10 Golden Rules for Setting Sustainability Goals

Woothiff noted that the emergence of sustainability reporting as a common practice of business organizations around the world had led to a focus on the process of setting appropriate sustainability goals and targets upon which the reports could be based.  Goals and targets are also a necessary element of sustainability strategy—without goals and methods for measuring performance against them a company’s sustainability initiatives will drift and quickly degenerate into a series of ad hoc actions and events will minimal overall impact.  In order to assist companies in setting their sustainability goals, Wothiff offered a menu of “10 Golden Rules”, which form the basis for the following list of suggestions and guidelines for sustainable entrepreneurs:

• The goals should not only address sustainability challenges laid out in the commitments but should also benefit the business and expand business opportunities for the company. In order to motivate involved parties within the company to pursue environmental and social goals they should also make good long-term business sense for the company.  For example, support skills development in the local community not only enhances wellbeing among the company’s neighbors but also provides the company with a strong local talent pool to choose from when hiring for growth initiatives.
• The goals and targets should be formally reviewed and approved at the very top of the organization—by the directors and members of the senior executive team. In the ideal situation the entire process will be publicly driven by the CEO, who takes responsibility for suggesting, championing and implementing the sustainability goals and targets.  The directors and executives have a responsibility to demonstrate to all internal and external stakeholders that sustainability is a key element of the company’s strategy and is perceived as a driver of innovation, improvement, progress and growth for the business.
• Sustainability goals should be based on activities and investments that will be integral to the business of the company, as opposed to creating separate work that diverts resources from core activities. Sustainability goals and targets should be created for each of the company’s main functional activities including research and development, manufacturing, operations, packaging and distribution, supply chain and human resources so that the company improves its processes and procedures at the same time it is making a positive impact on sustainability challenges.
• Companies need to strike the appropriate balance between impact and achievability when setting their sustainability goals and targets. The goals should stretch the company and its organizational capabilities and, if achieved, should have a demonstrable impact; however, they should not be set so high as to guarantee failure, which creates a weak track record and damages morale.  Setting goals that are too soft exposes the company to criticism for meaningless gestures and engaging in “greenwashing”.
• All of the goals should be important; however, resources are limited and companies need to prioritize activities for a particular period to make sure that their efforts achieve the most meaningful impact and generate the biggest results. Sustainability goals should be aligned with other current initiatives throughout the business so that sustainability is tightly aligned with strategy and the sustainability program clearly addresses important needs inside the company.
• Goals and targets should be not be selected and published without a clear strategy that outlines the path the company intends to take in order to achieve those goals and targets within the specified timeframe and budget. If agreement cannot be reached on strategy, or if the necessary resources are not readily available, the goal should not be included.  It is better to have a relatively small number of attainable and impactful goals as opposed to a long list that includes goals that cannot realistically be achieved.
• While, as mentioned above, the “tone at the top” matters and the CEO should be a champion of the sustainability goals and targets, ideas should be solicited from everyone in the organization. Employees generally have the best understanding of the types of changes in the day-to-day activities of the company that can have the biggest impact on the company’s environmental and social performance.  Moreover, a number of studies have confirmed that employee engagement in sustainability activities leads to higher morale and loyalty, thus reducing turnover.  Engaged employees are also strong ambassadors for the company in their interactions with other stakeholders.
• Sustainability goals and targets are certainly excellent internal management tools and external public relations activities; however, the three key stakeholders in terms of gaining traction on the company’s efforts are employers, customers and consumers. When choosing goals and designing measurements for targets it is important to take the expectations of these groups into account so that each of them can recognize the tangible benefits they can expect to receive if the company is successful.  Improved wellbeing for employees has already been mentioned; however, surveys indicate that consumers want to do businesses that perform well with respect to sustainability.
• Setting sustainability goals and targets is hard work and requires extensive engagement with internal and external stakeholders including outside organizations such as nonprofits, NGOs and governmental bodies in the communities in which the company operates. Engagement and collaboration with these external organizations provides access to new opportunities, solutions and resources.  Moreover, support from these organizations lends credibility to the company’s sustainability efforts and communications.
• While many of the points above have focused on benefits of sustainability goals and targets to the business, sustainability initiatives obviously must also position the company as a “good corporate citizen”. Companies should approach sustainability goals as an opportunity to find innovative ways to simultaneously create new products, services and processes while also solving environmental or social sustainability issues that have not been satisfactorily addressed using traditional methods or approaches.

Alan S. Gutterman is the Founding Director of the Sustainable Entrepreneurship Project.  This article is an excerpt from Alan’s book Strategic Planning for Sustainability.  For more information and tools on the subject, see here.