Sunday Brunch: Sustainability targets are just goals
Sustainability, Strategy & Finance Credit: Omar Ram on Unsplash

Sunday Brunch: Sustainability targets are just goals

Sustainability targets without a meaningful delivery strategy are just goals. And without good disclosure we cannot judge if they are deliverable (or not).

Your Strategic Plans Probably Aren’t Strategic, or Even Plans - Graham Kenny 2018

Many company's and governments have net zero and climate related targets. But without a detailed delivery strategy to back them up, they are just goals. Or even worse they are just hopes. Or even worse again, potentially a way of 'kicking the can down the road' a bit further - so that it becomes someone elses problem.

Which is where sustainability disclosures come in. These are where the company sets out, via the audited Report and Accounts, their sustainability transition strategy. And where they should give detailed plans for delivering the targets. And their financial implications.

Sustainability disclosures are where we can measure progress.

We argued last week that sustainability disclosures matter to traditional investors as well. This week I want to set out why sustainability professionals need to care about good sustainability disclosures. Why targets are not enough.

Governments and companies mostly disclose alignment with the Paris Agreement, often via long term targets. And they frequently provide limited detail around what concrete actions they plan to take, and what the financial implications might be of the choices they have made. And most do not have meaningful short and mid term milestones.

It's all out there in the distance. And it can only be many years later than the lack of progress is revealed.

So, if a company or government promises some appealing net zero target, don't take it on trust. Demand to see the strategy - in detail, including the financial implications.

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Targets are just goals, or sometimes even just hopes

I want to start talking about why sustainability professionals should care about good sustainability disclosure with a simple example. It's a government that had a target, but that failed to actually have a strategy for delivering it. This has a really close read across to company's. I picked Scotland, simply because it happened last week.

It all started back in 2019 with an announcement from the Scottish Government ...

"Scotland’s ambitious climate change legislation sets a target date for net zero emissions of all greenhouse gases by 2045. Our contribution to climate change will end, definitively, within one generation."

And as part of this they committed to target of reducing greenhouse gas emissions by 75% by 2030. Pretty punchy. And sadly, not really backed up by what you could reasonably describe as a well thought out and costed strategy.

Given that they missed eight of the last twelve annual targets, and failed to publish the plan they promised under their own legislation, last weeks news could not have been a real surprise to anyone.

The 2030 target was scrapped as now being "unachievable".

Scottish government scraps climate change targets
The annual and interim climate targets will be replaced with a system measuring emissions every five years.

Or putting it another way - no real plan meant the targets were exposed for what they really were, just goals and hopes. For sustainability professionals this means that five years on, we still of no clear idea if the Scottish plans are deliverable.

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