UNCTAD is empowering companies to better report their contributions to the Sustainable Development Goals (SDGs) and showcase how they are making the world a better place.

It’s guidance on core indicators on entity reporting on contribution to SDG implementation is a useful tool that provides practical information on how companies can report data on their contributions to the SDGs.

The tool also seeks to assist governments to design policies and build institutional mechanisms to collect data from companies’ reports to reflect the private sector’s contribution to SDG implementation in a consistent and comparable manner.

Built through consultations

The tool was developed through three-year consultations under the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR).

It was endorsed at the group’s thirty-sixth session (ISAR36) that took place from 30 October to 1 November at the United Nations in Geneva. It was attended by about 400 experts from more than 90 countries.

“We hope more enterprises will be able to report their contributions to the SDGs and therefore facilitate raising awareness and implementation of good practices,” said UNCTAD's director of investment and enterprise, James Zhan.  

• Guidance on core indicators for entity reporting on contribution towards implementation of the Sustainable Development Goals
• SDG Investment Trends Monitor: Investment trends and monitoring capacities across 10 SDG-investment sectors

• Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (30 Oct - 1 Nov 2019)
• ISAR Project: Enabling policy frameworks for enterprise sustainability and SDG reporting in Africa and Latin America

The toolkit’s core SDG indicators cover economic, environmental, social and institutional areas. They were identified based on key reporting principles, main reporting frameworks and companies’ reporting practices.

They allow companies to track their impacts and progress in SDG implementation based on reliable and comparable quantitative information.

The information covers issues such as the use of energy and water, carbon dioxide emissions, waste generation and recycling, human resource management, gender equality and community development, among others.

Several delegates at ISAR36 commended the toolkit for its usefulness in enabling organizations to provide comparable baseline data on their SDG contributions.

“The toolkit can serve as a framework to provide standardized data to inform national statistical offices and regulators regarding the progress of the country's private sector towards the SDGs,” said Richard Rothenberg, executive director of Global A.I. Corporation.

It can also serve as an investment promotion tool through increased transparency and data disclosure, he added.

"The indicators will allow a greater degree of government participation in the structuring of a cross-sectional reporting methodology that would allow comparability of companies between sectors," said Felipe Janica, a partner at professional services firm Ernst & Young in Colombia.

Successful case studies

The toolkit has successfully been implemented and validated in China, Columbia, Denmark, Egypt, Guatemala, Kenya, Russia and Ukraine in industries such as telecommunications, oil and gas, mining, healthcare manufacturing, retail, hospitality and energy.

Most of the indicators in the tool were found to be “reportable.” The few “unreportable” cases were due to lack of technical expertise, legislative restrictions or simply because there were no related activities.

"We were pleased to provide information on 32 of 33 indicators, as one of the leaders in non-financial reporting in Russia," said Svetlana Ivchenko, head of the social policy department at Nornickel in Russia.

In some developing countries such as Egypt, financial reporting on SDGs is a novel idea, said Nermeen Shehata, associate professor at the American University in Cairo.

“Company officials are unaware of the needed SDGs disclosure requirements and their importance. They need education on the benefits,” she said.

At ISAR36, several experts stressed that the indicators in the guidance toolkit should only be considered as a baseline to facilitate comparability.

"Larger and more able companies should report beyond those indicators to fully capture their contributions to the SDGs," said Mardi?McBrien, managing director of the Climate Disclosure Standards Board, an international consortium of non-governmental organizations.

Efforts to address challenges

Despite the successful implementation of the toolkit, ensuring consistent measurement and comparability of reported indicators remains difficult due to the lack of regulation on SDG reporting.

To address such challenges, UNCTAD is implementing a capacity-building project in Brazil, Colombia, Kenya and South Africa to strengthen the capacities of governments to measure and monitor the private sector’s contribution to SDGs.

Additionally, Guatemala’s government agency that promotes small and medium enterprise (SME) development plans to conduct training sessions on SDG reporting for 20 to 25 companies, including SMEs, on the application of the tool.

The agency intends to integrate the toolkit’s core indicators into a software that will be used to collect sustainability information across central America from 2020.

UNCTAD is also developing training materials that will explain how the underlying accounting data needed for reporting on the core indicators could be collected through companies’ accounting systems and presented in company reports.

In addition, it continues facilitating the sharing of national and international best practices in enterprise reporting on sustainability and the SDGs, in partnership with other relevant stakeholders, including as part of the ISAR Honours Initiative launched in 2018.