Aligning Corporate Ambition with an Ever-Changing World
Goal-setting is familiar territory for most major multinational corporations. But as the needs and demands of our world change rapidly — on issues from climate change and resource scarcity to equity and social justice — companies are challenged to make sure their ambitions evolve in kind.
Still, it’s rare to see a company revisit past goals still in progress and increase their ambition to align with what’s needed. As it transitions from its Sustainability 2022 framework to a set of more high-reaching goals for 2030, leading global consumer packaged goods company Kimberly-Clark offers a case study in how companies can go about changing their vision to align with what the world requires today.
Goal-setting must be purpose-fit for a challenging world
Before the global coronavirus pandemic, the world was already grappling with a host of social and environmental challenges.
The climate crisis remains dire. U.N. data indicates that government commitments fall far short of what’s needed to realize the goals of the Paris climate agreement. And despite progress in some areas, the world is also falling behind on achieving the U.N. Sustainable Development Goals (SDGs) by 2030, according to the U.N.'s annual Sustainable Development Goals Report, with advances “offset elsewhere by growing food insecurity, deterioration of the natural environment, and persistent and pervasive inequalities."
Both individuals and business leaders think the corporate world must step up its actions to fill these gaps. Over 90 percent of citizens think it’s important for the private sector to support the SDGs, for example, according to data from PwC. Yet more than 80 percent of the world’s largest companies are unlikely to meet the targets set out in the Paris climate agreement by 2050, according to a study of almost 3,000 publicly-listed companies and their climate disclosures.
Corporate action is ramping up. To date, nearly 1,300 leading businesses around the world have made climate commitments through the We Mean Business coalition’s Take Action campaign. More than 240 companies committed to source 100 percent renewable energy as part of the RE100 initiative. And 285 companies have had greenhouse gas (GHG) emissions reduction targets verified through the Science-Based Targets initiative (SBTi) in line with the Paris Agreement.
Sticky challenges demand bold ambitions
For Kimberly-Clark, which counts itself among those with goals verified by SBTi, an outside-in perspective is integral to the goal-setting process and matching ambition with the global agenda, said Lisa Morden, the company’s vice president of safety and sustainability.
“There is more scientific evidence around pressures and impacts on natural systems and the environment in general,” Morden told TriplePundit. “There are big, sticky, difficult challenges all around us — and those challenges require a pretty bold ambition. We’ve always set targets that we knew were a stretch, but in the last few years, we’ve worked on trying to understand what Kimberly-Clark’s contribution to the Paris accord, for instance, might look like.”
Kimberly-Clark’s 2022 Sustainability Framework, set in 2015, was updated with a new set of goals announced earlier this month. Many of the 2022 goals were already surpassed. The company now aims to reduce its plastics, water, carbon and natural forests footprints 50 percent by 2030. That includes reducing its absolute greenhouse gas emissions by half in just a decade from Scope 1 sources, which are the emissions from its own production, and from Scope 2 sources, those created from producing the energy a company purchases to run its business. In addition, Kimberly-Clark aims to cut its Scope 3 emissions from purchased goods and services and end-of-life treatment for sold products by 20 percent.
The company decided to take a fresh look at its goals about a year ago, Morden explained: “A lot has changed in terms of what we feel like we can do and what we feel like we should do as a result of the external context we're operating in. We said, ‘It's probably time to take a step back and ask, ‘Are we being big and bold enough?’ We felt it was time.”
The art of the stretch goal
Since 1995, Kimberly-Clark has had a five-year cadence of setting goals (the seven-year goals set in 2015 were an outlier, set to coincide with the company’s 150th anniversary in 2022). With each round, goals were adjusted, the company set more ambitious objectives, and the portfolio of programs expanded "as more knowledge came into the system,” Morden told us.
“It’s worked very well for us,” she explained. “It’s a source of engagement for our teams and with each cycle we’ve been able to innovate and stretch further.”
For the 2030 goals, two areas in particular reflect that stretch. Within its GHG emissions reductions, it was a first for the company to set an absolute target to reduce Scope 3 emissions by 20 percent.
“The Scope 3 piece is a very different challenge than we are used to,” Morden said. “We’ve had to apply some assumptions around what we can achieve that aren’t based in as much experience as some of our other programs." Those considerations depend in part on alternative materials development that is underway, how key core suppliers will drive reductions, and the success of the company’s circular economy focus.
Part of that focus is another bold goal: reducing Kimberly-Clark’s plastics footprint by 50 percent and having 100 percent reusable, recyclable, or compostable packaging by 2025. “We’ve amped up our focus on plastics significantly,” Morden said. “We’re looking at bio-based plastics, renewable plastics, plastics that can be recycled more easily, and even biodegraded or composted more readily.”
For corporate goal-setting, the key to success is an inclusive process
For Kimberly-Clark, the key to success with continually raising its ambition has been an inclusive process of goal-setting that reaches into every corner of the company.
“We've learned that the act of setting the goals with your business and functional teams , and connecting that to the vision or purpose of the company, is key to engagement and activation of the ambition” Morden said. “There's a whole layer of strategy deployment activity that sits below the goals themselves. This is where the rubber hits the road in terms of bringing the ambition to life.”
For the goal-setting to work, it can’t be top-down, she added. “When people have their fingerprints on the goals — and [they are] included in the process of learning, exploring and developing the pipeline of initiatives — it's a very different kind of engagement model. During every cycle that we've gone through since the early ‘90s, we've gotten better at that. Our employees are increasingly more excited to participate and engagement is expanding from where it started in supply chain and manufacturing, into product and material innovation, and now into helping our brands further their purpose in the world.”
For business leaders seeking to redefine their goal-setting process in an ever-more complex world, Morden’s advice is as follows: “Don’t be afraid of the bold ambition. Be sure that it is reasonable and appropriate to your footprint, to who you are as a company, to what your raw materials look like, to who your customers, consumers and stakeholders are—be sure it's a relevant focus. And then, in your strategy deployment, work with the different functions and regions and stakeholders internally in the company, get their fingerprints on it, bring them along the entire journey. With a little bit of rigor and discipline, and an inclusive process, we’ve found it’s possible to not only design ambitious goals but to actually deliver on them.”
This article series is sponsored by Kimberly-Clark and produced by the TriplePundit editorial team.
Image credit: Jianxiang Wu/Unsplash