A two-part session on Thursday afternoon explored sustainability context through examining the evolution of corporate sustainability goals, and case studies from leading companies proactively applying it to their goal-setting processes.
First, Sustainability Context Group co-founder Bill Baue — moderator of both parts — led a discussion on the state of corporate sustainability goals and equipping companies with practical advice on how to incorporate context.
Baue started by explaining the concept of context — which calls for assessing “the performance of the organization in the context of the limits and demands placed on environmental or social resources at the sector, local, regional or global level” — and raised the question: “Where are we now in sustainability and where are we going?”
Panelist Mark McElroy, founder & Executive Director of Center for Sustainable Organizations, further explained the necessity for Context Based Sustainability (CBS) in environmental goal-setting, as well as the need to turn to climate science for thresholds, to then devise a way to apportion them to organizations. A new CBS method, the MultiCapital Scorecard (MCS), which Ben & Jerry’s has just adopted, puts Trajectory Targets (interim goals) and Triple Bottom Line concerns in scope and assessing performance relative to both final (Sustainability Norms) and interim (Trajectory Targets) goals.
Next, Bob Willard picked up where his morning plenary presentation left off, further explaining The Future-Fit Business Benchmark — which defines the science-based, minimum acceptable levels of environmental and social performance that a company must reach if it is to be truly sustainable and fit for the future — and expanding on the 21 Key Performance Indicators (KPIs) for businesses. Social KPIs were divided into 5 categories (Employees, Community, Customers, Investors and Suppliers, & Partners) and Environmental KPIs included Energy, GHG, Water, Materials, Products, Waste and Land. A company’s Future-Fit performance on these KPIs ensures its environmental and social impacts do not contribute to the issues.
New Metrics '14!
Andrew Winston, author of The Big Pivot, engaged the audience with the latest updates from the PivotGoals Data introduced at SB’14 San Diego in June, and emphasized that 75 percent of Fortune 200 companies now publicly share sustainability goals. Echoing McElroy’s and Willard’s insights, Winston divided these goals into two categories: Science-equivalent — what external thresholds would demand for some large part of the business (not the full value chain); and “Future Fit” compatible — moral, ethical, or based on a flourishing model, but not technically ‘science-based.’ Winston encouraged the audience to track companies’ sustainability goals online on PivotGoals.com, and feedback from the audience was to track these goals periodically to see if companies were successful meeting these goals.
Then Cynthia Cummis, Deputy Director of GHG Protocol at the World Resources Institute (WRI) introduced the science-based target-setting framework it developed in partnership with CDP and WWF, which aims to raise the ambition of corporate GHG reduction targets to support a transition to a low-carbon economy and keep the planet below a 2-degree temperature rise. She then explained how WRI’s Sectoral decarbonization approach (SDA). — a sector-specific decarbonization pathway based on the 2ºC carbon budget, expected sector activity and mitigation potential — aims to engage the leading multinational companies to set science-based emissions reduction targets by the end of 2015, and demonstrate to policy-makers the scale of ambition among leading companies to reduce their emissions and act as a positive influence on international climate negotiations.
After a round of audience questions and a short networking break, Baue returned with a fresh set of panelists to delve into case studies from EMC, Cabot Creamery and Autodesk, detailing each company’s experience incorporating sustainability context into their efforts.
“We’re in transition from incremental goals towards more ambitious goal-setting that takes the larger context of ecological limits and social impacts into consideration,” Baue said.
Emma Stewart, Head of Sustainability Solutions for Autodesk, kicked things off the three reasons her company got into science-based goal setting.
“As an environmental scientist, I’d never seen the level of consensus and clear guidance that we have on climate science,” she said. Secondly, she found the current practices around goal-setting to be “ripe for disruption” due to short-term timeframes and guesstimate benchmarking that would “save the climate, but 39 years too late.” And finally, rising regulations expectations beginning to affect Autodesk’s customers opened an opportunity to be more responsive to their needs.
This analysis led Autodesk to build C-FACT (Corporate Finance Approach to Climate-Stabilizing Targets), a science-driven method for setting GHG emissions reduction targets against real-world limits, which Autodesk has since made freely available to all companies.
EMC’s Chief Sustainability Officer, Kathrin Winkler, spoke next about her company’s role as one of the first to set a carbon-reduction goal with the EPA climate leaders program. They hit that initial goal and then moved on to setting, and achieving, better ones for 2012, 2015, 2020 and 2050. Winkler described how the company has customized its glidepath for achieving its carbon stabilization goals, based on the C-FACT model, and cautioned that flexibility is key to meeting future challenges.
“The thing with absolute goals is that they kind of lock you into a mindset, and depending on what happens with climate science, business might need to do more,” she said.
Up next was Jed Davis, Cabot’s Director of Sustainability, who shared his company’s context-based sustainability journey as a nearly 100-year-old Vermont-based cooperative with 1,200 dairy farm families. He described the company’s sustainability motto — “Living within our means, Ensuring the means to live” — as a “straightforward way of baking in context-based sustainability that implicitly is about respecting some thresholds and limits.”
Baue and the panel then fielded inquiries from the room about how CBS and C-FACT can be applied to resources other than carbon (as Cabot is doing for water), material traceability, and for small businesses and cities. Stewart noted that the City of Palo Alto has just adopted C-FACT as its baseline target, as Autodesk customized the methodology for cities earlier this year.
Winkler shared another example of when context involves a company setting its own thresholds. Most hardware IT companies set goals for materials take-back in terms of tonnage, she said, but a better question to ask is: “How much are we getting back in terms of what we put out? Making e-waste isn’t the goal. The point is to create a closed loop. In this case, you set the threshold.”
The session closed with plenty of questions left to ask about ambitious sustainability targets and practice, but with a clear sense that setting real-world science-based goals is no longer just a possibility, but an imperative.