initiative has generated lots of positive changes. Furthermore, these achievements are measured and reported on. These are the eight UN MDGs and some examples of their respective contributions (United Nations, 2015):

  • Goal 1: Eradicate extreme poverty and hunger. Extreme poverty has been reduced from 50% in the developing world in 1990 to 14% in 2015.

  • Goal 2: Achieve universal primary education. Primary school enrolment in developing countries from 83% in year 2000 to 91% in 2015.

  • Goal 3: Promote gender equality and empower women. Women working outside the agricultural sector have increased from 35% in 1990 to 41% in 2015.

  • Goal 4: Reduce child mortality. Under-five mortality has declined from 90 deaths per 1000 to 43.

  • Goal 5: Improve maternal health. Contraceptive prevalence increased from 55% in 1990 to 64% in 2015.

  • Goal 6: Combat HIV/AIDS, malaria, and other diseases. New HIV infections fell by 40% between 2000 and 2013.

  • Goal 7: Ensure environmental sustainability. 1.9 billion people have gained access to piped drinking water since 1990.

  • Goal 8: Global partnership for development. In 2015, 95% of world population has access to a mobile-cellular signal.

4.2.1 Why and How Are the Millennium Development Goals Relevant for Businesses in Practice?

First of all, the MDGs illustrate that setting worldwide, concrete goals have an effect—even though they are not legally binding. For corporations the eight goals pinpointed issues in the developing world that are key challenges. Even though the key purpose of the MDGs targeted nations to reduce poverty and hunger, it has been relevant for business as well. To companies operating in or that had supply chains involving developing countries, the goals were especially relevant. However, the key contribution of the MDGs is that it perhaps laid the foundation and inspired to the development of the UN Sustainable Development Goals (SDGs) which replaced the MDGs when they “expired” in 2015.

4.3 The UN Guiding Principles on Business and Human Rights, 2011

The UN Guiding Principles on Business and Human Rights (UNGP): Implementing the United Nations “Protect, Respect and Remedy” framework was endorsed by the Human Rights Council in 2011. The Guiding Principles were developed by the UN Special Representative of the Secretary-General on the issue of transnational corporations and other business enterprises through extensive consultations. The UNGPs define the responsibilities of governments and corporations with regards to human rights: the state duty to protect human rights, the corporate responsibility to respect human rights and access to remedy. The UNGPs contain 31 principles in the framework of the following three pillars, guiding how states and corporations should operate to fulfil their duties with respect to human rights (United Nations Human Rights, 2011):

  1. 1.

    States’ existing obligations to respect, protect, and fulfil human rights and fundamental freedoms; the state duty to protect human rights includes making and enforcing laws that protect against human rights abuse by third parties, including business enterprises.

  2. 2.

    The role of business enterprises as specialized organs of society performing specialized functions required to comply with all applicable laws and to respect human rights; companies must respect human rights—also when the states in which the company operates in do not enforce legislation relating to human rights. Companies are expected to carry out human rights with due diligence to identify, prevent, mitigate, and account for how they address their adverse human rights impacts.

  3. 3.

    The need for rights and obligations to be matched to appropriate and effective remedies when breached. This implies making it possible for, for example, employees experiencing poor working conditions to report this safely and to guarantee that they will not be subject to reprisals.

The UN Guiding Principles are based on international human rights, including the International Covenant on Civil and Political Rights (1966); the International Covenant on Economic, Social, and Cultural Rights (1966); and the Core Conventions of the International Labor Organization. Human rights due diligence is gaining traction in business, not least due to investors’ calls for more detailed information on companies’ impact on human rights and legislation that is being adopted in several countries mandating human rights due diligence.

4.3.1 Why and How Are the UNGP Relevant for Businesses in Practice?

A key contribution of the UNGP has been to clarify the responsibilities of business enterprises when it comes to human rights, including their responsibilities with respect to their business relationships and value chains. Many companies use the UNGP to guide their operations and operations in emerging economies and as a framework for reporting. The UNGP are also relevant for small companies since they are not immune to being linked with adverse human rights impacts through their operations, products, or services.

Sometimes it can seem less relevant for a company in a well-regulated economy to focus on human rights. Many human rights issues such as forced labor and child labor are criminalized, and laws addressing human rights may be well enforced. Still, there are challenges in all countries, and in developed and rich countries, unacceptable working conditions and wages below national minimum level are uncovered. Modern slavery and poor working conditions are furthermore often widespread in global supply chains.

4.4 UN Sustainable Development Goals, 2015

The UN Millennium goals were launched in 2000 and set to be reached by 2015. The fact that the deadline for the Millennium goals was coming to an end called for a new set of goals and timeframe. The work on the SDGs started at the Sustainable Development conference in Rio in 2012. A 30-member Open Working Group was established to develop a proposal on the UN SDGs. During these three years a comprehensive job was done. In 2015, 193 UN Member States agreed upon the 17 goals in an historic new agenda: Transforming Our World: The 2030 Agenda for Sustainable Development.

Stakeholder engagement was a key element of the SDG development. Business and industry, children and youth, farmers, indigenous peoples, local authorities, NGOs, education and academia, and national and international authorities and politicians were consulted and involved (United Nations Sustainable Development, 2020). Seven million people were surveyed to find out what they thought were the planet’s key challenges, 300 issues were raised, and 83 nations involved. Altogether, this was the largest consultation and involvement of different stakeholders in the UN history. Through a complex and comprehensive process, all this work was reduced to 17 goals (Fig. 4.2). The 169 targets associated with the goals make the goals more specific. To make measuring progress possible, 232 indicators were developed.

Fig. 4.2
figure 2

The UN Sustainable Development Goals (SDGs)

Each of the 17 goals generally has between 8 and 12 targets. Some of the targets are clearly defined, for example, SDG#3 Good health and well-being 3.1 “By 2030, reduce the global maternal mortality ratio to less than 70 per 100,000 live births”, whereas others are more vague, like SDG#10 Reduce inequalities 10.4 “Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality”. The targets concretize the goals. Each target has between one and four indicators. The indicators are to be more specific on how to measure progress. With regards to target #10.4, the indicator, 10.4.1 “Labour share of GDP, comprising wages and social protection transfers” provide guidance on how target 10.4 is to be measured. This helps benchmarking achievements and in comparing countries and activities.

There are different ways to categorize the SDGs. The Stockholm Resilience Centre, a recognized institution in sustainable research, uses three categories: Biosphere (SDG#6, 13,15 and 14), Society (SDG#1, 2, 3, 4, 5, 7, 11 and 16) and Economy (SDG#8, 9, 10 and 12). Partnership for the Goals, brings the goals and categories together.

Different goals have different degrees of specialization and concreteness—same with the indicators. Furthermore, the indicators can be revised. In 2020, 36 changes in the global indicator framework were approved (Pandey, 2020). Making the indicators more dynamic is a good approach to ensure that the indicators are applicable and actually measure what they are supposed to. However, changing indicators make it more complicated to measure progress.

While the ten MDGs were mainly aimed at poorer countries and nations, the 17 SDGs also addressed the developed world and rich countries. Calling for collaboration with corporations and that rich countries were no longer only to donate money to poor countries, but actually had to shift to come on a sustainable track, was new. Reduced consumption, less negative impact on the environment, and so on are much more demanding for people in rich countries than donating money to poor countries.

As people were skeptical to the MDGs, of which many were achieved, there is even more skepticism to the SDGs. This is not surprising since the SDGs are more encompassing and involving many more stakeholders. One can be pretty sure that not all of these goals will be achieved by 2030. However, the world agreeing on a common agenda is a great step forward.

The most substantial critique of the SDGs is that the endeavor will be too expensive to achieve, and that there is not enough money put aside to finance these goals. The UN suggests that achievement will need trillions of dollars, and specifically investment in developing countries will require the most financing (UN Sustainable Development Goals, 2016). The World Bank estimates it will take $ 4 TN annual investment to create the infrastructure necessary to achieve the SDGs, other UN bodies estimate the budget to be $5–7 TN each annually (Gillian, 2019). At the same time, it is estimated that following up the SDGs could render 380 million jobs and it is a great opportunity for the private sector (Blyth, 2020; Business Call to Action, n.d.)

In addition to being expensive to implement, the SDGs are also put forward as a “fairy tales, dressed in the bureaucratese of intergovernmental narcissism, adorned with the robes of multilateral paralysis, and poisoned by the acid of nation-state failure”. In addition to being critical to the SDGs, this article in Lancet, a very recognized publication, concludes that the SDGs “have broad legitimacy among all parties—which is a big deal” (Horton, 2014).

The fact that so many stakeholders were invited to participate in deciding on what the SDGs should focus on lent the SDGs process and decisions support from many and important stakeholders on a worldwide basis. On the other hand, involving stakeholders in the process has also been criticized. It is argued that these actors will only set goals which they will be comfortable to reach and not demanding enough.

Several of the goals are contradictory as well. For example, Goal #13 Climate Action, “Take urgent action to combat climate changes and its impacts” is not possible to reach if Goal #8—Target 8.1 calls for at least seven percent gross domestic product growth per annum. Initially at least, such a growth will to a large extent be based on fossil fuels.

The SDGs are not legally binding, which means that countries as well as companies can withdraw and are not obligated to reach the goals. Still, if the goals were legally binding, the process would have certainly been much longer and not all the countries would have supported the initiative. Having an “intentional” agreement like this sets a good framework for further work and implementation. Some of the goals, like SDG # 13 Climate action, are however already addressed in the Paris Agreement. The Paris Agreement is a legally binding international treaty on climate change which entered into force in 2016 and will be addressed later in the chapter.

So, to sum up, the SDGs are challenging, maybe not realistic, but a necessity for a sustainable future and a good framework to organize the work on sustainability—from the point of view of nations, companies, organizations, and individuals (Fig. 4.2).

4.4.1 What Do the 17 Goals Contain?

In this section, I will introduce the key issues and challenges associated with 17 SDGs and targets. Some of the targets are measurable, whereas many are more general. I will provide examples of both. I will first describe what each SDG contains, and then I will alternatively, and when relevant, relate the content to specific examples. I will include examples from the developed world illustrating the relevance of the SDGs in these parts of the world as well. A key challenge with the SDGs is that some of the goals are mutually exclusive. Many developed countries which have full score (“green” according the SDG index) score “red” on climate action. The key issue is how to score “green” on all the 17 indexes. No country has managed that so far.

The first four goals are closely related to the millennium goals, with focus on poverty, hunger, education, gender equality, and health focused on children, maternal health, and combat of HIV/AIDS.

#1 NO POVERTY: In 2011 one billion, that is more than 12 percent of the population, lived in extreme poverty (on less than $ 1.25 a dayFootnote 1). The share of the world population below the poverty line has been declining, and prior to COVID-19, less than 10 percent of the population lived in extreme poverty. COVID-19 has led to increases in extreme poverty, which is a major setback in eradicating it by 2030. To reach this goal increased support from rich countries to support countries struggling with poverty is essential. In Chap. 11, I will look closer at what are key issues to render sustainable development in developing countries. It is a paradox that during the last few decades the poor countries have become poorer, whereas the rich countries have become richer. The gap between the two has increased at the same time as the discussion about how to close the gap has increased.

In the industrialized world, there is no extreme poverty, but still many live below the poverty threshold. In the EU, this is 60 percent below the media income. For people living in a country where there is so much available and many people living an affluent lifestyle, it is especially hard to only be able to cover housing and inexpensive food. For some this can be more challenging than living in a country where everyone has a similar situation, yet low standard of living. For children this is especially challenging. When all your friends can afford access to playground, sports, movies, and travel whereas you cannot, it can be devastating.

#2 ZERO HUNGER: Since 2014 to 2018, the percentage of the population affected by moderate or severe food insecurity increased from 23 to 26 percent. COVID-19 has led to an increase in the threat to the food systems. The goal is particularly focused on the poor and people in vulnerable situations, like infants and children. It is not only lack of food that is the problem, but malnutrition, especially the lack of key vitamins and minerals. To eradicate hunger, better conditions for small farmers are crucial.

Even though SDG #2 addressed hunger, many developed countries score low on these goals. The reason being the level of obesity. Obesity is related to the opposite of food shortage. In the United States, more than a third of the population is obese, scoring “red” on the country index. Obesity is often associated with poor health and had negative impact on well-being.

It is paradox that when more almost 11 percent of the world population is chronic undernourished, it is estimated that one third of all food produced globally is lost or goes to waste (Food & Agriculture Organization of the United).

#3 GOOD HEALTH AND WELL-BEING: There has been much progress in many health areas; however, again COVID-19 has imposed many healthcare disruptions. Less than half of the world population in 2017 had access to essential health services. Key goals for SDG #3 are to reduce maternal mortality and prevent death among newborns and children. Epidemics of AIDS, tuberculosis, malaria, and so on are also key issues. This SDG provides concrete indicator for how to measure improvements. Number of incidents by 1.000 people is a distinct way to measure changes.

In the developed world, material mortality is low with relatively few HIV infections and prevalent access to healthcare. Still, the fact that there are many people in poor physical condition is a problem which is not fully taken into account as an SDG indicator. Too little physical activity and obesity have a negative impact on well-being and happiness and need more attention in most developed countries.

#4 QUALITY EDUCATION: A key target for SDG#4 is to ensure that all girls and boys complete free, equitable, and quality primary and secondary education. More access to education for women is also a relevant with respect to this goal. There have been improvements in education among children the last two decades. Primary school completion in 2000 was 70 percent, whereas in 2018 it had raised to 84 percent.

There is great potential in digital and remote learning, however, access to the internet and digital tools is necessary to get take advantage of these resources. COVID-19 has reduced access to schools for children both in developing and developed countries.

Both in developing and developed countries, school drop-outs are a challenge. In the developed world, providing education that also addresses the SDGs is important. Business students for example need to be more aware of the SDG challenges and how to address these. Knowledge about sustainable development needs to be included in all levels and fields of education.

Increased awareness and knowledge in the field of sustainability is also crucial for sustainable development. Therefor integrating sustainability in curriculum at all levels and all fields of education is important—from kindergarten to universities.

#5 GENDER EQUALITY: This goal focuses on achieving gender equality and empowering all women and girls. The fact that women spend about three times as much time as men in unpaid domestic and care work is unfair. Unpaid domestic work for women has increased as a result of COVID-19. Today women account for 70 percent of health and social workers, maybe the most important work in today’s society. Yet their average income is much lower than men. Still, there has been some achievements, there has been a decline in forced early marriage for girls, and more women are in leadership roles. Giving women better access to resources is good for society. If women farmers had the same access to resources as men, it is estimated that the number of hungry people could be reduced by 150 million (Food and Agriculture Organization of the United Nations, 2016). Gender inequality is still a large challenge in developed countries as well.

#6 CLEAN WATER AND SANITATION: Ensuring availability and sustainable management of water and sanitation for all is the goal by 2030. In 2019, one in three people globally did not have access to safe drinking water and 4.2 billion did not have safe sanitation (World Health Organization, 2019). These are both key services to prevent spreading of COVID-19. The main challenge to achieve SDG#6 is lack of money and funding. Providing water to people with little or no money to finance the service requires support by the government. When the government has limited resources as well, clean water and good sanitation are hard to achieve.

Innovation can be a great contribution to clean water and sanitation. Eighty percent of the world’s wastewater is released into the environment without adequate treatment. Yet, wastewater is a valuable resource and has a great potential from which clean water, energy, nutrients, and other resources can be recovered (World Bank Group, 2020).

There are several initiatives to taken to recover the value in sewage. One example is the Nano Membrane Toilet which can treat human waste on-site without external energy or water (The Nano Membrane Toilet Project, n.d.). In the developed countries, increasing efficiency of the sewage system has great potential in reducing the use of clean water. Still, it is not enough to only provide the service; information and trust need to develop so that people do not refuse to use the water due to perceived lack of quality. A concrete example in Arusha, Tanzania, illustrates this. What was converted from sewage to safe drinking water is used for irrigation.

#7 AFFORDABLE AND CLEAR ENERGY: Increased share of renewable energy and improved energy efficiency are key actions to achieve this goal. Eight hundred million people lack access to electricity and three billion are still relying on wood, coal, and charcoal for cooking. Even though energy sources like wood are renewable, it takes several years for trees to be re-grown after harvesting. In Uganda, almost three percent of the forest is cut down for cooking among others (Tyson, 2020). If this continues, the country’s entire forest will be lost in less than 25 years. Countries in the Equator area have more exposure to sunlight and more stable seasons, and therefore also have great potential for alternative energy sources, like solar panels.

In the developed world, increased energy efficiency can be an important contribution. Also, new energy sources like wind and wave power have potential. These sustainable energy alternatives are starting to compete with more conventional energy sources also when it comes to price. Still, many of these more sustainable energy sources require large areas of land and impact biodiversity.

#8 DECENT WORK AND ECONOMIC GROWTH: Maybe the biggest challenge associated with SDG#8 is poor working conditions in emerging markets and that currently about 40 million people are enslaved worldwide (Hodal, 2019). Focus on supply chain management can contribute to eliminate this.

In poor countries, more than two thirds of the population work in agriculture, whereas the number for rich countries is less than five percent (Roser, 2013). In several countries, being a farmer is not perceived as a goal, and work in industry and factories are kind of at a “higher level”. I think we need to discuss this attitude, and maybe give the role of the farmer, even though the farm is not large and driven by machinery, more credit. A life on a farm is not necessarily a less valuable standard of living than spending a full day in a factory or an office. For farmers in poor countries however, more knowledge about good and efficient farming is required, as well as nutrition. To achieve sustainable development, economic growth in the right business areas is crucial, avoiding mass production of unnecessary and polluting products.

#9 INDUSTRY, INNOVATION, AND INFRASTRUCTURE: A good infrastructure is a prerequisite for sustainable development. Clean water and good sewage systems as well as roads and public transportation are important for both health and efficient ways of moving goods and services. Every year much food and resources are lost due to poor infrastructure.

A good infrastructure is not only getting resources to people, but also to return resources for remanufacturing and resale for a circular economy (see Chap. 6). Increased public transportation, transportation based on renewable energy and increased energy efficiency, and a society increasingly based on a shared economy are key issues to address in Goal #9.

#10 REDUCED INEQUALITIES: The GINI index (The World Bank, n.d.) measures income inequality. The GINI coefficient can be between 1 and 0. The 1 implies that one person owns all income and capital, whereas 0 indicates that the populations share income and capital equally. The Nordic countries are the ones with the lowest GINI coefficient, implying more equality. Poor countries, however, seem to have more inequality than rich countries, and the COVID-19 had the most disproportionate impact on the poor and most vulnerable groups. That almost half of the world’s wealth is owned by the richest one percent is in itself a paradox (Neate, 2017). As will be addressed in the last chapter, increased wealth and income is not necessarily correlated with happiness.

#11 SUSTAINABLE CITIES AND COMMUNITIES: About one million people live in slums, and the share of urban population living in slums worldwide rose to 24 percent in 2018. As people live close to each other in urban areas, COVID-19 has been relatively more contagious there. Over 90 percent of COVID cases have been in urban areas. In developing countries, where people are leaving farming and moving to cities searching for work, the rural to urban migration is a great challenge and is the key cause of the growing number and size of slums. Providing work outside cities and improving the framework to attract farmers is an alternative to more slums (Broom, 2019). The challenge of the poor image of being a farmer in for example in Africa will be addressed in Chap. 11.

In rich countries, population leaving rural areas and moving into the cities is a well-known challenge. Houses and farms are being abandoned and falling into disrepair. In many “peripheral” areas only retired people or unemployed people remain. Some governments have taken actions to reverse this dynamic by reducing tax for people living in rural areas as well as moving government offices into rural areas. Work attracts young people.

#12 RESPONSIBLE CONSUMPTION AND PRODUCTION: Overconsumption in developed countries is the main challenge to sustainable development. On average the ecological footprint, the metric that measure how much nature people use (Global Footprint Network, n.d.), was 2.75 planets per person in 2016. The planets biocapacity is 1.63 global hectares per person. This implies that we already over consuming and living on deficit. People in the developed part of the world consume many times their “allowance”. If everybody lived like people in South-East Asia and East Africa, we would be within the one planet limit (Guinness World Records, 2016).

Even though we have been aware of the problems associated with overconsumption for several decades, our consumption increased in the same period. In Norway for example, the import of textiles, which is something there is good data for, has almost quadrupled from 1990 to 2010.

A reduction in the ecological footprint can be achieved by reducing consumption of the more damaging products, like meat, throwing away less food, changing from incandescent to LED lightbulbs, car-sharing, nudging, reusing, and recycling. However, to become sustainable, with a footprint in line with the one-plant limit, a total shift of consumption is necessary. This fact is uncomfortable for the industrialized world but need more attention.

#13 CLIMATE ACTION: Due to greenhouse gas emissions, the global average temperature is increasing. More frequency of wildfires, long drought, and increase in the number and duration of tropical storms are related to climate change. 2019 was the second warmest year of all times. Even though the key SDG#13 goal is to reduce missions that cause the extreme weather, many countries and companies are moving toward adaption to the negative consequences. That is not reducing the problem (emissions) but adapting to the changes. Many poor countries cannot afford such adaptions. Reduced rainfall, which is one consequence of climate change, leads to poor harvests and food shortages in developing countries. In the United States, the loss associated with the 22 weather and climate disasters in 2020 exceeded one billion dollar (National Centers for Environmental Infomation, n.d.).

Since emissions from burning fossil fuels are the major source of the increase in greenhouse gas emissions, major steps are being taken to them. In many places, renewable energy is available and prices per unit of energy (kWh) are becoming competitive. Still, fossil fuel is currently our main energy source and 84 percent of total primary energy consumption in 2019 (BP, 2020). It will take time before we can switch to more sustainable sources of energy.

COVID-19 is likely to result in a six percent reduction of GHG in 2020, still 7.6 percent reduction is required to limit global warming to 1.5 °C (United Nations Sustainable Development, n.d.). On average Norwegians emit 8.4 tons of CO2 annually, whereas the world average is five tons.

It is the Paris Agreement that acts on the UN SDG#13. This is an international legally binding agreement aimed at reducing climate gases (reduce temperature increase to well below 2 °C relative to pre-industrial levels), increasing climate adaption, and providing a financing system for a low-carbon future. The agreement was signed by 175 countries in 2015 in Paris and has been ratified by 192 countries. United States, a major emitter of climate gases, withdrew from the agreement in 2017 and was not part of the agreement from 2020 to 2021. The United States joined the Paris Agreement in 2021. Achieving the goals of the Paris Agreement is very ambitious, and will be very demanding, if possible, to achieve. Many argue that it will require an economic and social transformation and others that sanctions are necessary to achieve the ambitions of the Paris Agreement.

#14 LIFE BELOW WATER: The ocean system is threatened by pollution, overfishing, and climate change. Human waste and emissions represent a major challenge, and it will not be easy to clean up. A plastic bottle left in the water, for example, will last around 450 years. On average 13,000 pieces of plastic litter can be found on every m2 of the world’s oceans. Forty percent of the world’s population depends on the ocean economy (Willige, 2020). As ocean temperature rise, marine wildlife habitats have to relocate. This can remove the livelihood for example fishermen—especially in poor countries. As the global temperature increases, icebergs at the poles melt, and water rises. This has a severe impact on the lives of people living in the coastal area. In the Netherlands, nearly fifty percent of its landmass is already at or below sea level (Glick, n.d.). The worst-case scenario of high climate emissions can imply an ocean rise of 2.5 meters (Lindsey, 2021).

#15 LIFE ON LAND: Forests are one of the main sources of capturing CO2 emissions. However, every year we are experiencing deforestation. In 2016, for example, forest areas almost the same size as Italy disappeared. An example of the chain effect of land changes is the tundra. As temperature rises, permafrost tundra thaws resulting in increased greenhouse gas emissions in the form of methane. Methane is a much more powerful greenhouse gas than CO2 (over a 20-year period about 84 times more potent) (UNECE Sustainable Development Goals, n.d.).

Changes in temperature also impact biodiversity. Of the 8300 animal breeds known, 22 percent are at risk of extinction and eight percent are already extinct (UNDP Seoul Policy Centre for Knowledge Exchange through SDG Partnerships, n.d.). The excessive use of fertilizers is a main source of soil degradation. There is a great potential for better and more efficient management of land in developed and undeveloped countries—both in terms of better yield and more sustainable management.

#16 PEACE, JUSTICE AND INSTITUTIONS: Wars, violence, abuse, exploitation, trafficking is continuously going on around the world. After the World War II, the number of deaths associated with war has declined continuously. Still civil wars in Yemen, Syria, and the Tigray have caused death, hunger, and terrible situations for many people. Terrorism has grown, and number of death tolls from terrorism has more than four folded from 2010 to 2014 (Ritchie et al., 2019).

For business, reduction of corruption and bribery might be one of the key challenges related to SDG#16. The global cost of corruption is five percent of global gross domestic products (United Nations Secretary-General, 2018). Corruption will be addressed in greater detail in Chap. 10.

#17 PARTNERSHIP FOR THE GOALS: This goal is about ensuring implementation of the rest of the goals. A prerequisite for achieving the goals is collaboration among different stakeholder beyond nations. Cooperation between corporations, governments, NGOs, and more is crucial. One of the main reasons for the success of the SDGs is that they are based on collaboration among different stakeholders. Involvement renders ownership among stakeholders, and a common agreement and dedication to reach the goals.

Funding is another crucial element to achieve the goals. In the long term, the SDGs form the basis of reduced costs. Reductions in emissions, pollution, better health are all good for economies. To achieve these positive economic effects in the long term, funding is necessary to get started. Target 17.2 is for developed countries to contribute with 0.7 percent of ODA/GNI (Official Development Assistance/Gross National Income). This goal was proposed already in 1970, but as of now, only five countries in the world meet this target.

To measure progress, the country profiles are available from the Sustainable Development Report Dashboard—Country Profiles (Sustainable Development Report, 2020), tracking progress and trends in achieving the SDGs for all the 193 member states. This is an excellent basis for benchmarking countries and business focus.

4.5 Why and How Are the SDGs Relevant for Business?

A majority of large multinational corporations address one or more of the SDGs. Two years after the SDGs were launched, 40 percent of the world’s largest 250 companies acknowledged the SDGs in their reporting (KPMG, 2018). As the targets and indicators are useful for benchmarking and comparing for countries, it is so for companies as well. I will now go through examples of how four well-known companies: Coca Cola, H&M, Huawei, and Phillip Morris, are applying the SDGs in practice. These companies are selected for several reasons. First of all, they produce consumer goods. In that way, they are operating in the ends-use marked, even though their products are very different. Second, the companies are originally anchored in different countries, H&M in Sweden, Coca Cola and Philip Morris in America, and Huawei in China. The companies’ products are often criticized for being non-sustainable, H&M for mass production of garments that people do not need, Coca Cola for selling sugar drinks and Philip Morris for producing and selling a very unhealthy product, cigarettes, and Huawei for causing security risks.

These companies have sustainability reports from 70 pages to almost 200 pages, and to make this manageable I will only focus on one SDG. Goal #12 Responsible Consumption and Production is very relevant for consumer products manufacturers, and I have therefore chosen to focus on that and associated targets.

Coca Cola is an US-based company and the world’s largest beverage company. It is a major provider of soft drinks, juice, and tea and coffee. The company’s 2019 Business & Sustainability report is 73 pages long.

12.2 By 2030, achieve the sustainable management and efficient use of natural resources. In 2018 the company launched World Without Waste with three fundamental goals; 1. Design—Make 100 percent of the package recyclable globally by 2025 and use at least 50 percent recycled material in the packaging by 2030, 2. collect and recycle a bottle or can for each one sold by 2030, and 3. partner with multi stakeholders to create platforms for collaboration.

12.5 By 2030, substantially reduce waste generation through prevention, reduction, recycling, and reuse. Coca Cola is one of the founding members of the PET Recycling Company (PETCO) which has led to an increased recycling rate in several African countries and is still expanding.

12.6 Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle. Through its sustainability report, the company addresses this issue.

12.8 By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature. Coca Cola works on pursuing water security and 160 percent of water used in finished beverages and their production was in 2019 replenished in nature and communities. Since 2010, 10.6 million people have been reached through the company’s water and sanitation program.

12.a Support developing countries to strengthen their scientific and technological capacity to move toward more sustainable patterns of consumption and production. In 2019, the company produced the first sample bottle using recovered and recycled marine plastics. Twenty-five percent of the bottles were from the Mediterranean Sea and beaches.

The company’s report sounds convincing, but there are still many negative issues that have not been properly addressed. For example, for three straight years Coca Cola has been named the world’s worst plastic polluter. From plastic waste found on beaches, in parks, and near rivers etc., Coca Cola bottles were the most common (Embury-Dennis, 2020). With regards to health effects, there are numerous medical studies showing a correlation that consuming Coca Cola beverages, both regular and diet, can lead to obesity, type 2 diabetes and tooth decay.

H&M is a Swedish company “making fashion and design accessible to everyone in a sustainable way”. The company had over 5000 stores and about 180,000 employees. The H&M Group Sustainability Performance Report of 2019 is 85 pages.

SDG #12 is covered in the two chapters “Leading the Change” and “Circular & Climate Positive”. The company does not respond directly to the SDG targets and has a more general approach to the SDG goals.

With regards to “Leading the Change”, Innovation; for solutions to complex social and environmental challenges. Through a circular innovation lab, the company works on recycled and other sustainably sourced materials.

Transparency, openness about business, performance, challenges, and product details to customers. In 2019, the company launched the Product Transparency Solution which makes it possible for online customers to see information about product materials, factory and garment care, or recycling options.

Rewarding sustainable action, H&M collaborates with different stakeholders to incentivize more sustainable behaviors. Sustainability goals are set at the executive level and part of management’s evaluations, customers are urged to sustainable actions by the garment collection schemes and suppliers receive sustainability training.

With regards to Circular & Climate Positive, the goal is to achieve full circularity and becoming climate positive by 2040. The approach is to decouple emissions from business growth through energy efficiency, 100 percent renewable energy, circular approach, and carbon sinks. From 2016–2018 the company has reduced its CO2 emissions; however, in 2019, they increased by 8 percent.

All of this seems quite convincing from a sustainability point of view, but the fact that H&M has factories in Myanmar which employ 14-year old children and they market to people to buy new clothes with a 15 percent rebate in exchange for used clothes is not sustainable. In fact, a company that has a business model based on low cost and fast fashion cannot be considered sustainable.

Huawei is a Chinese company and a “leading global provider of information and communication technology (ICT) infrastructure and smart devices”. The company has 194,000 employees and operates in more than 170 countries and regions. The 2019 Sustainability Report contains 110 pages.

SDGs are part of the company’s Sustainability Strategy covering several SDGs. SDG #12 is associated with Security and Trustworthiness and Environmental Protection.

Cybersecurity and privacy protection are among the company’s top priorities. Major progress in 2019 included: “Guaranteed network availability during more than 200 major events and natural disasters, Published an AI security and privacy protection white paper, obtained more than 20 cyber security and privacy certifications for our main products; and Saw multiple Huawei entities obtain ISO 22301 (business continuity management) certification”.

Contributing to a clean, efficient, low-carbon, and circular economy are key elements in the company’s Environmental protection strategy. Huawei increased the energy efficiency of their main products by up to 22 percent, cut CO2 emissions intensity by 32.7 percent compared with the base year, recycled 86 percent of returned products, and used 1.25 billion kWh of clean energy, thereby reducing the emissions by 570,000 tons.

The Huawei report on Consumption and Production also seems convincing. However, the fact that Huawei has been allegedly involved in state sponsored and industrial espionage as well as human right violations is not addressed in the report. These omissions diminish its trustworthiness and it detracts from the positive contributions the company presented in its sustainability report.

Philip Morris International (PMI) is the world’s largest tobacco company based in the United States, with about 73,500 employees and 38 production facilities worldwide. The company’s Integrated Report 2019 is 187 pages.

SDG # 12 is one of several SDGs PMI recognizes that it can contribute to. Improving lifecycle impact of products can be attained through reducing environmental impact of tobacco growing. Efficient low-carbon manufacturing, litter prevention, product eco-design, and recycling programs are primary contributions. The company is committed to finding alternatives to cigarettes “as quickly as possible”.

The company target is to become carbon neutral by 2030 as a company and by 2050 through the whole value chain. The plan is furthermore to achieve a 50 percent reduction of plastic litter from the production by 2025.

Philip Morris pays attention to reducing its environmental impact, but the company’s key challenge is that it is in the business of producting an unhealthy product. According to the WHO, tobacco kills up to half of its users and more than eight million people annually. Even though the company works on providing alternatives to its consumers, they are still expanding production in Africa for example, where the use of tobacco is increasing.

So, yes, companies are pursuing sustainability, but self-reporting on good performance is not always credible. There is growth in the market for sustainable and “green” products, and many companies market their products as such without data to support their claims. This gives a false impression that the products and companies are operating in a sustainable way, when it is in fact greenwashing.

From a more comprehensive perspective, can producing detrimental products such as tobacco and fast fashion ever become sustainable? Criticizing companies and sectors for behaving in a non-sustainable way is common—it happens all the time. But, companies are not the only ones that should be targeted with criticism. If we as consumers stopped purchasing such products demand would plummet and the production of such items would end.

4.5.1 SDGs in Practice: A Case

This case is based on an interview with a VP in one of the largest aluminum companies worldwide.

Involved in a resource intensive industry, the company has been actively involved in fulfilling their environmental and social responsibilities for several decades. When the Millennium goals were launched in 2000, the company was keen to implement and contribute to achievement of these. However, the Millennium goals were aimed at nations, not at corporations and it was therefore unclear how companies could contribute in their operations and practice.

The Sustainable Development Goals however were much more business oriented. Already when the SDGs were launched in 2015, the company started benchmarking itself relative to each of the 17 goals. Current status on performance with regards to each goal, and to which extent the company contributed positively or negatively to the goal, was mapped. Except for Goal #13 Climate Action, the analysis was not quantitative but qualitative. Even though there is no common, or official, approach to self-benchmarking with regards to SDGs, the process still resulted in awareness and made it easier to decide how to proceed on the sustainability journey.

A team representing employees across the company then started worked on identifying which of the goals were most relevant and where the company could contribute the most. In this process, it became evident that the most relevant goals could be divided into three groups:

  1. 1.

    Improving our footprint (Goal #13, #14, and #15)

  2. 2.

    Making a Positive Difference (Goal #8, #8, and #16)

  3. 3.

    Driving Innovation (#9, #12, and #13)

Most of the goals chosen are self-explanatory, relevant to the company sector. Other goals like for example #4 Quality Education , “Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all” is less obvious for an aluminum company. It is therefore a good example of how company impact comes forward when all the SDGs are reviewed, one by one.

As the company is operating in developing countries, the local workforce needs education to work at the facilities. In a long-term perspective, enhancing primary education for the local society will form a good basis for employees in the future. It is an advantage for everyone that local people, with their families close, can operate the facilities in a longer perspective, instead of importing the workforce from company HQ far away. The primary school contribution is done in cooperation with local schools and education authorities. The company also supports technical training and university level degrees in fields relevant to the company operation. In that sense, the company is working along the lines of the Triple-Bottom-Line, doing good for people, planet, and profit.

4.6 Additional Relevant Initiatives and Tools for Sustainable Performance

There are hundreds of initiatives and standards for how companies can address environmental, social, and sustainability issues.

I will give a brief overview and introduction to the initiatives which are most applied, accredited, and relevant. Such initiatives have different forms. Some provide frameworks that companies have to fulfill in order to get approved or certified. Such approvement can be a requirement for eco-labels and for being approved as a supplier for a company. Other initiatives are frameworks that companies can use for organizing and reporting on sustainability related issues. Other initiatives provide platforms where ESG data, especially on climate issues, can be posted for analysists and investors. Finally, there are laws and regulations on an international level which it is important to be aware of—also relevant for small companies.

4.6.1 Initiatives for Certifications

There are close to 500 different ecolabels. These are certification schemes that companies apply to meet compliance and demand from customers, but also to promote their own brand. The choice between the many different certification schemes depends upon among others the sector and type of business. These are three well recognized certification initiatives.

Forest Stewardship Council (FSC). If a product made of wood, including paper, chairs, flooring, and so on has a FSC label, you know that the forest the product is from is managed in an environmentally responsible way.

Fair Trade Certified. If you purchase a product with a Fair Trade label, you know that the farmers involved in the production among others have received fair wage, healthcare, housing, and education. Coffee and tea are typical products with the Fair Trade label.

Marine Stewardship Council (MSC). If you purchase a seafood product with a MSC label, you know that the products are from a fishery that is sustainably managed (no overfishing), minimizing environmental impact and run effectively.

Having these certification labels can make products preferred by customers. It can also be a good yardstick for the producer to ensure good sustainable production. On the other hand, becoming certified requires fulfilling a long list of criteria which can be costly to implement. It can be expensive to manage production according to the criteria set, especially if the company needs third-party certification bodies to approve the production site. For some labels, the companies have to pay a premium, which increases the price of the products. Still, being certified can also be a requirement for getting contracts for products and customers can be willing to pay a higher price for the products.

ISO 14001 : Environmental Management System (EMS) is the most well-known and applied environmental certification for business-to-business (B2B). ISO 14001 was launched in 1996 as a follow-up of the Rio conference. It has gone through three revisions after that, the latest in 2015. The purpose of the standard is to enhance the company’s environmental performance, fulfill compliance obligations, and achieve environmental objectives. ISO 14001 EMS covers the context of the organization, Leadership, Planning, Support, Operation, performance evaluation, and Improvement. It can be used by all types of organizations and corporations. Benefits of an ISO 14001 certification is improved resource efficiency, reduction of waste, reduced costs, and so on. Studies have shown that even though certification is associated with direct and indirect costs to fulfilling requirements, companies that are certified are more competitive, more efficient, and win more contracts (Gonçalves, 2018). The main motivation for most companies becoming certified is that it is a requirement for becoming a supplier in the value chain. For companies wanting to ensure that all is in order with regard to environmental issues in the supply chain, to require certification is a simple solution. By 2017 there were more than 300,000 ISO 14001 certifications. For discussing one ISO product related to environment, it is relevant to touch upon an additional ISO initiative, ISO 26000, on social responsibility, even though this is not associated with certification.

ISO 26000 Guidance on social responsibility was launched in 2010. Being a “Guidance”, ISO 26000 is not for certification. ISO 26000 is a framework for how to become a sustainable company or organization. The concept of social responsibility in this ISO standard has seven core subjects: human rights, labor practices, the environment, fair operating practices, consumer issues, and community involvement and development.

The Guidance manual is of 106 pages and can be purchased and downloaded online. The content is however rather vague. Given that there are so many new tools which attempt to contribute with the same assistance as ISO 26000, there might be other and more efficient tools that are more applicable.

There are several organizations and frameworks for guiding reporting on sustainability and it can be confusing with so many different initiatives. Given that companies measure and report in different formats, it is difficult to compare performance. Merging these initiatives is on its way, but it will take some time before it is ready. Next, I will provide a short list of different tools, including purpose, usefulness, and application. I will start with initiatives related to climate issues.

4.6.2 Greenhouse and Climate Reporting

The Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard is a comprehensive global standardized framework to measure and manage GHG emissions. It helps countries and companies to account for, report and mitigate emissions, and provide a standardized measurement of GHG as well as accounting and reporting standards. The framework is developed through a partnership between World Resource Institute (WRI) and the World Business Council for Sustainable Development (WBCSD ) and the first edition of the standard was published in 2001. The GHG Protocol was initiated with large multinational corporations like BP and GM, and eventually additional multinational corporations like Norsk Hydro, Tokyo Electric, Royal Dutch Shell as well as NGOs like WWF and The Energy Research Institute collaborated on developing the framework. This framework is the most widely used accounting standard for GHG and can be used to report in the Paris Agreement setting.

Emission factors convert corporate activity data to GHG emissions. Calculating GHG emissions based on kilometers driven by a company car and kilos of natural gas used are examples of company activities which can be converted to GHG equivalents. National environmental agency often provides simple tools for this type of assessment.

GHG emissions include CO2, CH4, N2O, HFCs, PFCs, SF6, and NF3 (Environmental Protection Agency, 2020). The approach is based on three “scopes”.

  • Scope 1 Covers direct GHG emissions. That includes emissions from sources that are owned or controlled by the company. For an SME that could be fossil fuel used to run its own machinery and gasoline used by its own cars.

  • Scope 2 Covers indirect GHG emissions from energy consumption. This includes for example electricity or district heating consumed. It is based on the mix of fossil and renewable sources of energy either by location and production or by market mechanisms like renewable energy certificates.

  • Scope 3 Covers all other indirect GHG emissions the company is indirectly responsible for along its entire value chain, both upstream and downstream. This includes, for example, emissions from buying products from suppliers and from its products when customers use them. Scope 3 emissions constitute the greater majority of a company’s GHG emissions.

The GHG protocol is the most widely recognized framework used for companies today.

CDP runs a global disclosure system and ranking system, Disclosure Insight Action, for investors, companies, and cities to manage their environmental impacts. For the last 20 years, this has been the key platform for institutional investors to collect data on corporations. Over 8400 companies with over 50 percent of global market capitalization have used the CDP as a channel for disclosing their environmental data in 2019.

Climate Disclosure Standard Board (CDSB ), formed in 2011, offers companies a framework for reporting environmental information with the same format as financial information. CDSB is committed to advancing and aligning the global mainstream corporate reporting model to equate natural capital with financial capital. The Board is a consortium of business and environmental NGOs.

Task Force on Climate-Related Financial Disclosures (TCFD ) was initiated by the Group of 20 Finance Ministers and Central Bank Governors and launched at the end of 2015 by the Financial Stability Board (FSB), an international body monitoring and making recommendations about the global financial system, under the chairmanship of Michael Bloomberg, founder of the world’s largest finance software companies. The purpose was to create a financial disclosure framework to provide investors, banks, and insurance underwriters better transparency regarding climate-related risks and opportunities that may impact disclosing company. TCFD is quickly gaining traction among regulators and the largest companies in the world; 60 percent of the 100 largest companies support TFCD, particularly in Asia and Europe. It consists of 11 different questions in 4 topic areas: governance, strategy, risk management, and metrics and targets. Since it is voluntary, companies generally selectively disclose information and generally include them in their sustainability reports.

As is evident there are a myriad of slightly different initiatives for keeping track of corporate disclosure on environmental issues. This is confusing and inefficient. It is positive and also necessary that many of these are starting to cooperate and merge. In the next section, I will give an overview over different frameworks for general sustainability reporting.

4.6.3 Sustainability Reporting Frameworks

The Global Reporting Initiative (GRI ): Since companies started reporting on social and environmental issues, the issues addressed and way of reporting had no common framework and the content was therefore, or even, impossible to compare. In response to this, the Global Reporting Initiative (GRI ) was developed by a network with representatives from companies and organizations founded in 1997 and the first version of GRI Guidelines was launched in year 2000. The GRI has later been revised and new and more encompassing versions were later launched. The latest version is GRI G4. Today the GRI is the world’s most widely used standard for sustainability reporting. It starts with an environmental focus, later on economic, environmental, and social performance, and lastly how the SDGs are part of the framework for reporting.

Today, out of the largest 100 companies in 52 countries, 80 percent report according to the GRI framework (Global Reporting Initiative, 2020).The GRI framework has developed both in size and specialization related to sectors and operations. Even though the framework and guidelines are available for download at the GRI website, they are too encompassing for most SMEs. Still, the general framework as well as framework can assist SMEs by inspiring to action as well as a checklist for activities.

The International Integrated Reporting Council (IIRC ), launched in 2010, is an international initiative by a group of stakeholders, regulators, investors, companies, standard setters, the accounting profession, and NGOs. The purpose is to integrate the annual and sustainability reporting. As the goal is to integrate sustainability in daily business, the reporting also has to be integrated. The initiative contributes with guidance and training on integrated reporting (Integrated Reporting, n.d.). In 2019, 58 percent of top 40 French listed companies produced integrated reports (Sweet, 2019). In 2021 IIRC merged with SASB (The Sustainable Accounting Standards Board) to form the Value Reporting Foundation (VRF). The merger of different reporting initiatives makes it less confusing both for companies as well as investors to evaluate companies. The EU taxonomy addressed in Chap. 9 will be a major step in the direction of a more coherent reporting system.

The Sustainability Accounting Standards Board (SASB) was formed in 2011 with the purpose of developing sustainability accounting standards. SASB contributes to facilitating the comparison of corporate data and communications between companies. In 2021, IIRC and SASB merged to form the Value Reporting Foundation (VRF). Key resources from the VRF framework include Integrated Thinking Principles, Integrated Reporting Framework and SASB standards to contribute to more coherent international corporate reporting. This merger between the IIRC and SASB makes it easier for companies to report and, together, this will make it attractive and realistic for more companies to report.

International Sustainability Standards Board (ISSB)—the formation of the ISSB, announced in November 2021, is an initiative to consolidate sustainability reporting and disclosure frameworks from CDP, CDSB, the GRI, and VRF. The ISSB will create one common comprehensive corporate reporting framework. New regulatory frameworks for reporting, like the EU taxonomy (Chap. 9), are often based on experiences from voluntary corporate initiatives through foundations and organizations like the ones mentioned above. In this way the “soft laws” based on corporate self-reporting norms make new “hard laws” more likely to work. 

The European Union (EU ) has with the European Green Deal policy initiative of 2019, committed to make Europe climate neutral in 2050. The United States has pledged to become carbon neutral by 2050 and China by 2060. The Green Deal includes ambitious action plans for among others the circular economy and a revision of energy taxation. It can be argued that EU is ahead of other countries, and I will therefore include two regulations associated with EU reporting requirements which will have an impact on companies from outside the EU that are doing business within the EU such as importing manufacturing products.

EU Directive 2014/95/EU, the non-financial reporting directive (NFRD), requires large companies to disclose information on how they operate and manage social and environmental challenges. A key goal is to make companies more aware of their societal impact and provide relevant and comparable information to stakeholders, like investors, NGOs, customers, and the media. Companies are required to include non-financial statements in their annual reports. Issues to be covered in the report include policies on environmental protection, social responsibility and treatment of employees, respect for human rights, anti-corruption and bribery, and diversity on corporate boards. The EU has developed more detailed guidelines for reporting, which make reference to the UN Global Compact, the OECD Guidelines for Multinational Enterprises and ISO 26000. The EU directive applies to listed companies with more than 500 employees and covers about 11,700 companies (European Commission, n.d.-a). In 2019, the EC published new guidelines on reporting climate-related information to accompany the NFRD and is based on recommended disclosures of the TCFD. 

Corporate Sustainability Reporting Directive (CSRD): The EC in April 2021(European Commission, n.d.-b) adopted a proposal to amend the NFRD. The proposal will, among others, extend the scope to all large companies (about 50.000), would require more detailed reporting as well as auditing. Even though the reporting requirements will be more comprehensive, the uniform standards will make the reporting easier for companies to produce and easier to read and compare for external stakeholders like investors and NGOs. It is anticipated that the CSRD standards will be adopted in 2022.

4.6.4 Supply Chain Guidance, Transparency, and Mandatory Due Diligence

The OECD Guidelines for Multinational Enterprises are recommendations from governments to multinational enterprises operating in or from their territories. They were adopted in 1976 as part of the Declaration on International Investment and Multinational Enterprises and have later been updated several times to be in line with developments in the landscape for international investment and multinational enterprises. The most recent update was in 2011, which included a new human rights chapter and a new and comprehensive approach to due diligence. Updates are made with the active participation of business, labor, NGOs, non-adhering countries, and international organizations (OECD, 2011). The Guidelines are non-binding, but still, as a multilaterally agreed code of responsible business conduct, they are widely recognized and used. The Guidelines cover disclosure, human rights, employment and industrial relations, environment, combating bribery and bribe solicitation and extortion, consumer interests, science and technology, competition and taxation (OECD, 2011).

Even though the guidelines are aimed at multinational enterprises, they are relevant for all enterprises. These Guidelines are also relevant for organizations outside the company to evaluate corporate performance with regards to sustainability. Interested parties may file complaints with allegations of non-observance of the Guidelines to National Contact Points (NCPs), which are established to promote the Guidelines and handle complaints in OECD countries and other countries adhering to the Guidelines.

Individual organizations, often trade unions and NGOs, may submit complaints where they allege that corporations are not observing the OECD Guidelines. The NCP determines whether to accept the complaint based on the procedural guidance of the OECD Guidelines. From 2000 to 2020, 500 specific instances were handled by the NCP internationally. After a complaint is submitted, it goes through a process of initial assessment by the NCP. If the complaint is accepted, the NCP offers its good offices to the parties (dialogue and/or mediation). This may result in a joint statement from the parties, or, if the parties do not agree on one, the NCP will issue its final statement. Sometimes companies admit not operating in line with the Guidelines and agree to change policies and/or practices. Other times they do not agree with the allegations and are not willing to change.

In a complaint submitted to the NCP in Norway in 2020, organizations claimed that a group of corporations, including Samsung Heavy Industries, Total, and Equinor, failed to exercise due diligence and operate in line with the OECD Guidelines when it comes to transparency and human rights in conjunction with an accident during the construction of an oil platform on Norwegian territory. A labor association in Yemen has submitted complaints against DNO, a Norwegian company operating in Yemen, for firing employees and closing down facilities. DNO was not found to be in violation of the OECD Guidelines in the specific instance that was closed in 2020. Another example illustrating the variation in complaints was submitted by Jinjevaerje Sameby in Sweden. The complainants alleged that Statkraft AS planned to set up windfarms in the area without consulting the local population involved in reindeer herding in the area. The parties did not reach an agreement, and the NCP concluded in its Final Statement that Statkraft had failed to comply with the OECD Guidelines. Even though the complaint mechanism does not entail fines or punishment, the complaints make companies aware of the OECD Guidelines and participation may prompt them to act in accordance with them. Avoidance of negative media coverage can also be an important motivator for observing the OECD Guidelines.

Transparency Acts An important focus in the field of responsible business conduct in recent years has had an adverse impact on human rights by business relationships in global supply chains. Of the estimated 40 million people working in slavery-like conditions, one in four are children. Women and girls are especially affected by forced labor in the commercial sex industry. Given these challenges and the demand for information on working conditions and human rights among stakeholders like non-governmental organizations, media, and customers, several countries are adopting legislation that extends transparency requirements and due diligence to business relationships and supply chains.

In addition, investors call for stronger requirements when it comes to environmental social and governance issues (ESG ). The Investor Alliance for Human Rights (IAHR) represents 160 institutional investors which manage more than $1.9 trillion assets under management. They call on the EU and the US Congress to adopt regulations mandating due diligence with regard to ESG issues (Investor Alliance for Human Rights, n.d.). New laws on transparency pertaining human rights and working conditions in supply chains have been developed and adopted in recent years.

The first law on transparency in the supply chain, the California Transparency in Supply Chains Act—TISC, was passed in 2010. The law requires companies to report on efforts to combat slavery and human trafficking. The TISC was a frontrunner for the UK Modern Slavery Act of 2015 addressing slavery, compulsory labor, and human trafficking. Section 54 on Transparency in Supply Chains (TISC) requires companies to report on risks of, and efforts to eradicate, modern slavery. If there are no such risks, the company may report this.

The French Corporate Duty of Vigilance Law was passed in 2017. The initiative for the law came in the aftermath of the Rana Plaza accident in Bangladesh in 2013. Mandatory due diligence is a key element in the law. This law makes it legally binding for large companies to identify and prevent adverse human rights and environmental impacts resulting from their own activities, from activities of companies they control, and from activities of their subcontractors and suppliers, with whom they have an established commercial relationship. (European Coalition for Corporate Justice, 2017) Liabilities apply when companies do not fulfill their obligations, by for example not having a plan for the above issues or when they do not follow up the plan.

The law is related to the UN Guiding Principles on Business and Human Rights (UNGP). Other laws, inspired to varying degrees by the UNGPs, have been initiated and passed in other countries, like the UK Modern Slavery Act of 2015 and the Dutch Child Labour (Duty of Care) Act of 2019.

Along the above lines, the “Transparency Act” (Åpenhetsloven) was passed in Norway in June 2021 and will enter into force July 1st 2022. This law is argued to go the furthest with regards to ensuring basic human rights and decent working conditions associated products and services. The act applies to companies which meet at least two of the following three conditions: over 70 MNOK in sales revenue, over 35 MNOK on its balance sheet and a minimum of an aggregate of 50 full-time employees. So, effectively, this will apply to about 9000 companies in Norway. As a member of the committee which drafted this law, I would like to emphasize that it is significant considering Norway’s relatively small size in terms of population. The laws apply to a relatively large proportion of Norwegian companies in comparison to similar transparency laws in other countries. The Act includes three key obligations: duty to carry out due diligence, duty to account for due diligence and the right to information. A company covered by this Act is required to conduct a due diligence assessment, reporting, and provide transparency throughout its supply chain with regards to human rights and working conditions. The right to information implies that a company is obliged to respond to any written request regarding the actual and potential adverse impact of its operations and products on human rights. The law is based on international obligations, specifically the UN Guiding Principles on Business and Human Rights (UNGP), the OECD Guidelines for Multinational Enterprises and the UN SDGs. So far we do not know the effect of the law. Many requests from external stakeholders can be expensive for companies, but on the positive side increases in corporate awareness should improve human rights performance in supply chains. The act is available in English through Lovdata. Several countries as well as the EU are working at similar actions to increase transparence and improve working conditions in the supply chain.