The SDGs and Corporate Activities

In September 2000, before the Global Financial Crisis, the Millennium Development Goals (MDGs) were established at the UN Millennium Summit in the wake of a new millennium. Eight goals were set for the international community to accomplish by 2015, including the eradication of extreme poverty and hunger, mainly in developing countries. Later in September 2015, several years after the collapse of Lehman Brothers, the UN Summit again adopted the 2030 Agenda for Sustainable Development. This was built on the MDGs that had been goals for 2015. The new Agenda is made up of 17 goals and 169 targets. Those goals are the Sustainable Development Goals (SDGs) which are a popular topic today.

The first three of the SGDs are about poverty, hunger, and health, indicating that they are succession from the MDGs. Nonetheless, unlike the MDGs, the SDGs concern all countries, including developed countries, and the preamble of the agenda adopted at the UN Summit emphasizes to "leave no one behind." The progressing globalization between the two sets of goals may promote a change in terms of stronger awareness about the Globe within the international community. Moreover, the world economy faced the Global Financial Crisis because of focusing too much on the pursuit of profit and efficiency, so I imagine that there might have been some regret over this in the minds of the representatives of the developed countries as they adopted this new agenda. It is easy to associate the SDGs with environmental problems and ESG investments (investments with an emphasis on the environment, society, and corporate governance), but a large part of the starting point might have been the question of how to improve the entire world. From this perspective, the relationship between the SDGs and corporate activities can be described as our awareness of how daily businesses contribute to making the whole world a better place.

Making the world a better place sounds grand and roundabout, and perhaps an individual might find it difficult to feel invested in it. However, taking a look at just one plastic packaging, if we follow its journey, it poses a threat to the survival of marine habitats, and all of us exist in that loop. Likewise, wasting electricity increases the consumption of fossil fuels and creates a chain that generates more carbon dioxide. The modest problem awareness of individuals and their actions based on that awareness is indeed very important for us to be able to hand off this world to the next generation in as good a state as possible. That is something I want to be reminded of whenever I hear the word SDGs.

Caring for the environment and society when conducting businesses requires more effort in the short term and appears to be inconsistent with maximizing profits as it bears extra costs. However, one of the lessons from the Global Financial Crisis is that the very survival of a company is put at risk if too much focus is placed on maximizing short-term profits. If it is true that the 2030 Agenda for Sustainable Development reflects some introspection on the Global Financial Crisis, then the SDGs should encourage companies to conduct businesses with a more long-term perspective. In the end, many companies will perish if the global environment or international community breaks down for whatever reason.

Since the collapse of the bubble economy in the early 1990s, Japan's economic management has frequently been branded as failed. Recently, however, some intellectuals in Europe and North America, who are facing a range of new difficulties in the management of democracy and capitalism, start saying "It seems that Japan is doing well in terms of preserving social stability." If such positive aspects remain, we should make the most of them, and companies also should consider "earnings" that do not neglect the long-term perspective. In the past, Omi district merchants cherished their "sanpo-yoshi" (benefit for all three parties) creed of "satisfying the seller, the buyer, and society." For companies today, aren't the SDGs a modern version of that mentality?