[Special Feature: Sociality of Corporations in the SDGs Era] Mitsuhiro Umezu: SDGs in 2022 and Their Implications—Hesitations from the Perspective of Business Ethics

2022/06/06

It has been a long time since the SDGs began to be widely featured in society. This movement has gained such momentum that, along with ESG investment, it is now addressed as a critical issue in all kinds of organizations across society, including not only corporations but also government administrations, NGOs/NPOs, and educational institutions. Even in the midst of the COVID-19 pandemic, I feared that criticisms such as "Is this really the time to be talking about CSR and SDGs?" would erupt, but those fears were entirely unfounded. Rather, it is no exaggeration to say that there is not a day when the topic of SDGs is not featured in the media, whether in newspapers or on television.

However, this is not merely a temporary boom fueled by the mass media. It is because the 17 goals proposed by this movement represent essential, universal, and ultimate objectives that humanity should aim for in the medium to long term for its survival. Furthermore, it is fair to say that the significance of the SDGs is highly regarded by scholars and experts worldwide. I have specialized in research on business ethics and Corporate Social Responsibility (CSR) theory. Invited by my mentor, who was my doctoral advisor at a graduate school in the United States, I have been involved since the drafting stages of the SDGs and its predecessor, the UNGC (United Nations Global Compact), as well as its sub-domain, PRME (Principles for Responsible Management Education). I have been involved in these UN-related movements for nearly 20 years.

The 17 goals of the SDGs are summarized in very colorful and easy-to-understand language, but a goal is an ideal normative proposition (what things ought to be) and possesses a character independent of factual propositions (what things are) that can be scientifically verified. Since the rise of positivism, factual propositions that allow for empirical observation and verification have been respected in the academic world, and there has long been a tendency to avoid discussing normative theories or "oughts" centered on the language of ethics. My own fields of expertise, such as business ethics, CSR, and compliance, have also been subjected to all kinds of criticism, skepticism, neglect, and disdain under the label of being "philosophical." Seeing the significance of these normative propositions finally being re-evaluated feels like a different era entirely, and as someone retiring at the end of this academic year, I am filled with deep emotion.

Just as I was soaking in the emotional sentiment of being able to witness the rise of the SDGs—the ultimate professional satisfaction at the end of my life as a researcher—an unthinkable situation occurred. It was the Russian invasion of Ukraine in February 2022. I never imagined that in this year, more than 20 years into the 21st century, I would witness outrageous war crimes, the slaughter of civilians in defiance of humanity, and mass destruction that makes one want to look away. I believe this act is a reckless move that instantly subverts the normative paradigm regarding peace and world order that the world has gradually built since the latter half of the 20th century.

Furthermore, what I am concerned about is that public opinion may tilt toward a more authoritarian Machiavellian way of thinking—centered on military and coercive force—fundamentally denying the frameworks of humanitarian social contribution and international cooperation based on goodwill, such as the SDGs, which had finally gained momentum. To begin with, the helplessness of the United Nations, which led the SDGs, is also being criticized. Angry voices have exploded, asking if there is any point to a UN that can do nothing against Russia's outrages, and a tone can be seen here and there that risks dismissing the SDG movement itself as the naive nonsense of the UN.

The United Nations is an organization established after World War II for the purpose of "international peace and security" to prevent such a great war from happening again. However, as you know, because five of the Allied nations that were the founding entities became permanent members of the Security Council and hold veto power over all resolutions, including amendments to the UN Charter, the organization constantly falls into a state of dysfunction where it cannot put anything into action. Therefore, the fact that there are problems with the UN was a well-known fact even before this recent outrage. While the UN's reputation is decent in Japan, this is why it is referred to in places like the United States as "the world’s largest bad joke."

It is only natural that UN reform has become an essential task due to this invasion of Ukraine. One cannot overemphasize the abnormality of a nation that commits war crimes sitting as a permanent member of the Security Council, while the world remains unable to do anything about this outrageous situation. However, it would be short-sighted and inappropriate to discard the SDG goals that the entire world has aimed for as a common challenge just because of the foolish act of one megalomaniacal dictator; it must not happen. We must not hastily "throw the baby out with the bathwater." Now is also the time to reflect on the words "The pen is mightier than the sword," which is the origin of the emblem of Keio University, and the biblical words "All who take the sword will perish by the sword" (Matthew 26:52). We should not forget that words of such spirit have the power to live and work in people's hearts across eras, and they possess a truly sustainable power that cannot be destroyed by tanks or missiles.

In fact, the SDGs have a background linked to UN reform. Their direct predecessor was the MDGs (Millennium Development Goals). These were a set of eight goals to be achieved between 2000 and 2015 at the start of the 21st century. While the MDGs were primarily goals for developing countries to work on, the SDGs call for the participation of all UN member states, and the number of goals has been expanded to 17.

Furthermore, the UNGC (United Nations Global Compact) was launched at the same time as the MDGs. This was established at the start of the 21st century under the leadership of then-UN Secretary-General Kofi Annan. Its characteristic feature was that it sought participation not just from UN member states, but also from private organizations such as multinational corporations and NGOs/NPOs. It is thought that there was a hidden motive to reform and revitalize the deadlocked UN by incorporating the business sector into UN activities.

This is evident in the fact that the announcement of the UNGC was made at the World Economic Forum (Davos) in January 1999, where it first appealed to the world's business leaders for a code of conduct and compliance to create a "world market with a human face." In fact, because the resolution at the UN General Assembly took place the following year in 2000, it was sometimes criticized as the Secretary-General acting on his own. However—and this may be just my personal view—one can see the intention of the UN Secretary-General to highly evaluate the then-rising business ethics movement and use it as a catalyst for UN reform.

The UN's objectives of world peace, security, and issues like poverty and hunger are the aspirations of the entire world. However, these were proposed based on the foresight of former Secretary-General Annan, who realized that the UN, as a political union of nation-states, could not reach effective solutions and could not achieve them without the understanding and cooperation of private companies, especially as economic entities. Since the launch of the UNGC, many principles that consider social responsibility in corporate management and management education have been adopted as individual sub-programs, such as the PRI (Principles for Responsible Investment) and the PRME (Principles for Responsible Management Education), which I have been involved in. From the planning stages of the SDGs as the successor to the MDGs, many business professionals and management scholars became involved. In Japan, while the predecessor MDGs lacked momentum, the current rise of the SDGs is remarkable. This is because of the support from many businesses, consultants, and advertising agencies; it is clear how attractive, colorful, and effective public relations become when the power of business is enlisted.

There is criticism that incorporating the business sector into the UN, which was originally led by the victorious nations of the war, is a contradiction. However, if I may be so bold, the attempt to change an organization or society from within by incorporating seemingly contradictory premises into thought or organization is itself a modern method of deconstruction. It is similar to the attempt of business ethics to "charge" business with ethics.

The SDGs incorporate knowledge and energy from the private sector, specifically the business sector, but this was no easy feat. This is also something not well known in Japan, but the UN as an organization was somewhat cold toward business. This was due to the typical prejudice against business held by people in the government sector, NGOs, and NPOs. They would say, "Business people are a bunch who only think about selfish money-making and cannot be trusted."

It is true that business has the aspect of being a for-profit organization. However, the theory that business only thinks about its own profits, or that shareholder profit should be the top priority, is the "myth of unethical business" that business ethics has always fought against, and it is already a thing of the past in the modern era.

Specifically, matters seen in SDG Goals 7, 8, and 9 were items not present in the MDGs, and they are business-like in a way that was not present in the previous anti-business ideas of the UN. While it is true that mutual support between governments and economic cooperation are indispensable for overcoming challenges such as poverty and hunger, that alone is insufficient. When it comes to the practical implementation of specific aid, it would not have functioned at all without the help of non-profit organizations like NGOs and NPOs, or the QUANGOs (quasi-autonomous non-governmental organizations) sector.

Why were corporations not allowed into such circles? It is thought that the aforementioned "myth of unethical business" had a negative impact. However, to overcome poverty, aid alone is not enough; the solution lies in creating industries in the relevant countries and regions and promoting independent economic activities. Business is the only engine that generates wealth independently and efficiently. Neither governments nor NGOs are adept at generating wealth independently, and they are organizations unfamiliar with operating efficiently. Without productive capacity, regions and countries cannot escape poverty, and at the same time, without someone continuing to generate wealth, sustainable development and support are impossible.

On the other hand, business itself has been liberated from the spell of the "myth of unethical business" over the past 20 years and has been putting effort into CSR and other initiatives. In Japan, 2003 was called the "First Year of CSR," and since then, CSR promotion departments have been established in many companies. Recently, Sustainability Promotion Departments have begun to summarize their activities in "Integrated Reports." Although we are still halfway there, the collaboration between government, business, and NGOs, known as the "Tri-Sector Alliance" specified in SDG Goal 17, is also progressing.

That said, tri-sector collaboration is not as easy as it sounds. The government sector aims for public safety and welfare, with resources provided by taxes from business and citizens; the business sector is adept at efficiency but doesn't quite grasp the concept of public welfare; and the non-profit sector practices welfare specialized in specific areas but neither produces wealth nor considers efficiency. Because these three sectors have grown based on different ideological premises and have carried different expertise, even if they are suddenly told to collaborate and cooperate, things will stall in a three-way confusion. I believe the SDGs provide an answer to this.

That is the teleological approach. The teleological way of explanation can be traced back to Aristotle's theory of the four causes. According to Aristotle, scientific knowledge is the pursuit of causes, and there are four elements that explain a cause: the formal cause, the material cause, the efficient cause, and the final (teleological) cause. Only by explaining all of these can it be called true knowledge. These are all ancient Greek ideas, and they may be completely incomprehensible to modern people. Trying to explain things only with the formal cause leads to idealism; only with the material cause leads to materialism; only with the efficient cause leads to mechanism; and only with the final cause leads to a teleological explanation. Modern scholarship tends to consider materialistic and mechanistic explanations as true explanations, and neither idealism nor teleology has been highly valued.

However, in recent years, the question "What is the ultimate purpose of the matter?" has been regaining strength. In recent management literature, titles such as "Purpose-Driven Management" are frequently seen. This can be said to be a revival of explanation based on teleology. Teleology is a uniquely human way of explanation involving human intentions and motives. At the same time, it has been found to vividly drive humans toward collaborative work and produce psychological effects such as a sense of achievement and fulfillment. In contrast to this is the natural-scientific, physical-imperialist explanation, which is based only on material and efficient causes. This is a mechanistic way of explanation that attempts to explain things automatically through the mechanical interlocking of inorganic matter and chains of causality, independent of human intention. There is a methodological bias there that tries to exclude free elements such as human intention and purpose as much as possible.

That said, while it is naturally difficult to scientifically accept explaining the movement of matter through some internal intention as it is an anthropomorphic explanation, it is also naturally impossible to try to explain the movement of human society only physically and mechanistically. This is because human actions have parts made possible by internal mental activities such as intention, motivation, and purpose—by free will. It is a fact that throughout the 20th century, there was a movement to deny these internal human mental activities in the name of science to explain social phenomena, and I believe this has brought immeasurable harm to the academic world.

It is impossible to try to move a large organization like the UN only through "carrots and sticks" such as political power and economic interests. Furthermore, if we try to solve critical issues such as world peace and environmental conservation only through political dynamics, the danger of triggering military actions like the current one is unavoidable. While the worldview of material mechanism has realistic persuasiveness, I believe the significance of finding common ground once again through spiritualism and teleology, and for various sectors to collaborate from a medium- to long-term perspective to carry that out, is important even without waiting for the SDGs.

As of early May 2022, when I am writing this manuscript, the fighting in Ukraine continues. Facing such a situation is the second such experience for me. The first was in 1990, when I began teaching at an American university and the first Gulf War broke out. At that time, I was lecturing at Northwestern University in the suburbs of Chicago, and I was somehow cast in a role like a faculty member representing Japan. American students would press me in the classroom, asking, "Why doesn't Japan participate in this war?" I desperately defended our position, saying, "Japan has Article 9 of the Constitution, which is a pacifist clause..." but the students' reaction to that was very simple and direct: "Then why don't you amend Article 9?" Later, I returned to my home country, Japan, and was fortunate enough to teach at Keio University. Despite my lack of talent, I have tried to speak about business ethics and corporate social responsibility in my own way, believing in the power of ethics—that is, believing in the power of the human spirit and goodwill. More than 30 years have passed since then, and I find myself facing a similar situation again. These days, the lyrics of the Juku-ka, "Though the goal be far away," resonate deeply within me.