This is the first of three blogs regarding setting Green House Gas (GHG) reduction targets.  It begins with a common situation.

It’s your first week as the newly minted Sustainability Manager for a fast growing mid-size company and the CFO sends you a one-liner via email - “GHG reduction target – recommendation?...need soon” You’re smart and senior enough to instantly recognize that this is a fairly complex topic that includes a bit of art but also a strong dose of science.  Given that, you work to buy yourself a couple of days before you respond so that you can brush up on the recent literature. 

The first lesson you note is the difference between an absolute target and one based on operational intensity like revenue or units sold. While the difference is basic you sense that the implications are immense regarding the way your company would go about meeting either objective. 

You like the simplicity the absolute target provides but you’re immediately wary of how your company might meet an absolute reduction given the growth goals you’re privy to. Oppositely, you like the ability of the intensity metric to scale with that growth. Additionally, you appreciate the industry comparability an intensity target provides. But what happens if the nearest competitors choose a different intensity metric? 

Hmmm…Since you’re at a standstill you table the choice regarding absolute or intensity target setting and continue toward other important, interrelated components of setting a target. 

Probably the most obvious component of the equation is what reduction target to choose. Should you choose 5%? What about 10%? Will numbers that small make a difference? Headlines? Perhaps we should go big and see what’s possible. Why not 50%?  Well, it’s more complicated than that. The answer depends on at least two additional inputs. 

Another important component is how long your plan extends. In other words, what’s the deadline? Again, you could choose a short time frame, say 3 years or a deadline 50 years out. It’s up to you.

At this point, you’re beginning to wonder if you might need GHG experts for support in making this recommendation. You can see business disciplines making justifications in opposite directions and it’s not hard to envision conflict and confusion as this process works its way through the company and externally to your stakeholders. 

Without a doubt, this decision carries many implications. 

To make some sense of the broader situation you put together a table of the top 10 performers from the Newsweek 2012 Green Rankings. You make a note of whether an absolute or intensity metric is used, what the reduction target was and the amount of time the companies allotted to meet the target. Your preliminary research returns the following information:

While the average, min and max of the first two columns are interesting you’re thoughts are directed toward the final, normalized column. In particular, you notice the small variance between the first seven companies (prior to Accenture’s big jump) which works out to a GHG reduction average of 2.1%/year. 

Feeling good about your ability to tease this data point out, but with even more questions than answers, you decide to call it a day and begin to sign out of your computer. Checking your email one last time you see an article from your MBA alma mater that reads: “Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting”

and wonder if the article could influence your reduction recommendation. You bookmark it, close your browser and head home. 

Be sure to read “Finer Points of Greenhouse Gas Goal Setting” in blog two of three to see what our character learns.