Directions 2015: The Rise of Science

How does it mix with sustainability, business strategy

and consumer emotion?

THE RISE OF SCIENCE

DIRECTIONS 2015 SALTERBAXTER

THE R

ISE

OF SC

IENCEDIRECTIONS 15

DIMENSION 1: SCIENCE-BASED GOALS

6

DAVID CROFT

A MEASURED APPROACH

8

MATTHEW SWIBEL

ITS NOT JUST SCIENCE ON OUR RADAR

10

MARK W. McELROY

SCIENCE + ETHICS = CONTEXT

12

JOHN KORNERUP BANG

APPLYING SCIENCE

14

CONTENTSSCIENCE AND DOUGHNUTS

2

IN THE LABORATORY

4

DIRECTIONS 2015 TEAM

NIGEL SALTERFounder & CEO

JIM PEACOCKDirector, Consultancy & Communications

NINA PICKUPCreative Director

ANNIE LANCASTERSenior Consultant

KRISTINA JOSSSenior Sustainability Consultant

CAROLINE CARSONSustainability Consultant

OLIVIA STANDISHResearcher & Project Lead

AMY KELLYStudio Manager

RICHARD WILSONDesign Director

AMBER HADLEY Designer

GARY McCALLPrint Manager

LOUISE MOYNAProduction Team Lead

MARK LEVERSenior Artworker

Science has always been a part of sustainability solutions. Yet in recent years its been lurking in the background of the corporate sustainability debate, biding its time, waiting for its moment to shine. It seems as though that time has arrived.

Companies from a wide range of sectors, from beauty to construction, are giving a greater prominence to science in their approaches to sustainability. Its now being mixed with mainstream business thinking, with sustainability theory, target setting and strategy, and with brands and their relationship to consumers and investors. But can this heady mixture be made to work?

Is science really going to unlock the big sustainability challenges as it gets blended into the hard realities of business and marketing?

Are science-based targets the driver of change?

How necessary and powerful are academic frameworks connecting the science behind sustainability to business strategies?

And will consumers or investors ever really be won over by scientific truths?

This 15th edition of Directions will look at three dimensions contributing to the rise of science in corporate sustainability: science-based targets, scientific frameworks, and stakeholder engagement with science. Well hear views for and against from academics giving businesses the tools for sciences adoption, and business leaders applying these tools to their thinking and activities.

Is science going to save us all from ourselves (and from our constant theorising about sustainability)? Well, take a look inside. At the very least we think its hard to argue against the signs that science is growing its influence and looks set to transform the way we think about corporate sustainability.

1

DIMENSION 3: STAKEHOLDER ENGAGEMENT

36

ANDY HOWARD

DISSECTING DATA

38ANNIE LANCASTER

THE RE-ENLIGHTENMENT

40DIMENSION 2: SCIENCE-BASED FRAMEWORKS

16

GUIDO SCHMIDT-TRAUB

ORCHESTRATED ACTION

18

KATE RAWORTH

CAN DOUGHNUTS SAVE US?

20

DR. JAKE REYNOLDS

REWIRING THE ECONOMY

24

PETER BAKKER

THEORY INTO PRACTICE

28

DR. GEOFF KENDALL

BACK TO THE FUTURE

30

CHRISTOPHER DAVISKATE LEVINE

BEAUTY IS ACADEMIC

34

CREATING SOLUTIONS?

42

2DIRECTIONS 2015 SALTERBAXTER

NIGEL SALTERFounder & CEO Salterbaxter

SCIENCE AND DOUGHNUTS IS THIS SUSTAINABILITYS NEXT WAVE?Science was at the heart of sustainability from the start. But now theres a renewed interest in how it can direct thinking and lead to better, more focused action. Thats good, says Nigel Salter, but many challenges lie ahead.

3And, finally, what about the social side of sustainability?

The science has done a very good job in certain aspects of environmental performance notably in understanding climate change and the need to reduce greenhouse gases.

Where social issues and the need to build a more just and equitable global economy are concerned, science has, so far, barely scratched the surface.

THE DOUGHNUTS

This is where the doughnuts come in. As we hear on page 20, Kate Raworths Doughnut Model presents a picture of where we must get to in the 21st century: living safely below the planetary boundaries but lifting people above the inner ring of social resources to ensure they can live in dignity and with fair access to opportunity. The doughnut gives us a clear picture of how and why we need to get that balance right.

But on the final frontier, perhaps, lies a very practical question can science help to sell stuff? By which I mean, can science be used effectively to sell the sustainability story to consumers? Can it provide a new imperative to change behaviours and alter purchasing patterns?

As we know from the GM foods debate, consumers have very firm views about issues and those views last even when scientific arguments, seemingly full of logic and reason, are presented to counter them. Theres also a danger that attempts to educate consumers using science and the power of logic can end up backfiring because they can too easily seem patronising.

This is the true test and at present, science isnt winning.

So welcome to the new era of science-led sustainability thinking!

Interesting times lie ahead. Lets hope the mixture of science, sustainability, business strategy, brands and emotions doesnt get too explosive. If handled right, it could be a far more creative force.

One Planet Thinking and Planetary Boundaries have given us a very useful way to look at environmental threats. They map the environmental limits we must live within if we want to preserve an environment that can be shared safely by the nine billion people who will live here by the middle of the century.

Then we have the UNs 17 Sustainable Development Goals, with their 169 targets, which, rather remarkably, have been agreed by 193 countries after a huge and unprecedented stakeholder consultation programme. They now stand as a very practical guide for businesses as they move forward on their individual sustainability journeys.

And we now have the Future-Fit Benchmark, which really does look like a workable framework allowing companies to measure their performance in practical ways and to begin the challenging but essential task of fundamentally rethinking their business models.

These all look like solid progress and clear evidence that scientific insight is gaining a necessary influence and providing some fascinating new models and ideas for business to work with.

BUT ITS NOT NECESSARILY ALL GOOD

There are some risks and some possible unintended consequences that need to be thought about too.

As we hear in the pages that follow, in some cases scientific targets if adhered to too rigidly or applied too bluntly could end up providing the wrong answers, justifying a reduction in carbon-cutting activity by some companies, for example.

Then theres the ever-present danger that business could merely turn science into another PR exercise and use it to screen a lack of real progress a more rational and seemingly more credible form of greenwashing, if you like.

Similarly, as some of our writers warn, theres a danger of turning science-based approaches into a self-serving industry, another time and resource consuming exercise that holds companies back from acting on the things that will really make a difference.

Science is, of course, not a new aspect of sustainability thinking. It was where it all started long before the business strategists, the management consultants and the communications agencies got in on the act.

But we have seen a significant refocusing on science recently and it now seems to be moving back to centre stage, claiming what many would say is its rightful place at the very heart of sustainability.

The interesting challenge will be to see if it can really blend with business strategy, with marketing, with branding and with business performance and start to bring about real change in tackling our pressing environmental, economic and social issues. To play a meaningful and lasting role it is going to have to force change in these areas and bring something useful to an already crowded party.

The signs are that it is already making a significant splash.

SCIENCE MAKING A SPLASH

Science-based targets have become something of a holy grail over the past year or so. Most businesses serious about sustainability now see them as a prerequisite to tackling and reporting on their sustainability challenges an accepted science, you might say.

But do they work? How can they be calculated? What are the implications of using a real science-based approach? And are these targets really practical or workable enough for business to put them to effective use?

There are, as you can see, still as many questions as answers.

But our experience is that they are central to the discussions in major corporations right now, and as youll read in the following pages, companies in diverse sectors are grappling with them and already applying some of the thinking.

Thats supported by some new and developing science-based frameworks for sustainability, that provide important ways of looking at the sustainability challenges we face.


IN THE LABORATORYHere are some of the experts who have contributed to this years publication:

Andy HowardAndy Howard is the founder of Didas Res

earch,

an independent research firm focused on long-term

equity investing. Andy previously led the GS SUSTAIN

research team at Goldman Sachs in London,

advised financial institutions with McKinsey,

and worked with the NGO Global Witness.

Christopher Davis

Christopher Davis is the Director of Corporate S

ocial

Responsibility and Campaigns for The Body Sh

op

International. He joined the business in 2004 to

work

with company founder Anita Roddick, and in 2

010 was

awarded the United Nations Business Leaders

Award

in recognition for his work.

David CroftDavid Croft is Sustainable Development Director

for Diageo. Previously with Waitrose, Kraft Foods,

Cadbury, and the Co-operative Group, Davids

roles included leading technical, marketing and

sustainability functions in quality, safety, brand

marketing, sustainability, and sustainable agriculture.

John Kornerup BangJohn Kornerup Bang is Head of Positioning and Strategic Risk Management, Group Sustainability at A.P. Mller Maersk Group. He is Lead Advisor on Climate Change for the Maersk Group.

Peter BakkerPeter Bakker is the President and CEO of

the World

Business Council for Sustainable Development.

Mr. Bakker is the recipient of the Clinton Global Citizen

Award (2009); the SAM Sustainability Leadership

Award (2010); and has been an Ambassador Against

Hunger for the UN World Food Programme since 2011.

He is also the Chairman of War Child Netherlands.

5Kate RaworthKate Raworth is a Senior Associate of the Cambridge

Institute for Sustainability Leadership, focused on

exploring the economic mindset needed to address

the 21st centurys social and ecological challenges.

She is the creator of the doughnut of planetary and

social boundaries.

Matthew Swibel Matthew Swibel is Lockheed Martins Director of Corporate Sustainability, leading the sustainability program, reporting and stakeholder engagement. During his tenure Lockheed Martin has been named a sector leader in environmental, social and governance performance. Previously, Matt was an award-winning business journalist, primarily with Forbes.

Mark W. McElroy, Ph.D

Mark W. McElroy, Ph.D. is the founder and Executive

Director at the Center for Sustainable Organizations

and the original developer of the Context-Based

Sustainability method. He is also co-founder of Thomas

& McElroy LLC, creators of the MultiCapital Scorecard,

and teaches in the MBA in Managing for Sustainability

programme at Marlboro College in Vermont.

Kate LevineKate Levine is the Director of Commitment and Corporate Communications for The Body Shop International. Kates background is in corporate communications, having worked for many years in consultancies, most recently as a Partner at Pagefield in London. Guido Schmidt-Traub

Guido Schmidt-Traub is Executive Director of the UN

Sustainable Development Solutions Network (SDSN).

Launched by UN Secretary-General Ban Ki-moon,

the SDSN mobilises scientific and technical expertise

from academia, civil society, and the private sector

in support of sustainable development.

Dr. Geoff KendallDr Geoff Kendall is CEO of the non-profit Future-Fit Foundation, which is leading the creation of the Future-Fit Business Benchmark.

Dr. Jake ReynoldsDr. Jake Reynolds is Director, Sustainable Economy at the Cambridge Institute for Sustainability Leadership. Jake leads the organisations efforts with business, government and finance leaders to build a sustainable economy.


In recent years weve seen a surge in the number of companies using scientific evidence in setting their sustainability targets across a range of environmental issues, from water to energy use.

THINGS TO NOTE:

The initial drive for science-based targets came out of businesses setting carbon targets in line with requirements to keep global temperature increases to below 2 degrees Celsius.

The adoption of science-based carbon targets has been accelerated by several partnerships, including a joint initiative by CDP, the UN Global Compact, the World Resources Institute, and WWF called Science Based Targets (SBT) that aims to increase corporate ambition on climate action by changing the conversation around decarbonisation.

The following section explores some of the different ways leading businesses are incorporating science into their target setting (carbon and beyond). It highlights the positive impacts, as well as the limitations, of setting science-based goals.

DIMENSION 1:

SCIENCE-BASED GOALS

7DIMENSION 1:

SCIENCE-BASED GOALS


Caroline Carson: Diageo has announced 20 new sustainability and responsibility targets to be achieved by 2020. Can you tell us more about the strategy?

David Croft: The strategy is around how Diageo progresses in 2020 and beyond. We are looking at three key areas alcohol in society, the communities where we operate, and the environment. The targets aim to act upon our most material issues.

Our strategy has to focus on alcohol perhaps not usually a frontline sustainability topic, but our approach is very holistic. We take a grain to glass approach: thinking through the impact of our supply networks on their communities.

In terms of implementation, there is a much greater focus on impact. Were looking at what we do and what effect it is having on us and on wider policy goals the Sustainable Development Goals, for example.

THE ISSUES WERE TRYING TO TACKLE NEED A HUGE

COALITION OF THE WILLING.

Science-based targets have a vital role to play in creating much better sustainability metrics, but they have their limitations too. The key is to measure the things that really add value and to use the right language, argues Diageos David Croft.

DAVID CROFTSustainable Development Director Diageo

CAROLINE CARSONSustainability ConsultantSalterbaxter

A MEA

SURE

DAP

PROA

CH

9Business cannot operate in isolation. The issues were trying to tackle need a huge coalition of the willing. As a leading organisation in our sector, we can help support and strengthen that coalition.

CC: Do you think the evolution of science-based targets has helped?

DC: Science-based activity has created metrics that werent there before. On the environmental side it works fairly well, but some of the broader issues we face are still hard to quantify. We need pragmatism as well as metrics. Without it you spend a lot of time and resource measuring impacts that dont necessarily add value.

CC: Were you able to incorporate these metrics in deciding your strategy and targets?

DC: Being able to measure has certainly played a role in setting targets, but it was not the only lens. For me, it starts with deciding the most material issues we face. If we cant measure everything to the level wed like as with socio-economic metrics we try to create frameworks to help that happen.

Science-based activity around the environment has been very helpful, particularly during our recent significant growth. It helps us measure how well we are achieving our targets in a wider context.

Although the science-based activity is still developing, it generates confidence that our approach is really relevant to the risks the world faces.

Historically, not having science-based targets meant organisations could remain isolated and thats not the strongest way forward.

CC: Are there other material issues to which you apply a science or context based approach other than carbon?

DC: We would certainly consider it. The environmental data is years ahead of the social data. I think the social side will catch up, but it remains challenging to get hold of the detailed data on health or on livelihoods needed for a truly science-based approach.

CC: Alcohol in society is one of your key sustainability focus areas. Does science play a role here too?

DC: Absolutely. We are committed to delivering the Beer, Wine and Spirits Producers Commitments1. Last year we had about 330 individual projects to manage across a range of areas. But the really key question is: which, or which facets, of these programmes are most effective?

Bizarrely, the sustainability movement has been slow to apply impact measurements around socio-economic issues. Yet thats exactly what wed do with any other business issue. It doesnt make sense but, previously, the data just hasnt been available.

CC: Diageo is on the advisory board for the Science Based Targets (SBT) Initiative. How did this come about?

DC: Weve been involved from the start because we wanted to put this data-driven approach alongside the pragmatic and materiality approaches already there.

SBT provides suggestions and guidance. Along with others on the advisory board, we bring an ability to translate the white coat theory into practical approaches for business.

WE NEED TO TRANSLATE THE WHITE COAT THEORY INTO PRACTICAL APPROACHES

BUSINESS CAN WORK WITH.Because theres a danger. If detail gets too convoluted, it can switch an audience off. So part of our role is thinking about how guidance might be couched in future to create and enable the desired impact.

CC: Do you have any advice for other organisations looking to adopt a more science-based approach?

DC: My start point is lets not create an industry around science-based targets. We need to be pragmatic or well spend a lot of time and resource that could dilute the actual activity itself.

SBT is hugely valuable in helping us focus on the right areas. It also enables that coalition of the willing to move consistently in a shared direction, with the right degree of scale to tackle these really big issues.

CC: What communication challenges have you encountered?

DC: Well it can be a double-edged sword. But I think the data helps you track progress and communicate better. Another danger is the language. It is not always accessible and its important to use language that connects with different audiences not everybody is a scientist.

IN MANY AREAS OF SOCIETY, THERE IS A MISTRUST

OF SCIENCE.CC: Is this something that can be resolved through dialogue or communications?

DC: I think its about dialogue, and making certain that a broad stakeholder group feeds into how targets are developed and communicated.

It irritates me when a business says the science tells me A+B = C with a perfectly logical rationale that may be completely devoid of any emotion. When consumers dont agree with that logic, the response is often: Well just have to educate consumers. That feels terribly patronising.

There are wider contexts that motivate people and change. If education was all that is needed, everybody would have been using low-energy light bulbs way before policy required it. And that wasnt the case, was it?

1 Leading producers of alcoholic beverages have made a collective commitment to reduce harmful drinking across five key areas underage drinking, marketing codes of practice, consumer information and responsible product innovation, drinking and driving, and enlisting retailer support in reducing harmful drinking. (http://www.producerscommitments.org/)


Kristina Joss: Your sustainability report is entitled Science of Citizenship. How do you connect the science of your business to the value you create for society?

Matthew Swibel: Sustainability is often best understood by recognising systemic impacts. A systems view creates opportunities to use science to address complex challenges and gather credible data to get to the heart of the problem. Being a scientifically driven business, we can take a systemic view.

MATTHEW SWIBEL Director of Corporate Sustainability Lockheed Martin

KRISTINA JOSS Senior Sustainability Consultant Salterbaxter


10

For Matthew Swibel, science offers a starting point but not always a destination. Turning data into knowledge requires judgements, too. At their best, scientific approaches help focus the conversation and provide the raw material for finding effective solutions.

11

KJ: How are you using science to enhance the sustainability of your products/services?

MS: One example is how we are trying to make solar energy more economical through developing low-battery energy storage. This will enable utilities to add renewable energy to the mix without disrupting the grid at high cost to customers. Mining companies have used our seismic sensors for several years. Now oil and gas companies are applying the science behind these to make fracking safer.

KJ: Do your engineers and scientists make the connection between sustainability and science?

MS: I think that they are driven to innovate with purpose and thats often closely linked to scientific discovery. Thats a strong thread running through our space programmes. Whether the innovations are about finding life on Mars or preventing wind farms jamming radars, theres a higher purpose to those two very different challenges. I think thats what employees latch on to.

KJ: What are the challenges when you talk about science and sustainability to stakeholders?

MS: Were trying to show the interconnection between both corporate and wider citizenship and, within that, the relevance of science, in terms of discovery and finding solutions. Sustainability is too often linked to the heart. Now we can say: lets put our minds to work and not get stymied by emotions.

But when you welcome science into the process you also have to shed long-held biases. For example, a strictly scientific approach to managing our carbon would show we neednt cut carbon again in our business operations and could actually increase emissions and still be contributing our fair share! So outcomes need to be thought about too and thats sometimes a complex conversation.

KJ: How is Lockheed Martin integrating science into sustainability?

MS: Whether youre talking about advanced weather satellites or the science behind flow batteries, theres a very close link between science and our products. We also take a scientific approach to organising ourselves, for instance using data to analyse where our weaknesses are in achieving high productivity or developing work accident risk indicators.

Most recently, we used the Centre of Sustainable Organisations context-based carbon metric for our emissions targets. However, we used the methodology as a compass rather than as a source for new thinking.

KJ: Does this help you set goals and measure progress?

MS: I think it helps translate the goal and understand the relative weight of the target. Before, all we could say was: we are going to reduce absolute carbon energy by a given percentage using a 2010 baseline. Now we can credibly say how close we got to the threshold. So if business conditions mean we dont meet our target, we are smarter about knowing how close we can go to the threshold and not feel discouraged with our performance.

KJ: How do you see the carbon goal-setting process evolving?

MS: Theres still potential for different carbon metrics to be harmonised. Wed welcome that. Our voluntary reduction targets extend to 2020, so we will probably continue to refer to goal-setting frameworks in formulating our next longer-term goals. And, as we become highly energy efficient, well want to demonstrate were making long-term progress not just year on year.

KJ: Your report says you monitor frameworks such as science-based targets. What other frameworks do you rate highly?

MS: We use the World Resources Institute (WRI)/World Business Council for Sustainable Development (WBCSD) Greenhouse Gas Protocol, Corporate Accounting and Reporting Standard, and we also consult ISO 14064-3 for greenhouse gases. Then we use a scientific approach to mitigate cyber threats. Our process is now reflected in the new National Institute for Standards and Technology (NIST) framework, which has been endorsed by US Administration as the cyber security framework that large companies should follow for reducing cyber risks to critical infrastructure.

KJ: Some feel science-based frameworks are prescriptive and stifle their sustainability approaches. Do you agree?

MS: For someone like me who views frameworks more as a starting than a finishing point, the challenge is that they could limit how firms respond to the outcomes. Maybe theres also a fear that its a precursor to some kind of auditable standard, which will not necessarily drive change but just increase costs. And maybe theres a worry it will remove some of the entrepreneurialism that has propelled sustainability efforts to date.

KJ: What would be your advice to other businesses looking to adopt a more scientific approach?

MS: First, make sure your objectives are well stated you can get quickly derailed if you start with the wrong objectives. Second: use science to start the conversation, rather than seeing it as a destination. It shouldnt be the only light on your radar.

SCIENCE ETHICS CONTEXT

12


THRESHOLDS AND ALLOCATIONS

To really understand that distinction you need to start by understanding the difference between thresholds and allocations.

A threshold is a limit in the carrying capacity of a resource, which can either be an upper limit or a lower limit.

So a threshold of water in a watershed, for example, is an upper limit that should not be crossed. By contrast, a liveable wage threshold is a lower limit that should at least be met. Both thresholds must be respected if societys impacts on water and wages are to be sustainable.

MARK W. McELROY, Ph.DFounder & Executive Director Center for Sustainable Organizations

Science-based metrics, while very useful, do not paint the full picture of how sustainable individual organisations are. Context-based metrics do. Its helpful to know the difference, as Mark W. McElroy explains.

Science-Based Goals/Metrics These are grounded in scientific or factual knowledge of the worlds vital resources and how human activities can and/or should affect them. But they do not fully reflect a fair and proportionate share of the burdens to abide by them.

As the importance of sustainability measurement and reporting grows, its helpful to clarify the distinction between so-called science and context-based metrics.

These terms are not synonymous, although they do overlap. More importantly, science-based thinking is by no means adequate for setting goals or measuring performance in an individual organisations sustainability necessary, perhaps, but still inadequate.

13

ETHICS-BASED METRICS

Some sustainability standards are not science-based at all and are perhaps better described as purely normative or ethics-based. They express duties or obligations organisations have to act with like fairness, justice, integrity and respect. Respecting racial and gender equality come rushing to mind here.

Such purely normative thresholds, however, are no less germane to sustainability performance and must be taken into account.

Context-based metrics, as indicated, always bring allocations to the table and are otherwise science- and/or ethics-based. Only context-based measures, therefore, make it possible to set goals for, and assess performance against, organisation-specific sustainability standards of performance. Neither science- nor ethics-based measures do this on their own.

Of course, there are other metrics that are not science-, ethics- or context-based at all and which focus instead on, say, the beneficial effects or good deeds of a firm, such as levels of employment or philanthropic contributions.

These should not be confused with measures of sustainability performance.

Allocations, by contrast, are fair, just and proportionate shares of the burdens required to abide by thresholds and which are assigned to individual actors, such as companies.

Once limits in the availability of water resources in a watershed

have been determined, for example, allocations can then

be made to individual users. In the case of water, this will typically involve

allocations to multiple parties, the sum of which should not exceed the available upper limit (or threshold) of supplies.

Where liveable wages are concerned, allocations are typically made to a single party (i.e. to an employer relative to its own workforce). So some thresholds are shared while others are exclusive. Once defined, allocations can be regarded as goals or targets, since they tell us what an organisations impacts on vital forms of capital must be to be sustainable.

SCIENCE AND FAIRNESS

This explains why science-based goals and metrics are by themselves insufficient for setting targets or assessing performance in individual organisations. In order to be useful, thresholds must be fairly apportioned to individual actors.

And all of that must be done in a way that adjusts for changes in an organisations size over time or other changes that occur and have an impact on the world. This is systems thinking at its best and nothing less will do.

This is what the allocation side of context-based thinking is designed to do. It adjusts for changes in the facts and acknowledges differences in accountability, even if we are, simultaneously, still striving to abide by science-based thresholds at the macro level. Context-based goals and metrics do that well; science-based measures alone do not.

Context-Based Goals/Metrics These are science- and morality-based goals or metrics that fully reflect fair and organisation- specific allocations of the burdens to maintain or produce vital resources at levels required to ensure stakeholder wellbeing. Context-based environmental metrics developed by the Center for Sustainable Organizations and the MultiCapital Scorecard developed by Thomas & McElroy make it possible to set goals and measure performance in fair and organisation-specific ways. Companies using such tools include Biogen Idec, Ben & Jerrys, New Chapter, Agri-Mark, EMC, Autodesk, BT and Lockheed Martin.

Ethics-Based Goals/Metrics These are grounded in moral or ethical rather than scientific knowledge of vital natural resources and how human activities can and/or should affect them. But, again, they do not fully reflect fair or organisation-specific allocations of the burdens to abide by them.

Acknowledgement: An earlier version of this article first appeared on the Sustainable Brands website on 25 May 2015 (www.sustainablebrands.com), and has been reprinted and updated here with permission.

14


To unlock growth, mitigate risks, and raise sustainability performance levels, companies are well advised to be mindful of science when developing their business strategies. However, John Kornerup Bang is sceptical of the value of scientific goal setting when its decoupled from your business reality.

APPLY NG SC ENCE

THE QUEST FOR BUSINESS RELEVANCE

JOHN KORNERUP BANG Head of Positioning & Risk Management Group Sustainability, Maersk Group

SCIENCE, AND THE ROLE OF ORGANISATIONS

The fact that science is rapidly moving centre stage in the context of sustainable development is a trend that cannot be ignored. Overall, it is a very good thing. However, before applying science in business target setting, we must be mindful of the role companies can best play in the pursuit of sustainable development.

The fact is, the real challenge for sustainable development is generally not the lack of knowledge, nor is it the availability of possible solutions. Both are there and have been for a long time. The real problems are twofold: the application of solutions at a scale

that is consistent with the size of the problems; and

the political will and space to really accelerate these solutions.

Companies have a very important role to play in both of these challenges.

15

TARGETS THAT ARE NOT BASED ON THAT BUSINESS REALITY RUN THE RISK OF BEING

SIMPLY EMPTY NUMBERS.From a strategic, risk-management perspective, the knowledge that frameworks such as the Planetary Boundaries model offer is useful for companies. It is important to know where the natural systems are approaching boundaries because those boundaries can hit you from a supply, as well as from a regulatory point of view. Also, the information from these frameworks or models can highlight areas in which your business can offer solutions, enabling opportunities for tailored, targeted innovation in your most significant areas.

However, when such a framework is used to drive target setting for your company, you can become decoupled from your business reality. When that happens, I am sceptical about how it adds value.

LOOKING BEYOND CARBON

Currently, the science-based targets agenda is primarily focused on greenhouse gas emissions, and can therefore oversimplify or narrow the debate. Carbon reduction is definitely a very significant factor when it comes to shipping. But theres no doubt that shipping offers solutions when it comes to the remaining Sustainable Development Goals (SDGs). It is important to bear in mind that our fundamental challenge is to reduce CO2 but enhance growth and development at the same time. By just focusing on the reductive part, you could lose emphasis on the growth and the development agenda.

ACCELERATING POLITICAL SOLUTIONS

It is so easy to expect politicians to come up with solutions, but when companies facilitate job creation from scaling solutions to sustainable development, and consequently generate profit and tax revenues, it works as a foundation politicians can use to push the framework conditions further in the direction of sustainable development. So, with the right approach, businesses can open up policy space.

Collaboration across businesses, sectors, and regulatory bodies is important, because achieving that scale and profitability of solutions is hard to do alone. The key is a close dialogue between business and governments. One of the merits of the SDG framework is that it is very mindful of that.

The whole area of science has a really strong role to play, and I welcome the fact that it is becoming central to the discussion again. But we need to ensure we find the right application for science as part of the holistic picture. An over-focus on science-based targets can distract from the real progress that can be made. Target setting has to be integrated with where we are heading as a business and where our capabilities are. When that is done, that is also where businesses have the biggest contribution to sustainable development.

THE ENGINE FOR SCALE

The engine for scale is businesss key contribution to this space, and the mechanism for that is profit. Its about maximising the positive impact of your business within the framework of that profit generating motor.

In order to unlock that potential, its crucial that your work and your objectives are set in the context of your business strategy, your core competencies, and other considerations such as your brand, how can you communicate to markets, your access to capital, and your appetite for risk. In that way your sustainability work becomes a relevant factor in your business strategy and as the business grows and prospers so does your positive impact on society.

AS THE BUSINESS GROWS AND PROSPERS SO DOES YOUR

POSITIVE IMPACT ON SOCIETY. When it comes to science-based targets related to climate change, there is the assumption that you have to work back from the global carbon budget. But taking shipping as an example; calculating back from a global carbon budget, assuming a share for the entire transport sector and then for maritime shipping down to the single company, can distract focus from the businesss strategic context.

Additionally, the exercise assumes that it is possible to predict where disruptive innovation that could shift service delivery between sectors will come from.

Hence, an over-reliance on science-based targets, at best, may just not be relevant for developing your strategy. But at worst it could actually induce you to put cost into something that doesnt drive business performance at the same time a straightjacket that could hold some potential back. In other words, targets that are not based on that business reality run the risk of being simply empty numbers.

16


This section explores the development of leading frameworks by academics and how they are helping businesses relate to the science behind environmental and social issues.

As we have seen from the previous segment, science-based goals alone wont save the planet. So, if taking science to the heart of business and applying scientific solutions is the key to sustainable business, how do we get there?

THINGS TO NOTE:

Based on social studies and scientific research like Limits to Growth, these frameworks give businesses scientifically validated vision, models and metrics to help guide their strategy.

And there are a number out there: from Planetary Boundaries and One Planet Thinking to The Doughnut model and the Sustainable Development Goals.

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GUIDO SCHMIDT-TRAUBExecutive Director UN Sustainable Development Solutions Network @gschmidttraub

ORCHESTRATED ACTIONIn September 2015 the largest ever gathering of heads of state adopted 17 Sustainable Development Goals (SDGs) and 169 targets that will apply to all countries. They are the outcome of an unprecedented global consultation process involving governments, civil society, and business.

There may be a lot of them and some may seem a bit lofty, but the 17 Sustainable Development Goals and their 169 targets are no pipe dream, and are using science to set targets that nations and business can use as a guiding star. They are a remarkable action plan for business, says Guido Schmidt-Traub.

These SDGs establish quantitative objectives through to 2030 to end extreme poverty, generate sustainable economic growth, ensure good health, promote quality education, ensure access to basic infrastructure, protect the environment, curb human-induced climate change, and promote gender equality and social inclusion.

It would be easy to fault the SDGs for being too many in number what company would set 169 targets? Easy, too, to say they are, at times, too ambitious or lofty.

But the world is complex, and its remarkable that 193 governments have agreed on a set of time-bound objectives of this kind. The world needs shared goals. We face major challenges that can only be addressed through enhanced cooperation across countries and key players.

So, it would be a grave mistake for companies to dismiss the Goals as a UN pipe dream. Used correctly, they can become a powerful tool for companies to become more successful.

COORDINATED PROBLEM SOLVING

At the Sustainable Development Solutions Network (SDSN) we have been studying some of the main challenges the goals address in great detail. While solutions are available to address each of these challenges, weve found that we need much more coordinated problem solving to deploy solutions at scale.

Think of the world as a large orchestra where governments, businesses, and civil society organisations play different instruments. Since there is no global conductor this orchestra lacks direction and focus. The SDGs can become a common song sheet. They are legally non-binding and therefore do not constitute rules, but as a widely shared set of objectives they can be communicated easily and provide shared focus, so that our orchestra becomes more harmonious.

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Second, the SDGs provide a framework for engaging governments and other stakeholders. They also provide a universally agreed framework for that dialogue, helping all stakeholders focus on the same sets of issues.

For example, several mining companies are successfully using the MDGs as a framework for stakeholder engagement. Pharmaceutical companies have used them to improve their relationship with civil society and governments on critical issues, such as access to essential medicine. The SDGs are broader and more universal, so virtually every company will find them useful as a basis for stakeholder engagement.

Third, the SDGs offer companies both an accountability framework and a powerful communication tool. As the recently released SDG Compass developed by the UN Global Compact, GRI, and WBCSD demonstrates, the SDGs can support business reporting and accountability. Companies can use them to train their staff on how their products and services contribute towards wider social objectives.

If successful, the SDGs will make a major contribution towards sustainable development.

Yet, success is far from guaranteed and will not happen without decisive leadership.

Business must get involved now to overcome passivity, short-termism, and even outright cynicism.

At the SDSN we are working to make the SDGs a success, and we invite companies to join us in that effort.

THINK OF THE WORLD AS A LARGE ORCHESTRA WHERE

GOVERNMENTS, BUSINESSES, AND CIVIL SOCIETY

ORGANISATIONS PLAY DIFFERENT INSTRUMENTS. THE SDGs CAN BECOME A COMMON SONG SHEET.

For the first time in many countries these pathways spell out how energy systems can be redesigned using technologies that are available today. They are now being discussed in countries around the world and provide a framework for long-term business models in such areas as energy efficiency, low-carbon transport and renewable energy. This is not theory. It is real business that the Presidents of the US and China have just committed their countries to.

Based on this work, the World Business Council for Sustainable Development, the International Energy Agency, and the SDSN have launched the Low-Carbon Technology Partnership initiative, which explores how businesses can promote the low-carbon technologies needed to stay within 2C.

These technologies provide another long-term business opportunity. The SDGs will support similar discussions in many other areas and provide fertile ground for innovative companies to take a lead.

PROOF POSITIVE

The power of global goals has already been demonstrated by the Millennium Development Goals (MDGs). These have supported an unprecedented mobilisation of business and civil society, particularly in the fight against child mortality and infectious diseases.

The SDGs can serve the same role and be useful for businesses in three main ways.

First, they provide a framework for developing immediate and long-term business strategies to support major transformations needed towards low-carbon energy, sustainable use of water and materials, sustainable agriculture, healthcare and education for all, and cities that are productive, resilient, and liveable.

Each of these transformations will require new technologies and new business models. Yet, the transformations are also highly complex and require long-term objectives with clear and predictable policy frameworks that make sure business has a level playing field.

Widely shared SDGs will force the same discussions about energy policies, healthcare strategies, the use of modern technology in education, innovation for low-carbon transport, water-efficient agriculture and the circular economy, in country after country. Countries will explore how the goals can be achieved over the long term and how business can be empowered to provide the necessary financing, the technologies, and the service delivery.

Take the work of the Deep Decarbonization Pathway Project promoted by SDSN and The Institute for Sustainable Development and International Relations (IDDRI), for example. The project has mobilised teams from 16 of the major greenhouse gas-emitting countries to develop long- term national pathways to ensure that global temperatures do not rise beyond the internationally agreed limit of 2C.


KATE RAWORTH Senior Associate Cambridge Institute for Sustainability Leadership

OLIVIA STANDISH Researcher Salterbaxter

CAN DOUG

HNUTS SAVE US?

Q21AOur aim in the 21st century must be to live between social and planetary boundaries, something we are currently failing to do. The Doughnut model is a powerful tool for helping non-scientists understand the science of earth systems and of social needs. Here Kate Raworth explains how her concept can help companies think differently about growth and play their part in moving humanity into this safe and just space.

Olivia Standish: Can you give us a brief overview of the Doughnut concept, and what led your thinking in this direction?

Kate Raworth: Human wellbeing has two fundamental aspects. Firstly, we all need resources to lead a life of dignity and opportunity the resources to meet our human rights to health, water, food, energy, income and education; to be resilient, have a voice, have jobs, and to have these things with social equity and gender equality.

But secondly, we must also protect and steward the planetary life-support systems on which we fundamentally depend ample fresh water, a safe climate, a protective ozone layer, fertile soil, and healthy oceans.

These two are both aspects of our wellbeing we cant trade them off against each other. The Doughnut image aims to capture that in a simple, easy-to-communicate way.

On the outside of the Doughnut is an environmental ceiling consisting of the planetary boundaries nine critical Earth systems which keep the planet in a stable state. We need to ensure that we dont put so much pressure on any one of those systems that we push the planet out of the safe space that it has been in for the past 10,000 years.

When I first saw the planetary boundaries diagram I had this great rush of adrenaline, because at last I was seeing natural scientists drawing boundaries around the space the economy could occupy. Its a hugely important rebalancing of our economic thinking, setting it in the much bigger context of the life systems on which we depend.

But you need to supplement it with a social foundation, because just as beyond the environmental ceiling lies unacceptable environmental degradation, so too, below the social foundation is a space of unacceptable human deprivation.


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And we invite them to look at their business and ask: how does our core practice put pressure on the social and planetary boundaries? Which ones do we affect most and what business risks are we creating as a result? How can we move away from the planetary boundaries or lift people above the social foundation?

Following the CISL programme several businesses have approached me. Sainsburys, for example, asked me to work with them in using the Doughnut to reflect on the progress they have made to date and the progress still needed. They also invited me to present it to their meat, fish and poultry suppliers, to communicate that they were stepping up action in this area, and thinking on a much broader scale about the impacts of their business.

Then we ran a workshop with the Sainsburys in-house team, exploring the impacts of meat production, taking both sides of the Doughnut into account land use, impacts on climate change, water impact, nitrogen impact, the impact it had on employees, and the wages and incomes paid to suppliers.

OS: What is the relationship between the Doughnut model and the Sustainable Development Goals (SDGs)?

KR: The SDGs strongly reflect many of the dimensions of the Doughnut. I was delighted to learn from insiders to the process that the Doughnut diagram was literally on the table as the SDGs text was being negotiated.

HUMANITYS FUNDAMENTAL CHALLENGE IS TO MOVE INTO THE SPACE BETWEEN THE

SOCIAL FOUNDATION AND THE ENVIRONMENTAL CEILING.

Already we have transgressed the boundaries on both sides. Many millions of people live in appalling deprivation. One person in three lives on less than $2 a day, one in ten is undernourished and one in five has no access to electricity. And we have already transgressed four of the nine planetary boundaries for climate change, land use change, nitrogen and phosphorus flows, and biodiversity loss.

So humanitys fundamental challenge in the 21st century is to move into the space that lies between the social foundation and the environmental ceiling an environmentally safe space, and a socially just one. It would be an extraordinary achievement if we could be the turn-around generation that starts moving us there.

To do that, we have to ask ourselves what kind of economy and what kind of businesses will help take us there. For companies the priority is to ensure that your business is a Doughnut Brand.

OS: Are there any Doughnut brands out there at the moment?

KR: There is certainly a growing number of companies that are trying to figure out how to become one. I am senior associate at the Cambridge Institute for Sustainability Leadership, and we use the Doughnut in our executive programmes, working with major companies from across many sectors. Its a starting place for looking at the sustainability challenge they face in the 21st century.

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Of course many companies still struggle with the eternal tension between creating shareholder value and hitting sustainability and social targets. Thats why I think the ultimate act of sustainability this century is going to be the transformation of corporate governance. I hope well see more companies saying: if we are going to be truly socially and environmentally sustainable, we need to change the way we are incorporated. If we are forever bound by the belief that we need to maximise shareholder return we are never going to tackle the real priorities.

OS: How do you see businesses leading in this area?

KR: The 20th century was a century of monetary metrics; it was the century in which GDP was invented and in which accounting and shareholder value really moved centre stage. I think the 21st century will see us move beyond monetary metrics to material or biophysical metrics, and those metrics are fast improving.

Fifteen years ago, if you asked somebody what their carbon footprint was they would have thought it absolutely bizarre. But now everyone understands that concept its become part of how we understand the world. Using an environmental profit and loss account is a good example of leadership in attempting to make this calculation.

We will see companies looking not just at their carbon footprint, but their nitrogen, water and land footprints, and then aiming not just to reduce their footprint but to become net positive. The cradle-to-cradle and the circular economy movements are leading in this area.

A good example is Desso Carpets. On its website, it reports its biophysical metrics right up front next to the profits because taking these new metrics seriously is clearly at the heart of what the company considers itself to be. I hope to see a lot more companies following that example.

OS: Coming back to Planetary Boundaries and the Doughnut model, how do you see them evolving?

KR: Planetary boundaries are a very powerful tool for bringing an understanding of Earth-systems science to non-scientists.

Its not perfect or set in stone, but we urgently need this science.

Over the past five or six years weve seen it used widely outside the scientific community. It has been very powerful for the UN, NGOs, business and across society, enabling people to understand and talk about the Earth system as a fundamental part of our wellbeing.

ITS NOT PERFECT OR SET IN STONE, BUT WE URGENTLY

NEED THIS SCIENCE.The 21st century part is figuring out how to use resources efficiently and equitably so that we can meet the human rights of more than nine billion people.

OS: How can businesses best communicate the link between environmental degradation and economic development to consumers and other stakeholders?

KR: Its all about the language. If we pitch it as a tension between economic development and environmental degradation, it creates a false competition one that just feels impossible to win.

So to me it comes back to is your brand a Doughnut brand? If youre part of that, youre part of the 21st century transformation that we need.

And if youre not part of that, theres only one question: whats stopping you?

But the Doughnut concept was itself shaped by earlier discussions of those goals: I sourced the social foundation from the social priorities that the worlds governments brought to the 2012 Rio+20 conference.

The SDGs are very important. I think it is vital that the global community gets together every now and then, and says where are we going as humanity?

IT IS VITAL THAT THE GLOBAL COMMUNITY GETS TOGETHER

EVERY NOW AND THEN, AND SAYS WHERE ARE

WE GOING AS HUMANITY?They provide a powerful guide to global social and environmental priorities. But I dont think businesses should follow them slavishly. You need to have a vision that is aligned with them, rather than relying exclusively on their targets and indicators.

OS: What would be your advice to businesses thinking of using the SDGs or other more human-focused frameworks?

KR: If youre really going to be a Doughnut brand you need to go beyond having a sustainability strategy. These ideas need to be part of the corporate mission, part of the vision of what the company is.

I really like the work of Marjorie Kelly and her book, Owning Our Future, which talks about companies having a living purpose. The Doughnut is a great starting point to help a company identify its living purpose and to find ways to earn a financial return in the process.

OS: Do you think that a scientific approach is important to support that?

KR: Yes I do. Understanding how our planet works and the life-support systems on which we depend is fundamental in designing businesses that can thrive.

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Incremental change is no longer enough: organisations need to incorporate climate science and the context in which they operate into their sustainability strategies. Achieving sustainable development means fundamentally rethinking our approach to managing the economy, says Jake Reynolds of the Cambridge Institute for Sustainability Leadership (CISL).

DR. JAKE REYNOLDSDirector, Sustainable Economy Cambridge Institute for Sustainability Leadership

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Based on 25 years of working with business leaders, we have reached a clear conclusion and its this: we need a fundamental rewiring of our economy to tilt the operating conditions for companies in favour of sustainable development. That means actively encouraging business models that create prosperity without eroding the natural and social capital on which we rely.

Rewiring the Economy our recently launched ten-year, ten-point plan is aimed at laying down these new economic foundations. The plan pinpoints ten tasks, which if addressed collaboratively by governments, business and finance institutions would match up economic progress with the UNs sustainable development goals (SDGs).

BOLD AMBITIONS

One of the ten tasks in the framework is all about the need for businesses to set truly bold ambitions.

The economy is clearly not set up to deal with the significant impacts we have seen since the great acceleration began in the 1950s. Business-as- usual operation is contributing to environmental degradation rather than offering solutions.

In the absence of public policy action, many companies are responding with well-intentioned sustainability strategies. Thousands are reporting sustainability performance or investing in CSR. But the economy remains largely unchanged by these initiatives they are too small and incremental to alter conventional economic behaviour.

Tackling this problem head on, Rewiring the Economy encourages the key players governments, business and financial institutions to work together to create conditions where sustainable business models thrive because they are commercially successful. Such conditions would see poor performers lose market share and ultimately disappear, replaced by firms that generate social and environmental value as a function of their core business.

REPORTING SHORTFALLS

There has been a radical improvement in sustainability reporting over the past decade, with more information and metrics available than ever before. While thats undoubtedly a positive development, its clear not all reports get to the heart of the companys core business.

The audience is becoming less tolerant of such anomalies. Indeed as both oil and gas companies and banks have learned some industries are being characterised as having no social purpose.

There are, of course, a number of businesses leading the way in measurement and disclosure. Kering, owner of Puma, has its Environmental Profit and Loss approach, and Kingfisher and BT have net positive and net good strategies.

But even they face a significant challenge. What does a company do once it has set a goal of becoming net positive? How does a business deal with a debt to nature of hundreds of millions of dollars per annum?

How to respond is a big question, full of value judgements as well as science-proofed targets and metrics. For example, if a company wishes to claim it is a good climate-change performer, it might choose one of three very different options.

It could take the position that it will emit less CO2 than last year the incremental position.

It could show that it has calculated what its fair share of global emissions is and will stay within budget the science-based approach.

Or it could demonstrate that it has a plan for ensuring that its whole industry, and the economy in general, is working to ensure the planet stays within two degrees of global warming the science + system approach.

The stance taken will depend on the extent to which the company regards itself as a leader, the nature of its dialogue with civil society and the risks it sees of not tackling pressing issues.

BUSINESS-AS-USUAL OPERATION IS CONTRIBUTING TO

ENVIRONMENTAL DEGRADATION RATHER THAN OFFERING

SOLUTIONS.

WE NEED A FUNDAMENTAL REWIRING OF OUR ECONOMY TO TILT THE OPERATING CONDITIONS FOR COMPANIES IN FAVOUR OF SUSTAINABLE DEVELOPMENT.

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CISLs ten tasks for business, finance, and government to lay the foundations for a sustainable economy.

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RE-ENGINEERING BUSINESS PRIORITIES

Business can and must play a central role in this process of economic rewiring.

Take the work being done through the Cambridge Natural Capital Leaders Platform, for example. This brings together companies who are placing a value on their impacts and dependency on natural capital, and who can, therefore, make better decisions, identify new opportunities and contribute solutions to natural capital loss and ecosystem degradation.

CISLs new project, Action Linking Growth with Nature (ALIGN), is taking this work further by convening companies actually investing in natural capital and asking: can we produce private returns alongside things of real public value such as improved livelihoods, conservation and resource protection?

MAKING THE CASE

We urge companies to help build the momentum for sustainability among the public through consistent brand and marketing messages.

But its vital that these communications are authentic and are not perceived as greenwash. Its precisely this sort of approach that has allowed Marks & Spencers widely publicised Plan A to make a positive connection with customers.

The UNs launch of its Sustainable Development Goals, and the COP21 climate change talks in Paris in December provide opportunities for companies to make the case more strongly than ever.

Many will be showing the public, and governments, how they are meeting the challenge of converting the science of sustainability into world-class business strategies that will make a meaningful difference.

COLLABORATION

Why are we so confident about that? Well, there is no doubt that private sector engagement on sustainability is growing, including among the investors and financial intermediaries that shape the flow of capital into the economy. A new class of collaboration is foreseeable that will help meet emissions targets quicker; one that will extend over time to other critical issues like global health, resource use and ecosystem quality based on increasingly robust science and standards.

In tandem we foresee governments beginning to call into question the vast sums of money spent on subsidising fossil energy estimated by the IEA to be $548bn in 20141 (four times those to renewable energy) and over $5tn p.a. by the IMF2 (more than global government health spending). In seeking alternatives to this inefficient use of resources the net effect on carbon-intensive assets

could be severe, but it will serve to stimulate already fast-growing, low-carbon innovation exactly the kind of tilt we are seeking to, as we say, rewire the economy.

We foresee other opportunities for rewiring, not least in the area of tax reform where burdens still fall on goods like labour, rather than bads like pollution and over-consumption. Innovation policy and economic metrics are other examples of where we see rewiring opportunities. If we get this right then sustainable business models will be buoyed by a tide of economic logic rather than against it; it will be possible to take a science-based approach to target setting without fear of being undercut by competitors who have no such intent.

In short, with those foundations in place, business will be enabled to get on with the task of building a sustainable economy.

SUSTAINABLE BUSINESS MODELS WILL BE BUOYED BY A TIDE OF ECONOMIC LOGIC RATHER

THAN AGAINST IT.

THERE IS NO DOUBT THAT PRIVATE SECTOR ENGAGEMENT

ON SUSTAINABILITY IS GROWING.

1 http://www.worldenergyoutlook.org/resources/energysubsidies/2 https://www.imf.org/external/pubs/ft/wp/2015/wp15105.pdf

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The World Business Council for Sustainable Development has developed a number of sustainability frameworks for businesses which are rooted in scientific consensus. Peter Bakker details how these science-based frameworks and scientific approaches are challenging business as usual, and helping business to lay the foundations for a more sustainable world.

PETER BAKKER President and CEO World Business Council for Sustainable Development

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The need for a sustainable world is more urgent than ever. As we count down towards the end of this critical year, it would be easy to lose hope. The climate has changed, land is degraded worldwide and biodiversity loss shows no signs of slowing. There is still war, growing inequality, youth unemployment and hunger.

WHAT FILLS ME WITH OPTIMISM IS SEEING HOW

BUSINESS IS NOW ADDRESSING THE GLOBAL SUSTAINABILITY

CHALLENGES THAT GOVERNMENTS CANNOT

RESOLVE ALONE.But there is also opportunity. What fills me with optimism is seeing how business is now addressing the global sustainability challenges that governments cannot resolve alone.

Forward-thinking companies know their success depends on developing sustainably. The WBCSD have long championed the integration of sustainability into core business strategy. With real integration, sustainability will become an integral part of a companys decision-making and performance management systems. The integration of financial, environmental and social capital elements into corporate governance, valuation and reporting will incentivise sustainable corporate behaviour. And, by enhancing the overlap between public and private interests, businesses can help lay the foundations for a truly sustainable world. Here are some of the WBCSDs key frameworks helping businesses to achieve this:

PUTTING VISION 2050 INTO ACTION

In 2010 the WBCSD published Vision 2050 a wide-reaching report on the priorities that must be addressed by 2050 in order for nine billion people to live well and within the boundaries of the planet.

It was the result of an intensive 18-month study of environmental, demographic and development trends, and was completed in partnership with the Stockholm Resilience Centre, the World Resources Institute and our member companies. Significantly, for the first time, insiders from global business publicly stated that business-as-usual was no longer an option and outlined pathways for transformational change.

Vision 2050s long-term perspective needed a pragmatic roadmap and that led to Action2020. This action plan identified the targets that must be achieved by 2020 to stay on track for 2050. These goals form the core of our work programme which seeks to accomplish a science-based societal target by 2020 for six key areas:

social impact

sustainable lifestyles

climate change

ecosystems and landscape management

water

safe and sustainable materials.

Across these areas, our members develop and deploy business solutions whose impact can be measured. There are sector and value-chain projects too, ranging from sustainable cities to forests and biomaterial solutions.

Were taking steps towards meeting human needs within planetary boundaries, but theres much more to do. At the WBCSD, we are pioneering collaborative solutions to drive sustainability deeper and further.

REDEFINING VALUE

A defining part of the WBCSDs work is building frameworks that help sustainable companies become recognised and rewarded for their integrated performance, and showing others how they can gain this competitive edge. Our Redefining Value Programme aims to achieve this vision by improving the effectiveness of non-financial reporting so that it progressively reflects the true value of a company by disclosing true profits and true costs.

Additionally, in 2016, two consortia managed by the WBCSD and the International Union for Conservation of Nature will deliver the Natural Capital Protocol, a harmonised measurement and valuation framework for natural capital. We are also developing a Social Capital Protocol to measure and manage social impact.

HELPING BUSINESSES TO REALISE THE SDGs

We are developing the SDG Compass for Business in partnership with the United Nations Global Compact (UNGC) and the Global Reporting Initiative (GRI). The SDG Compass will help businesses understand the methodologies and tools available to match up their strategy with the SDGs. We now need business to get engaged and bring forward its positive influence on society through innovation, investment and labour. The SDGs constitute the framework conditions for successful businesses of the future.

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BACKTO

THEAlmost 50 years ago we put a man on the moon. But here are a few questions for you about that extraordinary achievement:

What was the first, necessary precondition for making it happen? Was it our ability to develop sophisticated technologies? Was it our willingness to embrace a seemingly impossible vision? Was it our commitment to invest whatever it took to get the job done?

All these factors were, of course, critical.

But the first and most important precondition was that the destination was clear and compelling we knew exactly what to aim for, and we all wanted to go.

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Current ways of measuring sustainability either exaggerate achievement or utterly fail to capture real progress. We need a new kind of metric that connects businesses with the scientific context surrounding their actions, and gives them a clear and compelling destination, says Geoff Kendall of the Future-Fit Foundation.

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FUTUREWEVE HAD NO CLARITY WHEN

IT COMES TO WHAT HAS OFTEN BEEN CALLED THIS GENERATIONS MOON-SHOT:

THE TRANSITION TO A SUSTAINABLE ECONOMY.

Unfortunately, weve had no such clarity when it comes to what has often been called this generations moon-shot: the transition to a sustainable economy.

It is now widely accepted that we need to rapidly and radically change the way we do business if we are to avoid the worst effects of climate change, resource scarcity, environmental degradation and population growth.

And we need every business to play its part in this transition, because our economy as a whole can only become sustainable if every company operating within it is sustainable too.

CURRENT LIMITATIONS

But what, exactly, does it mean for a company to be sustainable? And how can we measure and thus manage progress toward this destination? Until now there has been no clear answer to either question.

You may be thinking: but there are no end of ratings, rankings and indices that claim to measure corporate sustainability performance surely theyre telling companies what to aim for?

The answer, in a word, is no.

Current metrics measure relative improvements in todays best practice. They do not track absolute progress toward tomorrows required practice.

That matters because there are two problems with rewarding incremental progress.

First, it can make companies look far better than they actually are. For example, last year the Dow Jones Sustainability Index announced that an oil company was 85% sustainable.

Thats not exactly going to keep the companys CEO and investors awake at night, pondering how to decarbonize their business model. Current metrics lull decision makers into believing that doing better than last year, or better than the next guy, is enough.

The second problem is that by not putting todays actions in a future context, were failing to acknowledge those companies that are really stepping up to do whats necessary.

A handful of forward-thinking CEOs have committed to deliver net positive benefits to society, in areas as diverse as reforestation, carbon capture, and poverty alleviation. Thats what true sustainability leadership looks like. But metrics that dwell on the status quo often dont even register such bold commitments, let alone capture their full potential.

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A NEW KIND OF METRIC

So we need a new kind of metric, one that tells companies where they need to be based on best-available environmental, social and systems science and which encourages and rewards progress towards that point.

That, in a nutshell, is the motivation behind the Future-Fit Business Benchmark, a new open-source tool grounded in a simple definition: a Future-Fit company is one that in no way undermines the possibility that humans and other life will flourish on Earth forever.1

This is far from utopian. Future-Fitness is not about demanding that every company tackles societal problems, eschews growth, or renounces profit. Rather, it is about defining the minimum that any company must do to avoid degrading the social fabric and natural processes we all depend upon.

The Benchmark centres around 21 Future-Fit goals: performance thresholds spanning the full range of environmental and social issues that may be affected positive or negatively by a companys operations, its supply chain, and the products it sells.

These goals collectively define the line in the sand that all companies should aim for. And were close to completing work on a complementary set of Future-Fit key performance indicators (KPIs), to help companies measure where their biggest gaps are, and where to prioritise accordingly.

THE FUTURE-FIT BUSINESS BENCHMARK OFFERS

COMPANIES SOMETHING THEYVE BEEN LACKING: A CLEAR DESTINATION

TO AIM FOR.Over the past year weve worked with a range of companies from social enterprises to global brands to explore what the Future-Fit goals mean to them. No two businesses are the same, so its unsurprising that discussions have varied wildly.

For example, one goal all employees are paid at least a living wage was quickly dismissed not as unimportant, but as unproblematic by a wealth management fund.

But it proved a major sticking point for a company that depends upon cheap labour in developing nations.

Another goal Products emit no greenhouse gases when used as intended was understandably a source of concern for one car manufacturer, the bulk of whose products are still powered by fossil fuels. However, another car company Tesla has already reached this goal, as all of its cars are powered by electricity.

CONVERSATIONS WORTH HAVING

In every such discussion, reactions to Future-Fit goals tend to fall into one of three categories. There are goals that seem easy, because the companys business model has very little impact in that area. There are goals for which the path to success is clear its just a matter of time and money. And then there are goals that appear impossible.

This last category is the most interesting. When someone says that a particular goal cant be reached, what they really mean is that it cant be reached within the confines of their current business model.

Which of course begs the question: how would the business model have to change? Now that is a conversation worth having.

Going to the moon was a choice; transitioning to a sustainable economy is not.

The Future-Fit Business Benchmark offers companies something theyve been lacking: a clear destination to aim for.

But to reach it will require a willingness to explore and embrace completely new ways of doing business. Incremental improvement is not enough. After all, we didnt reach the moon by shuffling up the nearest mountain.

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1 This is based on John Ehrenfelds definition of a sustainable society, more details of which can be found at johnehrenfeld.com

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Step one: Identified a set of seven Future-Fit business

principles that can be applied at the level of an individual.

Step two: Translated the principles into a clear set of environmental and

social performance thresholds or goals.

Step three: Arrived at a set of 21 Future-Fit

goals with KPIs.

CREATING THE FUTURE-FIT BUSINESS BENCHMARK INVOLVED THREE STEPS

Step one began with identifying a set of system conditions that describe how a truly sustainable society must operate. Thankfully, more than 25 years of academic research have already been devoted to this task2. We translated the results of that effort into a set of Future-Fit business principles that can be applied at the level of an individual company. There are seven of these principles. Heres an example: A Future-Fit business ensures no harmful substance escapes into the environment.

Step two involved translating the principles into a clear set of environmental and social performance thresholds or goals. To develop these Future-Fit goals we cross-referenced all of a hypothetical companys critical relationships with its customers, communities, suppliers, employees, owners, and the environment against each business principle, to identify the full range of actions that might cause breaches to occur. For example, by looking at the intersection of customers with the principle mentioned above, we deduced that a Future-Fit companys products emit no harmful substances when used as intended.

FUTURE-FIT IN THE FIELD

Companies, sustainability professionals and consultants are now beginning to adopt and use Future-Fit concepts.

The first company to commit to becoming Future-Fit is the social enterprise BR!GHT Products. Its Sun Bell product is claimed to be the worlds most elegant, durable and multi-functional solar lantern and over a million people in the developing world are already benefiting from it. BR!GHT embraced Future-Fitness to ensure the positive social impact of its products is not compromised by any other aspect of its rapidly growing business.

Large companies are understandably slower to declare ambitions that may mean disrupting established business models. But over the past year weve heard from a dozen or so sustainability professionals, working for global brands in sectors as diverse as fashion, cosmetics and mining, who are using the Benchmark to spark conversations within their organisations.

And its not just companies who are paying attention. Future-Fit concepts and goals are cropping up in consultant offerings and supply chain tools. For instance, we are partnering with B Lab to ensure the next iteration of the methodology it uses to score prospective B-Corps matches up, where appropriate, with Future-Fit criteria.

These early signs suggest that, when it comes to setting science-based business goals, the debate is shifting: from what and why, to how and when.

BUILDING A

SCIENCE-BASED BENCHMARK

Step three after a round of public consultation to challenge and refine our work, weve arrived at a set of 21 Future-Fit goals. Collectively, these goals draw the line in the sand the business world has been lacking. But to identify their biggest performance gaps and thus prioritize what matters most companies also need to be able to tell how far away they are from reaching each goal. So we created a concise, credible and comparable set of KPIs that enable progress toward each goal to be measured and thus managed. This work is due for completion in December 2015.

2 You can find out more at thenaturalstep.org

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The Body Shop is known for being one of the first businesses to shape ethical consumerism, led from the heart. But as the sustainability debate

has matured, there is a need to change tack: to embrace the latest scientific thinking and collaborate with academia to continue to drive the agenda.

Christopher Davis and Kate Levine talk to Annie Lancaster about how scientific thinking is helping The Body Shop do just that.

CHRISTOPHER DAVIS Director of Corporate Social Responsibility and Campaigns The Body Shop International

KATE LEVINEDirector of Commitment and Corporate Communications The Body Shop International

Annie Lancaster: As your sustainability strategy has developed, what role has science played in that development?

Christopher Davis: Historically, the company has been led from its heart; building sustainability strategy around the philosophies of Anita [Roddick] that business can be a real driver for change, so I think its fair to say that science hasnt been at the centre of our strategy in distant past. However, we are now embracing what we see as an exciting new development science moving more to the fore.

AL: What is driving this change in approach?

CD: Being led by your heart is a wonderful thing, but times are changing and for us its time for us to look at things a little bit differently too. The advances in science and academia are a massive factor. The way the academic community has begun to work with business, even in the past few years, has led to a transformation in our own perspective. Likewise, were witnessing scientists having an interest in what were doing, applying theory into practice. We are seeing a big shift, and a positive shift too.

AL: You recently reviewed Natural Capitalism and Planetary Boundaries as potential frameworks to support The Body Shops strategy. What was it about these approaches that appealed to you?

CD: It was the fact that they were taking a different approach; a holistic perspective, looking at society and the ecosystem. Of course, the fact that these approaches are based wholly on credible scientific data had a really big influence on us.

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ANNIE LANCASTERSenior Consultant Salterbaxter

Our challenge is taking that scientific study and applying it to business. Thats where the future lies: ensuring that theory and practice can be joined. And thats where the scientific and business communities have got such a rich opportunity to collaborate much more effectively.

AL: Do you see science playing a bigger role in corporate sustainability in the future?

CD: Yes, absolutely. I have no doubt its going to be the thing that drives us. We have started to embrace the work of the Cambridge Institute for Sustainable Leadership. Weve been sending our team members on courses there to connect them to leading perspectives. Its got us thinking differently on a strategic level. Were also exploring a new partnership with a leading academic institution around scientific innovations and sustainable design. It is our intention to apply our learnings to the business on a practical, rather than a theoretical, level.

Both are equally valuable, as were getting that independent perspective into our business, challenging our thoughts and our norms. Its about the meeting of minds, isnt it? Its about both parties wanting to learn from one another: for businesses, the academic theory. For academics, the faster, more rapid application of thought.

ITS UP TO ALL OF US TO EMBRACE, INTERPRET, AND APPLY THE SCIENCE

THE BEST WE CAN.

AL: One of the challenges around science-based target setting is whether or not they stifle innovation.

Kate Levine: Theres a parallel with the argument from years ago as to whether corporate sustainability should be regulation based or voluntary. A lot of people were saying that regulation would stifle innovation. But leaders see where they have to go for compliance and then look where they can innovate beyond that. I think this is exactly the same with science-based targets.

AL: Can science play a significant role in helping businesses connect their business ambitions to the bigger challenges facing society?

CD: Yes, certainly. Whats interesting about science is that it can be a meeting point for business, for government, for civil society; when fact-based knowledge is there at the centre. Its up to all of us to embrace, interpret, and apply it the best we can.

AL: Do you think consumers care about science when it comes to sustainability?

CD: I think that one of our responsibilities as a company is to lead our consumers; to take decisions that have been influenced by and have embraced the latest scientific research. For example, recently we have been working with concepts like green chemistry in making our formulations more degradable. We are not doing it in response to specific customer demands; often there are actions well take because they will have a more positive effect on the environment, but we also hope to lead the debate.

AL: Which ties right back to the history of The Body Shop taking that leadership role before it was demanded of you.

KL: We have a very close connection with our consumers perhaps more so than other brands. The challenge is to use science for leadership purposes but also continue to connect with our customers. This is where communication is really important. Economists, academics and social sciences are very important in

giving customers security in the knowledge that our actions are endorsed by independent third parties. But it might also give those, who didnt think they were interested, that curiosity to know more. We can lead the way, but the key is to make sure that we take our customers with us.

SCIENCE CAN TURN PEOPLE OFF UNLESS YOU CAN MAKE

IT INTERESTING.AL: What advice would you give other businesses that are looking to adopt a more scientific approach?

KL: Science can turn people off unless you can make it interesting. Its really important for the communications and the sustainability teams to work very closely together in order to create engaging messaging. Internal communications pieces are absolutely vital and also must be consistent with what we are saying externally.

CD: Go back to school. Learn from super smart people who were studying the environment or social sciences. Go back and listen because this area of study is growing and advancing at a tremendous rate. Go back and challenge academics to address some of the challenges that we are facing within our business.

In our experiences academia has been so open to us, its a great opportunity for all of us to take action. If we dont work together the planet and society are facing potential disaster there is a moral as well as a practical imperative to take action.


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The following section explores how organisations can communicate succes

Documents

Directions 2015: The Rise of Science