Just 15% of Stoxx 600 companies have made positive contributions to the UN’s Sustainable Development Goals, specifically in areas like clean energy, health and climate action, Impak Analytics has said. Conversely, nearly two-thirds had not effectively mitigated their negative impacts, casting doubt on the sincerity of their SDG commitments as the 2030 deadline nears.
Impak Analytics, an impact ratings and data firm, used its proprietary database to scrutinise 575 companies from the Stoxx 600 index, which tracks 600 of the largest listed firms across 17 developed European countries.
The 95-page , published on Thursday 14 September 2023, found that just 4% of the total combined revenue from these companies positively impacts the UN’ SDGs. The paper revealed that a mere 15% of the Stoxx 600 companies, representing 89 firms, are generating one or more positive contributions to the SDGs. These contributions represent an average of only 29% of their combined revenues. The majority of the remaining companies either have a neutral impact or negatively contribute to these global objectives.
The study also noted that among the companies making positive contributions, there is a significant emphasis on specific SDGs.
A substantial 39% focus on Affordable and Clean Energy (SDG 7), followed by 25% on Good Health and Wellbeing (SDG 3) and 16% on Climate Action (SDG 13). However, crucial goals like biodiversity, quality education, and gender equality are largely overlooked.
While it may seem promising that an average of 24% of total revenues is dedicated to SDG 7, the report cautioned that achieving this goal is uncertain due to rising energy prices and waning financial support in low- and middle-income countries.
Mitigation shortcomings
On the flip side, the report exposed that nearly two-thirds of Stoxx 600 companies are not effectively mitigating their negative contributions to the SDGs. When it comes to falling behind in this respect, 42% of companies are not making efforts for Zero Hunger (SDG 2), followed closely by 41% for Clean Water and Sanitation (SDG 6). Further, SDGs 11, 3, and 1 see 33%, 32%, and 25% of companies, respectively, not engaging in mitigation efforts.
In terms of sector-specific shortcomings, 30% of financial sector companies and 26% of real estate companies fail to implement any mitigation measures related to accessibility and affordability-focused SDGs. Additionally, 40% of companies in the consumer discretionary sector and 27% in the basic materials sector are not taking steps to alleviate their negative impacts on SDGs.
The report also emphasised the challenge of assessing corporate commitment to SDGs due to a lack of transparency. Many companies fall short in disclosing their SDG-related activities, making a comprehensive evaluation of their alignments and capital allocation towards these global goals complicated. Consequently, the report concluded that there is much work to be done in terms of both acknowledging negative contributions and increasing accountability towards stakeholders.