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Setting and Managing Sustainability Goals
Green Research, June 2011, Pages: 18
A growing number of companies are using sustainability goals as a means of signaling their commitment to become sustainability leaders, and to compete for superior positioning versus their rivals. In numerous interviews with sustainability executives, however, we have observed that companies' practices for selecting and managing sustainability goals vary widely. We have seen goals crafted on a foundation of meticulous analysis but we've also learned about goals made up on the way to a television appearance. We've seen highly professional practices established for managing and rewarding sustainability performance and we've also seen companies with goals but no tools in place to achieve them.
This study identifies the trends and best practices for defining, managing and communicating sustainability goals, an important new competitive arena for companies.
- What is the right way for companies to establish sustainability goals?
- How should companies manage sustainability performance to ensure they achieve their goals?
- When and how should sustainability goals be communicated to the public, and what is the place of internal sustainability goals?
- Companies should craft sustainability goals in consultation with internal and external experts and stakeholders, combining bottom-up and top-down analysis to produce goals that are material, achievable, quantitative and time-bound. A quarter of sustainability executives at leading companies have “aspirational” sustainability goals without a clear plan to achieve them.
- CEO support, operating executive accountability and regular progress reporting are the best practices of managing sustainability goals. Fifty percent of sustainability leaders tie part of C-level executive compensation to the achievement of sustainability goals. But over forty percent say progress on sustainability goals is reported to senior management only semi-annually or annually.
- Public sustainability goals demonstrate commitment and help galvanize internal staff and drive results. Seventy-nine percent of sustainability leaders have public greenhouse gas emissions goals while 45 percent have public waste and water goals. Companies with immature management or measurement practices should start with internal goals but aim to go public in short order.
Who Needs this Report
- Sustainability executives
- Senior executives and strategists
- Sustainability consultants
- Environmental and strategy consultants
- Vendors of, ERP, EHS, carbon accounting and sustainability management systems
- Industry associations
- Non-governmental environmental organizations
- Universities and sustainability research centers
- Sustainability public relations and marketing agencies
- Executive Summary
- Key Questions
- Key Findings
- Setting and Managing Sustainability Goals
- Environmental Goals are a New Competitive Arena
- Environmental Goals Have Key Differences from Other Corporate Goals
- Many Factors Influence the Selection of Sustainability Goals
- Goals, Targets and Timelines
- Consult Widely and Create a Coherent Framework for Goal Setting
- Reducing Greenhouse Gas Emissions is the Most Popular Goal
- “Stretch” Goals Most Common
- Set Targets by Combining Bottom-up and Top-down Analysis
- Set Targets Three to Five Years Out
- Experts Should Set Goals; Operating Execs Should Own Them
- Senior Management Should Review Progress Quarterly
- Ensure that Specific Individuals Are Accountable for Sustainability Results
- Tie Compensation to Achievement of Sustainability Goals
- Communicate Clearly, Simply and Consistently about Sustainability Goals
- Go Public with Goals, or Have a Good Reason Not To
- Companies Mentioned in this Report
- Report Methodology
- Green Research Sustainability Executive Survey
Table of Figures
- Factors that Influence Sustainability Goals
- Anatomy of a Sustainability Goal
- Kraft Foods' Sustainability Wheel
- The Most Common Sustainability Goals
- How Aggressive Companies' Goals Are
- Bottom-up and Top-down Analysis
- Frequency with which Goals Are Reviewed and Revised
- Plans, Goals and Visions
- Levels of Management that Approve Goals
- Progress Reporting Frequency
- Executives with Compensation Tied to Environmental Performance
- Fujitsu Environmental Programs
- Respondent Company Industry
- Respondent Company Size
- CA Technology
- Fujitsu Group
- Johnson Controls
- Kraft Foods
- Marks and Spencer
- Shaw Industries