Page 148 - EN_final

sustainable behavior. These financial mechanisms will incentivize a company to strive towards or

switch to more sustainable solutions.

Step 2 - Defining priorities

Over the last years, various standards and initiatives supporting the definition of priorities of
sustainability in organizations were launched. For companies, the most applied regulatory
frameworks are UN Global Compact, OECD and International Labor Organization guidelines, and
the ISO 26000 standard. These frameworks always cover human rights, labor conditions,
environmental protection, and anti-corruption measures. While all of them focus on Corporate
Social Responsibility in general, the SDGs are not addressed in general. The same holds true for

NGOs. Here, standards regulating specific areas of the organization are available, but they do
not tackle the SDGs.
The SDG Compass serves as a guide for companies on how to realign business activities towards

the SDGs. In doing so, companies that seriously seek to contribute to sustainable development
can seize a variety of business opportunities, as described above.

The process of realigning business activities towards the SDGs consists of three steps:
• First, the SGDs have to be mapped against the value chain of the company to identify

impact areas.
• Second, indicators for progress on sustainable development must be defined and

data has to be collected.

• Third, priorities need to be defined based on the previous assessment.

Mapping the SDGs against the value chain

At the very beginning of this realignment, a company has to analyze its value chain. For this, it is
advised to consider the entire value chain, upstream as well as downstream. Then, the individual
segments of the value chain have to be assessed regarding their impacts on the sustainable
development issues represented by the SDGs. This assessment is supposed to identify those
areas of business activity that have the highest current and future impacts on the SDGs, positive

as well as negative ones. Such an impact assessment is typically done at entity level but can be
narrowed to the site or product level or broadened to the regional level, if required. The
overarching aim of the realignment is to increase the positive impacts on sustainable development
and to minimize the negative ones.
The illustration below shows an adaptation of the value chain scheme developed by Porter. In

this generalized value chain, the segment „procurement“ can, for instance, be mapped to SDG 7
„affordable and clean energy“. In this exemplary case, the company would identify as a priority to
increase the share of renewables in the energy mix it uses to run its operations.
5
148
148