The challenges of sustainable development in the polycrisis era

Little by little, sustainability is beginning to be seen as the keystone in our societies. It is the central element that holds the complex structure of the world together, and it plays an essential role in distributing the weight of multiple crises which are piling up and feeding off each other. If we dispense with sustainability, this structure would collapse. 

The greatest challenges related with sustainability are twofold. On the one hand, we must apply measures to mitigate and adapt to global warming that will also minimize its impact on the most vulnerable. On the other hand, new socio-economic and production models have to be defined that will improve our relationship with natural ecosystems and provide a solid and fair social base for the future. 

We need socio-economic and production models that will improve our relationship with natural ecosystems

These are the conclusions of the SDG Observatory, an initiative promoted by the Center of LeadershipS and Sustainability of Esade and Fundació ”la Caixa”, in its report on the contribution of Spanish companies to the Sustainable Development Goals. This document monitors the progress of the 2030 Agenda in a context of polycrisis, focusing on the actions of SMEs and listed companies.  

What is the polycrisis? 

The term polycrisis describes a situation in which different, yet interdependent risks occur simultaneously. These risks interact with each other with the result that their joint impact is much greater than the impact they would have individually. The World Economic Forum coined the term at the beginning of 2023, anticipating a scenario characterized by the climate crisis, the scarcity of natural resources, and the deterioration of international cooperation. 

In the last few years, the aftermath of COVID has compounded problems in the global supply chain, the war in Ukraine, the energy crisis, and the loss of biodiversity. Meanwhile, attempts have been made to consolidate the green transition, and new challenges to governance have emerged due to the fragmentation of the world order. In the case of Europe, this turbulent period has undermined efforts to decarbonize and to reflect on the continent's industrial and defense model.  
 

The polycrisis involves the interaction of various risks which have a greater impact than the sum of their parts

 
In a context of polycrisis, volatility and uncertainty increase. The SDG Observatory warns of a growing distrust between global actors at a moment when cooperation is crucial if the progress of the 2030 Agenda is to be consolidated. And although globalization has brought us to this point, its future is uncertain, given that protectionist policies are on the increase and international alliances are being reconfigured. 

The 2030 horizon is critical for defining the global shift in the long term and for establishing a model that ensures sustainability while the polycrisis is managed. One of the most urgent measures is the implementation of alternative formulas for measuring the well-being of societies: in this respect, we find concepts such as degrowth, post-growth and circularity. The objective is that human development should respect the limits of the planet and cease to have a negative impact on the environment.  

Dilemmas of the energy transition 

The Paris Agreement in 2015 represented a milestone in the fight against climate change, with 196 countries signing a legally binding agreement to limit the increase in the global mean temperature to no more than 2oC. Furthermore, the agreement makes it obligatory to periodically provide information about emission levels and national mitigation strategies. 

This is an enormous challenge requiring a comprehensive systemic approach; in other words, the agreement cannot be implemented by means of isolated measures aimed at a single target. On the contrary, an evaluation must be made of the negative impacts that energy transition actions will have in other areas. This interdisciplinary focus, reflected in the SDGs, is necessary in order to deliver a complex transformation that goes beyond changing energy sources. 

Developing countries will need to consume more resources to guarantee the well-being of their population

One of the key aspects highlighted by the report is access to critical materials in order to move towards a decarbonized and digital economy. The growing demand for these raw materials, some of which are concentrated in very specific areas of the planet, may increase current geopolitical tensions or establish alternative centers of power. And although they are not scarce in geological terms, the challenge lies in the difficulties involved in exploiting them. 

On the other hand, implementing a circular economy which seeks to reduce the consumption of resources, use them for longer, reuse them, and prevent them from polluting the environment is one of the key goals of the sustainable agenda. Despite the fact that this model would considerably relieve the pressure on the planet, according to the Circularity Gap Report, the circularity of the global economy has shrunk from 9.1% in 2018 to 7.4% in 2023. 

Moving towards a circular economy is particularly important in rich countries – those that consume the lion's share of global resources. This would give greater leeway to developing countries, which are demanding more and more resources and increasing their carbon footprint, in order to reach levels of industrialization that will guarantee the well-being of their population and the achievement of other equally relevant SDGs. 

Transparency and sustainability

Although the business sector is increasingly embracing the rhetoric of the green transition and the SDGs, the presence of fossil fuel lobbies at events such as COP hinders the ambition and strength of the agreements. The authors of the report warn that shortcomings in the governance model in the fight against climate change may discredit these events and increase polarization around the protection of the planet.  

Beyond decarbonization, few companies develop indicators or specific strategies to evaluate the general impact they have on nature. On the one hand, natural capital is not usually considered in the material aspects of a company; on the other hand, there is a lack of concrete frameworks to measure these impacts, which are not reduced to a specific measurement, as in the case of emissions. 

There are few companies that develop indicators and specific strategies to evaluate their impact on nature

This contrast between narrative and practice results in growing levels of greenwashing on the part of many companies as they seek to position their products. After analyzing various websites with information from companies about their sustainable products, the European Commission found that 50% of them published vague descriptions or misleading messages, or they provided inaccurate information or no information at all.  

In the opinion of the SDG Observatory, as consumers' knowledge of sustainability increases and companies adopt solid commitments, there will be fewer opportunities for mass communication that is not very clear on the subject of sustainability. Moreover, legislative initiatives are being implemented to ensure that large companies are subject to greater accountability in their non-financial information reports.