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July 9, 2007 
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Setting Smart Green Goals
Mission statements are important. Corporate values are good, too. But for a company to actually execute, it usually needs some guideposts to point the way. Goals give us all something specific to shoot for -- not just the big picture vision, but also targets that inspire and drive action. Why do we all remember President Kennedy's eight-year goal of putting a man on the moon by 1969? Because while it may have seemed outrageous at the time, it was specific, definable, and inspiring -- and very different from NASA's core mission, which somewhat dryly focuses on space as a working lab for scientific research. In the environmental realm, well-formed goals are critical for driving behavior. Without specific environmental targets, the "green thing" is likely to get pushed down the priority list. Regular cost-benefit analyses often leave out the true costs (or benefits) of environmental challenges (or solutions). Take the business value of saving water in drought-prone regions -- usually marginal from a purely cost-saving perspective. But conserving water is not just about saving money or being efficient with a stressed resource; it's about being a good neighbor and maintaining your community-driven "license to operate." Even where the value is obvious (such as energy-efficiency projects that save money very quickly), organizations need goals to focus attention on the issue, and to justify that focus. There are many possible ways to save money, so, management might ask, why focus on this one?. 
Goal-setting is fundamentally about two things: building culture (by setting priorities) and driving execution. The goals themselves tend to fall somewhere between these two poles, which I like to think of in terms of symbolic vs. tactical. Big, fun, symbolic goals help build the culture and plant a flag on the horizon, or they make priorities crystal clear ("zero waste" or "zero emissions" from the airline industry -- a very tough goal). Specific tactical targets, like "cut waste 20%," drive changes down in the trenches and are easy to tie to compensation or performance evaluations.
Another critical distinction to consider is internal vs. external. Is this a goal that you'd want splashed in the Wall Street Journal? Or is it something that everyone inside needs to focus on quietly, but should not be pushed in PR or marketing materials -- until you hit your goal and can safely trumpet your success. There are other dimensions to consider: non-negotiable (no fatalities) vs. flexible (energy use per unit); goals for your operations (reduce water use in this facility 20%) vs. goals for elsewhere in the value chain (reduce product energy consumption 10% so customers use less). Here, however, we focus on the two big picture dimensions -- symbolic vs. tactical and internal vs. external -- to highlight what works in setting green goals…and what might bite you back. ~Andrew Winston, Founder, Winston Eco-Strategies, Co-author, Green to Gold (Read his "Eco-Advantage" blog here.) Comments or questions? Join Andrew and other readers online at the Eco-Strategies Forum. Tactical Move: Wal-Mart Pledge Is a Bright Idea 
Let's start with one of the largest, most aggressive, fundamentally tactical goals out there: Wal-Mart's pledge to sell 100 million energy-efficient compact fluorescent lightbulbs by the end of this year. It's a big sales target and nearly equal to total U.S. sales from all retailers last year. But given the chain's massive traffic (130 million shoppers each week), Wal-Mart has a shot at meeting its goal -- and having some impressive numbers to crow about in early 2008. The growing national interest in CFL will certainly give this effort a boost.
Symbolic and Inspiring: Toyota CEO Sells a Vision 
In his first speech in office, Toyota CEO Katsuaki Watanabe laid out a bold vision for the company's future -- one that had little to do with revenue projections. Instead, he took the opportunity to lay out a personal dream to develop "cars that can cross the American continent on just one tank full of gas." A cross-country drive behind the wheel of a Prius might take six tanks today, but the long-range goal tells consumers and investors Toyota will continue at the leading edge of technological innovation. And now the company has added a strong stretch-tactical goal as well: 100% of the fleet will be hybrid by 2020.
Internal Goes Public: SC Johnson's Material(s) Success 
In 2004, SC Johnson couldn't wait to get the word out about exceeding its goal to use at least 8% more environmentally preferable raw materials in its products. Funny, but we don't recall any mention of specific percentages when the company launched its Greenlist materials-sourcing program back in 2001. This internal goal, while certainly laudable from a sustainability standpoint, went public only when the news could be logged on the plus side of SC Johnson's PR ledger. The company was smart to play it close to the vest: when you're taking internal goals public, it often pays to wait until you've got something concrete to talk about.
External and Risky: Ford Takes Heat on Fuel Economy Goal 
Bill Ford made waves in 2000 when he declared that his company would improve the fuel economy of its cars by 25% in five years. Unfortunately, the car maker had to publicly rescind that goal just three years later (see it going, going . . . gone), resulting in some pretty rough handling from green groups. Not to be deterred, Ford has continued to push its green agenda in the media, with decidedly mixed results. The bottom line? Going public is not for the faint of heart; know your limits and what your company has a shot at pulling off.
Final Word: The Money Race 
With all the announcements lately, you can't help but imagine global corporations playing a game of "keeping up with the Joneses" in terms of spending on environmental initiatives. Bank of America made news back in March when it earmarked $20 billion for its green activities. A couple months later, Citigroup said it would commit $50 billion to its climate management efforts. Did HSBC feel the heat when it announced a comparatively paltry five-year, $100 million public-private partnership to fight climate change? Regardless, the big numbers meant big headlines for each company-- an always-appreciated branding boost in addition to any tangible benefits from implementing new sustainability programs.
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Books & Media "No executive can afford to ignore the green wave sweeping the business world. [Co-authors] Esty and Winston show how to make sustainability a core element of strategy-and profit from it." -Chad Holliday, CEO, DuPont Marks & Spencer's "Eco-Plan" 
The British retailer earned green cred last January when it launched Plan A, a comprehensive and aggressive set of environmental goals both symbolic (carbon neutral) and tactical (25% increase in stores' energy efficiency) -- and pledged to do it all within five years. They may just make it, thanks to nearly $400 million worth of funding and a strong top-down commitment to sustainable management: "We are calling this 'Plan A,'" the CEO Stuart Rose says, "because there is no 'Plan B."
Tools & Frameworks Setting Measurable Goals In this BusinessWeek feature, scroll down to the second article for an insider's view of goal-setting at Dupont. The company has been using "zero waste and emissions" as a symbolic target for nearly two decades but also focuses on setting aggressive, tactical sustainability goals such as reducing greenhouse gas emissions by 15%, improving water conservation by 30%, and cutting air carcinogen emissions by 50%. Solution Providers |
This work is licensed under a CreativeCommons License. Copyright Sustainable Life Media Inc. 2007
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