Why the UNRISD Sustainable Development Performance Indicators (SDPI) are a potential game changer
The ever-growing importance of sustainability and ESG reporting continues as more organisations recognise the need to consider their impacts on the environment and society. In addition, the effectiveness of sustainability measurement and reporting has improved signifcantly due to numerous standard-setting initiatives and revisions of existing tools and models. Whilst these efforts are undoubtedly a step in the right direction, there is on-going debate as to whether they are driving real world sustainable development.
On the one hand, sustainability reporting in the traditional sense can help companies identify areas where they can improve their sustainability practices and track their progress over time. By disclosing their sustainability performance, they can be held accountable by their stakeholders, including customers, investors, and regulators. This, in turn, may encourage companies to make positive changes that lead to more sustainable practices and contribute to the achievement of the Sustainable Development Goals (SDGs) set by the United Nations.
On the other hand, however, sustainability reporting does have its limitations. Some critics argue that companies may engage in “greenwashing” or “cherry picking”, misleading stakeholders into thinking that the company is doing more to address sustainability challenges than it actually is. Additionally, the complexity of reporting requirements and the immense amount of data to collect and analyse may be seen as burdensome, leading some companies to focus solely on ticking boxes and meeting the minimum requirements rather than properly integrating sustainability-based thinking into their business practices.
What is more, the impact of corporate sustainability and ESG reporting on sustainable development is limited due to the fact that it is still mostly a voluntary practice, although there are some regulatory requirements for reporting in certain jurisdictions. Companies that choose to report on their sustainability performance may still engage in unsustainable practices that harm the environment or society. The fact that an organisation engages in sustainability reporting does not necessarily mean that it is committed to sustainable development or that its practices are sustainable in the long-term. So whilst traditional corporate sustainability and ESG reporting approaches are a positive step towards sustainable development, questions remain as to whether these helps drive real world sustainable development and to what degree organisations contribute to the SDGs. The Sustainable Development Performance Indicators (SDPI) aim to address these exact concerns, with the SDGs and the achievement thereof placed front and centre.
Liu Zhenmin, the Under-Secretary-General of the United Nations Department of Economic and Social Affairs (2017-2022), stated in ‘The Sustainable Development Goals Report 2022’ that “the world is facing a consequence of crises that threaten the very survival of humanity. All of these crises – and the ways to prevent and navigate them – are addressed holistically in the SDGs. We ignore them at our own peril.” He further goes on to say that “the severity and magnitude of the challenges before us demand sweeping changes on a scale not yet seen in human history. …The stakes could not be higher. If humanity is to survive, we must survive together, leaving no one behind.”
The SDGs address the most pressing challenges facing the world today including poverty, hunger, inequality, climate change, and environmental degradation, amongst others. Unlike initiatives linked to a 2050-goal, the SDGs represent a near-term framework linking sustainability and human development in a manner that not only addresses planetary health and human well-being but also helps better plan and implement mitigation and adaptation actions to achieve these linked goals.
The Sustainable Development Performance Indicators (SDPI) tool is the culmination of a 4-year project undertaken by the United Nations Research Institute for Social Development (UNRISD) in partnership with the Center for Social Value Enhancement Studies (CSES) and the multistakeholder platform r3.0.
The aim was to develop methodologies and indicators that would meaningfully and authentically measure and evaluate impacts or performance as these relate to the vision and mission of the 2030 Agenda for Sustainable Development. And in addition to its alignment with the 2030 Agenda, three key areas set the SDPI apart from the field, paying attention to fundamental problems with current sustainability reporting:
- The SDPIs explicitly incorporate ecological, social, and economic thresholds, such as the Planetary Boundaries, and the Ecological Ceilings and Social Foundations of the Doughnut, to assess the performance of an organization against tangible measures of sustainable development in society.
- The SDPIs also endeavour to address fundamental problems related to omissions and blind spots of current sustainability reporting. Pertinent examples of omissions include “… a company may report in detail on efforts to improve occupational health and safety or other working conditions but say little, if anything, about core labour rights such as collective bargaining.” Examples given of common blind spots deal with “… corporate taxation; inequalities of income distribution within the corporation or value chain; or what support, if any, is being provided
for employees with caregiving responsibilities—responsibilities that can especially impact women’s pay and promotion in the workplace.”
- Further, the SDPIs are applicable to a broad range of economic entities, namely conventional for-prompt enterprises (FPE) and social and solidarity economy (SSE) organisations. SSEs include associations, cooperatives, foundations, mutual societies, social enterprises, self-help groups, as well as other bodies that operate in keeping with the values and principles of the SSE.
With this reporting framework, organisations are provided with a set of 61 context-based indicators that they can use to measure and report on their sustainability performance across a range of dimensions covering economic, social, and environmental sustainability. Economic sustainability indicators cover areas such as economic growth, income distribution, and poverty reduction, while the social sustainability indicators cover areas such as education, health, and gender equality.
The environmental sustainability indicators cover areas such as climate change, biodiversity, and water resources. In addition, the SDPI framework provides a set of guidelines for reporting on an organisations sustainability performance. This includes guidance on how to report on their sustainability performance using the SDPI indicators, as well as guidance on how to communicate this information to stakeholders. By following these guidelines, businesses can ensure that their sustainability reporting is transparent, accurate, and reliable.
A set of best practices for improving sustainability performance is also provided by the SDPI framework. These best practices include aspects related to stakeholder engagement, supply chain management, and sustainable procurement amongst others. By following these best practices, businesses can ensure that they are taking a comprehensive approach to sustainability and that they are addressing all of the key sustainability issues in their operations.
The SDPIs are intended to be a flexible and adaptable resource that can be used by governments, businesses, civil society organisations, and other stakeholders who are committed to advancing sustainable development. Users can select from a range of indicators to track progress towards specific SDGs, or they can use the tool to assess how different policies and programs are contributing to sustainable development outcomes. This framework allows for customisation based on the specific needs and goals of an organisation or policy initiative, as well as providing data visualization and analysis features to help users better understand the impact of their efforts.
By measuring their sustainability performance using these indicators, businesses can gain a better understanding of their impact on the environment, society, and economy. This can help to identify areas where they can improve their sustainability performance, as well as to track their progress over time. By providing a framework for assessing progress towards the SDGs and tracking their progress, the SDPIs can help businesses to identify areas where more work is needed, as well as demonstrate their commitment to sustainability to stakeholders such as investors, customers, and employees.
Allen White, Co-founder of the Global Reporting Initiative (GRI) stated at the November 2022 release of the UNRISD SDPI that this “… marks a seminal moment in mainstreaming contextualisation. It represents the first comprehensive guidance to embedding thresholds in sustainability reporting, the culmination of years of research and advocacy in support of a new generation of disclosures. A decade from now, historians will view the release of the SDPIs as a Brundtland in the urgent journey toward a just and thriving planet.”
Bill Baue and Ralph Thurm, 2022. UNRISD Ushers in a New Era of Authentic Sustainability Assessment with the release of its Sustainable
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Ilcheong Yi, Samuel Bruelisauer, Peter Utting, Mark McElroy, Marguerite Mendell, Sonja Novkovic and Zhen Lee. 2022. Authentic Sustainabilbity Assessment: A User Manual for the Sustainable Development Performance Indicators. Geneva, UNRISD.
United Nations, 2022. The Sustainable Development Goals Report 2022. https://unstats.un.org (accessed 2023/05/08)