The guide for businessaction on the SDGs

Developed by:TMOur planet faces massive economic,
social and environmental challenges.
To combat these, the Sustainable
Development Goals (SDGs) define global
priorities and aspirations for 2030. They
represent an unprecedented opportunity
to eliminate extreme poverty and put theworld on a sustainable path.
Governments worldwide have alreadyagreed to these goals. Now it is time forbusiness to take action.
The SDG Compass explains how the SDGs
affect your business – offering you thetools and knowledge to put sustainability
at the heart of your strategy.

The Sustainable Development Goals (SDGs)

What’s inside?
Page

Executive
summary

Step 01
Understanding
the SDGs

Step 02
Defining
priorities

Step 03
Setting
goals

Step 04
Integrating

Step 05
Reporting andcommunicating

SDG Compass

www.sdgcompass.org

Why do the SDGs matter for business?

4

What is the SDG Compass?

5

What are the SDGs?
Understanding the business case
The baseline responsibilities for business

6
7
8
10

Map the value chain to identify impact areas
Select indicators and collect data
Define priorities

11
12
14
15

Define scope of goals and select KPIs
Define baseline and select goal typeSet level of ambition
Announce commitment to SDGs

16
17
18
18
20

21
Anchoring sustainability goals
within the business
Embed sustainability across all functions
Engage in partnerships

22
23
24

Effective reporting and communication
Communicating on SDG performance

25
27
28

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Executive summary
Why do the SDGs matter for business?
The Sustainable Development Goals (SDGs)
define global sustainable development priorities
and aspirations for 2030 and seek to mobilize
global efforts around a common set of goals
and targets. The SDGs call for worldwide
action among governments, business and civilsociety to end poverty and create a life of dignity
and opportunity for all, within the boundariesof the planet.

Covering a wide spectrum of sustainable development
topics relevant to companies – such as poverty,
health, education, climate change and environmental
degradation – the SDGs can help to connect businessstrategies with global priorities. Companies can use
the SDGs as an overarching framework to shape, steer,communicate and report their strategies, goals andactivities, allowing them to capitalize on a range ofbenefits such as:

Unlike their predecessor, the Millennium Development
Goals, the SDGs explicitly call on all businesses toapply their creativity and innovation to solve sustainable
development challenges. The SDGs have been agreed
by all governments, yet their success relies heavily on
action and collaboration by all actors.

Identifying future business opportunities
The SDGs aim to redirect global public and private
investment flows towards the challenges they
represent. In doing so they define growing markets
for companies that can deliver innovative solutions
and transformative change.

The SDGs present an opportunity for business-led
solutions and technologies to be developed andimplemented to address the world’s biggest sustainable
development challenges.

Enhancing the value of corporate sustainability
Whilst the business case for corporate sustainability
is already well established, the SDGs may for example
strengthen the economic incentives for companies to
use resources more efficiently, or to switch to moresustainable alternatives, as externalities become
increasingly internalized.

As the SDGs form the global agenda for thedevelopment of our societies, they will allow leading
companies to demonstrate how their business helps toadvance sustainable development, both by minimizing
negative impacts and maximizing positive impacts on
people and the planet.

Business is a vital partnerin achieving the Sustainable
Development Goals. Companies
can contribute through their core
activities, and we ask companies
everywhere to assess theirimpact, set ambitious goals andcommunicate transparently
about the results.

Strengthening stakeholder relations andkeeping the pace with policy developments
The SDGs reflect stakeholder expectations as well as
future policy direction at the international, national andregional levels. Companies that align their priorities with
the SDGs can strengthen engagement of customers,
employees and other stakeholders, and those that don’t
will be exposed to growing legal and reputational risks.
Stabilizing societies and markets
Business cannot succeed in societies that fail.
Investing in the achievement of the SDGs supports
pillars of business success, including the existence ofrules-based markets, transparent financial systems,
and non-corrupt and well-governed institutions.
Using a common language and shared purpose
The SDGs define a common framework of action andlanguage that will help companies communicate moreconsistently and effectively with stakeholders about
their impact and performance. The goals will help bring
together synergistic partners to address the world’s
most urgent societal challenges.

Ban Ki-moon,
United Nations
Secretary-General

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www.sdgcompass.org

SDG Compass

What is the SDG Compass?
The objective of the SDG Compass is to guidecompanies on how they can align their strategies
as well as measure and manage their contribution
to the SDGs.
The guide presents five steps that assist companies
in maximizing their contribution to the SDGs.
Companies can apply the five steps to set or aligntheir course, depending on where they are on thejourney of ensuring that sustainability is an outcomeof core business strategy.
The five steps of the SDG Compass rest on therecognition of the responsibility of all companies tocomply with all relevant legislation, respect international
minimum standards and address as a priority all
negative human rights impacts.
The SDG Compass is developed with a focus on large
multinational enterprises. Small and medium enterprises
and other organizations are also encouraged to use it
as a source of inspiration and adapt as necessary. It isalso designed for use at entity level, but may be appliedat product, site, divisional or regional level as required.

The SDG Compass guide is organized into sections
that address each of the five steps of the guide:
01 Understanding the SDGs
As a first step, companies are assisted in familiarizingthemselves with the SDGs.
02 Defining priorities
To seize the most important business opportunities
presented by the SDGs and reduce risks, companies
are encouraged to define their priorities basedon an assessment of their positive and negative,
current and potential impact on the SDGs acrosstheir value chains.
03 Setting goals
Goal setting is critical to business success and helps
foster shared priorities and better performanceacross the organization. By aligning company goals
with the SDGs, the leadership can demonstrate its
commitment to sustainable development.
04 Integrating
Integrating sustainability into the core businessand governance, and embedding sustainable
development targets across all functions within thecompany, is key to achieving set goals. To pursue
shared objectives or address systemic challenges,
companies increasingly engage in partnerships
across the value chain, within their sector or withgovernments and civil society organizations.
05 Reporting and communicating
The SDGs enable companies to report information
on sustainable development performance using
common indicators and a shared set of priorities.
The SDG Compass encourages companies to build
the SDGs into their communication and reportingwith stakeholders.

SDG Compass

www.sdgcompass.org

5

Step 01
Understanding
the SDGs
As a first step, it’s important to familiarize
yourself with the SDGs and understandthe opportunities and responsibilities they
represent to your business.

The SDGs call on companies
everywhere to advance sustainable
development through the investments
they make, the solutions they
develop, and the business practices
they adopt. In doing so, the goals
encourage companies to reduce their
negative impacts while enhancing
their positive contribution to thesustainable development agenda.
The degree and speed with which
companies around the world develop
more sustainable and inclusive
business models will play a largerole in the success of achieving
the SDGs. In turn, all companies
are impacted by the challenges
that the SDGs address.

6

In this step we will explore what
the SDGs are, how they came about,
how companies can use them totheir benefit, and how they build on
existing business responsibilities bycovering the following areas:
What are the SDGs? 7 nderstandingU
the business case8 he baseline responsibilities
Tfor business

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SDG Compass

What are the SDGs?
Designed for global action: Between 2000 and2015, the Millennium Development Goals (MDGs)
provided an important development framework
and achieved success in a number of areas suchas reducing poverty and improving health andeducation in developing countries.
The SDGs succeed the MDGs, expanding thechallenges that must be addressed to eliminate
poverty and embracing a wide range of inter-connected
topics across the economic, social and environmental
dimensions of sustainable development.
The SDGs were born out of what is arguably the mostinclusive process in the history of the United Nations,reflecting substantive input from all sectors of society
and all parts of the world. Through the UN Global
Compact alone, more than 1,500 companies provided
input and guidance.
The goals are universally applicable in developing anddeveloped countries alike. Governments are expected
to translate them into national action plans, policies andinitiatives, reflecting the different realities and capacities
their countries possess.
While they primarily target governments, the SDGs
are designed to rally a wide range of organizations,and shape priorities and aspirations for sustainable
development efforts around a common framework.
Most importantly, the SDGs recognize the key rolethat business can and must play in achieving them.

Goal 1 	End poverty in all its forms everywhere
Goal 2 	End hunger, achieve food security andimproved nutrition and promote sustainableagriculture
Goal 3 	Ensure healthy lives and promote well-being
for all at all ages
Goal 4 E nsure inclusive and equitable quality
education and promote lifelong learning
opportunities for all
Goal 5 	Achieve gender equality and empower
all women and girls
Goal 6 	Ensure availability and sustainable
management of water and sanitation for all
Goal 7 	 Ensure access to affordable, reliable,
sustainable and modern energy for all
Goal 8 	Promote sustained, inclusive and sustainableeconomic growth, full and productive
employment and decent work for all
Goal 9 	Build resilient infrastructure, promote
inclusive and sustainable industrializationand foster innovation
Goal 10 Reduce inequality within and among countries
Goal 11	Make cities and human settlements
inclusive, safe, resilient and sustainable
Goal 12 	Ensure sustainable consumption
and production patterns
Goal 13	Take urgent action to combat
climate change and its impacts
Goal 14	Conserve and sustainably use theoceans, seas and marine resources
for sustainable development
Goal 15	Protect, restore and promote sustainable
use of terrestrial ecosystems, sustainably
manage forests, combat desertification,and halt and reverse land degradation andhalt biodiversity loss
Goal 16	Promote peaceful and inclusive societies forsustainable development, provide access tojustice for all and build effective, accountable
and inclusive institutions at all levels
Goal 17	Strengthen the means of implementation
and revitalize the global partnership forsustainable development

Each goal offers several
specific and actionabletargets. To find out more visit:www.sdgcompass.org
SDG Compass

www.sdgcompass.org

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Step 01
Understanding
the SDGs

Understanding the business case
By developing and delivering solutions for theachievement of the SDGs, companies will discover
new growth opportunities and lower theirrisk profiles. Companies can use the SDGs
as an overarching framework to shape, steer,communicate and report their strategies, goals
and activities, allowing them to capitalize on a
range of benefits. These include:

Identifying future business opportunities
Global sustainable development challenges alreadyrepresent market opportunities for those companies
able to develop and deliver innovative and effective
solutions, including:––Innovative technologies to increase energy
efficiency, renewable energy, energy storage,‘green buildings’ and sustainable transportation;––The substitution of traditionally manufactured andprocessed products by ICT and other technology
solutions that reduce emissions and waste;––Meeting the needs of the large and mostly
untapped market for products and services –including in healthcare, education, energy, financeand ICT – that can improve the lives of the fourbillion people who currently live in poverty.
The SDGs aim to redirect global public and private
investment flows towards the challenges they
represent. This will further grow markets andease access to capital for companies that canoffer relevant technologies and solutions throughsustainable and inclusive business models.

8

Enhancing the value ofcorporate sustainability
The business case for corporate sustainability
is well established. By integrating sustainability
considerations across the value chain, companies
can protect and create value for themselves by, forexample, increasing sales, developing new market
segments, strengthening the brand, improving
operational efficiency, stimulating product innovation
and reducing employee turnover.
Global efforts by governments and others to deliver
the SDGs will further strengthen financial value
drivers of corporate sustainability, including:––The introduction of taxes, fines and other pricing
mechanisms to make current externalities
become internalized to the business. This willfurther strengthen economic incentives forcompanies to use resources more efficiently
or to switch to more sustainable alternatives.
––Younger generations in particular value
responsible and inclusive business practices,and sustainability performance is emerging
as an important factor in the ‘war for talent’.
Employee morale, engagement and productivity
may further strengthen within companies thattake action to advance the SDGs.
––Around the world, consumers are increasingly
basing their purchasing decisions on theirperception of a company’s sustainability
performance, and the SDGs may further
strengthen this trend.

www.sdgcompass.org

SDG Compass	Strengthening stakeholder relations andkeeping pace with policy developments

	Using a common language
and shared purpose

The SDGs reflect stakeholder expectations aswell as future policy direction at the international,
national and regional levels. Companies that aligntheir priorities with the SDGs can better engage withcustomers, employees and other stakeholders, withthose that don’t being exposed to growing legal andreputational risks.

The SDGs define a common framework ofaction and language that will help companies
communicate more consistently and effectively withstakeholders about their impact and performance.

Companies that help advance the SDGs will belikely to:––Improve trust among stakeholders;––Strengthen their license to operate;––Reduce legal, reputational and otherbusiness risks;––Build resilience to costs or requirements imposedby future legislation.

Stabilizing societies and markets
Business cannot succeed in societies that fail.
Investing in the achievement of the SDGs supports
pillars of business success.
Successful implementation of the SDGs will help to:––Lift billions of people out of poverty, thereby
growing consumer markets around the world;––Strengthen education, thereby fostering moreskilled and engaged employees;––Make progress on gender equality andwomen empowerment, thereby creating a‘virtual emerging market’ equivalent in sizeand purchasing power to that of China’s andIndia’s populations;––Ensure that the global economy operates safely
within the capacity of the planet to supply
essential resources such as water, fertile soil,
metals and minerals, thereby sustaining thenatural resources that companies depend on
for production;––Foster accountable and well-governed institutions
as well as open and rule-based trading andfinancial systems, thereby reducing the costs
and risks of doing business.

SDG Compass

www.sdgcompass.org

Because they provide a unified sense of priorities
and purpose across all dimensions of sustainable
development, the SDGs may also assist in thecreation of more effective partnerships withgovernments, civil society organizations andother companies.

Transforming our world:
The 2030 agenda forsustainable development
Article 67 agreed to by all 193 UN Member States:‘Private business activity, investment andinnovation are major drivers of productivity,
inclusive economic growth and job creation.
We acknowledge the diversity of the private
sector, ranging from micro enterprises
to cooperatives to multinationals. We callon all businesses to apply their creativity
and innovation to solving sustainable
development challenges.’9

Step 01
Understanding
the SDGs

The baseline responsibilities for business
The SDG Compass rests on the recognition of
the responsibility of all companies – regardlessof their size, sector or where they operate –to comply with all relevant legislation,
uphold internationally recognized minimum
standards and to respect universal rights.
As embedded in the human rights Principles of the
UN Global Compact and reaffirmed and elaborated
by the UN Guiding Principles on Business and Human
Rights, respecting human rights is distinct from acompany’s effort to support or promote human rights.
It is a baseline expectation of all companies that they
avoid infringing on human rights, and that they address
any harms with which they are involved either throughtheir own activities or as a result of their business
relationships. This responsibility cannot be offset
by any effort to promote human rights or advancesustainable development.
According to the UN Guiding Principles, it should
always be a priority for a company to address all
adverse human rights impacts associated with its
operations and value chain. Where companies need toprioritize the order in which they address these issues,
the UN Guiding Principles make clear that they should
do so based first and foremost on the severity of thepotential adverse impacts – in other words, how gravethese impacts would be, how widespread, and how
hard to remedy.
Priority should be given to adverse human rights
impacts or risk, regardless of the potential costor benefit to the business. Nevertheless, there
is increasing evidence that risks to human rights
frequently converge with risks to business and that
this convergence is particularly strong where themost severe human rights impacts are concerned.

Existing normative
frameworks, principles
and guidelines
Over the last several decades, ongoing dialogue
among businesses, governments, civil society
and thought leaders has shaped internationalframeworks, principles and guidelines for responsible
and ethical business conduct.
The list of principles that apply universally to allcompanies include:––ILO Tripartite Declaration of Principles
Concerning Multinational Enterprises
and Social Policy––UN Global Compact Principles––UN Guiding Principles on Businessand Human Rights
These principles direct companies to respect
universal rights and uphold certain minimum
standards. For example, the UN Global Compact’s
Ten Principles covering human rights and labor,
environment and anti-corruption define theminimum expectation of any company engaging onsustainable development. Similarly, the UN Guiding
Principles on Business and Human Rights reaffirm
and elaborate on the responsibility of all companies
to respect human rights.
In addition, there are a number of guidelines thatcompanies are advised to take into consideration
as the basis for their contribution to the SDGs.
These include the ISO 26000 Guidance on
Social Responsibility and more regionalguidelines such as the OECD Guidelines forMultinational Enterprises.
An inventory of existing principles, standards andguidelines as well as other business tools can befound on www.sdgcompass.org

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www.sdgcompass.org

SDG Compass

Step 02
Defining
priorities
To benefit from the opportunities andchallenges presented by the SDGs,
defining where your company’s priorities
are will help you to focus your efforts.

Not all 17 SDGs will be equally
relevant for your company.
The extent to which your company
can contribute to each, and therisks and opportunities they
individually represent, will dependon many factors.
Taking a strategic approach to theSDGs, your first task should be to
conduct an assessment on thecurrent, potential, positive andnegative impacts that your businessactivities have on the SDGs
throughout the value chain.
This will help you identify where
positive impacts can be scaled up
and where negative impacts canbe reduced or avoided.

SDG Compass

www.sdgcompass.org

This step outlines how yourcompany can define priorities byfocusing on three broad actions: ap the value chainM
to identify impact areas12 elect indicators
Sand collect data 

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Define priorities

15

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Step 02
Defining
priorities

Map the value chain to identify impact areas
The greatest social and environmental
impact that your company has on the SDGs
may be beyond the scope of the assets it
owns or controls, with the greatest business
opportunities being potentially further
upstream or downstream in the value chain.
It is therefore recommended that your company
considers the entire value chain – from the supply
base and inbound logistics, across production andoperations, to the distribution, use and end-of-lifeof products – as the starting point for assessing
impact and defining priorities.
Companies are encouraged to start this impact
assessment by doing a high-level mapping of theirvalue chain to identify areas with high likelihood of either
negative or positive impacts on the issues that theSDGs represent. Due consideration should be given toboth current impacts and the likelihood of future ones.

This mapping does not entail a detailed assessment ofeach SDG at each stage of the value chain, but rather ahigh-level scan of where impacts can be expected to begreatest. This means examining each segment of thevalue chain falling within the scope of the assessment
to identify areas where:––Your company’s core competencies, technologies
and product portfolio currently or potentiallycontribute positively to the implementation of
one or more of the SDGs;––Your company’s activities directly or indirectly acrossthe entire value chain may have current or potential
negative impacts on one or more of the SDGs.

See below for an example in action

In action: Mapping the SDGs against the value chain
Company identifies as a priority to increase
its positive impact on SDG 8 in its operations
by providing a living wage to all employees at
all sites globally.

Company identifies as a priority to increase
its positive impact on SDG 13 for use of
its products by developing and delivering
products that allow customers to reduce
their energy use and related GHG emissions.

SDG 8
Decent workand economic
growth

SDG 13
ClimateactionIncreasing positive impact
Value chain

Raw materials

Suppliers

Inboundlogistics

Company
operations

Distribution

Productuse

Product
end life

Minimizing negative impact
SDG 6
Clean waterandsanitation

Company identifies as a priority to reduce its
negative impact on SDG 6 in its supply chain
by working with suppliers to reduce its water
consumption in water stressed regions.

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SDG 12
Responsible
consumption
andproduction

SDG 11
Sustainable
cities andcommunities

Company identifies as a priority to decrease
its negative impact on SDG 11 in its inboundand outbound logistics by improving roadsafety for its drivers.

Company identifies as a priority to reduce
its negative impact on SDG 12 at its
products end of life by improving thereusability and recyclability of its products.

www.sdgcompass.org

SDG Compass

The three actions suggested in this step are designed
for impact assessment at entity level, but may be
applied at product, site or regional level as required.
Whatever choice is made, it is important to be transparent
about the boundaries that have been selected andclear about whether and why certain geographies
or businesses are excluded.

A number of tools and methodologies are available
to help companies map high impact areas. Manycompanies use Life Cycle Assessment (LCA)
methodologies and environmentally-extended
input‑output (EEIO) models.

During the mapping process, it is recommended to takecontext into account, such as the proximity of operations
and other segments of the value chain to geographicalareas that have a low performance related to the SDGs.
For example, if your company has labor-intensive
operations or supply chains in regions with low wages
and poor enforcement of labor rights and standards,
this will likely define an area of potential high impact.
Similarly, current or potential operations in countries
where there are human needs that the company’s
products can help to address – such as medical needs
or access to sustainable energy – may also indicate anarea of potential high impact.

Some tools can be applied to specific SDGs.
Examples include the GHG Protocol Scope 3
Evaluator, the Social Hotspots Database,the Human Rights and Business Country
Guide, the WBCSD Global Water Tool and the
Poverty Footprint Tool.

In some cases, industry sector data is available to help
identify high impact areas and additional tools can also
help this process (see ‘Tools for mapping high impact
areas across the value chain’).

Engaging stakeholders

The mapping process includes engaging with external
stakeholders to identify views and concerns which
relate to the company’s current or potential impact
across the SDGs. Stakeholder engagement should
be inclusive with due concern for the perspectivesof marginalized and vulnerable groups.
Stakeholders will not always provide a complete
understanding of all potential high impact areas,
particularly with regard to the potential positive impacts
the company may have. Therefore, the mapping of highimpact areas also involves an internal assessment ofexisting and potential linkages between the company’s
activities and the themes covered by the SDGs.

SDG Compass

Tools for mapping highimpact areas across thevalue chain

www.sdgcompass.org

These and other tools for impact assessment canbe found at: www.sdgcompass.org

Inclusive internal and external stakeholder
engagement is key to the three-action process.
Paying close attention to their issues, interests,
concerns, and expectations will help identify andbuild a full understanding of your company’s impact
on the SDGs. Stakeholders can also provide
relevant information and inspiration for exploringbusiness opportunities related to the SDGs.
It is recommended that your company prioritizes
stakeholders who may be adversely impacted byits decisions and activities. Prioritize the remaining
stakeholders by the effect the company has onthem and the potential influence that they haveover the company.
It is vital to make a special effort to understandthe interests and concerns of stakeholders who
are unable to articulate their views (such as future
generations or ecosystems) and to give due
consideration to disadvantaged or marginalizedgroups and other vulnerable stakeholders suchas women, children, indigenous peoples andmigrant workers.

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Step 02
Defining
priorities

Select indicators and collect data
Mapping high impact areas will help yourcompany understand where to concentrate its
efforts. For each of the areas of potential highimpact, identify one or more indicators that mostadequately express the relationship between
your company’s activities and their impact onsustainable development, so that performancecan be tracked over time.
To this end, the SDG Compass website
www.sdgcompass.org contains an inventory ofbusiness indicators mapped against the 17 SDGs andtheir targets. The inventory contains existing businessindicators from widely-recognized sources/standards
such as GRI and CDP, and from other relevant sources.
Your company can select the most relevant indicator(s)for each potential high impact area or use them as aninspiration to define its own indicators.
To understand how your company impacts the SDGs,
it is important to realize how business activities translate
into economic, environmental and social impacts.
A five-step process, often referred to as a Logic
model, traces the path from inputs through activities,
outputs, outcomes and impacts. It is often helpful todevelop such a model together with stakeholders,
including those affected. The Logic model can beused to understand which data should be collected.
For example, if your company cannot collect data on
outcomes and impacts, it may be able to collect dataon outputs instead.
See below for an example in action

In order to select the appropriate indicators for the
impact assessment, your company should first choose
a combination of indicators that offer a balanced andadequate reflection of the company’s performanceand impacts in a given area. This includes considering
different types of indicators, expressing inputs,
activities, outputs, outcomes and impacts and ensuring
a balance between lagging indicators (those thatmeasure outcomes and impacts) and leading indicators(those that predict the outcomes and impacts).
The next action is to identify and collect data for eachof the selected business indicators. It is not always
possible to collect data directly, because of impacts
occurring further up or down the value chain andalso the complexity of the value chain. The cost andcomplexity of measuring must be proportional to thevalue that measuring helps to create.
Using existing business systems and processes fordata collection, for example extracting the required
data from purchasing or sales systems, will be more
efficient than developing new processes. If the required
data is not available through existing systems, othergeneral methods of collecting and aggregating data
include implementing reporting systems (for company
operations and/or suppliers), performing field visits,
questionnaires, focus groups, interviews and so on.
For each data collection action, it is suggested thatyour company identifies the risks of misreportingand puts in place controls to ensure data quality andintegrity. Internal and external verification will help
increase the reliability of the data.

In action: The logic model
An example will help demonstrate how a Logic
model works. A company that is investing in
the development of water purification tablets has
the potential to reduce incidence of water-borne
diseases, which contributes to SDG Goal 3,
target 3.3: “by 2030 end the epidemics of AIDS,
tuberculosis, malaria and neglected tropical diseases
and combat hepatitis, water-borne diseases andother communicable diseases.”

Clearly the further down the Logic model,
the more difficult it is to collect accurate data.
Many organizations therefore choose to measure
inputs, activities and outputs, and use those as
proxies to estimate outcomes and impacts.
More guidance can be found in WBCSD’s Measuringsocio-economic impact guide for business.

This company could understand its contribution to
SDG target 3.3 by going through the following steps:

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Inputs:What resources go inthat could positively
or negatively affect
the SDG?

Activities:
What activities
are undertaken?

Outputs:
What is generated
through those activities?

Outcomes:
What changes inthe target population
occurred?

Impacts:
What are thechanges as a resultof those outputs?

Example:R&D, manufacturing,marketing spend($ spent).

Example:Water purificationtablet sales (qualitativedescription of marketingand distribution efforts).

Example:Tablets sold (# sold anddemographic information
regarding consumers
buying the tablets).

Example:Purified water
consumed (% of total
water consumed).

Example:Reduced incidenceof water-borne diseases(% reduction vs.
pre-sales).

www.sdgcompass.org

SDG Compass

Define priorities
An example ofindicator selection
Consider a global manufacturing company thatuses water in its production process. The company
has many factories, some of which are located inrelatively arid and high poverty regions. When thecompany looks at its dependency and impact onwater, it will first want to assess which of its factories(or key suppliers) are located in water stressedregions. This can be achieved by using a water risk
mapping tool such as WBCSD’s Global Water
Tool, WRI’s Aquaduct or the WWF-DEG Water
Risk Filter.
In this case, an appropriate indicator would be “Totaland percentage of withdrawals in water-stressedor water-scarce areas”. However, the quantityof water used by the company is not the only
important measure of its impact on communities
and ecosystems. A water quality indicator is also
key as it addresses the company’s impact on thequantity of water available for all. To determine awater quality indicator, the company could use
global guidance (for example by the WHO) or
benchmarks set by industry. In order to capture
both national and international standards for water
quality, the company could select the “Percent offacilities adhering to relevant water quality standards”
indicator. It may also select other indicators that help
assess its impact on the human right to water – forexample, indicators concerned with the availability,
accessibility or affordability of water.
Together, these indicators will provide the company
with a more complete picture of the dependence
and impacts of its factories on local water resources.
The SDG Compass online inventory of indicators
provides information on commonly used indicators
related to water and sanitation, including from the
CEO Water Mandate’s Corporate Water Disclosure
Guidelines, which address the complexity andsocial nature of water resources.

Your company should now have an
understanding of its current and potential,
negative and positive impacts on sustainable
development. The next action is to define yourpriorities across the SDGs. The following nonexhaustive criteria can help this process:––Consider the magnitude, severity, and likelihoodof current and potential negative impacts, theimportance of such impacts to key stakeholders
and the opportunity to strengthen competitiveness.
Additional considerations include the likelihood thatnew regulation, standardization, market shortages(of materials or labour), supply chain disruptions,stakeholder pressure or changing market dynamics
over time may translate these negative impacts into
costs or risks for the company.
––Assess the opportunity for your company to growor gain advantage from its current or potential
positive impacts across the SDGs. This may include
opportunities to innovate, develop new products andsolutions or target new market segments.
When working through the three actions of step 02,
it is important to note that assessing impacts anddetermining priorities are not scientific processes
but require subjective judgments. For this reason,transparent documentation of this process is
encouraged. It is recommended that the three actions
are repeated periodically, for example annually, to keep
track of how impacts and priorities constantly evolve.
If your company already has a system in place toassess impacts and identify priorities, it would benefit
from using the SDGs as the overarching frameworkand integrating the three-action process into theassessment process. Finally, the priorities defined inthis step are on top of the priorities defined by baseline
responsibilities, as explained in step 01.

Natural and Social
Capital Protocols
The Natural Capital Protocol (NCP) and Social
Capital Protocol (SCP), under development
at the time of publication, move the impact
assessment from stakeholder dialogue level to a
hard measurement. On behalf of the Natural Capital
Coalition (NCC), the WBCSD and a broad field ofexperts are leading the development of the NCP.
The call for collaboration to develop the SCP is led
by WBCSD with a range of partners.
The NCP and SCP both aim to be standardized
frameworks for businesses to measure andvalue their impacts on natural and social capital
respectively, and once published they can beused for more detailed guidance on the elements
described in this step.

SDG Compass

www.sdgcompass.org

15

Step 03
Setting
goals
Goal setting builds directly on the outcomesfrom the impact assessment and prioritization
covered in step 02, and is essential to driving
good performance.

Setting specific, measurable andtime-bound sustainability goals
helps foster shared priorities anddrive performance across theorganization, and is becoming
increasingly widespread.
By aligning with the SDGs,
companies can set more meaningful
goals and communicate more
effectively about its commitment
to sustainable development.

16This step on goal setting consistsof four actions: efine scope of goals
Dand select KPIs

17 efine baseline andD
select goal type

18

Set level of ambition

18

 nnounce commitment
A
to SDGs

20

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SDG Compass

Define scope of goals and select KPIs
It is recommended that the scope of yourcompany’s sustainability goals is guided by thestrategic priorities identified in step 02. This will
ensure that your company’s goals will include
opportunities to make positive contributions
to the SDGs as well as to reduce current andpotential negative impacts. Similarly, this will
ensure the goals not only cover your company’s
own operations but also create opportunities tomake improvements across the entire value chain.
For years, many companies have set environmental
goals related to issues such as carbon emissions aswell as the use of water and other natural resources.
However, goal setting related to the social dimensionsof sustainable development such as poverty eradication
and anti-corruption is less common, partly becausesuch issues can be more challenging in terms ofmonitoring and measuring success. Regardlessof these methodological challenges, the advice
to companies is to set goals that cover all theirdefined priorities across the economic, social andenvironmental aspects of sustainable development.
Selecting key performance indicators (KPIs) is an
essential stage in setting goals that can be used as
the basis for driving, monitoring, and communicating
progress. Some companies set broad or ambiguous
goals that do not in themselves enable progress to bemeasured, such as an aspiration to become ‘carbon
neutral’ without a clear definition of the goal’s scopeor end date. In these cases, the recommendation isto select several KPIs that each form the basis for a
specific, measurable and time-bound target.

SDG Compass

www.sdgcompass.org

The ideal starting point for selecting KPIs is the range
of indicators used to assess impacts, as explained instep 02 ‘Select business indicators and collectdata’. For each priority, your company can narrow
the selection down to a few key indicators that best
express its impact on the sustainable development
topic in question.
Whenever possible, your company is advised to selectKPIs that directly address the impact or outcome of
its activities. For some goals this may be difficult oreven impossible, due for example to a lack of relevant
and available data. In such cases, select KPIs that canbe considered ‘proxies for impact’ – for example, byaddressing the resources, such as capital, that yourcompany will invest or the specific activities, such as
training, that it intends to undertake.
A further recommendation is that your company
should choose a commonly used indicator as the KPI
wherever possible. This will make it easier to aggregate
and compare data across companies. As explained instep 02, the website: www.sdgcompass.org shows
the online inventory of commonly used businessindicators for each SDG target.
In addition to the KPIs that are adopted company-wide
and communicated externally, your company may findit helpful to identify additional indicators to help specificparts of the business monitor progress towards targets.

17

Step 03
Settinggoals

Define baseline andselect goal typeSet level of ambition

It is important to define the baseline for eachgoal. This process is closely related to the impact
assessment process summarized in step 02.
The baseline can be tied to:

It is recommended to carefully consider yourcompany’s level of ambition regarding goals
and consultation with internal and external
stakeholders for guidance. Ambitious goals
are likely to drive greater impacts and better
performance than more modest goals.
By setting the bar significantly above theperformance that is projected relative to thebaseline, and by defining goals that no one yetknows exactly how to achieve, your company
will spur innovation and incentivize creativity.

––A particular point in time: For example, there might
be a goal to increase the number of women on the
Board of Directors by 40% at the end of 2020 relative
to the baseline defined at the end of 2013;––A particular period of time: For example, yourcompany could set a goal to decrease average water
usage in the three-year period from 2018–2020 by
50% compared to the average water usage across
2006–2008, thereby eliminating the impacts thatshort-term variability may have.
How your company defines the baseline cansignificantly impact the likelihood of reaching the goal.
It is therefore recommended to be transparent about
how and why a particular baseline has been chosen.
In order to monitor progress accurately, it is essential totake into account changes that impact the consistency
and relevance of the reported information, such as
mergers, acquisitions and divestments. Following
such events, the baseline should be recalculated.
Your company should also decide on which typeof goal to set. In general, goals fall into one of two
categories:––Absolute goals, which take only the KPI into account:for example, reduce the number of health and safety
related incidents by 30% by 2020 from 2015;––Relative (also called intensity) goals, which compare
the KPI to a unit of output: for example, reduce
Scope 1 greenhouse gas emissions per unit ofcompany sales by 25% by 2018 from 2014.
Absolute goals best express the expected impact onsociety, but do not take company growth (or decline) into
account. Relative targets on the other hand measure
more accurately your company’s performance per unitof output, but the impact the goal will have is unsure.
Neither type of goal provides a complete picture, so therecommendation is to tell the story of what impact yourcompany aims to achieve.

18

The decisions made regarding ambition will also have
reputational implications, and industry leaders createpressures on their peers to keep up. For example, if one
company commits to a living wage for all employees,
others in the same sector will have to follow suit or beleft behind.
Traditionally, companies set their ambitions by analyzing
current and historical performance, projecting trends
and scenarios, and benchmarking with industry
peers. However, the combined impact of such goals
is not enough to fully address the global social andenvironmental challenges that the world faces.
In recognition of this, leading companies have recently
started to take a more ‘outside-in’ approach to goal
setting. This approach is gaining traction with respect
to climate change, as companies commit to set ‘sciencebased’ targets, and is emerging in other areas as well.
The SDGs represent an unprecedented politicalconsensus on what level of progress is desired at the
global level – and this is an opportunity for companies
to apply a similar approach across a wide range ofsustainable development challenges. This means
setting the level of ambition for your company basedon the aspirations of the SDGs and defining what is‘reasonable share’ for your company, based on yourindustry, geographical location and size. Despite
inherent methodological challenges, various ‘outside-in’approaches to goal setting aligned with the SDGs may
well help define corporate sustainability leadership in theyears ahead.
Deciding the level of your company’s ambition isfundamentally linked to establishing the timeframe forthe goals. There is a strong argument for making thetime horizon long enough to set goals that represent
a major turning point for the industry to create a future
significantly different from the reality of today. Making thetimeline sufficiently long will enable better communication– a goal of ‘Sourcing 100 percent of the company’s
energy use from renewable sources by 2030’ is forexample likely to be more inspirational and impactful thana goal of ‘75 percent renewables by 2025’. The offset isthat the longer the horizon, the lower the accountability
to deliver. So if your company sets long term goals, forexample aligned with the 15 year timeframe of the SDGs,
it is necessary to also define short/medium term goals
or milestones.

www.sdgcompass.org

SDG CompassIn action: Adopting a goal setting approach
Inside out approach

Outside in approach

Today’s internally focused approach to goal setting is not enoughto address global needs.

By looking at what is needed externally from a global perspective
and setting goals accordingly, businesses will bridge the gap
between current performance and required performance.
The SDGs represent an unprecedented political consensus onwhat level of progress is desired at the global level

SDGs

COMBINED IMPACT OF
CURRENT BUSINESS GOALSBusiness goals:– Set internally– Based on historical data,
current trends and future projections
on the company’s performance– Benchmarked against performanceand goals of industry peers

Global andsocietal needs

Performance gap
There’s a gap between
current businessperformance andrequired performancein addressing
global needs

SDGs

Business goals:– Set based on externalsocietal or global need
– Based on scienceand external data
– Benchmarked against theneeds of society that yourbusiness can address

SDGs

SDGs

Goal setting initiatives
The growing number of initiatives that promote andsupport an ‘outside-in’ approach to business goal
setting include:––The Science Based Targets initiative by CDP,
the World Resources Institute (WRI), WWF andthe UN Global Compact, which is developing tools
and methodologies for companies to set targets
that align with the prevailing scientific consensus
that global temperatures should not rise above
two degrees Celsius.
––The Future-Fit Benchmarks developed by Natural
Step which identify a set of ‘absolute’ goals thatare based on social and natural science and that
all companies must ultimately strive to reach,irrespective of the products and services
they offer.

SDG Compass

www.sdgcompass.org––WBCSD’s Action2020 which sets the agenda forbusiness to take action on sustainable development
to 2020 and beyond. Action2020 defines societal
targets, ‘Societal Must-Haves’ and around nine
Priority Areas, based on a scientific review led by
the Stockholm Resilience Centre.
In addition, there is inspiration to be found in online
databases for business goals and targets, including:––The United Nations website which contains
public commitments to goals and targets
announced by companies.
––PivotGoals by Winston Eco-Strategies whichallows users to browse goals and targets set by
Global 500 companies.

19

Step 03
Settinggoals

Announce commitment to SDGs
Making all or some of your company’s goals
public can be an effective communication tool
because they express in simple and practicalterms the company’s aspirations on sustainable
development. Doing so may inspire and engage
employees and business partners and canprovide a good basis for constructive dialogue
with external stakeholders.
The benefits of publicly announcing goals andtargets should be weighed against the potential riskof criticism if the company does not meet its targets
in time. To manage this risk, your company would
benefit from communicating regularly and transparently
about the efforts made, progress achieved, and thechallenges faced.
Companies can announce goals aligned with
the SDGs on the United Nations website, usingwww.business.un.org. This includes a transparency
requirement in the form of a commitment tocommunicate annually – using existing channels
of sustainability or integrated reporting – about the
progress made towards achieving your goals.

20

www.sdgcompass.org

SDG Compass

Step 04
Integrating
As an outcome of goal setting, you will
have identified specific KPIs and set goals
for each of your company’s strategic
priorities. Integrating sustainability into
the core business and embedding targets
across functions is fundamental towards
addressing these goals.
Integrating sustainability has thepotential to transform all aspectsof your company’s core business,
including its product and service
offering, customer segments, supply
chain management, choice and useof raw materials, transport anddistribution networks and productend-of-life.

In this step we identify how you
can integrate the SDGs throughthe following actions: nchoring sustainability goalsA
within the business

22

 mbed sustainability acrossE
all functions23
Engage in partnerships 24

To pursue shared objectives oraddress systematic changes,
companies are increasingly working
with partners to enhance their impact
and reach.

SDG Compass

www.sdgcompass.org

21

Step 04
Integrating

Anchoring sustainability goals within the business
Active leadership by the CEO and senior
managers is key to the success of any type ofsignificant organizational change. For businessintegration of sustainability goals – where thebusiness value may not always be fully understoodby every part of the organization – the lead givenby those at the top is especially important.
There is also strong, and growing, recognition of
the important role that Boards of Directors play in the
integration of sustainability into long-term strategy.
Boards can play an important role by, for example,
integrating sustainability goals into the criteria forrecruitment and remuneration of executive management.
To make sure that sustainability goals are solidly
anchored within the organizations, two principles
are especially important:––Create a shared understanding of how progress
towards sustainability goals creates value for thecompany, in particular by clearly communicating thebusiness case and how it can complement progress
towards other business goals;––Integrate sustainability goals into performance reviews
and remuneration schemes across the organization,with additional incentives reflecting the specificrole that a function or individual has in achieving
relevant goals.

22

To be most effective, your company’s sustainability
goals should be an integral part of its full set of financial,strategic and operational goals, alongside goals forareas such as sales and productivity. Ultimately, thesustainability ambitions will also be reflected in the vision,
mission and/or purpose statements of the company,
thereby fundamentally and prominently tying thecompany’s future success to sustainable development.

Industry-specific examples
In order to showcase industry-specific leadershipexamples and help identify concrete opportunities
for companies to advance the SDGs, while creating
value for shareholders, the UN Global Compact and
KPMG led the development of an SDG Industry
Matrix for seven industries.

www.sdgcompass.org

SDG Compass

Embed sustainability across all functions
Although dedicated sustainability teams andprofessionals can play an important role inachieving the company’s sustainability goals,
the support and ownership of corporate
functions such as R&D, Business Development,
Supply Management, Operations andHuman Resources are the key to embedding
sustainability in business strategy, culture
and operations.
Depending on the nature of the company and its
sustainability goals, some functions will be more
important than others. For example, goals related
to suppliers have a better chance of success ifthey are owned by the department responsible forsupply chain management. In all cases, individual
accountability for progress on individual goals andtargets will help drive success.

Many different practices are involved in drivingorganizational change and supporting businessintegration, from awareness raising and training toutilizing knowledge and inspiration accessed throughrelationships with external experts and stakeholders.
To support the development and implementation of
the company’s strategy as it relates to sustainable
development, many companies have establishedcross-functional sustainability councils, boards or task
forces. In some instances governance structures may
also include a sustainability committee at Board level.
This allows time for strategic discussions dedicated tosustainability priorities, which can be especially valuable
in the early stages of business integration.

In action: Embedding sustainability goals in the organization
Corporate Management Agenda 2016
KPI: Contribute to SDG 12
Phasing out all harmful* chemicals in products by 2020
Ensuring that all harmful chemicals are identified and phased out
where possible, and alternatives identified by year ending 2016
* Harmful chemicals as identified with input from internal and external experts, which go beyond those that are prohibited by law

Actions delegatedFunction management Agenda

Function Management Agenda

R&D

Supply Chain management

Identify alternative materials for all identified harmful
chemicals in products by year ending 2016.

Identify and phase out where possible all harmful chemicals
in purchased products and components by year ending 2016.

Actions delegatedindividual targets

R&D engineer
Identify alternative
materials for all identified
harmful chemicals in
products and components
under responsibility by
year ending 2016.

SDG Compass

www.sdgcompass.org

individual targets

Componentpurchaser
Ensure all supply
accounts comply withpurchasing policy on
harmful chemicals by
year ending 2016.

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Step 04
Integrating

Engage in partnerships
In a 2014 survey, 90% of a sample of 38,000
executives, managers, and thought leaders
surveyed, agreed that effectively addressing
sustainability issues cannot be carried out
in isolation.
This appreciation of the value of collaboration is also
explicitly built into the design of the SDGs, with SDG 17
outlining various targets for cross-sector partnerships.
In general, a company can explore at least three typesof partnerships:––Value chain partnerships, within which companies
in the value chain combine complementary skills,
technologies, and resources and bring new solutions
to market;––Sector initiatives that bring several industry
leaders together in efforts to raise standards
and practices across the entire industry andovercome shared challenges;––Multi-stakeholder partnerships, where governments,
private sector and civil society organizations join
forces to tackle complex challenges.

24

The SDGs can help bring together partners arounda shared set of goals and priorities. Building effective
sustainable development partnerships requires ahigh degree of commitment from those concerned.
Partners should aim to set shared goals, leverage theirrespective core competences, depoliticize projects,
develop clear governance structures, create a single
monitoring framework, focus on impacts, forecast
future resource needs, and create a process forknowledge management. For new partnerships, it isrecommended to start small but to design for scale.

www.sdgcompass.org

SDG Compass

Step 05
Reporting andcommunicating
Over the last decade, the practice ofcorporate sustainability disclosure has
increased dramatically in line with stakeholder
demand for information. It’s important toreport and communicate on your progressagainst the SDGs continuously in orderto understand and meet the needs ofyour stakeholders.
Many governments, market
regulators and stock exchanges
have initiated reporting policies andregulation in recent years. At least
180 national policies and initiatives
on sustainability reporting exist
worldwide, and approximately two
thirds of these are mandatory.

The SDGs make this level of reportinga clear expectation. SDG target 12.6
calls on governments everywhere to‘encourage companies, especiallylarge and trans-national companies,
to adopt sustainable practices and tointegrate sustainability information
into their reporting cycle’.

Today, most of the world’s largest
companies disclose theirsustainability performance andimpacts. Of the world’s 250 largest
corporations, 93% report on theirsustainability performance, see
The KPMG Survey of Corporate
Responsibility Reporting 2013.

This step outlines the actions
needed in terms of reportingand communicating:

SDG Compass

www.sdgcompass.org

 ffective reportingEand communication

27

 ommunicating on
C
SDG performance

28

25

Step 05
Reporting andcommunicating

Developing systems to integrate the managementof sustainable development issues into everyday
business decision-making is a must in
the transition towards more meaningful andeffective reporting.

A data revolution

Significantly more than simply a piece of communication
to key stakeholders, effective reporting creates trustand supports value creation – and it can be a powerfultool to stimulate internal changes and decisionmaking through integrated performance management.
Not surprisingly, the Reporting Matters project by
WBCSD in partnership with Radley Yeldar showsthat sustainability information is becoming increasingly
important for sound investment decision-making.

As the UN, governments, and research institutions
gather and analyze information related tothe indicators, it will bring about a data
revolution for sustainable development, (seewww.undatarevolution.org). This means providing
high-quality data on the right things at the righttime to enable better decision-making.

The quality of disclosure varies greatly between
reporters, but research shows an overall improvement.
The development of standards and regulation is central
to this move towards better disclosure practice as is anunderstanding of the role that non-financial data andinformation plays in continuous success.
In addition to formal reports, companies are
increasingly using a variety of channels to communicate
sustainability strategy and performance. Large
companies as well as SMEs will benefit from publicly
reporting and communicating their contribution towards
the SDGs. Corporate websites, social media channels,
events, product and service labeling, market andadvertising are a few of the many effective ways tocommunicate to stakeholders on sustainability.

By the spring of 2016, the UN will identify a numberof global, universal indicators to measure and monitor
progress against the SDGs.

The data revolution for sustainable development
will benefit from changes to the way that the private
sector produces data on its sustainable development
performance. It will require data that is moreaccessible, comparable, available in real-time andbased on widely recognized standards. By offering
an inventory of existing business indicators mapped
against the SDGs, the SDG Compass website(www.sdgcompass.org) enables companies tostart or accelerate this journey.
The private sector will play a key role in achieving
this revolution, not only as a producer of data but
also as a source of funding and creativity that will
facilitate the development of new technologies andinnovative solutions to effectively gather, analyze
and share data.

While in its origins, sustainability reporting wasviewed as a way to build trust and improve reputation,it has now evolved into a strategic tool that is also
used to support sustainable decision-making
processes, stimulate organizational development,
drive better performance, engage stakeholders
and attract investment.

26

www.sdgcompass.org

SDG Compass

Effective reporting and communication
It is important for companies to useinternationally-recognized standards forsustainability reporting such as thecomprehensive standards offered by GRI and/or
issue level reporting mechanisms like CDP andothers. Examples of other issue level reporting
mechanisms include the UNGP Reporting
Framework and the CDSB Framework. The SDG
Compass website (www.sdgcompass.org)
includes a selection of other standards
and frameworks.
Companies can decide to use existing reporting
formats and communications, or to prepare a moreconcise stand-alone report or communication.
As sustainability reporting has evolved over the last
20 years, a number of key principles have emerged.
GRI has for example defined ten principles forsustainability reporting: stakeholder inclusiveness,sustainability context, materiality, completeness,balance, comparability, accuracy, timeliness, clarity
and reliability. These are helping companies prepare
high-quality information on the issues that matter, andare useful for both sustainability reporting as well as
communications overall. A number of these principles
become even more important and actionable withthe arrival of the SDGs. An example is the principleof ‘sustainability context’ which directs companies
to present information on performance in the wider
context of sustainability and with reference to broader
sustainable development conditions and goals.
The SDGs provide a framework for companies
to understand their sustainability context.
In the drive towards more effective reporting,companies are advised to focus reports andcommunications on material issues. Material issues
in sustainability reporting are defined as those issues
that reflect the company’s significant economic,

environmental and social impacts (as identified instep 02), whether positive or negative, as well as thoseissues that substantively influence the assessments anddecisions of stakeholders, as defined by the GRI G4
Sustainability Reporting Guidelines, 2013.
Your company’s list of material issues are likely toinclude the strategic priorities identified as an outcomeof step 02. Your company should report on boththe positive and negative aspects of its performanceagainst these priorities. This will ensure that thereport covers how the company meets its baseline
responsibilities related to the SDGs; how it addresses(potentially) adverse impacts on the SDGs; and how
it utilizes its core competencies, technologies andsolutions to further contribute to the achievement of
the SDGs.
In addition, an effective report will consider issuesof high significance to stakeholders. This means
responding to the reasonable interests, concerns, andexpectations raised by stakeholders (as explained instep 02) with regard to the company’s actions andresponses to the SDGs, even if the SDG in question has
not been identified as a priority by the company.
A matrix is an effective way to visualize the materiality
assessment in the report, where the priority areas,such as those identified in step 02 are placed withrespect to the ‘significance of the company’s economic,
environmental and social impacts’ and the ‘influence on
stakeholder assessments and decisions’. A priority area
does not have to be highly significant in both viewpoints
to be deemed a priority for reporting.
Companies can make use of competent andindependent external assurance as a way to enhance
the credibility and quality of their reports.
See below for an example in action

In action: Mapping SDG reporting priorities through materiality

Example:Water consumption
in the supply chain(as identified by mapping
the company value chain
against SDG 6)

The influenceon stakeholder
assessments
and decisions.

The significance ofeconomic, environmental
and social impacts.
SDG Compass

www.sdgcompass.org

27

Step 05
Reporting andcommunicating

Communicating on SDG performance
The SDGs provide a common language forreporting. Their common framework forsustainable development may also be helpfulin shaping how to prioritize the reporting
narrative and the type of performance
disclosures a company makes acrossa variety of communications on its
sustainable development performance.
Many companies already report and communicate on
topics covered in the SDGs, such as climate change,sustainable water management or employment anddecent work. Aligning your company’s reporting andcommunication with the SDGs means both discussing
performance in the context of the expectations set
by the SDGs, and also aligning disclosures with thelanguage of the SDGs to ensure a common dialogue
among stakeholders.
For each SDG identified as relevant, companies
can disclose:––Why the SDG has been identified as relevant and how(for example, describe the process for defining SDG
priorities and any stakeholder engagement used);––The significant impacts, whether positive or negative,
related to the relevant SDG;––Their goals for the relevant SDG and progress madein achieving them;––Their strategies and practices to manage impacts
related to the SDGs and achieve goals throughintegration across the business (for example, adescription of policies, systems and processes
such as due diligence).

28

The KPIs and other indicators that your company
has defined in the process of assessing impacts
and setting goals – as described in step 02 andstep 03 – are important starting points for selecting
the relevant indicators for reporting. For reportingand communication purposes, those indicators canbe supplemented with additional indicators. Bothsets can be selected, using the inventory of existing
business indicators mapped against the SDGs on
www.sdgcompass.org
Furthermore, to enable reporting about impacts on
disadvantaged, marginalized or vulnerable groups, it isimportant to use indicators that allow for disaggregation
by socio-economic criteria such as by sex, age, race,
ethnicity, disability, and other relevant characteristics.
Those companies that choose to produce a standalone SDG report can structure and organize theinformation in the report around the relevant SDGs,
clearly directing readers to where they can find theinformation on the SDGs that matter most to them.
Companies that integrate information on the SDGs into
existing types of reports or communications can use
visual solutions such as icons for each of the relevant
SDGs to highlight the relevant SDG information. In
addition, they can also highlight the relevant SDGs in
the table of contents. For example, companies using astandard such as GRI to report their contribution to the
SDGs can add a column to their GRI Content Index,
mapping the relevant GRI disclosures against their listof relevant SDGs.
The SDGs integrate economic, social andenvironmental aspects and work together to achievesustainable development in all its dimensions.
As such, companies will benefit from acknowledging
and articulating the links between these elementsin their reports and communications. For example,
many issues such as gender equality, health orsustainable consumption and production cut acrossseveral SDGs. Your company may find it helpful toexplain how the progress made in one area hascontributed to progress elsewhere.

www.sdgcompass.org

SDG Compass

Acknowledgments

GRI, UN Global Compact and the WBCSD
would like to thank the many individuals,
companies and organizations that contributed
to this publication with inspiration in therecommendations and feedback they
provided during the consultation periods.
A special thanks to Radley Yeldar
for editing and design.
The partners also greatly appreciate the support
provided by PwC, IO Sustainability, the Swedish
International Development Cooperation Agency(Sida), and the Swiss State Secretariat for Economic
Affairs (SECO).

The SDG Compass is the result of a collective effort
involving many colleagues from GRI, the UN Global
Compact and the WBCSD, including:

GRI
Lead: Pietro Bertazzi (Bertazzi@GlobalReporting.org),
Bastian Buck, Diana Danciu, Laura Espinach,
Teresa Fogelberg, Anne Kullman, Punjanit Leagnavar,
and Rashmi van de Loenhorst

UN Global Compact
Lead: Ole Lund Hansen (hansen4@un.org),
Swati Chaudhary, and Emmeline Skelton

WBCSD
Lead: Mark Didden (Didden@wbcsd.org),Anaïs Blasco, Emily Grady, Rodney Irwin,
Carina Larsfalten, and Amanda Williams

About usTM

Developed by GRI, the UN Global Compact andthe World Business Council for Sustainable
Development (WBCSD), the SDG Compass
incorporates feedback received throughthree consultation periods from companies,
government agencies, academic institutions
and civil society organizations worldwide.

About GRIGRI is an international independent organizationthat has pioneered corporate sustainability reporting
since 1997. GRI’s mission is to empower decisionmakers everywhere, through its sustainability reporting
standards and multi-stakeholder network, to takeaction towards a more sustainable economy and world.
www.globalreporting.org

About UN Global Compact
The UN Global Compact is a call to companies to alignstrategies and operations with universal principles onhuman rights, labor, environment and anti-corruption,and take actions that advance UN goals. It is theworld’s largest corporate sustainability initiative, withover 8,000 companies participating in 160 countries.
www.unglobalcompact.org

About WBCSD
The World Business Council for Sustainable
Development (WBCSD) is committed to galvanising
the global business community to create a sustainable
future for business, society and the environment.
The WBCSD provides a forum for its 200 member
companies to scale up business solutions that change
the status quo.
www.wbcsd.org

Disclaimer

SDG Compass

This publication is released by GRI, UN Global Compact and the WBCSD. This publication has been prepared for general guidance on matters ofinterest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining
specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information
contained in this publication, and, to the extent permitted by law, GRI, UN Global Compact and the WBCSD, its members (if applicable),
employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting,or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
www.sdgcompass.org
29

Where can I find out more?

On our website you can findresources that will help yourcompany align your strategy
with the SDGs.
The website includes: This SDG Compass guide (executive summary
as a separate download), explaining the five
steps to implementation in more detail.
 A live inventory of existing business indicatorsfrom relevant and widely-recognized sources,
mapped against the 17 SDGs and their targets.
 A live inventory of business tools mapped
against the SDGs.
 A two-page overview for each SDG, covering
the role of business, and illustrative examplesof business solutions, indicators and tools.

www.sdgcompass.org