Capital 5 Flashcards
FOr the ambition level setting process the company has to decide which 3 things`?
decide where to Comply, Compete and Lead on material topics
What does the “Comply” phase entail in sustainability efforts? (ambitious level)
COMPLY and declare intentions
- Focus on legal compliance
- Little competitive edge
- Sustainability mainly as cost
What characterizes the “Compete” phase in a company’s sustainability journey?
COMPETE with start of selected projects
- Clear positioning beyond compliance
- Sustainability as business opportunity
What defines the “Lead” phase in sustainability? (ambitious level)
Lead and shape the industry
- Ambitious goals & industry leader
- Willingness to invest
- Sustainability as a business opportunity
What is the purpose of peer benchmarking in ambition setting?
- comparing companies ambitions with peers in the same industry or sector
- Helps identify where to Comply, Compete, or Lead based on environmental, social, and governance (ESG) factors.
What are the focus areas in peer benchmarking in environmental, social and, governance?
Environmental:
- GHG emission from own operations
- GHG emissions in the Ssupply chain
- Water usage
What are the focus areas in peer benchmarking in environmental, social and, governance?
Social
- Health & Society
- Diversity
- Social standards in the supply chain
What are the focus areas in peer benchmarking in environmental, social and, governance?
Governance:
- Compensation
- Transparency and reporting
What is the general procedure in peer benchmarking?
1.Assess current state
2.Analyze peer ambitions ( No target, comply, complete, lead)
3.Define future ambitions (comply, compete,lead)
4.Link targets to initiatives
5.Monitor progress
What is the first step in peer benchmarking analysis?
- Assess the company’s current state by comparing its performance on key ESG metrics to industry peers
- identify strengths and weaknesses across Environmental, Social and Governance
What are the main dimensions evaluated during peer benchmarking?
- Environmental (E),
- Social (S), and
- Governance (G).
What happens during the analysis of the peer ambitions?
- Compare competitor targets to categorize industry benchmarks
- Understand where peers set leadership-level ambitions and identify gaps in the company’s own targets
How are peer targets categorized in in benchmarking analysis?
- “No Target,”
- “Comply,”
- “Compete,” and
- “Lead” levels.
What is the purpose of analyzing peer ambitions?
= To identify leadership benchmarks and gaps in the company’s current targets.
What happens in the 3.step defiine future ambitions in the peer benchmarking analysis?
- Set measurable ESG goals aligned with peer benchmarks and company strategy
Classify targets into level of ammbition:
- “Comply” (basic compliance),
- “Compete” (competitive positioning),
- “Lead” (industry leadership)
Peer benchmarking analysis
- Step: Linking targets to initiatives, what happens here?
- Develop specific initiatives required to achieve the defined targets
- Ensure alignment with ESG frameworks (e.g., SBTi, Sustainalytics) and assess feasibility.
What happens in the monitor progress in the peer bennchmarking analysis?
- Continuously track achievements against benchmarks
- Adjust targets and initiatives based on changing industry dynamics and company priorities
What defines Flagship Initiatives? (Quantity, Purpose, Impact, Timeline)
- Quantity: A maximum of 4-6 initiatives across the organization
- Purpose: Targets high-importance and material topics for external communication.
- Impact: Leads to large-scale changes
- Timeline: Longer implementation time, with significant budget requirements.
What are Operative Measures? (scope, focus, Impact, outcome)
- Scope: Non-flagship (other key) initiatives implemented centrally or decentrally
- impact: Relevant topics with moderate ambition levels
- Outcome: Results in considerable changes, varying in time and budget.
What are Low-Hanging Fruits? (Scope., Focus, outcome)
- Scope: Quick wins identified during discussions
- Focus: Lower ambition levels, often to “walk the talk” on ESG topics
- Outcome: Leads to short-term, small-scale changes with minimal budgets.
What are Core Enablers? (Scope., Focus, outcome)
- they supprt the ESG initiatives but do not directly have an ESG ambition
- Often rolled out organization-wide.
- Outcome: Varies depending on the initiative; enables the overall ESG agenda.
How do ambition levels vary across the four initiatives?
- Flagships: High ambition level, aligned with “Lead”
- Operative Measures: Moderate ambition, aligned with “Compete”
- Low-Hanging Fruits: Lower ambition, aligned with “Comply”
- Core Enablers: Not ambition-driven but foundational to success.
