New measures on contribution of corporations towards sustainability

3.1New information from existing statistics

Every year SD produces about 500 “Statistical News”, and the SDG perspective has been taken on board in several of these. For example, the presentation of statistics of the compositions of executive boards in companies (showing only about 20 per cent women) of course includes a reference to indicator 5.5.2 (women in managerial positions). Similarly, news about usage of IT makes references to indicator 17.8.1 (Proportion of individuals using the Internet), and also to indicator 5.b.1 (Proportion of individuals who own a mobile telephone, by sex). The statistics of income distribution, of course, also refer to target 10.1 (reduce income inequalities).

The results from the Environmental Economic Accounts also play a very important role in providing information from a SDG perspective, as the environmental and climate aspects are the most discussed SDG fields in Denmark. Emission of CO2 (indicator 9.4.1), and energy efficiency (indicator 7.3.1) are essential indicators in this field. Further, water use and production and treatment of waste are also elements in environmental accounts very closely linked to measuring needs in relation to the SDGs. The accounts are developed in accordance with the framework System of Environmental-Economic Accounting, which is a statistical standard in its own right since 2012 next to the System of National Accounts. The results are communicated by types of industry, making it easy to follow the performance in specific business sectors and to compare with the performance in the economic field.

However, also several social issues are related to the business sector. Statistics Denmark has very detailed data on employment and wages, why gender issues, also broken down by type of industry, can be covered very well. Differences and developments for specific sectors can be shown for all stakeholders. Further, for instance, differences in salaries, as well between women and men and between staff in leading positions and in non-leading positions can be highlighted. Further, data also exist for occupational injuries and sick leave, broken down by type of industry, making it possible to show a comprehensive picture of the working conditions in different sectors. The concept for development of comprehensive SDG-related statistics is shown in Fig. 1.

UNCTAD, in collaboration with financial experts, have developed a global set of so-called Core Indicators for Business entities (presented in the report: Guidance on core indicators for entity reporting on contribution towards implementation of the Sustainable Development Goals) – in brief GCI. In total 33 indicators are proposed, covering the economic, environmental, social and institutional areas, respectively. The GCI is now also part of the research program of the UN Committee of Experts on Business and Trade Statistics on wellbeing and sustainability. Analyses conducted by SD shows that the majority of the GCIs can be mapped to existing statistical information and individual SDGs. This means that selected parts of official statistics can provide macro-level information, where the companies themselves can provide micro-level information. By having results at both macro level and company level will the value of the information on changes in individual business sector be higher.

However, micro-data also exist in the statistical work, as most data in the business statistics are collected at enterprise level via a number of surveys on specific topics. Statistics Denmark has for some time worked to link different sets of micro-data to create a data warehouse with integrated information, as this will create new opportunities for analyses, also looking into sustainability issues. Where data on economic figures is linked to e.g. consumption of energy, it is possible to group by level of energy efficiency – for companies with comparable activities. By using such methods the statistical information comes closer to the situation for the single enterprise and also increase the outcome while comparing enterprises performance.

3.2Specific surveys – also an option

How does the business sector react to the SDG-agenda? That is a question of interest for the government, the business associations and the public in general and, increasingly, also for investors. As described above, existing statistics can indirectly provide knowledge in the area, but also dedicated surveys is an option. In the spring of 2019, a pilot exercise was conducted by SD with the aim of obtaining a picture on how larger enterprises have been working with the SDGs. Questions were asked about whether contribution to the SDGs has become an issue for the enterprises or was expected to become so in the near future.

If this was the case, the companies were asked to specify the steps taken; i.e. if SDGs already form part of the written corporate strategy, form part of company descriptions or reporting or in specific policies in the company. Regarding the policies, import policy, staff policy and product development policies were among the possible answers. The survey was voluntary for the companies and the response rate were one third only, as the survey was not made legally obligatory, which is normally the case for SDs business surveys.

Further, we asked about the enterprises’ motives behind the SDG orientation. Improvement of business opportunities, attraction of new investors, an increased attention to the input costs and better possibilities to attract new staff was included in the list of possible answers. The specific questions are partly reflected in the outcome shown below. For most of the questions the enterprises could choose between, “to a high degree”, “to a medium degree”, “to a low degree” or “No/not relevant”. For other questions only “Yes” and “No” were the options.

Specific elements in the SDGs were also part of the survey. We selected 21 SDG-targets which were considered of particular relevance for the enterprise sector. Targets related to products, environment and staff issues, covered the largest part, but also target (8.7) on child labor was included. The targets were changed into questions relevant for actions at enterprise level. It should be noted that targets related to SDGs 13–17 were not included, as the goals (and connected targets) are less specific than for SDGs 1–12.

SD also focuses at the possibilities to change or add elements in existing surveys, so that new information related to sustainability can be collected. An example is a survey on the use of IT, which will include questions about “green apps” with the aim to get a picture of the use of such tools to optimize sustainable behavior. Also, in the innovation statistics slight revisions are considered, as it can be relevant to include questions about innovation with the purpose of improved sustainability.

It will be considered if the specific survey will be repeated at a later stage during the lifetime of the SDG-agenda with the aim to catch up the reflections in the business sector on initiatives and the outcome of these.

4.1The SDG-indicators for Denmark – in general

SD coordinates the establishing and compilation of the indicators related to the full SDG agenda – in close cooperation with other governmental agencies and institutions. Most of the indicators can be compiled using existing data in SD, but several depend on data and research from other institutions in Denmark, in particular on goals 14 (Life under water), 15 (Life on Land), 16 (Peace, justice and strong institutions) and 17 (Partnership for the goals).

Currently, about 90 per cent of the defined SDG indicators are compiled and published at the official website (https://www.dst.dk/en/Statistik/Sdg). By the end of the year it is expected that only a few indicators from the official list will remain pending, including those where the definitions are still being elaborated internationally.

For quite a number of SDG indicators the reporting from Denmark has been easy, as the targets are already met or the issue is not relevant in Denmark. An example of the first type is indicator 6.b.1 about local policies (or not) on water supply. The indicator value from Denmark is in this case 100 per cent. An example of irrelevance is indicator 3.3.3 on malaria incidence, which is not a problem at all in Denmark, except for very few travelers returning from tropical regions.

In regard to the indicators referring specifically to the business sector, or part of the business sector, SD easily compiles the indicators for Target 9.2 (referring to the role of the manufacturing industry) as data are readily available. On the other hand, data for indicator 9.3.2 (Proportion of small-scale industries with a loan or line of credit) are not easily available, as the statistical coverage for small companies is low and business debt cannot be separated from personal debts for personally owned business units. However, it was decided to compile the indicator using a survey on access to finance, conducted every fourth year.

A more challenging indicator is 12.6.1 about the number of companies which disclose Corporate Social Responsibility reports. SD does not have information available which can be aligned to the definition in the official list of SDGs and thus we decided to use as proxy the number of companies obliged to provide reports under the legal framework on Corporate Sustainability Reporting, even though a lot of these reports contains no or only scarce quantitative information. Statistics Denmark is exploring new data sources to improve the reporting on this indicator, for instance based on the reporting of the UNCTAD GCIs.

4.2Business related results from existing statistics

Information on businesses and sustainability can to a large part be found or compiled from existing statistics, depending, of course, on which statistics is actually compiled in the country. Further, it is possible to provide results broken down by main types of industry – for different domains of the SDG concept. Key statistical information for monitoring sustainability is Environmental Economic Accounts, which include accounts on emissions and consumption of energy, among several other issues. From these statistics and the National Accounts a lot of statistical information can be shown on this matter.

By way of example, the CO2 emissions from the Danish business sector accounts for approximately 80 million tonnes of CO2 – excluding emissions from renewables as they are considered neutral. Broken down by main types of industry in 2018, the Transportation sector has the main share (56.4 per cent) of these emissions, followed by Agriculture forestry and fishing (15.6 per cent), Utility services (12.5 per cent) and Manufacturing (7.4 per cent), as shown in Fig. 2. The remaining types of industries only accounts for about 8 per cent of total emission.

Figure 2.

CO2-emission from the business sector in Denmark, by type of industry. 2018. Source: Statistics Denmark, Emission statistics. Note: The emission from renewable energy sources is not included. Bunkering abroad is included.

Figure 3.

CO2-emission over Gross Value Added in the Danish business sector, by type of industry. 2018. Source: Statistics Denmark, Emission statistics and National Accounts Statistics (GVA in constant prices). Note: The emission from renewable energy sources is not included. Bunkering abroad is included.

Figure 4.

Development in CO2-emission over Gross Value Added in Danish business sector, by type of industry. Source: Statistics Denmark, Emission statistics and National Accounts Statistics (GVA in constant prices). Note: The emission from renewable energy sources is not included. Bunkering abroad is included. Only selected types of industry are shown.

However, it is important to know, that 90 per cent of the emissions from Transportation is from international activities and thereby outside what should be measured according to the global agreements on reduction of emissions. Ignoring this part of emission in the picture for Denmark increases the relative significance of other types of industry significantly. Another angle is to use the definition of SDG indicator 9.4.1 more directly, i.e. calculating the emissions in relation to the value added. Similar figure is compiled at national level for comparison with other countries, but is can also be disaggregated by type of industry.

This analysis (Fig. 3) shows that CO2 emissions over gross value added (GVA), (shown in tonnes of CO2 emission per mio. DKK value added) are highest in Agriculture, forestry and fishing (692), while Transportation (412) is only number two when compared to the sectors GVA. The figures from Manufacturing (23) and Construction (17) is at a very low level using emissions per GVA, and trade and other services are almost invisible. However, the very different nature of business activity must be taken into consideration when interpreting these figures.

A third way to analyze the development is to look at the relative development in the specific sectors over time. This can be done as well for the total CO2 emissions by type of industry or by emissions over GVA.

Compiling the indices in CO2 emissions over GVA (Fig. 4), there is clearly a decreasing trend over time in most sectors. This is most significant in the utility sector, where emission over GVA has decreased by 58 per cent since 2010. This drastic change is mainly due to a steep increase in the use of renewable energy sources, but also higher efficiency in the energy production in general is part of the explanation. Construction and Manufacturing show a decrease at 24 per cent, followed by Wholesale and retail trade (22 per cent) and Transportation (10 per cent). An increase on CO2 emissions over GVA is observed for Agriculture by 20 per cent, affected by a relatively low GVA in 2018.

Explaining the development, better efficiency in the consumption of energy in most types of industry plays a vital role in the reduction of the CO2 emissions. SDG indicator 7.3.1 on energy efficiency (consumption over GVA) will highlight this, if broken down by type of industry. The varying development in the CO2 emission for Agriculture is, however, not a result of changes in energy efficiency, but is driven by varying results of harvest and GVA from year to year.

Similar analyses can be done on waste, water and energy, where the development can be followed and analyzed broken down by industry – as valuable information for the companies as well as for other decision makers. Further, in several domains, there are also statistics available for other countries, while comparisons also can be done for specific business sectors.

Also in other areas on sustainability it is possible to show results for the business sector’s performance. Several indicators could be chosen, but occupational injuries (SGD indicator 8.8.1 and C.3.2 in the UNCTAD GCI list) are selected as example for illustrating the possible use of the statistics.

In Fig. 5 the incident rate (non-fatal injuries per 100.000 workers per year) are shown for selected types of industry for 2017. It is obvious that the most dangerous jobs are in Construction and Transportation with over 3,000 incidents per 100,000 workers, followed by Manufacturing with an incident rate of approximately 2,000. Initiatives to improve sustainability from this perspective may, therefore, be of particular importance in these sectors, while initiatives seems less important in example Agriculture, Wholesale and retail trade and in Accommodation and food service activities, where the incident rates is between 1,000 and 1,500. It could be added, that the number of fatal incidents is at a level of 1 to 3 per 100.000 workers depending on type of industry.

Figure 5.

Occupational injuries in Denmark, by types of industry. 2017. Source: Eurostat, Health statistics. Note: Only selected types of industry are shown.

Figure 6.

Occupational injuries in construction activities by country. Source: Eurostat, Health statistics.

Looking at the time series, the figures show that much already has been done to improve health and safety at the work place. Within transportation the incident rate has gone down by 37 per cent since 2010 and within manufacturing and trade a decrease of 32 per cent is seen. The lowest decrease was in agriculture with only 13 per cent.

Similar statistics exist in other countries in the EU or the OECD, making it possible to monitor progress in sustainability on injuries across countries. As shown in Fig. 6, the incident rates among workers in Construction in Denmark and neighboring countries indicates that the most dangerous country for workers is Germany (2017: rate 4,800), and even has increased from rate 4,200 in 2010. However, also the situation in Denmark (2017: rate 3,300) indicates a need for awareness, even though progress has been observed, as mentioned earlier. It may be surprising that it seems much safer for the workers to work in the construction sector in The Netherlands (2017: rate 1,400), Sweden (rate 1,300), United Kingdom (rate 1,000) and Poland (rate 600). However, in-depth studies of metadata is needed when assessing the comparability, as the development in data depends on the legal situation and report practices in each country.

On the social part of the sustainability indicators also other elements can be covered by existing information – in particular on gender issues. In SD detailed statistics exist by type of industry. Women’s share of workers, their share of staff in leading positions and also on salary gaps are examples. Further, related to the institutional domain, statistics also exist on the composition of boards and top-management in the companies. By this, it is possible to show women’s share by type of industry.

4.3Outcome of the pilot survey

As previously mentioned, SD conducted in the spring of 2019 a pilot survey among larger enterprises. The main result was that two thirds of these were focusing at the SDGs in their business activities. The response also shows, that more companies will “be on board” within the next 2–3 years, meaning that a SDG approach is under consideration.

Figure 7.

Enterprises focusing on the SDG’s by industry. 2019. Source: Statistics Denmark, Pilot survey: How do large enterprises work with the SDG’s?

Figure 8.

Enterprises work on SDG’s, specific focus areas. 2019. Source: Statistics Denmark, Pilot survey: How do large enterprises work with the SDG’s? Note: The percentages are compiled as shares of all respondents.

Figure 9.

Enterprises work on SDG targets on inclusion and equality. 2019. Source: Statistics Denmark, Pilot survey: How do large enterprises work with the SDG’s? Note: The percentages are compiled as shares of all respondents. The figures in brackets refer to the numbering of SDG targets.

Another interesting result (also shown in Fig. 7) is that the level of attention is almost the same in all main types of industry. It is not only the case within the Manufacturing and utility services (70 per cent), where the business opportunities are quite high because of Denmark’s position on sustainable technologies. The high attention is also found in companies in Trade and transport (72 per cent) and Business services (71 per cent), where sustainability rather represents higher costs than higher earnings. These results indicate a very high level of responsibility towards the society.

Analyzed by policy areas in the companies, the highest attention was recorded at the environmental aspects (48 per cent), followed by a focus at the products and services provided by the companies with 43 per cent, as shown in Fig. 8. Number three in the ranking is Human resource (41 per cent), indicating that a “sustainability profile” is of high importance while attracting new staff or encouraging the staff to stay in the companies. The lowest in ranking are Research and development and Investment plans. However, hardly all responding companies have activities in all fields, why the comparing between policy areas has to be made with caution.

The response at the selected 21 SDG-targets showed high focus at reduction of CO2 emissions (target 9.4), at energy efficiency (target 7.3), efficient material consumption (target 12.2) and higher degree of reuse (target 12.5). For these targets more than 40 per cent of the responding enterprises answered “to a high degree” or “to a medium degree”. These results underlines that the Danish focus on sustainability is to a large extend on the climate issues.

Regarding the social elements of sustainable development, the most attention is at gender issues, meaning making society more equal between men and women. This focus is in particular clear as regard reduced pay gap (target 8.5), where 60 per cent on enterprises will work on this issue, which was even higher than the share focusing on greenhouse gas emissions (41 per cent). These results may be affected by the fact that gender issues are relevant for all companies, while CO2 emission is of low importance in some types of industry.

Further results (also shown in Fig. 9) is a high share of the companies has responded, that they are aware about how jobs and training can make their companies more active in creating an inclusive society. Forty-six per cent will work on More educational positions (target 4.4) and 39 per cent has focus at Reduced youth employment rate (target 8.6). This is of high relevance as one out of five in Denmark in the working age doesn’t have a work or are studying. Danish companies could contribute in offering those not employed a new chance to be a part of the labor market.

The lowest ranking target in the social field regards Income growth for low-income groups (target 10.1), where only 20 per cent answer “to a high degree” or “to a medium degree”. This is not surprising as this issue may be considered mainly an issue for collective agreements and general government to take forward, although the single enterprises could take action themselves.

For one of the selected 21 targets covered by the pilot survey, the positive response was very low. Only 2 per cent responded having activities on affordable medicines in developing countries. This response was expected, as the target only makes sense for companies in the medical industry. However, it would have been strange not having the target in the questionnaire. However, this reminds about the difficulty to design surveys relevant for all types of industry.

5.1Strengths

SD has access to a broad range of administrative registers that can be combined across areas, with survey data and with other data sources. This is clearly a strength when developing a new statistical area such as SDG activities of businesses. As the results in the previous chapter show, it is possible to draw a rather detailed picture of the SDG activities among Danish businesses using administrative data without collecting data directly from the businesses. The explorative phase of developing new statistics can thereby be carried out without collecting data from the businesses and thus without additional administrative burden.

This study has benefited from the collaboration with representatives from the business sectors, organizations, academia and authorities. This collaboration organized through a working group not only benefitted the interpretation of the data, but also ensured the stakeholders buy-in to the chosen approach. In addition, in particular the association FSR – Danish Auditors has been deeply involved in the work. The involvement of the business sector in the early phase of the study has not only guided the statistical work, but has also made the formulation of SDG related business statistics a collaborative project between the private and public sector. This is a collaboration that is expected to guide the future work in this area.

5.2Weaknesses

The weakness of using existing data is that this type of data is often only approximations of the official SDG indicators. An example is indicator 12.6.1 Number of companies publishing sustainability reports within the global goal Encourage companies to adopt sustainable practices and sustainability reporting. Not all Danish companies are legally obliged to report this information to a public authority. However, companies within specific size classes have to disclose reports on Corporate Social Responsibility, and the number of these companies will for the time being be used as an approximation of 12.6.1. When such approximations are robust they can be used to monitor the development over time in a given domain within a country. However, with national differences in definitions cross country comparisons may be hampered.

It is not possible to cover all business related SDG indicators within the global goals using existing data. A mean to fill in the gaps is primary data collection among representative samples of businesses. The pilot survey conducted in Denmark in 2019 is an example of this. There are several weaknesses with this approach. Firstly, it is difficult to formulate questions on the importance of the SDG agenda in the business that can be answered objectively. In many cases the businesses’ replies will reflect their strategy or intention and not their actual behavior. Secondly, the assessment of what is sustainable behavior may be based on comparisons with the peers of the business and therefore differs across sectors and changes over time. For instance, in a male dominated sector the self-assessment of a company with only a few women in managerial positions may be that they fulfill a goal of gender equality. If the company operates in a female dominated sector the self-assessment may be that they do not fulfill the goal.

Thirdly, and most importantly, a value chain approach, as applied by the UN Global Compact, should be followed to the extent possible. This implies that indicators on for instance increased use of renewable energy should be answered for the whole value chain the business is part of and not only the local unit participating in the survey. The experience from the dialogue with businesses in Denmark is that it will be very difficult if not impossible for most businesses to provide these value chain related data. Apart from emissions, indicators on gender equality, decent work and responsible production may be costly for the businesses to collect from the value chain and disseminate for statistical purposes.

Finally, it should be noted that sampling may be a challenge. SDG activities come in many forms and may be relevant for all businesses independent of size and sector. Thus, a comprehensive questionnaire and a large sample may be needed to provide robust statistics. This will be a costly exercise for the statistical institutions to conduct and for the business sector to comply with.