The Energy Sector and the Sustainable Development Goals
The 2030 Sustainable Development Agenda poses a unique and critical challenge to the energy sector: how to scale access to clean energy to power sustainable, economic development for a growing population, while simultaneously decarbonizing global energy supply. Expanding access to clean energy will play a crucial role in achieving nearly every one of the Sustainable Development Goals, including those related to agricultural production, health outcomes, educational performance, water systems, access to infrastructure, and reducing inequalities. However, practices by some actors in the energy sector, and continued over-reliance on greenhouse gas-intensive fossil fuels also undermine global efforts to mitigate climate change and maintain healthy ecosystems and populations, and can exacerbate global conflict and inequality.
In recent years, a number of frameworks and standards have been created, to evaluate energy companies’ alignment to the SDGs and to help companies and investors improve performance and decision-making. While such initiatives are surely a step in the right direction, to date, many of these tools fail to account holistically for the ways that energy sector conduct could impact sustainable development, and how those impacts map onto each of the 17 SDGs. This failing has allowed companies to “cherry pick” their preferred reporting criteria while ignoring less convenient SDGs. Further, the lack of consensus around standards and evaluation metrics for SDG-aligned practice has led to broadly different conclusions about the same companies’ conduct, undercutting confidence in the utility of evaluation frameworks altogether.
In order to assist both the energy and financial sectors in their alignment with the SDGs, CCSI and the UN Sustainable Development Solutions Network developed a conceptual framework to define SDG-aligned business practices in the energy sector, and in particular the utility sector.
The conceptual framework, composed of four pillars and applied to the utility sector, is as follows:
(1) Product: Is the utility a leader in zero-carbon electricity generation and is the utility on the path to reach zero carbon emissions by 2050 or earlier?
(2) Production process: Is the utility’s production process socially and environmentally sustainable?
(3) Value chain responsibility: Is the utility’s supply and value chain aligned with the SDGs and PCA?
(4) Citizenship: Is the utility a good corporate citizen?
This table here provides further details to address these questions.
The full report adapts the four pillar framework to the utility sector, evaluates the proposed framework against twelve existing sustainability initiatives, and compares the performance of the ten largest utilities in Europe and the United States, by market capitalization. The report also provides recommendations for next steps.
The summary of the findings are here.
A presentation of the findings is here.
The project aims at bringing coherence and rigor to SDG measurement, reporting, and tools, supporting engagement with the sector on responsible practices and enabling highly responsible SDG-oriented companies to set themselves apart from the rest.
For more on CCSI and SDSN’s work on corporate alignment with the Sustainable Development Goals, a 2-page description of this project and the framework is available here, and see our framework defining SDG-aligned business practices in the food sector.