Steps 2 and 3 Define priorities and set goals

Steps 2 and 3 Define priorities and set goals

“Our integrated corporate strategy is supported by the four pillars of our sustainability agenda: footprint, innovation, sourcing and care. In these areas, we want to systematically minimise the negative impacts of our corporate activities and increase our social added value, thus actively contributing to the attainment of the SDGs”. (Symrise, sustainability report)

Main topics: Materiality, Stakeholder, Supply Chain, Impacts

Overview

Step 2 Define priorities

After companies have made themselves familiar with the SDGs in Step 1, Steps 2 and 3 of the SDG Compass deal with the identification of the individual action priorities of the companies and giving these priorities goals.

To this end, companies should first perform an analysis of their positive and negative impacts on the SDGs along the entire value chain. The greatest impacts of corporate activity on the SDGs occur mostly in the supply chain (raw materials and production), logistics, sales and in the use of products. An analysis of your own value chain will ensure that you become aware of the most important opportunities the SDGs can give you – but you will also identify the risks that can arise in conjunction with the SDGs.

To this end, companies select appropriate indicators for each identified area that has a (potentially) large impact. If possible, inputs (resources expended), outputs (the result of an activity such as the number of people reached), outcomes (results such as changes in the lives of people reached by the company’s activities) and impacts (long-term impacts of the company’s activities) should be measured with the help of these indicators. However, impacts are difficult to measure, because they either occur in the long term, or the basis measurement is still being discussed. If the impacts are too difficult to measure, outputs or outcomes can prove useful.

On this basis, companies can then define their action priorities, with the involvement of stakeholders. Here it is important to also consider marginalised population groups such as women and disabled persons. Companies must also address the individual (country-specific) context in which they carry out their business activities. On the one hand, a company could e.g. maintain labour-intensive activities in a country where wages are low or labour rights are not enforced; on the other hand, manufactured products or services offered can also improve the living conditions of the people there.

Step 3 Setting goals

Now the company can set goals for itself that contribute to the attainment of the SDGs. A commitment of the company to sustainability and the SDGs is more credible if corresponding specific, measurable and time-limited corporate objectives exist. The selected KPIs against which progress or the degree of fulfilment of the goals are determined, must reflect the outcomes and impacts of the corporate activities. The output or outcome indicators selected as a replacement for impact KPIs can be improved or strengthened through stakeholder commitment.

 

Best Practice - Symrise

The commitment of the Symrise AG, headquartered in Holzminden, shows how companies can define their action priorities and subsequently set their goals for attaining the SDGs based on these priorities. Symrise produces fragrance, flavour and active ingredients for cosmetics and food, and applies its commitment to sustainability to the social environment in which the company is active. The company strives to fulfil its environmental and social responsibility in such a way that both the company itself and its customers, employees and the society can develop positively and sustainably. In accordance with its own mission statement of ‘Sharing Values’, the entire value chain is involved, from raw material suppliers to end consumers, as the sustainability report of the company tells us.

The company’s strategy is based on the four pillars of Symrise’s sustainability agenda: footprint, innovation, sourcing and care. In these areas, the company wants to consistently minimise the negative effects of its corporate activities and increase its social value. In this way, Symrise actively contributes to the attainment of the SDGs. Formulated short, medium and long-term goals measure the implementation of the company’s aspirations.

Goal – Footprint

  • Minimising the environmental footprint along the entire value chain to conserve resources, reduce environmental impacts and prevent risks.

Goal – Innovation

  • Maximising the social and environmental added value of the products. Consistent compliance with sustainability criteria in product development not only leads to resource-saving and business-enhancing effects within the company’s own value creation processes, it also has a positive influence on consumer behaviour.

Goal – Sourcing

  • Generating lasting value for the employees and local communities. Strengthening of the infrastructure and the community to gain new talents and increase the motivation of the employees.

Goal – Care

  • The sustainable development of commodities procurement and the associated supply chains. The focus here is on a stable supply of high-quality, raw materials and the greatest possible transparency and control of the environmental and social Impacts.

Symrise has carried out a materiality analysis to determine the relevance of each SDG and ascertain the potential influences the company has.

The main topics

Symrise has divided the different sustainability topics according to its ‘Value for Society’ and ‘Value for Symrise’ and identified these topics by their greatest potential for joint value creation. The company determined the priorities of the main stakeholders, including customers, employees, shareholders, neighbours, politics, NGOs and business partners, with the help of stakeholder management which is oriented on the AA1000 Stakeholder Engagement Standard.


Higher ‘Value for Symrise’ was assigned to the fields of action, ‘Ensuring the highest possible product safety’, ‘Plant safety’, “Human rights” and “Compliance”; ‘Animal welfare’ was also added to the fields of action.


In addition to strategic orientation, the identification of major topics also serves as a means of structuring reporting in accordance with the GRI (Global Reporting Initiative) G4 guidelines. Comprehensive reporting is carried out on topics to which Symrise has assigned a high value for both itself and society. The company reports on topics that have a high relevance in only one dimension with at least one indicator. Accountability pertaining to sustainability performances and KPIs is filed in the sustainability report.


Symrise combines three dimensions in the materiality matrix: The X axis reflects the ‘value’ of the respective action fields for Symrise, while the Y axis shows the ‘value to society’. The size of the action field circles reflects the extent of the expectations assigned to the action field from the perspective of the stakeholders.


To assess the impact Symrise has on the respective SDGs, the company has analysed the identified action fields with respect to the four pillars of the sustainability agenda: footprint. innovation. sourcing and care. A matrix represents the direct and indirect impact of Symrise and the level of relevance regarding the SDGs and lists them accordingly.

For the Footprint pillar, this means e.g. that thanks to its progress within the defined action areas of resource conservation, emission reduction, efficient use of raw materials and conservation of biodiversity, Symrise has a direct impact on the following SDGs, to which the company assigns a high degree of relevance:

  • SDG 7 Ensure access to affordable, reliable, sustainable and modern energy for all
  • SDG 8 Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
  • SDG 9 Build a resilient infrastructure, promote inclusive and sustainable industrialisation and support innovations
  • SDG 12 Ensure sustainable consumption and production patterns
  • SDG 13 Take immediate measures to fight climate change and its impacts
  • SDG 15 Protect and restore terrestrial ecosystems and promote their sustainable use, sustainably manage forests, combat desertification, stop and reverse soil degradation and stop the loss of biodiversity

Transfer

  1. Analyse the company-specific effects on the SDGs along the entire value chain in terms of the following questions:
    a. which core competencies, technologies or products (can) especially contribute to the attainment of specific SDGs?
    b. which activities of the company (can) negatively affect the SDGs, either directly or indirectly or indirectly?
  2. Select suitable indicators and record the data. In doing so, take inputs, outputs, outcomes and impacts into account and find the right balance between lagging indicators (which measure the results and impacts) and the indicators which predict results. You can use a so-called logic model such as the ‘WBCSD Measuring Socio-Economic Impact Guide for Business’ to assist you in this. You should also use standardised indicators. In this way, companies can be compared with one other and the company’s impacts on the SDGs can be better understood. To this end, you can use the list of existing standard indicators for each of the 17 objectives on the SDG Compass website (www.sdgcompass.org/businessindicators).
  3. You then define the priorities for action. You should use the following guidelines, which can help you with this.
    a. The size, severity and the likelihood of negative effects and the significance of such impacts for stakeholders.
    b. The probability of future laws, lack of resources or manpower, interruption of the supply chain, pressure from stakeholders or future market dynamics, which can increase the costs and/or risks of these negative effects for the company.
    c. Analysis of growth opportunities or increased market power for the company thanks to (potential) positive effects on the SDGs., e.g. possibilities for innovation, development of new products or services, or the opening up of new market segments.
  4. Define goals – In this context, the determination and communication of the baseline is important for external credibility and the reliable measurement of changes. You should address the following questions:
    a. Are the goals ambitious enough?
    b. Should external communications be carried out in this case? If so, then you must regularly report on the progress you have achieved.
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