Report: Finnish companies produce societal good still too often at the expense of the environment
Finnish companies produce societal good, such as jobs and infrastructure, but still at the expense of nature and climate. The findings are made in a report published recently by UN Global Compact Finland.
The report by UN Global Compact Finland examined how large of a portion of the goods and services produced by its 192 member companies advance or hinder the achievement of the UN Sustainable Development Goals (SDGs). The study was conducted by the technology company Upright, which specializes in measuring the impact of companies.
Member companies of the Finnish corporate sustainability network have various positive impacts on the surrounding world. Of their combined revenue of almost 339 billion euros, equaling to 26 percent, promotes sustainable economic growth, generates employment and decent jobs (SDG 8), 15,7 percent promotes sustainable infrastructure, industry, and innovation (SDG 9), and 10,1 percent accelerates climate action (SDG 13).
Change is already underway – and its pace is accelerating
The most notable harmful impacts from the point of view of sustainable development relate to climate action: 19,9 percent of companies' revenue hinders the achievement of SDG 13 which requires urgent climate action. 19,3 percent of the companies' revenue hinders the achievement of the goal of affordable and sustainable energy (SDG 7) and 15 percent of the goal of sustainable cities and communities (SDG 11).
"The findings of the report are blurry but incorruptible. The report does not explore how companies conduct their business, for example, how they promote equality and human rights or prevent discrimination at the workplace. It sheds light on the impact of goods and services produced by the companies considering the SDGs", says Marja Innanen, Executive Director of UN Global Compact Finland.
The results of the report change when each company’s contributing impact is not weighted according to revenue but given equal weight. In this case, the impact of small and medium-sized enterprises can better be seen, and simultaneously, the share of revenue that hinders the achievement of the sustainable development goals is clearly reduced. On the other hand, the proportion promoting the achievement of the goals is also smaller on average.
Executive Director Innanen believes that both revenue-weighted and equally weighted impact data will showcase a strong shift towards sustainable development in the future when the study is repeated.
"The report is a snapshot and does not yet show progress, but change is clearly already underway in our members. Companies have noticed that it is more profitable to be in the driver’s seat rather than a passenger. All of society, from consumers to investors and legislators, is demanding more sustainable business," says Innanen.
Sustainable development guides pioneers
Several companies have adopted the SDGs as a strategic framework. To support the work of companies, the UN Global Compact has developed SDG Ambition Business Benchmarks, which guide companies in setting ambitious sustainability goals that support sustainable development in the areas where companies have the greatest impact.
For example, UPM is committed to annually ensuring that everyone throughout its global organization is paid at least a living wage. Fiskars Group's goal is that, in terms of purchase volume, 60 percent of its suppliers of goods and services have committed to science-based emission reduction targets by the end of 2024. Furthermore, the technology company Solita aims for gender equality at all levels of management.
In autumn 2023, UN Global Compact Finland will publish a summary report shedding light on the operating methods of the network's member companies. This spring, all 18,000 companies committed to the UN Global Compact and approximately 200 member companies of the Finnish network will report on how they implement the Ten Principles of responsible business, which are closely related to the SDGs.
How the impact was calculated
- The results of the net impact analysis are based on the machine learning assisted calculation model developed by Upright. Upright's model gathers information from more than 200 million scientific articles, based on which it derives the positive and negative impact of goods and services produced by companies on society, knowledge production, health, and the environment.
- The ratio of the companies' positive and negative impact forms the company's net impact figure.
- Upright's model also produces information about the impact of products and services produced by companies, in terms of alignment and misalignment with the UN Sustainable Development Goals (SDG). This calculation is based on the results of the net impact model and other science-based sources that enable each product and service to be linked to the SDGs
For further information:
Download the Finnish Business and the SDGs: Studying Impact report here.
Executive Director Marja Innanen, UN Global Compact Network Finland, tel. +358 50 471 7314 or email@example.com
Vice president Markus Weckman, Upright, tel. +358 50 552 2023 or firstname.lastname@example.org (for questions regarding the methodology of the study)
About the United Nations Global Compact:
As a special initiative of the UN Secretary-General, the United Nations Global Compact is a call to companies everywhere to align their operations and strategies with ten universal principles in the areas of human rights, labour, environment, and anti-corruption, and to take action in support of UN goals. With more than 18,000 companies and 3,000 non-business signatories based in over 160 countries, and 69 Local Networks, it is the largest corporate sustainability initiative in the world.