Previously I have written about the importance of the healthcare, resource transformation, food and beverage, consumption, extractives & minerals processing, renewables and alternative energy, infrastructure, transportation, and technology and communications sectors to the 17 Sustainable Development Goals (SDGs). The underlying data for that blog are based on a paper “The Relationship Between Investor Materiality and the Sustainable Development Goals: A Methodological Framework” that I wrote with Professors Gianni Betti and Costanza Consolandi of the University of Siena. A summary of our methodology is provided in my healthcare post. In brief, we mapped the 26 material environmental, social, and governance (ESG) issues (organized in terms of the categories environment, social capital, human capital, business model & innovation, and leadership & governance) in all 77 industries organized into 11 sectors, developed by the Sustainability Accounting Standards Board (SASB), to the 169 targets of the SDGs.  Mapping these issues to the SDGs’ targets enabled us to assess how each industry is creating or destroying value for society while focusing on those ESG issues that create value for shareholders. Based on this mapping we created an index that ranges from 0 to 100.

In this post I will analyze the importance of the services sector. It’s overall score is 15.7—compared to 36.0 for food and beverage, 32.6 for healthcare, 30.4 for extractives & mineral processing, 28.4 for resource transformation, 24.2 for technology and communications, 23.8 for renewables and alternative energy, 21.4 for infrastructure, 20.1 for consumption, and 18.1 for transportation—putting it the lowest end of the sectors I have written about so far. There is an enormous amount of variation with this sector of nine industries. At the top end is hotels and lodging (42.4) which is the seventh highest industry reviewed to date after biotechnology and pharmaceuticals (both at 53.7), agricultural products (49.0), food retailers and distributors (46.8), medical equipment (45.6), and meat, poultry, and dairy (45.3). It also has the five lowest rated industries: advertising and marketing (4.7), education (7.4 and tied with tobacco), professional services (8.1), leisure facilities (9.1), and cable and satellite (9.6 and tied with car rental and leasing). In between are cruise lines (29.8) and media production and distribution (17.5).

This sector has its highest impact on four SDGs. The highest rated one is #4 (Quality Education-31.9 [four of seven targets]). The other three are at about the same level: #2 (Zero Hunger-19.4 [five of five targets]), #3 (Good Health and Well-Being-20.0 [nine of nine targets]), and #5 (Gender Equality-20.4 [six of six targets]). The lowest is #11 (Sustainable Cities and Communities-9.4) and all the rest are in the range of 12.0-18.0.  The low rating of this industry is due to the low number of material issues for each of its industries. Whereas there are 11 materials issues for hotels and lodging (in all of SASB’s five broad categories of environmental, social capital, human capital, business model and innovation, and leadership and governance) and nine for cruise lines (in all categories except for business model and innovation) all the remaining industries only have three to five material issues. The issues common to the greatest number of industries are energy management and customer welfare (4) and fair marketing and advertising; employee health, safety, and well-being; and business ethics and transparency (three).

Barcelona hotel sign | GETTY

The hotels and lodging industry (42.4) impacts all 16 SDGs are a level of 25.0 or greater. At the low end are #4 (Quality Education-25.0), #13 (Climate Action-29.4), and #16 (Peace, Justice and Strong Institutions-26.1). The next group up has scores between 30.0 and 40.0: #5 (Gender Equality-38.9), #8 (Decent Work and Economic Growth-37.5), #10 (Reduced Inequalities-36.4), and #11 (Sustainable Cities and Communities- 36.8). Scoring between 40.0 and 50.0 are SDGs #1 (No Poverty-50.0 [five of five targets]), #6 (Clean Water and Sanitation-42.4 [six of six targets]), #9 (50.0 [four of five targets]), #12 (Responsible Production and Consumption-48.4 [four of eight targets]), and # 13 (Climate Action-44.4 [one of three targets]). The highest rated SDGs are #2 (Zero Hunger-60.0 [five of five targets]), #14 (Life Below Water-60.0 [seven of seven targets]), and #15 (Life On Land-61.0 [six of nine targets]). These are among the highest scores across all industries reviewed so far. These numbers are a function of the number of material issues and targets relevant to these SDGs.

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