This post represents an analysis of step one in our '5 Steps To A Business Sustainability Plan' E-Book. If you want to view the "5 Steps To A Business Sustainability Plan", click here.
As more companies pledge 'Net Zero' and 'Carbon Neutral' commitments, it is important to review best practices for achieving these lofty goals. While corporate environmental goals are tremendous and necessary for the health of our planet, there is a problem, not all goals are created equal. During the goal-setting process, companies must balance sustainability targets which they deem to be truly aspirational and aggressive, and the execution and strategy required to achieve real, meaningful results.
If planned and executed correctly, business sustainability goals can reduce carbon footprint and waste from operations, boost profits through operational efficiencies, and create meaningful reporting for customers.
Below are 4 tips to keep in mind when setting sustainability goals, to ensure your business capitalizes on its environmental ambitions:
1. Establish a Baseline
The first step toward building an effective sustainability strategy is to establish an accurate baseline. A meaningful and consistent comparison of emissions and sustainability over time requires that companies set a performance time period with which to compare to current performance. This selected time period is referred to as the base year. According to the GHG Protocol, a widely accepted standard for corporate carbon footprint monitoring,
"companies should choose a base year the earliest relevant point in time for which they have reliable data."
The key is to select the earliest 'relevant' year which the data can be confidently compared to your company's current sustainability performance. For growing companies, the earliest relevant year is usually one to two years prior to the start of the sustainability program. For instance, if a company establishes a sustainability plan in 2021, relevant data can be found from 2019 or 2020 to calculate the base year performance.
For consistent tracking over time, the base year sustainability metrics may need to be recalculated as companies undergo significant structural changes such as acquisitions, divestments, and mergers.
2. Select Targets which are Ambitions and Material
First and foremost, sustainability goals should be material to your company's core sustainability and business strategy. Goals should address relevant environmental, social and/or governance (ESG) challenges of the industry sector and be under management’s control.
Material and ambitious goals are categorized as:
Relevant and core to the company’s overall business, and of high strategic significance to the company’s current and future operations;
Representing a material improvement in the respective KPIs beyond a “Business as Usual” trajectory;
Where possible, compared to a benchmark or an external reference;
Determined on a predefined timeline,
If your company needs help determining goals which are material to your business, the Sustainability Accounting Standards Board (SASB) released a 'materiality map' which indicates sustainability metrics best applied to specific industries.
3. Align with Certified Sustainability Benchmarks
Where available, company sustainability goals should be based on a combination of
benchmarking approaches to accurately measure progress. Targets adopted by companies to reduce GHG emissions are considered “science-based” if they are in line with the level of decarbonization required to keep global temperature increase well below 2°C compared to preindustrial temperatures. Many companies benchmark their sustainability plan against the Science-Based Target Initiative (SBTi) to ensure their sustainability goals align with the latest climate science.
Companies wishing to benchmark their sustainability goals against universally approved policy mandates can also use the United Nations (UN) Sustainability Development Goals (SDGs) to guide sustainability decision-making.
The following SDGs relate directly to reduced carbon footprint and environmental impact, however, the results of an effective sustainability plan affect all of the 17 SDGs:
Benchmarking sustainability goals against a universally accepted policy or framework gives long-term structure and legitimacy to your company's strategy.
4. Make Sure Goals can be Monitored
Monitoring your company's sustainability progress is key in the execution of an effective sustainability plan. Companies can consider using the SMART philosophy to outline each sustainability goal in a manner which can be measured and implemented:
SMART Goal Setting:
- S: Specific
- M: Measurable
- A: Attainable
- R: Relevant
- T: Time-bound
An example of a SMART sustainability goal is categorized below:
"We commit to reducing our company-wide total Greenhouse Gas (GHG) emissions by 30% by the year 2026."
- Specific: The company will reduce 30% of total GHG emissions.
- Measurable: The company is using 'total GHG emissions' as a sustainability KPI, which can be adequately measured using GHG Protocol calculations.
- Attainable: The company reduced GHG emissions by 8% in the past year alone, indicating a 30% reduction over the next 5 years is attainable. This goal also aligns with the SBTi GHG reduction goal to keep global temperature increase well below 2°C compared to preindustrial temperatures.
- Relevant: The company used the 'SASB Materiality Map' to find a goal which is relevant to their industry. As a logistics company, GHG emissions are deemed relevant and material to improving the sustainability of the company's business model.
- Time-bound: The company commits to achieving their goal by 2026. Actions must be implemented to achieve the intended results within 5 years.
For monthly monitoring of sustainability goals, companies can use a variety of software and online tools. The problem with most small and medium-sized businesses, is that they lack the time and expertise needed to establish effective sustainability plans, and monitor the progress towards their goals.
The FreeWorld Monitoring platform provides a free and simple way for companies to set up, monitor, and report sustainability, so they can reap the rewards of reduced carbon footprint, higher profit margins, and increased customer engagement. FreeWorld understands companies' need for clarity when establishing sustainability programs and monitoring their sustainability goals. Once companies perform a sustainability assessment and implement monitoring of their goals, they can confidently reduce the business carbon footprint and boost profits.
If you enjoyed reading about establishing sustainability goals for your company, you can download a copy of our '5 Steps To A Business Sustainability Plan' to learn more about the full process of establishing a strategy for your company. The process from the initial sustainability assessment to a reduced business carbon footprint can be achieved using free carbon footprint calculator tools, and incorporating examples of companies reducing carbon footprints successfully.
Companies which embrace sustainability now will benefit from growth and value over the long-term.
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