“Where do you see yourself in 10 years?”, “Where do you see this going?”
There is something about questions about the future that can make people feel uncomfortable. Since organizations are increasingly getting similar questions about their sustainability strategy, we wrote a blog to help you formulate a kick-ass answer. It all starts with setting ambitious and realistic goals!
Targetting unsustainable behavior
It is a question we often get; “How do you formulate good sustainability targets?” This blog is here to give you some practical tips and tricks.
Where do you see this going?
Sustainability targets are a crucial part of any sustainability strategy. They are essential because they answer three questions:
- Where do you see this going? – Communicating about past efforts only gets you so much credibility. Stakeholders want to know your vision & ambition.
- When can we open the Champagne? – Targets offer a common goal for your team to work on and to track progress. Importantly, it also allows you to adjust your course if you get sidetracked.
- Will my auditor ask about it? – Probably. Targets are a core element of the EU Corporate Sustainability Reporting Directive, which requires limited assurance.
In sum, having a strategy without targets is like saying, “I’m on my way,” without any indication of where that is or when you’ll arrive there.
Below you can find an example of Velux and how its targets support the different pillars of its sustainability strategy.
Tell me what you want, what you really really want
Before thinking about the details of a target, take a step back. What do you want to achieve? What is your ambition?
Figuring out your level of ambition is not straightforward. However, there are different ways to approach this.
For starters, there is the obvious and absolute minimum level of ambition. Some targets are legally binding, such as environmental norms for pollution. Some measures are also financially attractive, e.g., the fiscal regime for company cars in Belgium makes electric vehicles more appealing. In that case, however, boosting your electric fleet credentials will not bring you any praise (or credibility).
Companies are often interested in knowing what the competition does. After all, being more sustainable can, in some markets, lead to a competitive advantage. A benchmarking exercise can therefore provide inspiration.
However, what the competition does is not necessarily enough to meet our common sustainability challenges. For example, is your emission reduction ambition enough to stave off climate change? Is your pollution reduction ambition sufficient to avoid ecosystem collapse?
That’s why there are increasing calls for putting targets in a broader context and making them science-based. This is especially the case for significant sustainability challenges, such as crossing a planetary boundary like climate change. We cannot afford to wait for minor incremental improvements for such challenges.
In other words, the challenge is not about being more sustainable than your competitor, but about not causing any harm. Or even better, have a positive impact. Of course, it is always important to consider what is feasible within your organization & sector.
You can find practical guidance to set context-based targets in the Science Based Targets initiative (SBTi)¹ or the UNRISD “Authentic Sustainability Assessment” manual².
There is not one to rule them all
The type of targets and how many targets you need depends on the following:
- The number of material sustainability topics: it’s not enough to have a carbon reduction target to tackle climate change mitigation. You’ll also need targets for your other material topics. E.g., a target for waste, safety, diversity, pollution, etc.
- Use of sub-targets: Larger organizations often consider sub-targets per location to divide responsibility towards the company-wide target.
- How far do you see yourself in time: It is best practice to set targets for the short, mid, and long term. This allows you to better follow up on progress.
- Use of absolute and/or relative targets: Relative targets indicate whether individual products become more sustainable. Absolute targets help you keep an eye on whether these improvements are sufficient when your company grows. E.g., despite significant energy-efficiency improvements for individual trucks, their collective emissions keep growing due to increased demand.³
- Output versus outcome: Outcome targets are more powerful than output targets. E.g. “zero accidents” versus “10 safety training sessions”. Output targets are good to support outcome targets or can be used if formulating an outcome target is not feasible.
The example of Firmenich below offers some inspiration on the many types of targets you can set.
Keeping it real
To ensure your targets are realistic, it is important to understand where you are currently (your baseline) and what it would take to realize your ambition.
If you don’t yet have insight into this, take the time to do (at least) a back-of-the-envelope calculation to ensure you are not engaging in greenwashing by promising things that can’t be achieved. It’s perfectly acceptable in that case to set a target that says you will set a real target by next year.
Make sure to involve or consult key stakeholders when setting your targets. Moreover, adopting the necessary action plans and governance structures is crucial to successfully reaching your goals.
Keep your eyes on the prize
Tracking progress is crucial to ensure you stay on course. Sometimes your action plans don’t deliver the expected outcome. By tracking progress you can reevaluate and correct your course of action.
Stay critical when interpreting progress towards your targets. For example, during the pandemic there was a drop in carbon emissions from flights . This was not the result of investments in lower-emission planes. Instead, it was linked to a decline in flight demand due to quarantine measures.
It can happen that you miss a target. Here is how you can deal with that:
- Identify the root causes for missing your target
- Identify the risks of missing your next deadline
- Adopt mitigating measures
- Be transparent
Need some help figuring out your targets? Get in touch with our experts: email@example.com