Ceres, January 30, 2020
As we move further into 2020, many companies are unveiling their next generation of sustainability goals. Dell Technologies, a member of the Ceres Company Network, worked with Ceres over a two-year period to develop their Social Impact Plan for 2030.
Ceres’ Company Network members know that having high quality environmental, social and governance (ESG) goals can help stir innovation, reduce costs, demonstrate a commitment to key stakeholders and help companies manage risks. By also paying attention to the right Key Performance Indicators (KPIs) and implementing strong measurement systems when setting ESG goals, companies can seize opportunities to fulfill growing stakeholder expectations for reporting on environmental and social impacts, as well as maximize financial returns.
Ceres worked with Dell Technologies, as it does with other members of our Company Network, starting from the premise that not all goals are created equal. In fact, our research shows that the truly meaningful goals being set by leaders in corporate sustainability share a few distinct characteristics:
- They’re ambitious: Goals should be difficult to achieve, requiring radical performance improvements and innovation rather than small incremental changes.
- They’re specific: Goals should have metrics that clearly define objectives and explain how progress will be measured.
- They’re science-based: Goals should align with the latest scientific consensus to ensure they’re based in the facts about what our planet can actually support.
- They’re about material impacts: Goals should address a company’s material issues according to the GRI’s definition of the materiality principle. That is, they should deal with companies’ most significant economic, environmental and social impacts and/or substantively influence the assessments and decisions of stakeholders on these issues.
- They’re globally integrated: Goals should support shared visions for a sustainable future, such as the United Nations’ Sustainable Development Goals (SDGs), to ensure they address the most significant global challenges.
- They’re both time-bound and long-term: Goals should include specific deadlines for accountability and be set far enough out to allow for significant performance improvements among teams.
That last characteristic of high quality sustainability goals was one of the chief focuses of the discussions facilitated by Ceres between Dell Technologies’ employees and external stakeholders from diverse constituencies: goals should “scan the horizon” and get companies to engage in “future thinking.”
That is to say: high quality sustainability goals should consider potential long-term trends and how they may change companies’ material impacts. Companies should consider the risks and opportunities that goals may contain during their timelines, and anticipate the need to respond flexibly and appropriately.
In the conversations and discoveries we led for Dell Technologies, one joint objective was to scan the horizon to 2030 and discuss long-term trends that the company’s stakeholders believe will increase the significance that certain issues will hold for the technology industry.
Dell Technologies’ stakeholders identified five top trends for the next decade and recommended actions to take in order to effectively address them:
- Rising wealth inequality already affects the majority of nation states but is most extreme in advanced economies. Companies will face increasing risks to their social license to operate as well as the possibility of higher taxation as societies try to address inequality. To stay ahead of these risks, companies must pay their fair share of taxes, ensure pay-equity, make larger contributions to retirement and health insurance programs, have a fair ratio between executive and employee salaries and invest in worker empowerment and community welfare programs.
- Human-driven climate change threatens our very existence, and as the latest report by the U.N. Intergovernmental Panel on Climate Change (IPCC) clearly lays out, the next twelve years are a critical, closing window to keep average global warming to a maximum of 1.5 C and avoid the worst effects of climate change. Companies must commit to science-based climate targets, aim for net-zero carbon buildings and transition entire supply chains to renewable energy.
- The transition to a circular economy has the potential to further reduce carbon emissions, waste, and environmental degradation and limit the need to extract raw materials from the earth. However, the world’s economy is only 9.1 % circular, leaving a massive “Circularity Gap.” Leading companies will need to develop fully closed-loop systems by investing in research and development to improve performance in the reduction, re-use and recycling of materials used in products and packaging. Companies will also need to invest in recycling technology and infrastructure, and take responsibility for products at the end-of-life stage.
- Emerging technologies, including artificial intelligence (AI) and robotics, present significant risks to people that are likely to increase over the next decade. Companies must ensure respect for human rights through a policy commitment, establish a due diligence process to identify, prevent, mitigate and be accountable for adverse human rights impacts, and commit to remediating any adverse human rights impacts the company causes, or to which it contributes. Companies should also focus on developing technologies that improve workers’ experiences and support workers in “reskilling” as technology changes the roles and requirements of workforces.>
- The “Gig Economy” is expected to include more than half the U.S. workforce by 2027. This trend threatens workers’ access to employer benefits, increases families’ income volatility, and presents risks to company culture, as well as to their compliance with labor laws. Technology companies need to work hand-in-hand with governments to ensure policies and systems are in place to meet the non-homogenous needs of the growing number of short-term and contract workers, such as by developing “portable benefits” that cover independent workers and aren’t tied to a specific company.
These five predicted long-term trends, identified by the “future-thinking” discussions led by Ceres, helped inform Dell Technologies’ Social Impact Plan for 2030, allowing them to anticipate both changing and emerging issues as they strive to create a positive and lasting impact on humankind and the planet.
Ceres invites other corporate leaders to join Dell Technologies in establishing high quality sustainability goals that, among other important aspects, take account of fast-changing social, environmental, political and technological landscapes. For many of the issues involved, waiting until they are staring us in the face will be to both companies’ and shareholders’ detriment. The time for future-thinking is always now.