I am providing a short response to the question – why does a company need to set sustainability goals?
We need goals that we target to achieve. The journey towards a goal could contain multiple targets. UN Development Program (UNDP) has set sustainable development goals for the planet. These aim to end poverty, establish peace and harmony and protect the earth. Seventeen goals are defined to achieve these UNDP objectives.
Goals for a company, on the other hand, could be different. A company may seek to achieve the objective of sustainable development by setting goals to reduce carbon emissions. Another target could be gender equity on the board and the company. There could be a target to achieve the goal of equality of opportunity irrespective of race and religion. Each of these targets will have a measure against which we monitor the organization’s performance to achieve and reach the goal.
Why do companies set goals for sustainable development? Customers are demanding that there should be a sustained global effort to reverse global warming. In response to customer demand, companies set targets to reduce carbon emissions in their internal and partners’ operations. As a company progresses towards achieving its goals, customers note that this is a company working towards fulfilling its desire. They then view products and services that the company offers favorably compared to competitors.
Goal setting is a popular means to track performance. We set goals for life and business. Goal setting is a standard Human Resource management practice in most corporations. Setting sustainability goals for meeting climate change targets is an exercise adopted by participating countries, companies, and other institutions attending climate change summits.
The OECD International Program for Action on Climate (IPAC) regularly monitors each country’s progress toward reaching net-zero greenhouse gas emissions by 2050. It evaluates policies and provides feedback on results and good practices. It complements and supports the UNFCCC and the Paris Agreement monitoring frameworks. IPAC has developed a Climate Action Dashboard that tracks progress for each country against indicators. The end objective is to build a more resilient global economy by 2050.
Moodys, for instance, has set its Net-zero target for 2040. The near-term science-based targets to reduce GHG emissions in its operations and value chain have been validated by SBTi (A leading science-based targets monitor). The company has committed to using only renewable electricity in its operations. The remainder of its operations, business travel, and employee community emissions will be reduced to the same level in 2000. It was in this year that Moody’s became public.