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SUSTAINABLE DEVELOPMENT
GOALS, BUSINESSES AND THE
ROLE OF INDUSTRIAL POLICIES
Measuring Progress towards Inclusive and Sustainable Growth in Japan
Guy Lalanne, 24 April 2023
• The attainment of the SDGs will require
significant effort, including from the
private sector.
• Sustainability is increasingly considered
as a business opportunity
– Growing momentum to align activities with
sustainability (CSR, ESG, impact investing,
green finance …).
– Consumers are increasingly concerned with
the impact of firms’ activities
Firms have a large potential to contribute to the SDGs
Distance to the SDGs for OECD regions
Although firms have the potential to address a wide
range of SDGs, they also face obstacles – leaving room
for governments to design industrial strategies to
foster the contribution of firms to the SDGs.
Source: OECD, 2020
Firms can address the SDGs through their core
business activities
Economic activities linked to the SDGs, as a share of total value added, 2015
Results pertain to averages in a sample of countries comprising of: (Canada, Denmark, Japan, Korea,
New Zealand), Source: OECD (2021), Industrial Policies for the SDGs
• Mapping economic
activities and SDGs using
Natural Language
Processing, combined with
value added data.
• Highest share of economic
activities linked to SDG 9,
but also SDGs 3, 8, 11 and
12.
Firms also address SDGs through non-core business
activities
SDGs and their relationship with firms’ core business
Source: OECD (2021), Industrial Policies for the SDGs
Firms face obstacles to contribute to the SDGs, in
particular SMEs
Source: OECD (2021) based on 2020 UNGC Survey
Likelihood of very large firms (>50,000 employees) declaring taking
action on the SDGs compared to small firms (<250)
• Very large firms
(>50,000) are more
likely to take action on
SDGs 2, 4, 5, 7, 8, 9, 11,
13, 16 and 17 than small
firms
• Very large firms
(>50,000) are 12.5 times
more likely to take
action on Goal 13.
Using sustainability reports? Meaningful information
or ‘SDG-washing’? SDG 5 – Gender Equality
• Sustainability reports contain self-
declared information. Is this
information reliable to monitor firms’
SDG orientation and related actions?
• Do firms mention more SDG5:
– In more equal countries (‘low-hanging fruit
hypothesis’), or
– In more unequal countries (‘significant
concerns hypothesis’)?
• Results are driven by partner economies
Impact of increasing the women to men secondary
education ratio from the 25th to the 75th percentile of the
distribution on the prevalence of SDG 5
Note: Based on a negative binomial regression run a sample of 9 343 standalone reports from 3 109
firms over 2009-2018.
Source: Authors’ calculations based on UNGC data.
Governments are using diverse sets of policies to
support firms with respect to the incentives the SDGs
Number of instruments collected, by target SDGs and policy instrument type
Note: Numbers in the bars refer to the number of policy instruments collected in 2021 for the policy benchmarking
exercise of Canada, Costa Rica, the European Union, France, Germany, Japan, Korea and New Zealand.
Source: OECD (2021)
• Policy benchmarking
survey on 7 countries
and the EU conducted
in early 2021.
• 173 policy instruments
collected, some of them
bundled into strategies
• Heterogeneity in types
of instruments used for
targeting different SDGs
• Besides regulations and taxes, industrial policies including
government assistance and rewards & incentives are needed to
support the contribution of firms to the SDGs
– Support to the development of SDG-related sectors and to innovation in these sectors
(e.g. innovation subsidies [Horizon Europe], SDG Awards [SDG Accelerators Award,
Canada])
– Support to other firms, especially SMEs (e.g. resources [Support to women
entrepreneurs with export potential, Costa Rica], grants to start-ups [C-Prize in New
Zealand])
• Increase the market size for sustainable products (e.g. trade
policies, public procurement [Eruboshi certification, Japan])
• Governance is key (mission-oriented policies [Korean new Deal]).
Industrial policies can help foster the contribution of
firms to the SDGs
https://www.oecd.org/sti/ind/industrial-policy-for-sdg.pdf
Thank you for your attention!

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Measuring Progress towards Inclusive and Sustainable Growth in Japan, Guy Lalanne

  • 1. SUSTAINABLE DEVELOPMENT GOALS, BUSINESSES AND THE ROLE OF INDUSTRIAL POLICIES Measuring Progress towards Inclusive and Sustainable Growth in Japan Guy Lalanne, 24 April 2023
  • 2. • The attainment of the SDGs will require significant effort, including from the private sector. • Sustainability is increasingly considered as a business opportunity – Growing momentum to align activities with sustainability (CSR, ESG, impact investing, green finance …). – Consumers are increasingly concerned with the impact of firms’ activities Firms have a large potential to contribute to the SDGs Distance to the SDGs for OECD regions Although firms have the potential to address a wide range of SDGs, they also face obstacles – leaving room for governments to design industrial strategies to foster the contribution of firms to the SDGs. Source: OECD, 2020
  • 3. Firms can address the SDGs through their core business activities Economic activities linked to the SDGs, as a share of total value added, 2015 Results pertain to averages in a sample of countries comprising of: (Canada, Denmark, Japan, Korea, New Zealand), Source: OECD (2021), Industrial Policies for the SDGs • Mapping economic activities and SDGs using Natural Language Processing, combined with value added data. • Highest share of economic activities linked to SDG 9, but also SDGs 3, 8, 11 and 12.
  • 4. Firms also address SDGs through non-core business activities SDGs and their relationship with firms’ core business Source: OECD (2021), Industrial Policies for the SDGs
  • 5. Firms face obstacles to contribute to the SDGs, in particular SMEs Source: OECD (2021) based on 2020 UNGC Survey Likelihood of very large firms (>50,000 employees) declaring taking action on the SDGs compared to small firms (<250) • Very large firms (>50,000) are more likely to take action on SDGs 2, 4, 5, 7, 8, 9, 11, 13, 16 and 17 than small firms • Very large firms (>50,000) are 12.5 times more likely to take action on Goal 13.
  • 6. Using sustainability reports? Meaningful information or ‘SDG-washing’? SDG 5 – Gender Equality • Sustainability reports contain self- declared information. Is this information reliable to monitor firms’ SDG orientation and related actions? • Do firms mention more SDG5: – In more equal countries (‘low-hanging fruit hypothesis’), or – In more unequal countries (‘significant concerns hypothesis’)? • Results are driven by partner economies Impact of increasing the women to men secondary education ratio from the 25th to the 75th percentile of the distribution on the prevalence of SDG 5 Note: Based on a negative binomial regression run a sample of 9 343 standalone reports from 3 109 firms over 2009-2018. Source: Authors’ calculations based on UNGC data.
  • 7. Governments are using diverse sets of policies to support firms with respect to the incentives the SDGs Number of instruments collected, by target SDGs and policy instrument type Note: Numbers in the bars refer to the number of policy instruments collected in 2021 for the policy benchmarking exercise of Canada, Costa Rica, the European Union, France, Germany, Japan, Korea and New Zealand. Source: OECD (2021) • Policy benchmarking survey on 7 countries and the EU conducted in early 2021. • 173 policy instruments collected, some of them bundled into strategies • Heterogeneity in types of instruments used for targeting different SDGs
  • 8. • Besides regulations and taxes, industrial policies including government assistance and rewards & incentives are needed to support the contribution of firms to the SDGs – Support to the development of SDG-related sectors and to innovation in these sectors (e.g. innovation subsidies [Horizon Europe], SDG Awards [SDG Accelerators Award, Canada]) – Support to other firms, especially SMEs (e.g. resources [Support to women entrepreneurs with export potential, Costa Rica], grants to start-ups [C-Prize in New Zealand]) • Increase the market size for sustainable products (e.g. trade policies, public procurement [Eruboshi certification, Japan]) • Governance is key (mission-oriented policies [Korean new Deal]). Industrial policies can help foster the contribution of firms to the SDGs