science-based goal-setting as the holy grail of managing non-financial performance: the future-fit...

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

Sustainability GoalsPivotGoals.com Search Criteria:• Keyword search

• 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:

• Supply chain: 13% • Operations: 69% • Use phase: 12% • End-of-life: 3%

Note: Calculations as of Sep 2015; results change as new data is loaded

Part II: Results from the GF200• Goals for Environmental Focus Areas

• Goals for Social and Governance Focus Areas

• Goals by when they are due

Portion of Companies Setting Goals for…

(Environmental)

7 Note: Calculations as of Sep 2015; results change as new data is loaded

Clim

ate/

GHG

Ener

gyW

aste

Wat

erRe

newa

bles

Toxic

sBu

ildin

gsFo

rest

Fuel

Dist

ribut

ion Air

Land

Use

Food

& A

gPa

ckag

ing

Biod

ivers

ityMi

ning

Ocea

n0%

10%

20%

30%

40%

50%

60%

70%

80%

Portion of Companies Setting Goals for…

(Social & Governance)

8 Note: Calculations as of Sep 2015; results change as new data is loaded

Compli

ance

/Stan

dard

s

Commun

ity

Emplo

yees

Safet

y

Gover

nanc

e

Philan

thro

py

Women

Tran

spar

ency

Health

& W

ellne

ss

Human

Rights

0%

10%

20%

30%

40%

50%

60%

We Like Round Numbers – When Goals Are Due


2014

2015

2016

-2017

2018

-2019

2020

-2024

2025

2030

-2039

2040

-2049

2050

+

Ongoin

gOpe

n0

100

200

300

400

500

600

Year

# O

f G

oals

Top 10 – Companies with Most Goals


Nestle

Unilever

Novart

is

Rosneft

Oil

Panaso

nic

Genera

l Elec

tric

Honda M

otor

E.ON

Wal-Mart

Stores

Renau

lt0

10

20

30

40

50

60

70

80

90

100

Company Name

# of

Goa

ls

Top 10 – Companies with Most Coverage of ESG Focus Areas


Nestle Unilever Wal-Mart Stores

Ford Motor J&J Total BMW Peugeot Bayer E.ON0

5

10

15

20

25

Company Name

Num

ber o

f Goa

ls

Analysis #1: Three levels of waste goal setting

How many of the Fortune 500 have a Waste goal(s)?

Note: Calculations as of Jun2015; results change as new data is loaded

How many of the Global Fortune 500 have a waste goal?

Answer: just over half (52%)

How many of the Global Fortune 500 have a waste goal?

How many of the Fortune 500 have Zero Waste to Landfill goals?

How many of the Global Fortune 500 have a Zero Waste

to Landfill goal?


to Landfill goal?

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCP_js5Gd8McCFQFZPgodMNsBBQ&url=http://www.powerbrandingsecrets.com/category/branding-book/&bvm=bv.102537793,d.cWw&psig=AFQjCNExBaFJX6CHXu1Q_KJSCs_zrewy8w&ust=1442103323008629

Company Goal Year

Wal-Mart Eliminate landfill waste from U.S. stores and Sam’s Club locations 2025

Bridgestone A waste-free tire industry Open

Toyota N. AM) Achieve zero waste to landfill at manufacturing plants 2013

Samsung Establish resource recycling system and become a company with “zero emission of waste” Open

Daimler Eliminate landfill waste (US plants) Ongoing

Honda Completely close the loop for all resources and bring product life-cycle waste down to zero Open

Honda Maintain zero landfill waste performance (Japan and Europe) 2014

Rosneft Oil 0 mln tonnes of legacy drilling waste, at the end of the period 2018

Rosneft Oil 0 mln tonnes of legacy oil sludge waste, at the end of the period 2018

N.T.T Continue to achieve zero emissions (waste) for all decommissioned telecommunications equipment Ongoing

Bank of America Dispose 100% of e-waste using certified responsible vendors 2015

Nestle All Nestle UK Factories to achieve zero waste Ongoing

Nestle 10% of Nestle factories to reach zero waste 2015

Kroger Transition all Kroger manufacturing plants to 'zero waste' facilities 2014

HSBC Holdings Recycle 100% of HSBC’s office and electronic waste Open

PTT Achieve zero hazardous waste to landfill 2020

Panasonic EU: Achieve 99% waste recycling rate at EU manufacturing sites 2013

Companies with Zero Waste to Landfill goals

Panasonic Taiwan: Increase waste recycling rate to 99.3% or more 2016

Panasonic Achieve “zero waste emission” from production activities by achieveing factory waste recycling rate of 99.5% 2018

Unilever Achieve zero non-hazardous waste to landfill at all manufacturing sites 2015

Unilever 100% of our US manufacturing sites achieve zero non-hazardous waste to landfill status 2013

UnileverSend zero non-hazardous waste-to-landfill in our Englewood Cliffs, NJ headquarters and our Trumbull, CT Research and Development center 2013

Unilever top 21 countries of operation 2017

Aviva Zero waste to landfill in the UK 2015

Aviva Zero waste to landfill worldwide 2020

Woolworths Zero food waste to landfill (where facilities available) 2015

Intel Zero chemical waste to landfill 2020

Fujitsu Maintain zero waste emissions at factories in Japan 2015

Idemitsu Kosan Maintain final disposal (landfill) volume of industrial waste at all refineries & petrochemical plants at 0.5% or lower Ongoing

Walt Disney Send zero waste to landfills Ongoing

ABB Reach our long-term (2020) target of zero waste 2020

GlaxoSmithKline Achieve zero waste to landfill 2020

Denso Reduce waste: Overseas: Promote waste zero emissions 2016

Denso Seek to realize zero waste to landfill Open


Mitsubishi Electric Strive for zero waste output from manufacturing processes 2021

J. Sainsbury Through our Zero Waste to Landfill target we aim to actively put all operational waste to positive use 2020

Royal Bank of Canada Formalize policy to ensure zero electronic waste is sent to landfills 2013

DirecTV Reduce landfill waste from our operations and facilities to almost zero Ongoing

Suzuki Motor Maintain non-consolidated group landfill waste under 1%. 2015

WM. Morrison Supermarkets Zero waste direct to landfill from stores 2013

Mazda Motor Reduce direct landfill waste to zero across the entire Mazda Group in Japan 2020

Staples Achieve zero waste in our operations and help our customers to minimize their operational waste. Ongoing

Sumitomo Chemical Achieve zero waste emissions at all our manufacturing facilities in Japan 2015

Kobe Steel Achieve zero landfill waste in the long term Ongoing

Sprint Nextel Send all of headquarter's operational waste to recycling, composting or use in alt source of fuel Ongoing

Abbott Laboratories Achieve 12 zero-waste-to-landfill manufacturing facilities 2015

News Corp. Achieve zero waste to landfill at studio lot. 2016


• 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?


goal?

Honda

• Completely close the loop for all resources and bring product life-cycle waste down to zero

• Timeframe: open



goal?

Bridgestone America’s Tires4ward Program

• Achieving a waste-free tire industry

• Timeframe: open



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

• Aspirational (4 companies)– Walmart, BMW, P&G, Noble: 100% renewables

Note: Calculations as of Feb 2015; results change as new data is loaded

“Ethics” Goals: Governance, Safety, Employees, Human Rights

Governance (multiple areas like zero corruption, 100% transparency)• (1 companies)

– UPS: Train 100% of full-time managers and specialists on ethics and compliance every 2 years

Safety (zero injuries/fatalities, or certification for all facilities)• (34 companies)

– Dow: Vision of no accidents and no injuries

Employees (100% living wage, health coverage, wellness, or other similar) • (18 companies)

– Electricite de France: Ensure equal pay for female employees

Human Rights (Zero violations of some criteria)• ( 11 companies)

– Microsoft: Support industry efforts to identify, reduce, and ultimately eliminate conflict minerals from the technology supply

Note: Calculations as of Feb.2015; results change as new data is loaded

Additional: “Science-Based” Goals: Water and Waste

Water: “Water-neutral”, “watershed”, “water stress”•Science-equivalent (5 companies)

– Unilever: Halve the water associated with the consumer use of our products on a per consumer use basis

– Toyota N. America: (N. Am) Reduce water withdrawal 6% per vehicle produced, from a baseline of FY2010

•May Qualify (5 companies)– BMW: Reduce water, energy, waste, solvents per vehicle by

45%•Aspirational (3 companies)

– Saint-Gobain: Zero industrial liquid discharge

Waste: Zero target (up to 1% landfill/other)•Science-equivalent (19 companies)

– Intel: Zero chemical waste to landfill by 2020– Walmart: Eliminate landfill waste from US stores and Sam’s

Club by 2025


Additional: “Science-Based” Goals: Forests, Food, HealthForests (zero deforestation, large certified target)

•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


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)

• Present back to the audience and discuss