The first step of reinforcing is to deepen your commitment to contributing positively to the SDGs. This is an opportunity to more fully integrate what you've been doing into the highest levels of governance of your company or organization, and to revisit your commitment to managing for impact as contexts continuously evolve. We've covered many ways you can do this in previous lessons, but I want to highlight some key elements here. There are four main areas where you can deepen your commitment. These areas are taken from the Sustainable Development Goals disclosure recommendations to which the SDG standards require compliance. These are most relevant to larger public companies like Miguel's, but smaller enterprises like Grace's can also use this as a checklist. Under governance, you want the integration of your SDG commitment to appear at the board level of your organization. For example, the board chair can make a statement that the board accepts responsibility for the SDG disclosures in the annual report. This statement should include the time period over which targets will be achieved, the board's impact management competencies in guiding the organization toward these SDG outcomes and commitment to promoting a culture of learning and development. You may want to actively engage your shareholders on these issues as well, depending on the governance structure of your organization. Under strategy, describe how consideration of sustainable development issues has influenced your overall business strategy and its impact on the SDGs. This includes material risks and opportunities and scenario analysis to test the resilience of your strategy and the kinds of value that have been created for the organization and its stakeholders through this SDG activity. For management approach, align internal operations around the achievement of your SDG targets, including accounting, finance, strategy, and other departments. Set incentive structures that validate your staff for embedding impact considerations at all levels. Allocate adequate financial and non-financial resources to the development and implementation of a sound impact management system. Under performance and targets, you'll want to commit to reporting on short, medium, and long-term SDG targets, describing what happened and potential hypothesis about why it happened. Be sure you're reporting aligns with any material issues relating to lobbying, taxation, and human rights. Miguel established his SDG targets based on company policy and then integrated them into team processes, including setting up systems to manage and optimize impact. However, he realized he had not taken the time to draw direct lines with the company management team or the board. He engaged the COO who immediately saw how Miguel's work could support and influence the companies more public-facing strategy around sustainable agriculture. The COO and CEO led a series of conversations with the board who agreed to integrate and cement Miguel's goals along with similar goals within other divisions. By the end of the year, the board had signed off on a cross-cutting strategy to expand this work, including instituting some new resource allocations and incentives for staff. The CEO included sustainable agriculture and SDG related targets in her annual letter and expanded the board to add expertise in smallholder agriculture and development issues to the body governing this work. The second part of reinforcing your SDG impact strategy is to disclose progress to key stakeholders. The purpose of disclosure is to create transparency with your stakeholders and the public about your organization's actual impact, both intended and unintended, as well as progress and learnings around SDG impact. You should disclose externally to donors, investors, beneficiaries, and other key stakeholders at least annually. Your disclosures should include how you manage your impact and contribution to the SDGs and how your SDG impact is integrated into your management approach and governance practice. The sustainable development goals disclosure recommendations include three key concepts that should be covered in your public SDG disclosures. How are you creating long-term value for the organization and society? How are you working in a relevant way within the evolving sustainable development context? How are you ascertaining and addressing issues material to stakeholders? According to the SDG impact standards, a good enterprise impact report complies with these concepts. If you've worked through the prior lessons in this training, you should have produced a lot of information and evidence that you can incorporate into your impact report. High-level information should go into your public report, and some of this might be details that you reserve for more private reports to your stakeholders. For example, from our set strategy module, you can provide information on which sustainable development issues have the most positive and negative impact on stakeholders across the value chain of your business, which sustainable development issues has the enterprise decided to actively manage and why, which sustainable development issues as the enterprise decided not to actively manage at this time and why, what are the specific SDG targets the enterprise is focusing on for this period, and what are the ABC goal classifications of your SDG targets for this period. From our integrate module, you can share what outputs and outcomes did you decide to measure for each SDG target and indicator. Did you set suitable baselines, counterfactuals, and thresholds? What trade-offs, if any, did you make between different sustainable development outcomes or stakeholder groups, and what processes and operations are included in your impact management system? From our optimized module, you can document how is performance compared to projections over the given time period on all SDG targets? Did you compare actual performance against suitable baselines, counterfactuals, and thresholds. What explanations are there for your performance deviations? What actions did you decide to take to improve performance and why? What risks remain to future performance and how will you address them? How will you recalibrate your ABC goals based on data and performance? In addition, the SDG impacts standards ask that in reporting, you comply with the sustainable development goal disclosure also called SDGD recommendations, that you implement reporting mechanisms that meet the needs of stakeholders affected by your activities, and the civil society organizations that act on their behalf, including considering additional non-public tailored reporting or changes to existing public reporting to make disclosures more relevant and accessible to a broader range of stakeholders, that you make public your policies concerning respect for human rights in line with the UN guiding principles and other responsible business practices, and that you comply with relevant laws and regulations regarding social and environmental disclosures. Now that you've done the work to build a strong impact management practice, you may consider the last step and reinforcing your impact, which is to seek verification of your impact management practice and to our performance by an independent third party. Why should you consider engaging a third party for verification? Doing so can create an additional layer of confidence in what you report about your SDG related practices or results. It can help your stakeholders compare your commitments and performance to those of your peers. It can help them make purchasing, partnering, or investment decisions. There are many credentials, verifiers, and certifications available, and we've listed some in our resources section. The SDG impact standards ask that you consider third-party validation or assurance of your impact management practices or that you explain why you chose not to do so. How should you prepare for verification? Most impact verifications concentrate on governance, strategy, management approach, and performance. Many will either ask you for documentation, survey you about your practices, or interview you to understand how well you're creating and managing impact. The sustainable development goal disclosure recommendations report includes a sample list of the documents that you as an enterprise may be asked to provide. How should you react to what you learn? Usually, if you engage with a third-party verifier, you'll receive some report that indicates what you're doing well, as well as areas for improvement. You might receive a score, a high, medium, or low rating that you can compare with peers and/or a detailed report. Take the information to the relevant decision makers within your organization. What can you learn from the analysis? What actions will you take as you refine your impact plans for the next period? What resources are needed? If you're being asked to share your third party verifications with stakeholders and you're not happy with the analysis, you may ask if there is a redress period during which you can make improvements and then resubmit for another analysis. You may also choose to feature the analysis as part of your regular reporting or marketing. We highly recommend that if you do feature it, you try to avoid selecting just the most positive parts to include, but instead include an overall summary and articulate where you might be making changes for improvement. Making it real. Here's a summary checklist of ways you can reinforce your SDG impact commitments. Reflect on and make changes to any existing policies or practices that may hinder or impede your commitment to SDG impact. Consider how you could align other powerful stakeholders of the business, such as shareholders or investors with a commitment to contributing to SDG impact. Disclose at least annually the high level strategy for creating long-term value in a sustainable development context on all positive and negative material impacts on your stakeholders. Last, consider engaging with an independent third party to validate or assure your impact process, performance, and/or governance. Then, take the recommendations from the assurance process into account as you refine your impact plans for the next period or year. At the end of this lesson, you should have your SDG commitments integrated at the highest levels and among key stakeholders in the business, and a public and perhaps as well some private SDG impact reports that disclose your performance and impact management practices.
