The UN Global Compact (UNGC) published Moving Business Forward Faster: 2024 Trends & Insights (2024), which provides an overview of how more than 1,700 companies are progressing in five areas: gender equality, water resilience, living wage, climate action and finance and investment. These five areas are the focus areas for the UNGC’s Forward Faster initiative - a global platform for credible, ambitious corporate action to guide companies on meeting the Sustainable Development Goals (SDGs) by 2030.
Human Level’s Take:
- Progress on the Sustainable Development Goals (SDGs) is lagging, with only 17% on track for 2030. The UN Global Compact’s Forward Faster initiative is a call for urgent corporate action, focusing on five critical areas: gender equality, climate action, living wages, water resilience, and finance and investment.
- The initiative recognises the inextricable link between climate action and human rights. Companies are urged to set two targets: 1) set science-based net-zero emissions reductions targets; and 2) contribute to a just transition by taking concrete actions that address social impacts of climate change mitigation and adaptation measures in partnership with actors such as workers, unions, communities and suppliers. However, the report finds that out of more than 1,700 companies, only 36 have committed to both targets.
- This not only puts people at risk but also carries a financial cost, as the price of inaction on just, equitable and sustainable transformation far outweighs the investment in it.
- There is some progress to build on, for instance 275 companies have adopted living wage targets both in their operations and in their supply chain.
- So, companies, now is the time to ask yourselves: do I have what I need in place to demonstrate that I’m going forward faster? The UNGC’s targets can help show where the expectations are.
Some key takeaways:
- The state of play: Since the launch of Forward Faster, the report finds that more than 1,700 companies have pledged to accelerate their contributions to the SDGs through at least one Forward Faster commitment. This totals to more than 4,360 individual targets across the five action areas. In addition, most companies are prioritising climate action in their sustainability target-setting efforts, with gender equality coming a close second. Accelerating action towards the SDGs is important because only 17% of the SDGs are on track to be met by 2030. However, trends indicate that there will be increased action and investment in corporate sustainability strategies. For instance, ESG assets are expected to surpass $40 trillion by 2030, and 96% of board directors expect continued or stronger focus on ESG in the next five years.
- Progress against the five areas of action: For gender equality, target 1 is equal representation, participation and leadership across all levels of management by 2030. Target 2 is equal pay for work of equal value by 2030. The report finds that few companies in emerging markets have made commitments on equal pay for equal work and equal representation despite the large gap in pay and in female managerial representation. For climate action, target 1 is setting corporate science-based net-zero emissions reductions targets through the Science Based Targets initiative, aligning action with a 1.5°C pathway with a goal of reaching net zero by 2050 at the latest. Target 2 is contributing to a just transition by taking concrete actions that address social impacts of climate change mitigation and adaptation measures in partnership with actors such as workers, unions, communities and suppliers. The report finds that only 36 Forward Faster companies have committed to targets 1 and 2. For living wage, target 1 is 100% of employees across the organisation earning a living wage by 2030. Target 2 is establishing a joint action plan with contractors, supply chain partners and other key stakeholders to work towards achieving living wages and/or living incomes with measurable and time-bound milestones. The report finds that a significant number of companies - 275 in total - have adopted both living wage targets. This demonstrates an increasing awareness of the need to address wage disparities in their direct operations and supply chains. For water resilience, target 1 is building water resilience across global operations and supply chains and joining hands to achieve collective positive water impact in at least 100 vulnerable prioritised water basins in 2030. The report finds that a significant number of companies committed to the water target - around 60% - are based in the Global South. For finance and investment, target 1 is aligning corporate investment with SDG policies and strategies, and setting targets, tracking and reporting on the amount and proportion of such SDG investments. Target 2 is establishing a corporate financing strategy that is linked to SDG investments and performance, and reporting on the amount and proportion of such SDG finance. The report finds that companies recognise that SDG finance is a key enabler of their other commitments on specific SDGs.
- A just transition approach is critical to climate action: The impacts of climate change are already felt by vulnerable communities at the frontlines of the crisis. Despite this, global emissions are hitting record highs and oil and gas production is expected to increase through 2030. The report states that the private sector has a critical role to play in the just green energy transition and that this makes good business sense. For instance, the cost of climate inaction will be much higher than the cost of action and investing in opportunities that support a just transition to net zero and reduce climate risks. In addition, just transition is gaining increasing prominence on the global agenda. This provides an opportunity for companies to adopt more holistic and rights-based approaches that integrate both mitigation and adaptation. The report also finds that the U.S. and the EU are dominant in total climate commitments, while the Global South takes the lead on working towards a just transition and emphasising the need to integrate just transition principles into climate plans and strategies. Furthermore, companies that commit to net zero are twice as likely to conduct regular internal reviews and report directly to their CEOs on sustainability targets. This demonstrates the importance of these commitments in companies’ strategic oversight.
