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Setting Environmental Targets for Success 5/15/2019 Ryan McMullan, John Friedman

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Page 1: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Setting Environmental Targets for

Success 5/15/2019

Ryan McMullan, John Friedman

Page 2: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

What Are Your Current Targets? Activity

Page 3: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Your Current Targets

Consolidate tables to at least 4 per

table

Work with your table

Share your current environmental

targets

5 Minutes

Examples

Energy

Water

Waste

Carbon

Biodiversity/Habitat

Page 4: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Overview

Aligning Sustainability Targets to Organizational Goals

Six Styles of Targets

How to Handle Growth

Current State of Corporate Targets

Draft Your Future Targets

Page 5: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Aligning Sustainability Targets to

Organizational Goals Lesson

Page 6: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Aligning Sustainability Targets to Organizational

Goals

Making a Strategy Map

Recognizing Co-Benefits

Page 7: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

7 –

Objectives License to

Operate

Cost

Reduction

Market

Opportunity Employee

Engagement Investment Capital

Financial

Reduce DSOs

Reduce

compliance costs

Reduce fines/

penalties

Ensure compliance

Enhanced reputation

Socially Responsible

Investment Funds

Favorable

guidance

Sales

Expand share of business with

existing clients

100 percent

retention of

existing clients

Increase market share

Expand premium offer

Increase sales volume to

existing

customers

Attract new

customers

Improve margins

Operational

Identify & integrate best practices

throughout

company

Maximize safety

Ensure compliance

Increase productivity

Reduce waste

Reduce

transportation costs

Reduce lost time

accidents

Reduce mediation

Provide the best and reliable

service

Be responsive

to customers

Culture of continuous

Improvement

Reduce raw materials costs

Ensure compliance

Cultural

Align HR processes and incentives with

desired outcomes

Reduce turnover

Attract / hire / retain and

engage the

best talent

STRATEGY MAP

Page 8: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

8 –

Objectives License to

Operate

Cost

Reduction

Market

Opportunity Employee

Engagement Investment Capital

Financial

Reduce DSOs

Reduce

compliance costs

Reduce fines/

penalties

Ensure compliance

Enhanced reputation

Socially Responsible

Investment Funds

Favorable

guidance

Sales

Expand share of business with

existing clients

100 percent

retention of

existing clients

Increase market share

Expand premium offer

Increase sales volume to

existing

customers

Attract new

customers

Improve margins

Operational

Identify & integrate best practices

throughout

company

Maximize safety

Ensure compliance

Increase productivity

Reduce waste

Reduce

transportation costs

Reduce lost time

accidents

Reduce mediation

Provide the best and reliable

service

Be responsive

to customers

Culture of continuous

Improvement

Reduce raw materials costs

Ensure compliance

Cultural

Align HR processes and incentives with

desired outcomes

Reduce turnover

Attract / hire / retain and

engage the

best talent

Page 9: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Co-Benefits E N VI R ONM ENTA L S O C I A L & G O VE R NAN CE

Page 10: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman
Page 11: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

In just 3 ½ days, 4,801 out of 10,872

accounts from customers who visited this

page got enrolled in Paperless Billing…that’s 44.2% sign up success!

Page 12: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman
Page 13: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman
Page 14: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman
Page 15: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

What Organizational Goals Might

You Align With? Activity

Page 16: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

What Organizational Goals Might You Align With?

Work with your table

Pick one of your current targets

Identify at least one organizational

goal or other department goal that

it aligns with

Discuss how you can collaborate

with that department

5 Minutes

Page 17: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Six Styles of Targets Lesson

Page 18: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Styles of Targets

Things We Measure

Types of Targets

Application of Targets

Picking a Baseline Year

Page 19: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Things We Measure

Targets

o Well-quantified

o Controllable

o Determine success of goals

Metrics

o Well-quantified

o Controllable

o Important for explanatory power

o Potential future targets

Indicators

o Well-quantified

o Out of your control

o Important for explanatory power 19

Page 20: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Components of a Target

Type

Absolute

Relative

Programmatic

Application

Consistent

Conditional

Baseline

Constant

Shifting

Page 21: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Types of Targets

Absolute Targets

Relative Targets (Intensity-based)

o Percentage (Part of the Whole)

o Past-referenced (Get Better)

o Plan-referenced (Part of Our Plan)

o Context-based (What The World Can Sustain)

Programmatic Targets

Page 22: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Absolute Targets

Absolute: Not normalized by business activity

Ex: Reduce MTCO2e by 20% from a 2010 baseline by 2020

Page 23: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Percentage Relative Targets

“Part of the Whole”

Percentage: Expressed as 0-100%

o Doesn’t require a baseline except to show progress

o Easy to communicate

Relative: Performance/Total Possible Performance (same

units)

Ex: Increase renewable energy to 30% of total energy by

2020

Page 24: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Past-Referenced Relative Targets

“Get Better”: How do we want to do better than we were?

Past-Referenced: Where has the company been in the past?

Relative: Performance/unit business activity

Ex: Reduce MMBtu/vehicle produced by 30% from a 2010

baseline by 2020

Page 25: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Plan-Referenced Relative Targets

“Part of Our Plan”: Where are we in our long-term plan?

Plan-Referenced: Where is the company going?

Relative: Performance/unit business activity

Ex: As part of our goal to reduce MTCO2e/Profit to zero by

2050, we will reduce MTCO2e/Profit by 25% from a 2010

baseline by 2020

Page 26: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Context-based Relative Targets

“What The World Can Sustain”: What does truly sustainable look like?

o AKA science-based targets

Context: Considers the context of a future sustainable society and the company’s role in it. What is a sustainable regeneration rate for the resource?

Relative: Performance/unit business activity, Our share is Profit/GDP

Ex: Scientific consensus is that to avoid greater than a 2℃ warming, we need to reduce emissions to X by 2050. Based on our company’s contribution to GDP our contribution to GHG reductions is Y MTCO2e/Profit by 2020.

Page 27: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Context-based Targets

Example of Context-based Carbon

Metric (CSO method)

Well-recognized

Affected by general economy

(GDP) and economic factors (gross

margin) in addition to performance

Nets out currency inflation

Recommends against including

scope 3 emissions

Page 28: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Programmatic Targets

Programmatic: Commit to implementing a program, plan,

pilot, study, assessment, etc.

Ex: Conduct a water balance and watershed study at our

largest water user

What activity will we complete?

Preparing for future quantitative targets, way of learning

Page 29: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Application of Targets

Consistent Targets

o The same in all locations (the default)

o Appropriate for widely dispersed impacts (e.g. GHG) or little difference between locations (e.g. waste landfilling in the U.S.)

Conditional Targets

o Adjusted based on local conditions, risk-based

o Appropriate for localized impacts (e.g. water scarcity) or large differences between locations (e.g. grid CO2e intensity)

o Ex: Reduce water use by 5% in regions with a water supply stress index of 0.4 or less, reduce by 15% in regions greater than 0.4.

o More work to manage

Page 30: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Constant Baseline Year

Reduce X by 20% from 2010

baseline by 2020

Reduce X by 40% from 2010

baseline by 2030

Reduce X by 60% from 2010

baseline by 2040

As early as you can get reliable

data for most metrics

Shifting Baseline Year

Reduce X by 20% from 2010

baseline by 2020

Reduce X by 20% from 2020

baseline by 2030

Reduce X by 20% from 2030

baseline by 2040

Picking a Baseline Year

Page 31: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Picking a Baseline Year

Constant Baseline Year

Gets to zero

Shows how for you’ve come

Not “punished” for early action

Easier to visualize long-term target

70

50

30

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

1 2 3 4 5 6 7 8 9 10 11

Tons

of

Wast

e G

enera

ted

Year

Waste Generated at 10%/year Constant Baseline

Page 32: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Picking a Baseline Year

Shifting Baseline Year

Asymptotic

Looses sight of earlier progress

Takes in to accounts undershoots

and overshoots

Doesn’t suggest a long-term target

Might mimic the diminishing

returns of efficiency gains

73

48

25

10

1

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

Tons

of

Wast

e G

enera

ted

Year

Waste Generated at 10% reduction/year Shifting Baseline

Page 33: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Categorize Your Targets Activity

Page 34: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Categorize Your Targets

Work with your table

Review your current targets and categorize them into the Six Styles

Discuss

5 Minutes

Six Styles

Absolute Targets

Relative Targets (Intensity-based)

o Percentage (Part of the Whole)

o Past-referenced (Get Better)

o Plan-referenced (Part of Our Plan)

o Context-based (What The World Can Sustain)

Programmatic Targets

Page 35: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

How to Handle Growth

Page 36: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Aligning Sustainability Targets to Organizational

Goals

Types of Size Change

Options for Handling Growth

Page 37: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Adapting to Size Change

Types of Size Change

Acquisitions & Divestitures

Market Share Gain/Loss

Market Growth

Target types respond differently to size change.

Page 38: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Absolute Targets

Absolute: Not normalized by business activity

Ex: Reduce MTCO2e by 20% from a 2010 baseline by 2020

How absolute targets react to changes in size

o Acquisitions & Divestitures: Add/remove from baseline

o Market Share Gain/Loss: Doesn’t account o Market Growth: Doesn’t account

Page 39: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Percentage Relative Targets

“Part of the Whole”

Ex: Increase renewable energy to 30% of total energy by

2020

How these targets react to changes in size

o Acquisitions & Divestitures: Total Possible Performance Changes

o Market Share Gain/Loss: Total Possible Performance Changes

o Market Growth: Total Possible Performance Changes

Page 40: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Past-Referenced Relative Targets

“Get Better”: How do we want to do better than we were?

Ex: Reduce MMBtu/vehicle produced by 30% from a 2010

baseline by 2020

How these targets react to changes in size

o Acquisitions & Divestitures: Add/remove from baseline

o Market Share Gain/Loss: Units of business activity increase

o Market Growth: Units of business activity increase

Page 41: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Plan-Referenced Relative Targets

“Part of Our Plan”: Where are we in our long-term plan?

Ex: As part of our goal to reduce MTCO2e/Profit to zero by

2050, we will reduce MTCO2e/Profit by 25% from a 2010

baseline by 2020

How these targets react to changes in size

o Acquisitions & Divestitures: Add/remove from baseline

o Market Share Gain/Loss: Units of business activity increase

o Market Growth: Units of business activity increase

Page 42: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Context-based Relative Targets

“What The World Can Sustain”: What does truly sustainable look like? (AKA science-based targets)

Ex: Scientific consensus is that to avoid greater than a 2℃

warming, we need to reduce emissions to X by 2050. Based

on our company’s contribution to GDP our contribution to GHG reductions is Y MTCO2e/Profit by 2020.

How these targets react to changes in size

o Acquisitions & Divestitures: Add/remove from baseline

o Market Share Gain/Loss: Profits increase/decrease

o Market Growth: Profits increase/decrease

Page 43: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Programmatic Targets

What activity will we complete?

Ex: Conduct a water balance and watershed study at our

largest water user

Changes in Size Scope

o Acquisitions & Divestitures: N/A

o Market Share Gain/Loss: N/A

o Market Growth: N/A

Page 44: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

How to Handle Growth

Page 45: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

How to Handle Growth

You’re half way to your target … when suddenly you’re back where you were at the end of year 1

Page 46: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

How to Handle Growth Promise same trajectory and timeframe for new operations as heritage? Revise trajectory and timeframe based on your actual trend, promising to leverage the learning from your last few years of efforts? Promise to hit the same absolute target in the original timeframe? Promise to hit absolute target but in a faster timeframe for new operations (6 years instead of 10)? How long do you report ‘heritage’ and ‘new’ separately? Does it matter if they’re in different geographies? Is your promise local or universal?

Page 47: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

How Would You Do It? Activity

Page 48: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

How Would You Do It?

Work with your table

Review different growth scenarios

Decide how you’d change the metric

Discuss

5 Minutes

What happens to the baseline?

What happens to the target?

What’s included?

Page 49: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Current State of Corporate

Targets

Page 50: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Current State of Corporate Targets

Target Trends

Topics for Sustainability

Example of Styles

Page 51: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Target Trends

Leading Edge

Solid Performers

Falling Out of Favor

Page 52: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Leading Edge

Focusing on a vision for a sustainable future

Target Types

o Context-based Targets

o Plans for Net Zero

o Conditional Targets (risk-based)

Page 53: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Solid Performers

Focusing on real gains for environment/communities

Target Types

o Percentage Relative Targets

o Plan-Referenced Relative Targets

o Absolute Targets

o Programmatic Targets (if supplemental and part of plan for the

future)

Page 54: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Falling Out of Favor

Sometimes abused, less trusted

Target Types

o Programmatic-only Targets

o Past-Referenced Relative Targets

o Shifting Baselines without a Long-term Plan

Page 55: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Topics for Sustainability Targets

Energy

Carbon

Water

Materials

Waste

Others for Consideration

Page 56: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Energy

Target Type Future Target Options

1 Context-based Targets No protocol developed (see Carbon)

1 Plans for Zero • 100% renewable by 2050. Target 30% by 2030.

• Net Zero energy by 2075. Target 40% by 2030.

1 Conditional Targets Higher targets where grid CO2e intensity is higher

2 Plan-Referenced Targets Project total possible MMBtu/sq ft reductions of 60%

from 2010 baseline. Target reaching it by 2035.

Target 30% reduction by 2025.

2 Absolute Targets Reduce MMBtu by 50% from 2010 baseline by 2035

2/3 Programmatic Targets • Conduct energy audits at 50% of facilities by 2025

• Pilot 4 renewable energy technologies by 2030

3 Past-Referenced Targets Reduce MMBtu/sq ft by 50% from 2010 baseline

Page 57: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Energy

Alternatives

o Shift focus to Net Energy to subtract onsite generation (reduced demand on grid)

o Drop energy as a sustainability target and just focus on carbon

o Consider embodied energy of water for comparison (not in scope)

o Shift renewable energy to % of whole instead of absolute consumption

3rd Party Certifications/Programs

o Energy Star Certified Building

o ISO 50001 EnMS

o LEED O+M (more than just energy)

o LEED Net Zero Energy (coming soon)

o RE100 Commitment

o BREEAM In-Use (UK/Europe)

Page 58: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Carbon

Target Type Future Target Options

1 Context-based Targets Science-based carbon targets (e.g. CSO)

1 Plans for Zero Net Zero carbon by 2050. Target 55% reduction of

MTCO2e/revenue from 2010 baseline by 2030.

1 Conditional Targets Higher targets at facilities with higher emissions

2 Plan-Referenced Targets 60% carbon reduction by 2050. Target 45% reduction

of carbon from 2010 baseline by 2030.

2 Absolute Targets Reduce carbon by 50% from 2010 baseline by 2030

2/3 Programmatic Targets Establish 7 new PPAs by 2030

3 Past-Referenced Targets Reduce MTCO2e/sq ft by 45% from 2010 baseline

Page 59: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Carbon

Alternatives

o Other science-based target method (Sectoral Decarbonization

Approach, 3% Solution, BT-CSI, etc.)

o Consider embodied carbon of water and waste

3rd Party Certifications/Programs

o RE100 Commitment

o LEED Net Zero Carbon (coming soon)

Page 60: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Water

Target Type Future Target Options

1 Context-based Targets Still nascent

1 Plans for Zero Net Zero water by 2075. Target 45% reduction of

water from 2010 baseline by 2030.

1 Conditional Targets Higher targets in water scarce regions

2 Plan-Referenced Targets 70% water reduction by 2050. Target 45% reduction

of water/occupant from 2010 baseline by 2030.

2 Absolute Targets Reduce water use by 40% from 2010 baseline by 2030

2/3 Programmatic Targets • Conduct water balance study at largest water user

in each business unit.

• Conduct water risk assessment.

• Convert one facility to Net Zero Water.

3 Past-Referenced Targets Reduce Mgal/occupant by 45% from 2010 baseline

Page 61: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Water

Alternatives

o Shift measurement from water to potable water (allows reclaimed

water, rainwater, etc.)

o Shift measurement from water to Net Water to account for onsite

treatment and rainwater capture

o Compare embodied water of electricity to onsite use

3rd Party Certifications/Programs

o LEED O+M (more than just energy)

o LEED Net Zero Water (coming soon)

Page 62: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Waste

Target Type Future Target Options

1 Context-based Targets Still nascent

1 Plans for Zero All facilities Zero Waste Certified by 2035

1 Conditional Targets Increased targets on coastal facilities

2 Plan-Referenced Targets Target 70% avoidance rate by 2050. Target 45%

avoidance by 2030.

2 Absolute Targets Reduce waste generation by 40% from 2010 baseline

by 2030.

2/3 Programmatic Targets • Conduct 4 reverse logistics recycling pilots.

• Add 17 remanufactured products.

3 Past-Referenced Targets • Reduce Waste Disposed/Profit by 45% from 2010

baseline by 2025.

• Increase 3R Rate to 92% by 2030.

Page 63: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

“90% Diversion from Incineration, Landfill,

and the Environment” plus Zero Waste Policies

and Programs

Waste

Alternatives

o Avoidance Rate (Reduce/Reuse as %)

o 3R Rate (Reduce/Reuse/Recycle as %)

o Salable Waste (separate recycling paid for)

o Packaging Reduction

3rd Party Certifications/Programs

o TRUE Zero Waste (US GBC) [Northrup Grumman, Raytheon]

o Zero Waste to Landfill (ULE, NSF, Green Circle)

o LEED Net Zero Waste (coming soon)

Page 64: Setting Environmental Targets for Success · X 'HFLGHK RZ\RX·GFKDQJHWKH metric X Discuss X 5 Minutes X. Targets . Ryan McMullan John Friedman

Other Topics for Consideration

Biodiversity/Habitat Protection

Elimination of Substances of Concern

Alignment to UN Sustainable Development Goals (SDGs)

o Goal 7: Affordable and Clean Energy

o Goal 11: Sustainable Cities and Communities

o Goal 12: Responsible Production and Consumption

o Goal 13: Climate Action

o Goal 14: Life Below Water

o Goal 15: Life On Land

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Putting It All Together

Topics vary by the company’s

o Impact (materiality)

o Sophistication

o Outside Perception

Don’t have to pick the same target components for every topic

Good to have the same baseline year for every target

Consider your target development and deployment process

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Where Are Your Targets? Activity

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Where Are Your Targets?

Work with your table

Review your current targets and categorize them into Leading, Solid, or Falling

Discuss

5 Minutes

Leading Edge

o Context-based Targets

o Plans for Net Zero

o Conditional Targets (risk-based)

Solid Performers

o Percentage Relative Targets

o Plan-Referenced Relative Targets

o Absolute Targets

o Programmatic Targets (part of plan for the future)

Falling Out of Favor

o Programmatic-only Targets

o Past-Referenced Relative Targets

o Shifting Baselines without a Long-term Plan

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Draft Your Future Targets Activity

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Draft Your Future Targets

Work with your table

Pick one current target

Draft a future target for the same

topic

Discuss

Continue to another target if time

permits

15 Minutes

Consider

Aligning Sustainability Targets to

Organizational Goals

Six Styles of Targets

How to Handle Growth

Current State of Corporate Targets

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Thanks

Thank you for your participation

Thanks to Dr. McElroy for clarifications on the CSO Context-

based Carbon Targets

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Conclusion and Questions?

Aligning Sustainability Targets to

Organizational Goals

Six Styles of Targets

How to Handle Growth

Current State of Corporate Targets

Draft Your Future Targets

Ryan McMullan

Strategic Sustainability Consulting

o [email protected]

o www.linkedin.com/in/ryan-mcmullan

o Twitter: @LeanGreenRyan

John Friedman

Sustainability Manager at WGL

o www.linkedin.com/in/johnfriedman/

o Twitter: @JohnFriedman

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