Science-based Goal-setting as the Holy Grail of Managing Non-Financial Performance: The Future-Fit Business Benchmark and PivotGoals Bob Willard, The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line @bob_willard Jeff Gowdy, Vanderbilt University
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Science-based Goal-setting as the Holy Grail of Managing Non-Financial Performance: The Future-Fit Business Benchmark and PivotGoals Jeff Gowdy
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Science-based Goal-setting as the Holy Grail of Managing Non-Financial Performance: The
Future-Fit Business Benchmark and PivotGoals
Bob Willard, The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line @bob_willard
Jeff Gowdy, Vanderbilt University
PivotGoals.com The ESG, science-based, and visionary targets of the largest companies
Jeff GowdySustainable Brands New Metrics Workshop // Boston @MIT// October 6 , 2015
Session Outline• Part I: Pivot Goals Overview and Introduction
• Part II: Results from the GF200
• Part III: Specific Analyses using Pivot Goals data
• Analysis #1: Three Levels of Waste Goal Setting
• Analysis #2: Three Levels of Report Type
• Analysis #3: Science and Ethics-based Reporting
• Part IV: Group Exercise
Part I: Pivot Goals Overview The Global Fortune 500’s
• Company Name, Goals (e.g., search for “net zero” or “deforestation”)
• Checkbox search/narrowing to…• 29 focus Areas (Climate, Water, Human rights, etc.) • By Industries and sectors• Value Chain area (from supply chain to end of life)• Absolute/Intensity• Goal type (specific & dated; undated; intentional)
* Note: the full Fortune 200’s goals are loaded; some of companies 201-500 are loaded
Part I: Pivot Goals Introduction• 168 of the Fortune 200 (84%) have sustainability goals
• F200 set 2,167 goals (3,700+ in full database)• Goals are…
• Specific and mostly time-bound (69%)• Mostly absolute (85%) vs. relative/intensity (15%)• Predominantly about operations, although cover value chain:
News Corp. Achieve zero waste to landfill at studio lot. 2016
Companies with Zero Waste to Landfill goals
• Establish resource recycling system and become a company with “zero emission of waste”
• Zero Waste to Landfill
• Maintain zero landfill waste performance• Zero Waste to Landfill
• Eliminate landfill waste• Zero Waste to Landfill
• Zero waste direct to landfill from stores• Zero Waste to Landfill
• Transition all manufacturing plants to 'zero waste' facilities…Actually it is not “zero waste” but
• Zero waste to Landfill
Various ways of saying ZWL…
How many of the Fortune 500 have a Zero Waste goal or vision?
How many of the Global Fortune 500 have a Zero Waste
goal?
How many of the Fortune 500 have a Zero Waste goal or vision?
How many of the Global Fortune 500 have a Zero Waste
goal?
Honda
• Completely close the loop for all resources and bring product life-cycle waste down to zero
• Timeframe: open
How many of the Fortune 500 have a Zero Waste goal or vision?
How many of the Global Fortune 500 have a Zero Waste
goal?
Bridgestone America’s Tires4ward Program
• Achieving a waste-free tire industry
• Timeframe: open
How many of the Fortune 500 have a Zero Waste goal or vision?
How many of the Global Fortune 500 have a Zero Waste
goal?
Analysis #2: Three levels of Report Type
Scoring System based on Breadth/Coverage, Centrality, and Certification
Note: Calculations as of Jun 2015; results change as new data is loaded
Analysis #2: Three levels of Report Type
Results for GF500 v. DJSI Sector Winners (2014)
Note: Calculations as of Jun 2015; results change as new data is loaded
Analysis #3: Science and Ethics-based Goals
Definitions•Science-based
– Based on scientific knowledge or inherent logic of thresholds in vital capitals in the natural world
– Goals that are in line with these externally-based thresholds can be considered science-equivalent, even if not explicitly stated as based on science
– E.g., for carbon: 6%+ reduction in carbon intensity per year, or 3% per year in absolute emissions
•Future Fit or Ethics-based– Express aspirations or performance in terms of
fairness, justice, or equity – the conditions we need to build human capital and create a thriving, prosperous world
– In terms that don’t have science-based thresholds
•None– Goals that do not satisfy any of the above
definitions.
29
Area CriteriaScience/Data Based
GHG/Climate 3% absolute or 6% intensity reduction per year
Energy 3% absolute or 6% intensity reduction per year
Renewables Similar pace of change as above or 100% goal
Air Zero target or Context/Science-based indication
Water "Water-neutral", "watershed", "water stress"
Waste/Pollution Zero target (<1% landfill or incineration)Haz Waste Zero targetPackaging 100% certified target or zero
deforestationToxics Zero target or indication of green
chemistry guidelinesBiodiversity/Land Use
Zero net impact or context/science mention
Forest Large certified target or zero deforestationFood & Ag (Sourcing) All sustainability sourcedHealth & Wellness (Nutrition) Reduction based on dietary standards Future-Fit Governance Zero incidents of corruption, unethical
practice, 100% transparencySafety Either zero injuries/fatalities or
certification for all facilitiesEmployees 100% employees getting living wage and
othersHuman Rights Zero violations
PivotGoals Criteria for Science and Ethics based
Science-equivalent/Ethics Goals• 2 categories…
– Science-equivalent (for a large part of business, not full value-chain)
– Ethics-equivalent: moral, ethical, or based on flourishing model
• Of 1709 goals in eligible categories, 18% are in the ballpark…– 210 (12%) Science-equivalent (only a few explicitly
science-based)– 88 (4%) F2 & Ethics-equivalent– 12 (1%) Aspirational (Meet criteria, but undated)– 44 (2%) May qualify, but not enough data (e.g., no
baseline)
• 111 of the 168 companies have at least 1 qualifying goal…– Leader: Unilever (33 qualifying goals) Note: Calculations as of Sep .2015; results change as new data is loaded
Top 10 – Companies with Most Science/Ethics-based Goals
Note: Calculations as of Sep .2015; results change as new data is loaded
Unilever Nestle Nissan Motor
Honda Motor
Intel Siemens Kroger Sony J&J PepsiCo0
5
10
15
20
25
30
35
Company Name
# of
“Science-Based” Goals: GHG and Renewables
GHG: 3% absolute or 6% intensity improvement per year• Science-equivalent (49 companies)
– Tesco: Become a zero carbon business– Volkswagen: Reduce GHGs in the supply of energy to production
facilities in Germany by 40% by 2020 (vs. 2010)– Microsoft: Become carbon neutral for data centers, software
development labs, office, and employee air travel (Achieved)• Aspirational (2 companies)
– Noble: Implement an emission reduction and offsetting programme, the Carbon Neutral Project
– Shell: End continuous flaring in Nigeria
Renewables: Similar pace of change or 100% goal• Science-equivalent (10 companies)
– Unilever: Use 100% renewable energy– Microsoft: Meet 100% renewable energy commitment by matching the
total amount of kwh consumed with the volume of renewable energy purchased
•Science-equivalent (10 companies)– Woolworths: Achieve zero net deforestation through consumer goods
supply chain…by 2020– Bank of America: 100% of paper sourced from certified forests
•Aspirational (1 companies)– Lowe’s: Certification to Sustainable Forest Management (SFM) standard
for all products sold in our stores
Food & Ag: All sustainability sourced (certified/3rd party where possible)•Science-equivalent (11 companies)
– Tesco: Use 100% certified sustainable palm oil in all UK-own brand products by 2015
•Aspirational (1 company)– Woolworths: All wild-caught seafood sourced from MSC standard
fisheries
Health & Wellness (dietary standards for products, other wellness goals)•Science-equivalent (5 companies)
– Unilever: Reduce salt levels in products by a further 15-20% on average to meet target of 5g of salt per day by 2020
Note: Calculations as of Feb.2015; results change as new data is loaded
Big questions on “Science-Based” Goals
• Should it “count” if it’s just a “four walls” goal, or does it need to be value chain?• Today vs. ultimately?• How big a part of the business should qualify?
• What if the goal doesn’t have a date attached (not time-bound)?
• When is “all” or “zero” the only acceptable goal vs. some or progress?
• Are science and ethics-based enough?
Context-based Goals include Allocations
Part IV: Group ExerciseInstructions:
• Break into groups of 4-5 • You’ll need at least one laptop and internet
access
• Using what you learned today (e.g. what constitutes a science or ethics based goal), find what you consider the best goal in the PivotGoals database
• Include why you selected this goal (e.g. consider value chain, timeframe, science/ethics based and other variables)