A global call to action to end poverty, preserve the planet, and achieve equality and inclusion for all people, the U.N.'s sustainable development goals (SDGs) provide the public and private sectors a blueprint for how to positively impact the lives of many. Business leaders should incorporate these SDGs into the core of their business practices and leadership philosophies, managing for all stakeholders' interests. Adoption of humanistic management practices can move businesses closer to achieving economic efficiency, environmental responsibility, and social stability.
Business Roundtable's Commitment to All Stakeholders
In August 2019, the Business Roundtable issued an updated and revised Statement on the Purpose of a Corporation. For decades, issued statements reinforced the notion that corporations exist to generate profits for shareholders. The new statement instead expresses a more expansive purpose, with the 181 signing CEOs committing "to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders." According to the Business Roundtable, delivering value to all stakeholders will lead to success as companies.
How Will Companies Benefit All Stakeholders?
The Business Roundtable members commit to:
- Deliver value to their customers, meeting or exceeding customer expectations.
- Invest in employees, providing fair compensation and benefits, and offering training and education.
- Deal fairly with suppliers.
- Support their communities, which includes protecting the environment with sustainable practices.
- Generate long-term value for shareholders.
Overview of the SDGs
The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, set forth 17 Sustainable Development Goals (SDGs). These Global Goals and their 169 targets sound a universal call to action for governments, businesses, and individuals. For life on this planet to continue, peace to flourish, and people to not only survive but thrive, everyone needs to work toward these SDGs for everyone, everywhere:
- Eliminate poverty
- End hunger
- Ensure healthy lives and promote well-being
- Ensure quality education and lifelong learning that is inclusive and equitable
- Achieve gender equality
- Clean water and sanitation
- Affordable, clean energy
- Provide decent work and sustainable economic growth
- Build industry and infrastructure, and foster innovation
- Reduce inequalities
- Safe, inclusive, and sustainable cities
- Responsible consumption and production
- Climate action
- Conserve aquatic resources and life
- Protect and restore ecosystems
- Promote peace, provide justice, and erect strong institutions
- Strengthen global partnerships
How Do the SDGs Relate to the Business Roundtable's Commitment to All Stakeholders?
The SDGs provide a framework that can help corporate leaders and private sector companies address the commitments set forth in the Business Roundtable statement. Only through managing for the betterment of all stakeholders will the SDGs be realized.
Humanistic Management: What Leadership That Embraces the SDGs Looks Like
The dominant business paradigm of continual growth at all costs, with shareholder primacy, is not sustainable. An alternative philosophy that seeks protection of dignity and the promotion of well-being for all stakeholders better meets the needs of the planet and people, while still achieving profits.
Humanistic managementrecognizes humans' innate motivating drives: the drive to acquire, the drive to defend, the drive to comprehend, and the drive to bond. Humans need social interaction, are naturally inquisitive and exploratory, and seek protection from physical and emotional harm. One way to imagine humanistic management is to picture theeconomic system as a bagel: the hole in the center represents the dignity threshold, and the outer edge of the bagel represents planetary boundaries and resource limits.
The dignity threshold contains the basic needs that must be fulfilled to live as humans. The threshold is met when people have connection to friends and family, develop an understanding of a higher purpose beyond just basic survival, and have adequate food and shelter.
Modern managers must move people out of the inner core, above the dignity threshold, while reducing the impact of human activity on the planetary limits, in order to enable all life on earth to flourish.
Moving Beyond CSR: Incorporating SDGs Into Your Core Business
For most companies, corporate social responsibility (CSR) pertains to projects and initiatives rather than to fundamental values or organizational action. For long-term benefit, SDGs must be integrated into the core of your business, touching upon all stakeholders. Aligning company goals with the SDGs demonstrates leadership's commitment to sustainable development, which includes human development. The key to achieving set goals will be embedding sustainable development targets across all functions within the company.
For example, let's look at how a company might advance the eighth SDG, decent work and economic growth. In support of that goal, the business can act to support decent working conditions for all employees across the business and its supply chains and educate its workforce.
About the Author
Melissa Jenkins is a freelance writer and business consultant with expertise in healthcare management, small business accounting and marketing, innovative technologies, and emerging industries.
Melissa J is a freelance writer who writes about lifestyle and travel.
