Guide to Setting Targets

Article Highlights

• Best Practices: impact and opportunities, stretch goals, science-based targets, business strategy connected to targets, ownership, global focused targets and make public.

• Effective Targets: Focus on integration of your targets with the company’s governance and process, accountability, performance and remuneration and monitor and report.

A company can set specific and time-bound targets. By doing so, you provide clarity across the entity and improve the entity’s performance.

Best Practices:

• Impact and Opportunities: Focus on company’s (1) greatest impact and (2) business opportunities. For example, set goals related to product use.

• Stretch Goals: Set goals that are ambitious even if you are not sure how to achieve them yet.

• Science-based Targets: Set targets that are required by the greater world. For example the Science Based Targets initiative is a collaboration between CDP, the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature. It sets targets that focus on global greenhouse gas (GHG) emission levels.

• Business Strategy Connected to Targets: Your business strategy should be supported by the targets i.e. productivity, risk management, and/or revenue growth.

• Ownership: Obtain broad support and ownership of the targets across the organization. This includes internal and external support and from the bottom up and top down.

• Globally Focused Targets: Targets set to the United Nations Sustainable Development Goals (UNSDG).

• Make Public: Make your targets public to show your commitment to stakeholders and society overall.

Effective Targets:

• Focus on integration of your targets with the company’s governance and processes.

• Accountability: Integrate targets into each business unit’s strategy and hold each business unit accountable.

• Performance and Remuneration: Reward high performers that assist with achieving the targets.

• Monitor and Report: Regularly review progress and adjust where necessary. Be transparent with stakeholders regarding target progress with sustainability updates and reports.

Key Takeaways

Tasks to help you prepare

• Set specific and time-bound targets that fit with the company’s strategy.

• Focus on effective targets that are carried out with internal accountability to achieve the targets, employee performance reviews, appropriate remuneration structures to achieve targets, monitoring of progress, and public reporting.