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Reporting and goal-setting are inextricably linked, yet at opposite ends of the sustainability process. Rather than starting with past progress, sustainability leaders have realized that greater accomplishments start with a stronger and clearer vision of what the future should look like.
When ambition and action come together, great things can happen. Knowing this,
companies that set ambitious goals with concrete targets are receiving more
praise and delivering more value to their business. Reporting and goal-setting
are inextricably linked, yet at opposite ends of the sustainability process.
Rather than starting with the progress of the past, leaders in the
sustainability space — including both corporates and their advisors — have
realized that greater accomplishments start with a stronger and clearer vision
of what the future should look like.
Science-based, multi-stakeholder initiatives such as science-based targets and
have helped propel companies towards goals that are rooted in forward-looking
realities. This also makes sense from a company standpoint, as well. From my own
experience as a consultant working with companies to set sound sustainability
goals, I can confirm that those that focus on how things “ought to be” deliver
the most bang for the buck.
I caught up with Kristina Joss, Executive Director at UK-based
sustainability consultancy SalterBaxter, to
hear more about her view on sustainability goals. Her answers were an excellent
intro to the more detailed thought leadership
the firm recently published on the subject.
Kristina Joss: Corporate sustainability targets have traditionally been
driven by reporting frameworks with an emphasis on disclosure and year-on-year
progress, much like financial metrics. These will no doubt remain important,
especially as investors look for greater harmonization in sustainability
reporting in order to apply it to business valuation. However, the
sustainability landscape has evolved significantly in the last decade and the
risks of inadequate action are growing. This means the conventional targets we
have seen to date are no longer enough to drive the transformational change
required, and a new generation of goals are emerging that are more ambitious and
strategic for today’s business environment.
KJ: Sustainability goals should focus less on where things are today and
more on how we want things to be. With this in mind, there are two core
characteristics for better sustainability goals.
The first is focus — which sounds obvious, but too often companies overlook the
importance of ensuring the goal is focused on where they can have the greatest
influence and where the company’s impacts are the greatest. Sustainability goals
should be strategically relevant to the company with careful attention to its
products and services. One example is
DuPont’s goal for doubling
investment in R&D programs that have direct, quantifiable environmental benefits
for customers and consumers, with a target for introducing a 1,000 new products
related to safety.
The second is driving transformation, both inside and outside the business.
Traditional sustainability goals have been very inward-looking. Today’s
sustainability leaders are developing goals that deliver significant
breakthroughs in the business, lead systems change across the value chain and
influence wider ecosystems on cross-sector issues. H&M really broke the mold
by addressing a longstanding challenge for the apparel industry when it created
a goal that focuses on changing behaviors across the value chain to align with
the company’s broader sustainability goals.
KJ: Sustainability goals should really be more useful for companies
themselves rather than trying to appeal to external stakeholders. Much like
corporate business goals, they should allow companies to manage risks and
opportunities unique to their sector and business, with clear links to
commercial and strategic value. This could include goals that respond to future
customer demand, the long-term value of assets, or even the growth of your
product portfolio. They will still drive the reductions and progress traditional
targets have sought to achieve, but will also incite the right type of action in
and out of the business and deliver better returns on investment.
A great example of a company using sustainability as a business drive is
Ford. Its goal for delivering its
focuses on leveraging emerging opportunities in mobility to drive up
transactions and market share, while also accelerating the transition to a more
sustainable business model.
KJ: Sustainability and business growth are not mutually exclusive. It is
this belief that is driving the next generation of sustainability goals, and
many of the transformational changes and leadership we see in the space today.
As a result, there are some really powerful examples out there that demonstrate
how business growth and innovation can drive sustainable change and vice versa.
Our biggest challenge is not in making this possible, but convincing people
that it is, and that it is critical for the long-term transformation the world
KJ: The goals that I find inspiring are the ones that really think outside
the box and/or leverage a company’s influence for systems change. For example,
Alpro has partnered with WWF to develop science-based targets for
nature; and ING is the first bank to commit to steering its lending
portfolio towards science-based goals. Another unique example is
Danone’s goal for employee
engagement on sustainability: To deepen an “ownership mindset,” Danone will
grant one Danone share — in combination with an annual amplified, dividend-based
incentive scheme — to each of its employees. Finally, Target’s recently
of having 80 percent of its suppliers set science-based reduction targets on
scope 1 and 2 emissions by 2023 is very impressive in its focus on influencing
the system beyond their four walls.
Published May 16, 2019 8am EDT / 5am PDT / 1pm BST / 2pm CEST
Mia Overall is a sustainable business consultant and founder of Overall Strategies, based in New York City.
This article, produced in cooperation with the Sustainable Brands editorial team, has been paid for by one of our sponsors.