How to finally take science-based goals from rhetoric to reality
With companies across industries taking up the mantle of sustainability, considering how and why corporate goals are selected in hugely important.
Sustainability is mainstreaming, right? You can’t walk through a city, listen to the news or buy a product without hearing something is sustainable, green, eco-friendly — and the list of claims goes on.
So, how much of this is rhetoric, and how much of this actually can be backed up by empirical evidence?
Many organizations are able to demonstrate reasonable sustainability performance, such as consistent energy efficiency improvements over the last three years, a decrease in normalized CO2 emissions or more social responsibility audits in their supply chain than ever before.
All good, then? Job done. We have embedded sustainability into our operations and can get on with business while feeling warm and fuzzy inside.
But what is the evidence really showing us? We need to remind ourselves of the bigger picture: Are future opportunities unlimited or is future value creation being put at risk; how is our home planet doing; how is society changing?
While it is true and commendable that some fantastic progress has been and is being made, many trends concerning some of our most critical life support systems and basic human rights are not improving. In fact, many are doing just the opposite.
What science really tells us
Last month, I had the pleasure of leading a half-day tutorial on the science of science-based goals at the annual GreenBiz Forum in Scottsdale, Ariz.
In this time — the blink of an eye in planetary time — we have achieved many amazing things. We have created unprecedented infrastructure, sanitation and education. We have transformed natural resources into everything from this laptop I am writing on to the sumptuous afternoon cakes we were tempted with at the forum. We have been prolific and imaginative, resourceful and creative.
During the session, we reviewed some high level graphs which showed that with the acceleration of many indicators of progress comes a similarly steep acceleration of our draw on our earth’s assets.
While we have pulled millions out of poverty, the global population has grown faster. Millions — in fact, more than 2.2 billion people — lived on less than $2 a day in 2011, according to the World Bank.
Further evidence is seen in the fantastic work of many scientists carefully sourced and adapted by Will Steffen and others, such as shown in the great acceleration.
Additionally, the summary of UNEP’s review of environmental trends — GEO-5 (PDF), shows that many environmental trends are worsening. While science isn’t static and our understanding continuously develops, there is pretty irrefutable evidence that we are negatively affecting our ability to live well on Earth.
The opportunity: improving quality and relevance of corporate goals
However, there is an upside to all of this.
Great insight on approaches to get us back on track — that can enable corporations to set goals and targets that build value for the enterprise as well as society — was provided by panelists Kathrin Winkler from EMC, Andrew Winston of Winston Eco-Strategies and Nicole Labutong from the CDP.
It was exciting to see the interest and engagement from attendees, and it seems the time is right to ratchet up the quality and relevance of corporate goal setting. Done well, this will close this gap between the rhetoric and the reality of what we collectively need to ensure the success of our businesses in the markets of the next 20 years (not to mention keeping our life support system healthy).
We need to look at what the best science and evidence available tells us, then work backwards so that we set goals that will put us on track to live within our means in culturally and ethically acceptable ways. It requires a fundamental shift in our sophistication.
Winston took us through the headlines of his pivot goals research, conducted with Jeff Gowdy and the team at Vanderbilt University. This showed us that although 75 percent of Fortune 200 corporations have sustainability goals as of September, only 20 percent of these goals qualify as science- or ethics-equivalent goals (only a few are explicitly science-based), according to the pivot goals criteria.
In fact, only a handful of companies have multiple goals that hit the mark. Unilever stands out with 20 goals that fulfill the criteria.
How available and reliable is science for business?
Labutong focused in on a company’s fair shares of emissions reductions in order to reduce CO2 emissions in line with the science of the Intergovernmental Panel on Climate Change, specifically by following a sector-based decarbonization approach.
Science-based emissions targets aim to keep the planet within the widely accepted global goal of a 2 degree C temperature increase from pre-industrial levels.
Labutong explained more about the Science Based Targets initiative, a collaboration of the CDP, United Nations Global Compact, World Resources Institute and WWF Climate Savers. This provides free tools and guidance to help companies set emission reduction targets in line with climate science.
She also introduced a number of other methodologies and tools that companies can use for a range of impacts. Not only are there tools that are readily available, the CDP will incentivize companies to implement science based targets in 2016.
I recall hearing Herbert Giradet, an eminent environmentalist, speaking in my hometown of Swindon, U.K. He said that while CO2 is only one impact area, it is a great proxy for overall environmental impact; if we get this right, other environmental trends are likely to follow.
I think he is right. Carbon emissions are a great starting point — and one where business has the tools available to take action now.
'Context-based' goals and fusing science with strategy
Technology firm EMC Corporation is one example of a company that has worked to develop science-based goals. Winkler, chief sustainability officer of EMC, showed how climate science translates to reality for executives.
As Winkler neatly explained, there is more to science than the science itself. It is also about getting buy-in from your executives and presenting a business case that enables a company to stretch its time horizons into the real strategic zone — without creating a threat to business growth and better understood shorter term measures.
Involving a range of executive reviewers, including those most skeptical, not only helps address their concerns, but also importantly brings the variety of voices needed to fully frame the organization’s context.
EMC considered a range of sources for its carbon emissions targets and have established targets to 2050, as well as shorter-term targets to 2020 and the end of this year, 2015.
They evaluated a number of models including the Autodesk-developed C-FACT. These models do not penalize a company if it begins to contribute a greater proportional share of GDP (such as capturing market share), which was a concern for some when the idea was proposed.
Kathrin also suggested that calling this approach "context"-based targets may be more accurate, as science can only provide some of the basis for effective goal setting.
No shortage of other initiatives are out there to help organizations set more impactful and relevant corporate social responsibility goals.
Many organizations have been referring to principles to help guide their thinking, from the GRI content principles to the 10 principles of the United Nations Global Compact. The excellent and freely available open source Future Fit Framework provides a sound basis for 28 goals across nine impact areas.
As the rigor in measuring progress against a greater range of issues improves, businesses are faced with a number of follow-up questions, such as whether thresholds should be used (should workplace accidents be zero? Should female representation on the board be 50 percent?).
The general consensus was yes, thresholds should be clear. It is the very rare company which does not have a goal of zero workplace fatalities, for example.
Moving beyond explicit thresholds, what is a credible constant to derive a goal? Social dynamics where the science is informed by ethical, moral and cultural considerations are another big area of importance. While we are unlikely to jump to a clear consensus across all issues — and there undoubtedly will be some cultural variation — a number of themes emerged.
One idea was that if it is left to individual businesses, then differences in acceptable thresholds will proliferate. The UNEP’s forthcoming Making Environmental Reporting Important to All report discusses improvement opportunities for environmental reporting, and asks the question of whether it or other supranational organizations/collaborations, such as the Science Based Targets group, should determine thresholds and provide recommendations.
Kevin Rabinovitch, global director of sustainability at Mars, provided a simple and effective suggestion to test the quality of your science- or context-based goals: reverse the target or goal and see whether it sounds reasonable. For example, if you have a goal to reduce waste to landfill by 5 percent by 2020, flip the context of this goal and consider whether sending 95 percent of waste to landfill until 2020 is something you are comfortable with.
In reality, will we achieve true sustainability? The answer is likely not. However, I truly believe that we can make choices that can help develop our businesses, our society and reduce the draw on our resource base now and into the future.
Developing a vision of what our companies might look like and how we want them to operate in 2030 and beyond, with measures and targets to guide progress, is a great next step. Giving them a sound science basis and context can help shift corporate sustainability from rhetoric to a new level of sophistication that makes sense and drives innovation and future success.