Following the ratification of the Paris Agreement last fall, companies have become increasingly aware of the need to adopt strong sustainability strategies that have the ability to create real, meaningful change. But to do so requires starting from a solid foundation, one that is informed by a company’s core sustainability challenges and an understanding of planetary boundaries. Science has defined and measured some of the most pressing sustainability issues facing the world today, providing an indispensable tool that can help businesses set targets that both address their most significant impacts and work towards keeping the climate within 2°C.
SB'17 DetroitScience is the backbone of sustainability consulting firm Quantis, which uses science-based metrics to help companies to define, shape and implement intelligent sustainability solutions. The company is helping drive the paradigm shift away from benchmarking to a metrics-based framework that assesses what the planet can support and defining the necessary sustainability targets. Here, Quantis CEO Emmanuelle Aoustin discusses how science-based targets can empower businesses in their transition towards a more sustainable, resilient future.
SB: What does it mean to set a science-based goal?
EA: We are currently undergoing a paradigm shift in goal-setting. Up until now, companies have had difficulty defining what their reduction targets should be. They often set targets that were achievable given available technologies or best practices — we know we can reduce our energy consumption by 10 percent, so let’s set a target to reduce consumption by 10 percent within the next five or 10 years — or they set goals that were incremental, something in line with what they’ve already done. Benchmarking was another way companies would set their goals, taking a sectorial approach and setting goals in a similar way to their peers.
This way of setting targets is somewhat arbitrary and has resulted in a lot of discussion and argumentation in the boardroom about why goals are being set for 15 percent rather than 10 or 20 percent, instead of focusing on what the solutions should be to get there. This was and still is how many companies set their sustainability goals.
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With science-based goals, we get this paradigm shift and the focus is now on a much bigger framework. Companies want to operate in a sustainable world and their objective is to be resilient in such a world. The big question, then, is how can companies be an integral part of that? And the idea is to appropriately set goals that allow companies to operate in that space, within that framework.
When we talk about science-based goals, we are talking about using science to define what the planetary boundaries are. If we take the example of climate change, scientists tell us that the limit we have to target is a 2°C increase, or potentially even lower than that. Scientists are currently working to identify those planetary boundaries for other topics, such as land use change, water availability, eutrophication, biodiversity.
SB: There are so many things companies can do to bring about change. How can they determine which impacts are most important for their business?
EA: It’s true that companies are sometimes overwhelmed by the number of topics that are out there. There are two ways Quantis supports companies in identifying what is most important and what they should target first. Materiality assessment allows you to identify what is material for the both internal and external stakeholders. The other approach is to measure your corporate footprint and hence identify where hotspots lie in your value chain.
This second approach is science-based. Doing your corporate footprint allows you to identify your hotspots with a scientific approach, by looking at multiple indicators and then narrowing down to those that are contributing the most.
It is also important to take a complete value chain approach, ensuring you take account of your supply chain or the use phase of your product as well, so that you focus on what really matters within your value chain.
SB: How does Quantis help businesses set science-based goals?
EA: The first step is to make the company understand what the topic is about. It’s usually a primary discussion with a sustainability manager followed by awareness-raising sessions with C-level members, where we help them understand this new approach to setting goals and its business value. This step is really about building awareness and generating buy-in from top management.
The next step is to do a quick gap analysis to find out a company’s current footprint and targets and how they fit within the science-based goal-setting framework — determining how far away they are from being on track. Companies might be on track, but for a very short timeframe. Science-based goals require extending your timeframe for a longer period. So, if you’re working on a 2015 baseline, you want to set targets for 2030, which can be a hard thing to do for companies when they have four or five-year strategy plans.
Then, we enter into a phase of iterative work with different parts of the company, suppliers included if they if they are a big part of a company’s footprint. Together we define the science-based goals to be managed by them. We’re not just setting one big goal for the company, but rather setting goals that are adapted to the different business units or parts of the company.
It is here that we also enter into the action plan discussion, asking what needs to be done to achieve these goals by 2030 or by 2050, what action plans are currently being implemented and how much can be done with what has already been invested. We also explore what available technologies can help us go one step further and close the gap and what we will need to work on in the coming years. These are discussed in workshop settings and help generate the buy-in, willingness and team engagement needed to work on these efforts.
The final part is the communication and deciding what the narrative will be to explain to stakeholders how those goals and action plans fit together with the company’s business model and strategic decisions.
You have to continue to measure year after year how much you’re progressing towards those goals and recalculating goals if the company is going through big changes.
SB: Do you find often that corporate footprinting and materiality assessments reveal a discrepancy between what companies think their goals should be and what they should actually be focusing on?
EA: Yes. It’s really eye-opening for them. Science-based goal-setting shows where companies are most off-track. There is usually a discrepancy between where they thought they were and where they should be. But it also shows that they may need to work at a different speed or change gears.
The approach also helps bring the topic of sustainability up the hierarchical ladder. Sustainability teams are often fighting to be heard or understood and they are getting push back on the goals they are setting. But with science-based goals, sustainability and resilience is hardwired into a company’s business strategy and business model. The Science-Based Targets Initiative — it’s a CEO-level commitment, so there is a shift up to the boardroom, which is helpful in unlocking investment money and ensuring efforts are allocated appropriately to achieve targets.
SB: Reducing carbon emissions is a top priority, but reducing impact goes beyond measures of CO2. How does a science-based approach help businesses reduce impacts in other areas, such as water scarcity and land-use change?
EA: While the methodologies to define science-based goals are available for climate change, they are still in the research stage for these other topics. At the moment, it is easier to address the topic of climate change as opposed to other topics such as water scarcity, land use and biodiversity because it has a global impact, while the others have local or regional impacts. This is why methodologies are still in the process of being developed for these topics.
However, some companies are already using these early-stage methodologies in partnership with academia or Quantis to define science-based goals. Companies such as Mars, for example, are working on defining their water and land use goals, as they are as important to them as climate change. Another example is our work with L’Oréal, which is using early-stage methodologies to shape goals on topics other than climate change.
SB: The environmental benefits of a science-based targets approach are clear, but what about the business case for this approach? What sort of business benefits does this approach offer companies?
EA: I don’t think it’s a question of whether companies should or should not engage in science-based goal-setting — this is really the appropriate approach to setting goals. But there is a benefit in the fact that these targets are not arbitrary, meaning C-level discussions are no longer focused on whether the target is relevant, but rather on finding solutions and creating action plans.
There is also the benefit of setting the internal motivation right in the company. When you tell people in the company that you need to reduce energy consumption by 20 percent because of cost-cutting, for example, you might not get as much buy-in as when you say that you are reducing energy consumption to create a more resilient future for the company and its different stakeholders. By explaining the overall picture, you can generate more buy-in internally.
Science-based targets generate momentum, something that we’ve actually been acknowledging in the companies we’ve been supporting. They allow companies to define action plans and put them into context, identifying what investments are needed and pointing out what they don’t know and where they will have to work faster than planned.
SB: How can this approach help companies create a consistent sustainability narrative and communicate what they’re doing to consumers, investors and other stakeholders?
EA: In terms of narrative, it’s about leadership and changing the focus of the conversation.
Companies want to show that even though those goals are complex and potentially difficult to achieve, that they are taking them seriously. They are committed to addressing them and they will get there. It’s a bit of a sectorial benchmark. As a company, you want to show that you’ve understood and you want your stakeholders to hear your story and see that you’re making decisions to get there. Science-based goals really allow you to explain how the different decisions and action plans fit together.
In terms of changing the focus of the conversation, science-based targets shift the conversation away from should we set the target higher or lower to how are we going to get there. They also support big decisions and allocation of resources, as well as the launch of new businesses and investments. They help allocate the needed resources and investments in a company towards what will be a business tomorrow.