By Shiue-Chuan Wang & Jerry Hung, Senior Partner and Associate of Formosan Brothers Attorneys-at-Law

The Sustainable Development Goals (SDGs), adopted by the United Nations in 2015, call for industries to join in the social responsibilities to tackle global issues relating to our society and the environment. Among which are 17 goals and 169 targets, including affordable and clean energy, responsible consumption and production, and gender equality. Yet under the uncertain pandemic, how social responsibilities could go hand in hand with business growth is a new topic worth exploring.

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The impact of SDGs on Taiwanese corporates

In order to pursue economic growth, environmental protection and social responsibility in a sustainable way, many companies in Taiwan have incorporated the SDGs into their products and services. When incorporating the SDGs, there are two things that companies care about the most: First, due to the increase in production costs, companies that implemented the SDGs need to price their products and services higher than others, resulting in a direct impact on their competitiveness. Second, to reach the SDGs goals, companies may spend excessive effort on matters not of their expertise, possibly losing their concentration on the corporate mission and goals.

With respect to the two aforesaid concerns, although there have been researches showing that consumers would still choose to purchase products or services from social enterprises that implemented the SDGs because of their goals, and that social enterprises may not necessarily lose profits or businesses over the fact that they implemented the SDGs. However, how companies can find their unique values and plan the process to improve them with the addition of the SDGs has become the greatest task for social enterprises.

Take Apple for example. In order to ensure high quality of products, adherence to laws and regulations during production, and commitment to social responsibilities, Apple requires its suppliers to adhere to the “Apple Supplier Code of Conduct.” If a supplier reached a certain level of standard in terms of labor rights, health and safety, and environmental protection, Apple would continue to cooperate with such a supplier. However, if a supplier cannot meet or refuses to meet such standards, it would then be expelled from the “Apple supply chain.” To be a part of the “Apple supply chain,” in addition to incorporating SDGs, companies need to have mostly the same goals as Apple.

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Role of the government

In response to the requirements of the SDGs, in August of 2018, Taiwan government employed the new economic model of “innovation, employment, and distribution,” which strengthens international connections and promotes inclusive growth in the economic, social and environmental aspects, and had the Executive Yuan and its subordinate ministries implement the “Social Innovation Action Plan.” According to the Executive Yuan’s website, social innovation is, “through the innovative application of technological or business models to change the interactions among groups of a society and, through such changes, to find a new way to resolve social problems, that is, to solve social problems with innovation.” In addition to promoting the concept of social innovation and deepening such concepts among its citizens, the government’s most important task lies in helping companies participate in social innovation in response to the requirements of the SDGs. Therefore, the government needs to establish an inter-ministry platform to provide incentives for businesses to comply with the SDGs.

With respect to the impact of the COVID-19 pandemic on the SDGs, the UN indicated in its report that, besides the impact of the pandemic on the poor and marginalized populations, in the post-pandemic era, using technology and enterprise power to strike a balance between sustainable development and disease-prevention, that is, to maintain economic development with limited resources under the premise of protecting public/employee health, is the most important task of all countries. In Taiwan, due to our government’s swift action in taking preventive measures, the pandemic’s impact is smaller. Hence, businesses can take the opportunity to look into their industry chain and make necessary improvements to meet the SDG requirements in order to enhance their international competitiveness. The government should also provide active assistance and subsidies to businesses to further Taiwan’s economic growth and enhance its international visibility.  

(This article was published in the Expert’s Commentary Column of the Commercial Times. https://view.ctee.com.tw/business/28708.html)

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