Imagine that you arrive to take your first flying lesson. The instructing pilot asks, “How much fuel do you guess we should put in the tank?” You think: “Guess? Come again? Shouldn’t we calculate the distance between where we are and where we are going, and then determine the fuel needed (and add in some extra fuel for peace of mind)?”
Yes. And the same is true for sustainability goals.
For the great majority of the Fortune Global 200, sustainability goals appear to be based on incremental improvements and/or what the company thinks it can easily do, rather than where the company needs to go.
Sustainability goals must be based on the gap between the starting point and the destination and identified by the leading science or ethics relevant to the goal, such as IPCC goals for GHG reductions, or management-diversity goals based on gender percentages in the population.
Over the past two-plus years, Pivot Goals, a Winston Eco-Strategies initiative, has researched, analyzed and posted the Fortune Global 500’s publicly available environmental, social and governance goals.
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The results? The Fortune Global 500 companies are falling short of what is needed to achieve sustainability. But there is some light on the horizon.
As of late September 2014, results from Pivot Goals show that of the Fortune Global 200, only 150 (75 percent) have sustainability goals. On average, those 150 companies have 13 sustainability goals each. Not all of these sustainability goals fit into categories that have a science or ethics basis. Of the 1,621 goals in eligible categories, only 212 of the goals are science- or ethics-based (13 percent). Moreover, only 1 percent of the eligible 1,621 goals are science-explicit, meaning that they contain specific references to leading science.
But the good news is that 50 of the Fortune Global 200 companies have a science-equivalent carbon reduction goal. In other words, on the most important goal — mitigating climate change — a good chunk of the world’s largest companies are leading the way.
Eight companies stand out as the only ones with a goal to reach 100 percent renewable energy. These companies include: Walmart, Apple, BMW, Nestlé, Swiss Re, P&G, Unilever, Intel and Commerzbank. Of their goals, only one covers the entire company and has a due date. It is Commerzbank’s goal to "Purchase 100 percent green electricity from four new hydropower plants in Norway from 2013 to 2015."
Other companies phrase their carbon goals differently, such as being “net zero carbon.” Tesco plans to be a zero-carbon business by 2050. By 2020, Unilever has set a goal of halving the GHG impact of its products, and by that same year, Volkswagen plans to reduce GHGs in the supply of energy to production facilities in Germany by 40 percent. And Microsoft has already reached its goal of becoming carbon neutral for data centers, software development labs, offices and employee air travel.
Unilever tops all companies in the Fortune Global 200 with 20 science-based goals, followed by Nestlé with 9, Maersk and Panasonic with 8 each, and P&G and Woolworth’s with 7 each.
But outside of renewables and carbon emissions reductions, for the other 27 “Focus Areas” presented at PivotGoals.com, the gap between the threshold of sustainability and where we are today is strikingly wide.
The companies with no science or ethics-based goals are too long to list. To find them, visit PivotGoals.com and search by focus areas or categories of goals, value chain stage (supply chain, operations, product usage, end of life), macro-industry (such as commodities), micro-industry (such as metals), company name, goal type (such as specific & dated), absolute versus intensity, and keyword search.
As of now, it is easy to spot the leaders in sustainability goal-setting because there are so few. But their numbers are growing. As aggressive goal-setting based in science and transparent reporting continues to proves its worth, we’ll likely see more companies stopping guessing and start utilizing science to set sustainability goals.
This post first appeared on Jeff Gowdy's blog on December 19, 2014.