Dec 1, 2022
6 ways to set good sustainability targets for your business
We all know that setting targets is important, but why? And what makes a good target? And how should you go about setting a good target?
If you’ve ever wondered about whether you’ve been setting good sustainability targets for your organization, this is the blog post for you.
In this blog post, we’ll go in-depth about what it means to set good sustainability targets, and the 6 ways you can make sure you’re setting good sustainability targets for your business:
What are sustainability targets?
Why is it important to set good sustainability targets?
What does it mean to set a ‘good’ sustainability target?
6 ways to set good sustainability targets
Examples of good sustainability targets
What are sustainability targets?
Sustainability targets can be seen as driving forces toward achieving your larger goals and strategy. An important clarification – ’goals’ and ‘targets’ are not interchangeable:
A sustainability target is a specific, measurable, time-bound, and often science-based objective whose attainment will contribute in major ways to achieving one or more goals. It is aspirational yet attainable, and should speak to all relevant stakeholders and be contextually relevant, and be adaptable should science advance.
A sustainability goal on the other hand, expresses an ambitious, specific, and actionable commitment that is more aspirational in nature, and more overarching than a target.
In short? Sustainability targets support sustainability goals.
Why is it important to set good sustainability targets?
There are many reasons why you should be setting good sustainability targets (we’ll get to what defines a good target later), but one of the reasons is to meet global sustainability goals necessary to combat climate change, such as:
The Paris Agreement: limiting global warming to well below 2°C , and pursuing efforts to limit it to 1.5°C
European Green Deal: reducing net greenhouse gas emissions by at least 55% by 2030, and being climate-neutral (net-zero greenhouse gas emissions) by 2050.
Why should you care about global sustainability goals? To spell out the obvious: the impacts of climate change are already being felt, with increasingly frequent extreme weather events and biodiversity loss.
On an economic level, 97% of companies surveyed by Deloitte report that they have already felt the negative impacts of climate change , and companies are being affected by biodiversity loss . At the rate we’re going, if we don’t collectively improve our climate change resilience at a faster pace, the global economy will shrink by 3% by 2050.
What does it mean to set a ‘good’ sustainability target?
According to the Science Based Targets initiative (SBTi) , targets are deemed ‘science-based’ if they are in accordance with what the most recent research on climate change indicates is required to achieve the Paris Agreement's objectives of keeping global temperature well below 2°C and pursuing efforts to keep it below 1.5°C.The SBTi provides companies with a clearly-defined path towards reducing their greenhouse gas (GHG) emissions, with a clear framework and a specific set of criteria on how to set science-based targets.
What about realistic targets then? According to Kevin Moss, Chief of Institutional Alignment of the World Resource Institute (WRI), a realistic target is one that “solves the problem you're trying to address”.
The key question companies should be asking is, "What's the problem I'm trying to solve, what is my share of the problem, and how do I do enough to solve my share of the problem?" - Kevin Moss, WRI
6 Steps to set good sustainability targets
Now that we have explained to you what good sustainability targets are and why they are important, you might be asking, ‘so how do I set good sustainability targets?’
Here are 6 steps you can take to make sure you are setting good sustainability targets:
1. Understanding your starting point
When you’re trying to set good sustainability targets, make sure that you understand your starting point – where are you now, what initiatives are already in place, and what is your company’s greatest impact? In other words: materiality.
This also means looking at previous data: how have the numbers changed in the past? What were the trends, if any? What modifications led to these trends? Which targets were in hindsight too ambitious or too modest? In other words, ensure having a robust data baseline.
When it comes to understanding your company’s greatest impact, spend some time considering your business's primary activities, and map out the activities that occur ‘upstream’ and ‘downstream’ from you. For instance, for most companies, their greatest impact lies in their upstream supply chain (i.e. purchased goods and services), which could indicate the need for working with activities in their manufacturing processes, freight and logistics, but other hotspots might also be downstream activities like the use of their sold products and/or the end of a product’s useful life.
On top of considering your company’s materiality, something equally important to consider is its double materiality. The concept of double materiality acknowledges the fact that risks and opportunities can be material from both a financial and non-financial perspective.
In short, double materiality = financial materiality (topics that are material for enterprise value creation) + impact materiality (matters that reflect the company’s impacts on economy, environment, and people). Upcoming legislation such as the CSRD and ESRS will require this, so be prepared!
2. Make your targets scientific
To be truly effective, make sure your targets are guided by sound, scientific principles, and grounded within tangible, measurable facts. There are multiple frameworks you can use:
SBTi: The Science Based Targets initiative provides a framework with which companies can set a clearly-defined path to reduce emissions in line with the Paris Agreement goals. For a goal to be recognized by the SBTi, it needs to follow certain criteria set by the SBTi, and also must follow the GHG Protocol Corporate Standard, Scope 2 Guidance, and Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
SDG: The UN Sustainable Development Goals show us how to lessen our environmental impact and foster greater social inclusion, equity, and diversity at work. To have a strong framework for your business to operate within, it is worthwhile to actively incorporate the SDGs into your goals and targets.
UNGC:known as the "world’s largest corporate sustainability initiative," the United Nations Global Compact provides a framework that is aimed at aligning corporate strategies with human rights, labor, anti-corruption, and environmental principles.
3. Make your targets ambitious
It can sound frightening to set ambitious targets, but think about it this way: ‘realistic’ and ‘ambitious’ go hand-in-hand, especially since science shows that we’re in a situation where we need to be ambitious in order to reach the targets we need to reach. It's also crucial to keep in mind that doing so forces the company to think creatively and differently. However, don't overlook the details while concentrating on the broader picture. Sometimes, optimization produces more change.
With reference to ambitious targets, the SBTi recommends that “the most ambitious decarbonization scenarios are ones that lead to the earliest reductions and the least cumulative emissions”.
The key is finding the balance, which can be achieved by designating ‘champions’ who will supervise optimizing particular procedures. While concentrating on moonshot objectives is great, you will see results manifest more quickly if you also optimize the little things.
To achieve ambitious targets, you will need to create an action plan that helps break the ambitious targets down into steps that are more within reach. Alas, even with an action plan in hand, setting ambitious targets often comes with a certain degree of uncertainty that is unavoidable. But don’t let that deter you! Ambitious targets will promote innovation and resilience of your business – e.g., are you working on a plan that will help take your business along its vision and for the better of its people?
4. Align your targets with your core business
What is strategically important to your company? You must make sure that your targets affect and reflect your principal business operations. This could entail altering a sizable amount of the production-related materials you use, reassessing your energy sources, or ensuring that e-waste is successfully reused or recycled.
Aligning your sustainability targets and overall sustainability goals with your company’s core values, vision, mission, objectives, and business goals will help you to retain (1) the integrity of your strategy from the top down, which can help guide decision-making at various points, and (2) enable you to consistently communicate your plan to your important stakeholders, including people who approve your projects, suppliers, shareholders, employees, and customers.
5. Set short-term targets vs long-term targets
It is essential to have both short-term and long-term goals for a company. What do you want to achieve in the next 10 years vs. what do you want to achieve by 2050 (~30 years) and beyond?
As part of the SBTi’s criteria for setting science-based targets, it recommends that targets must cover a minimum of 5 years and a maximum of 10 years. These can be considered short-term targets.
Targets that cover a time period of longer than 10 years are considered long-term targets. The SBTi encourages companies to develop long-term targets, in addition to short-term targets.
The ability to plan long-term and within a large context doesn’t just come naturally – good thing the Inner Development Goals (IDGs) provides a framework that helps with developing the necessary skills, particularly the cognitive skills, for long-term orientation and the ability to formulate and sustain a commitment to visions relating to the larger context.
6. Measure and track your efforts
What use would it be to set good goals if you don’t know whether you’re achieving them? That’s where data, measurement, and tracking come into play.
Understand what you will measure, how you will measure, and how often you will measure, so you can adjust your target accordingly.
Getting the help of sustainability management software to help keep up with your data collection and measurements is an easy way to ensure you’re on track with your targets.
Collecting data can be tedious, but with a digital tool, it doesn’t have to be. In fact, with software like SustainLab, you can get better visibility into your data as often as you like, and also ensure accountability by communicating regularly, encouraging feedback, and treating sustainability goals like other company goals, all within the same platform.
Examples of good sustainability targets
Coming up with good sustainability targets and achieving them are not merely lofty ideals – as a source of inspiration, here are some examples of companies who have been able to set good short-term and long-term targets that have been approved by the SBTi:
Afood and beverage conglomeratebased in Norway has committed to reaching net-zero GHG emissions across the value chain by 2045 from a 2016 base year, with the following targets:
Short-term: Reduce absolute scope 1 and 2 GHG emissions 65% by 2025 and 70% by 2030 from a 2016 base year (includes biogenic emissions and removals from bioenergy feedstocks), and reduce absolute scope 3 GHG emissions 30% by 2025 and 50% by 2030 from a 2016 base year.
Long-term: Reduce absolute scope 1 and 2 GHG emissions 90% by 2045 from a 2016 base year (includes biogenic emissions and removals from bioenergy feedstocks), and reduce absolute scope 3 GHG emissions 90% by 2045 from a 2016 base year.
A real estate firm based in North America has committed to reaching net-zero GHG emissions across the value chain by 2050 from a 2019 base year, with the following targets:
Short-term: Reduce absolute scope 1 and 2 GHG emissions 50% by 2030 from a 2019 base year, and 70% of its customers by emissions covering use of sold products, will have science based targets by 2025.
Long-term: Reduce absolute scope 1, 2, and 3 GHG emissions 90% by 2050 from a 2019 base year.
A construction and building materials company based in Switzerland has committed to reaching net-zero GHG emissions across the value chain by 2050, with the following targets:
Short-term: Reduce gross scope 1 and 2 GHG emissions 25% per ton of cementitious materials by 2030 from a 2018 base year, reduce gross scope 3 GHG emissions from purchased goods and services 25.1% per ton of purchased clinker and cement by 2030 from a 2020 base year, reduce scope 3 GHG emissions from fuel and energy related activities 20% per ton of purchased fuels by 2030 from a 2020 base year, and reduce scope 3 GHG emissions from upstream and downstream transport and distribution 24.3% per ton of materials transported within the same timeframe.
Long-term: Reduce scope 1 and scope 2 GHG emissions 95% per ton of cementitious materials by 2050 from a 2018 base year, and reduce absolute scope 3 GHG emissions 90% by 2050 from a 2020 base year.
A consumer products conglomerate based in Japan has committed to reaching net-zero GHG emissions across the value chain by 2040 from a 2018 base year, with the following targets:
Short-term: Reduce absolute scope 1 and 2 GHG emissions 72% by 2035 from a 2018 base year, reduce absolute scope 3 GHG emissions covering use of sold products 45% over the same target period, and 10% of its suppliers by emissions covering purchased goods and services, will have science-based targets by 2025.
Long-term: Reduce absolute scope 1, 2, and 3 GHG emissions 90% by 2040 from a 2018 base year.
The bottom line
Now that we have provided you with the explanation and examples of good sustainability goals from other companies, we know there is uncertainty but other companies are already doing it - setting targets, and putting resources into it, so you can reveal gaps in data and data quality. While there have been more companies daring to set net-zero sustainability goals lately, it’s not enough.
Setting targets is merely a means to an end of achieving them and your larger goals, but it is an extremely important process nonetheless. In order to achieve your targets, you need to measure and track, and we’ve got you covered with our AI-powered sustainability management platform!
Contact us or schedule a free demo to find out more about how our platform can give you better and constant insight into your sustainability data, so you can measure and track your progress on your targets with ease.
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