This article was originally published on Mandag Morgen’s website, on June 2nd in Danish. You can read the article here.

International researchers found that we are on the brink of failing to achieve the Sustainable Development Goals, in a soon-to-be-published United Nations report. They propose a fast, tough, and effective recovery plan that will force companies around the world to question their very purpose and existence.

Danish business leaders have called for politicians to set clear and ambitious climate requirements that make sustainable business a matter of business advantages. In the new groundbreaking UN report, such calls are applauded and further seen as the antidote to cure the ills that are preventing us from achieving the Sustainable Development Goals. However, the question is whether the companies will embrace the political regulation that now appears to be necessary.

Indeed, the UN Global Sustainable Development Report is a dire prescription of economic, social and climate-related policy treatments that will lead to an elimination race in the business world, with environmentally damaging companies being held accountable for billions of dollars. That is the frightening prospect for ‘business as usual’.

It may sound dramatic but it is absolutely paramount if we are to meet the Sustainable Development Goals, goals crucial to our very existence, as the UN report suggests.

Agenda-setting at UN Summit

Behind the United Nations report is a group of 15 independent international researchers, including Professor Katherine Richardson from the University of Copenhagen. Their conclusion is equally clear as it is unpleasant: given the current development, it is unlikely that we will reach the goals by 2030.

Katherine Richardson, University of Copenhagen, is amongst the 15 international researchers behind the UN report.

“The very limited fulfillment of the 2030 goals should not only cause concern but ring alarm bells ring for the entire world community. Our only hope is to change the world’s economic and social system” states the researchers in the (draft) report, which has just been sent to the UN member states for consultation.

The report will be discussed and its conclusions are likely to be adopted at the Climate Action Summit in New York in September, convened by the UN Secretary-General. Thus, the report will set out the guidelines that all countries should pursue if the world goals are to become more than just good intentions.

Substantial changes in six areas:

The report’s guidelines are dramatic and prescribe a thorough restructuring process, using large-scale investments, increased taxes, and fees, combined with a number of public regulations on production methods, reorganisation of subsidies, and more. According to the researchers, these changes are absolutely necessary in order to prevent violent climate disasters and environmental, social and economic collapse.

However, the green policy antidotes can lead to a new, sustainable, and viable social models that can create better living conditions, social stability and open up new job markets.

The challenge can be compared to carrying out a quick yet comprehensive transformation of a competitive business. The business literature is full of examples of how such conditions have created new business successes. This could also be the case with the Global Goals.

The researchers have prioritised six areas where a thorough transformation and a new mindset are required. They are:

  1. Strengthening people’s quality of life
  2. Conversion to sustainable and socially balanced economies
  3. Development of sustainable food systems and healthy nutrition
  4. Development of fossil-free energy forms and free access to them
  5. Promotion of sustainable urban development
  6. Ensuring common environmental resources (including biodiversity)

This message goes to businesses and politicians alike.

One of the biggest issues that they jointly must solve across the world, is financing the transition to a sustainable society. This cannot happen without a radical reorganisation of financial incentives, including significant tax reform.

Essentially, the United Nations report notes that the bill for achieving the world targets by 2030 will cost the rich countries ten trillion dollars annually and the developing countries two and half a trillion dollars annually. The funding of this effort must primarily be through public investment, the researchers believe, and secondarily via the financial sector. But it requires interventions and regulations that force or motivate companies as well as citizens to produce and consume in a significantly different manner.

The losers of tomorrow

Here, the researchers predict a dramatic showdown with one of the world’s strongest industrial powers, namely the countries and groups that thrive on fossil fuels. They include 10 of the world’s 30 most powerful economies – countries and businesses alike – that receive annually direct and indirect subsidies of around $5 trillion, while renewable energies have to settle for just $140 billion.

But if the climate is to be saved and the global temperature rise kept from increasing out of control, industries must be phased out over the next 30 years, leaving “stranded assets” or unprofitable businesses for an estimated $10 trillion.

According to the UN report, it is first and foremost a political task to start the phasing out of the fossil industry through measures including higher carbon prices, tighter regulations, new taxes and tariffs, and greater capital requirements. In other words, the fossil industry must be repressed systematically. This must be achieved in close cooperation with the financial sector, and especially with the investors who are also closely tied up in the fossil industry – they have a great self-interest in a quick and painless transition.

But not only the oil, coal, and gas industries are being challenged. Any sector or company not performing sustainably will be watched closely and will be subjected to restrictions, motivating business model changes. This report foresees an elimination race across the entire international business community over the next decades.

The winners of tomorrow

But an elimination race also creates a number of winners.

According to the “Better Business Better World” analysis launched during the World Economic Forum in 2017, the Sustainable Development Goals will open up new market opportunities valued at around $12 trillion annually over the next 5-10 years. This includes industries such as agriculture and food, energy, health, and urban development – industries which are of particular interest for Danish business.

Working with the Global Goals is no longer just the right thing to do, it also makes business sense, with serious financial growth opportunities in relevant markets. The two reports also signal an enormous business prospect and complete financial restructuring, with $10 billion worth in stranded assets from unsustainable business and a potential $12 billion in the sustainable market space.

It will confront every business leader with existential choices around their choice of business model and markets.

One thing is for sure: choosing business “as usual” is losing. This is the very clear message from the 15 researchers as well as the experts from the World Economic Forum.

The Global Goals have moved from the abstract to the concrete; from a concept note to a script for settlement. The new United Nations report prescribes a difficult and complex process and will challenge a number of commonly held attitudes, including acceptance and understanding that even tight regulations and extensive changes to tax and tariff systems may be necessary and even more conducive to the development of new markets and business opportunities.

In other words, scoring Global Goals is not for delicate business leaders. It requires strong nerves, a cool overview, and the courage to think broad and long-term. The Sustainable Development Goals must be perceived and understood as something else and much more important than the overall UN project.

They express and summarise a mindset and a reality that establishes the terms and conditions that will apply to the development of tomorrow’s society – and thus to which businesses will live on.


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About the author

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Erik Rasmussen

Founder and Publisher
erik@sustainiaworld.com

Erik Rasmussen is the Founder and Chairman of Sustainia, and former CEO of Danish innovation house Monday Morning. Erik was selected as one of the world’s 100 most influential journalists by World Economic Forum, has been a member of the International Media Council, and was recently awarded the prestigious Danish Publishing Prize for his influence on a generation of Danish journalists. Today he advises boards and executive leaders on successful sustainable transformation.