Achieving SDGs and the hidden costs for businesses

Recently the European Commission published the progress indicators in relation to the implementation of the 17 Sustainable Development Goals of the United Nations (UN SDGs) as identified and defined in the now well-known Agenda 2030. In seeking Sustainable Development in all professional and technological fields, the European Union (EU) fully integrates and embeds the UN SDGs. The indicators are demonstrating the progress that has been achieved in the continent in the last fifteen years.

Regarding the data on Cyprus, the assessment includes both positive and negative elements. The most positive are identified in three Goals, “No Poverty”, “Life on Land” and “Good Health and Well-Being”, in which Cyprus is ranked higher than the EU average and progress is being recorded towards their full implementation. At the same time, the progress made, also indicates partial development in tech and digital advancement of various sectors (Fintech / Technology).

On the other hand, the results of the survey unfortunately show that in relation to most of the SDGs, Cyprus remains below EU average, although there is progress recorded, such as on “Decent Work and Economic Growth”, which is currently slightly below EU average. Greater progress, but still well below EU average, is made on the “Industry, Innovation and Infrastructure” Goal. Eight more Goals are well below the EU average with limited progress recorded. Of these goals, furthest from the EU average are those of “Peace, Justice and Strong Institutions” and “Gender Equality”. Matter for concern comes also from the Goal for “Reduced Inequalities”, which, although remains above EU average, it has been deteriorated. It is also worth noting that for three Goals, there is no assessment for Cyprus, namely in “Clean Water and Sanitation”, “Life Below Water” and “Climate Action”.

Most of the EU countries also face problems in their effort to achieve the SDGs. Even large economies such as France and Germany. In the case of Greece, most Goals are below the EU average, but significant progress is being recorded on most of them.

It is worth mentioning that the above-mentioned assessment does not cover the full range of possible negative effects that the COVID-19 pandemic may have caused, and certainly does not include the spillover effect of the war in Ukraine, such as the further rise of inflation and rising energy costs. These developments, depending on how long they will last, may affect the targeted implementation of the SDGs in the coming years.

The importance of financial resources

As the European Commissioner for Economy, Paolo Gentiloni, comments, “the creation of a sustainable and resilient Europe requires significant economic resources”. The same is true in the case of Cyprus. Recently, speaking at the annual General Meeting of the Cyprus Investment Funds Association (CIFA), Minister of Finance Constantinos Petrides, emphasised that the shift towards a Sustainable, Green, and Digital economy requires significant investments and resources from both the public and private sectors. As he rightly said, this change of direction entails significant costs and is something that must be realized early on by Cyprus-based companies and groups. If not, they will risk losing their path to sustainability, or best-case scenario, will face penalties for not complying with and implementing sustainability programs and criteria factors at the level of commercial practice and reputation. Clearly, the operational model of previous decades does not work today. Companies that adapt early can lower costs and remain viable for longer periods of time.

Lawyer, Banking & Financial Services, LLB. LLM. LPC, CISL, University of Cambridge.