E-135: Corporate Sustainability Strategy

Sustainability Metrics:
Considering Materiality at Marks & Spencer
(Case for Week 12, Nov. 14-20, 2016)

Introduction: Materiality
With this week’s topic of sustainability metrics, we would like you to think about how
companies choose what to report regarding their sustainability results, and how they
actually communicate those results.

We have already discussed some important topics, including resource efficiency and
emissions, workforce relations and productivity, stakeholder engagement and supply chain
management. But how can companies track this information as well as report upon it in a
coherent manner to company stakeholders? What are their stakeholders most interested in
hearing about, and how can it be presented in a way that makes sense and also satisfies
essential goals of transparency?

The Global Reporting Initiative has developed Sustainable Reporting Guidelines that have
been widely recognized as valuable sustainability tool. These guidelines have been
mentioned several times over the semester. The latest version G4 of the GRI guidelines has
an increased emphasis on materiality. The result of this emphasis is that rather than reporting
on all or part of the various aspects listed in the guidelines, the organization itself uses
materiality to determine the threshold for whether a certain aspect should be reported. The
guidelines outline basic principles of reporting to ensure appropriate scope,
comprehensibility and comparability across various sustainability reports. There is a copy of
the latest GRI G4 guidelines in the Supplementary Reading folder for this week.

The principles of the GRI include the following (GRI, 2013a, pp. 16-18):

Content:
• Stakeholder Inclusiveness: identify stakeholders and describe how the report
responds to their interests
• Sustainability Context: report regarding the specific context of the organization
• Materiality: Include significant environmental, social or economic impacts; or
significant stakeholder concerns
• Completeness: this includes time, scope and boundaries identified according to
stakeholder concerns

Quality:
• Balance: include positive and negative assessments to provide an objective
overview
• Comparability: metrics should be used to enable reasonable assessment over time
and to compare results accordingly
• Accuracy: metrics should enable stakeholders to verify the information and
performance
• Timeliness: there should be regular schedule of reporting to enable stakeholders to
make informed decisions

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 E-135: Corporate Sustainability Strategy

• Clarity: information should be accessible to a wide variety of stakeholders

• Reliability: stakeholders should have assurance that the information presented is
correct

In the section on materiality, the GRI G4 guidelines emphasize that reporting on information
may include items that are not necessarily strong concerns of the organization itself but may
instead be concerns of outside stakeholders. This may make an item material for reporting
purposes. Figure 1 shows how material aspects should be determined according to GRI. The
items in the upper right hand areas of the graph below are those most material for reporting
(GRI, 2013b):

Figure 1: GRI Prioritization of Aspects (GRI, 2013b, p. 12)

The reading materials this week describe various techniques to determine materiality for a
company’s reporting. There is a multi-step process listed in the GRI guidelines, but sometimes
it helps to have another perspective to understand how a process works. AccountAbility
suggests the following process for determining the material aspects for a company to report
(Murninghan, M & Grant, T, 2013):

1. Develop a long list of possible issues, and then include multiple stakeholders to
analyze those issues – both inside and outside the organization,
2. Prioritize the issues, based once again upon both internal and external factors, and
scaling various issues based upon the importance (benefit and/or risk) of various
stakeholder interests,
3. Review the analysis through a third-party advisory group, and approve the list at the
board level, and

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4. Embed the materiality process into the company’s management systems, through
strategy, stakeholder engagement, performance frameworks, and reporting.

What is material for one company may be very different for another. Subsidiaries and
divisions of companies are even beginning to prepare their own sustainability reports so that
they can better include information that is more appropriate for their operations and
locales.

As we have mentioned in class, determining what is material is often a group exercise

including company employees and various stakeholders. Various topics can be charted on
a sliding scale according to their importance to stakeholders and to their impact on the
company, and the top tier of topics can be prioritized accordingly.

Although material issues can vary, there are also some common factors, such as good
governance, climate change, use of resources, and attention to human rights. Ceres is a
leading NGO that has been mentioned in the course materials several times this semester.
Ceres was behind the initial adoption of the GRI, and they have published a report, The 21st
Century Corporation: The Ceres Roadmap to Sustainability. We’ve mentioned this report
before, but we’re providing it on this week’s web page again to give you a second look.

The Ceres report included some suggested indicators for most companies, including
specific goals for GHG emissions and reporting through the GRI. This list could serve as a
starting point for any company in its effort to determine the most material issues. The Ceres
“key expectations” are included as an appendix to this case.

The GRI guidelines provide a process view of how the materiality selection process
proceeds, shown in Figure 2 below:

Figure 2: Defining Material Aspects and Boundaries – Process Overview

(GRI, 2013a, p. 90)
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In this process, step 1 includes applying the principles of inclusiveness and context to
determine the various aspects for reporting. Step 2 utilizes the principle of materiality to
prioritize which aspects should be reported. Step 3 applies the principles of completeness
and inclusiveness to ensure the correct aspects have been selected for reporting. After the
report is released, step 4 instructs the organization to review the report with stakeholders to
determine how the next reporting cycle can be improved and whether important material
aspects should be updated or revised (GRI, 2013a, p. 90).

Marks & Spencer

Finally we’re getting to the case! Figure 3 below shows a materiality analysis chart from
Marks & Spencer or M&S, our case company for this week. In their sustainability report Plan A
(M&S, 2016a), they describe a similar process as outlined above to develop the material
issues for their report. They started by identifying important issues with their stakeholders and
then prioritized the issues with management according to the relative importance to
stakeholders and to the company itself. Working with DNV GL, they developed a list of
about 40 issues that were of highest importance to both outside stakeholders and to the
company and then had the results from those issues independently assured through either
AA1000 AS or IASE 3000 standards. All of the remaining issues were audited internally (p. 37).

Figure 3: Marks & Spencer Materiality Reporting (M&S, 2016a, p. 37)

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Marks & Spencer (M&S) is based in the UK with sales last year topping £10.4 billion (or $15
billion). They are ranked number 816 in the 2016 Forbes global 2000 and are regularly
ranked at the top of various lists for their sustainability practices, including ranking number
21 in the Corporate Knights Global 100 for 2016 (M&S, 2016a; Forbes, 2016; Corporate
Knights, 2016).

Founded in 1884 as a single stall in London – in what nowadays would be called a mall –
today they employ nearly 83,000 people worldwide including food and general
merchandise from 2,200 suppliers worldwide (M&S, 2016a). They are known for their high
quality products and provide easy access on their website to their sustainability goals.

Sustainability has been increasingly important at M&S over the past decades, and they
have received a number of awards and accolades for their progress. But until about 10
years ago it was mostly cherry picking in various areas – reducing obvious risks here and
taking advantage of efficiencies there. In 2006, then CEO Stuart Rose directed the
sustainability team to get serious about their efforts and make them a driving force for the
company, embedding sustainability throughout the company and its supply chain. This
brought about the first Plan A, which set at first 100 and then 180 targets across the
company to improve their impacts upon climate, water, energy, resources, and human
well-being by 2015, and embedding sustainability into every area of the company. The
effect was to essentially inspire products across the company that supported these goals,
such as organic cotton clothing and sustainably caught fish – products that their consumers
wanted anyway and that they had the capability to provide (Nichols, 2013a).

Plan A for 2014 honed the targets back down to 100, a more manageable number to report
upon and also most likely due to the GRI emphasis on materiality (the 2014 report was the
first to follow the GRI G4 guidelines). In 2015 their report format was revised to follow the
basic categories of economic, social, environmental and supply chain for the GRI
framework. In its recent reports M&S emphasizes its business case for sustainability, reporting
£160 mil net income from its sustainability efforts for 2014 and £185 mil (or $230 mil) in 2015.
They are the first retailer to be certified by the Carbon Trust for three standards: water,
energy and waste, and claim to be the world’s only major retailer with carbon neutral
operations. On the climate side, they track both normalized (per sq. ft.) and absolute CO2
emissions – down 39% and 31% respectfully on a 2006/07 basis. Diversity is also a hallmark,
with women holding 36% of their board positions (vs. 19% for S&P 500 companies) and 41%
of senior management positions (vs. 25% for senior level officers for S&P 500 companies). As
you will find this week, M&S takes sustainability seriously; from inside the company to outside,
bringing style and flavor to the sustainability picture (M&S, 2014; M&S, 2015; M&S, 2016a;
Catalyst, 2016).

Part of the goals for Plan A 2014 with M&S was to further embed the program within the
company rather than having it be an add-on silo or separate bureaucracy. Mike Barry,
head of sustainable business at M&S, saw it this way: "The first 180 commitments [were]
about making individual parts of the business less bad - less energy, less waste, less
packaging, better standards of cotton, wood etc. But they've all been individual silos. The
next step is to start to look at M&S as an ecosystem and how you go from a less bad
business to a better business” (Nichols, 2013b).

In 2016, M&S achieved its goal of “integrated reporting,” showing the connection between
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the environmental and social responsibilities and its financial results. They have done this
according to the International Integrated Reporting Council’s Integrated Reporting
Framework. They still report according to the GRI G4 Guidelines, but throughout the 2016
Plan A report you will see references to their Annual Report (M&S, 2016a). In next week’s
case you will see another example of integrated reporting with Novo Nordisk, but they have
combined their sustainability and annual reports into one overall report.

Besides the integrated report from 2016, M&S published a separate Human Rights report.
This is the first such report for M&S, and they seem to be forthright that they are working to
resolve some of the tough challenges in their supply chain. We’ve provided some news
items regarding these issues on this week’s web page, which will help to give you some
perspective from outside stakeholders. The emphasis in the report is upon individual rights
more than general business risk, and they break the major components down to include the
following: discrimination, forced labor, freedom of association, health & safety, living wages,
water & sanitation, and working hours (M&S, 2016b, p. 16).

M&S has achieved many of its human rights goals in its first tier supply chain, but it is the
lower tiers that remain a challenge, and this is true of many companies, as you have
already seen so far this semester. As we have noted, part of the problem is that local laws in
some of these places conflict with the basic human rights principles for the company, and
indeed for the rest of the civilized world. This will be a very interesting area to watch, to see if
M&S provides real leadership in this challenging area, and to see if they can engage the
suppliers who have previously resisted compliance in their quest for a responsible supply
chain.

It can also be helpful to review the past years of sustainability reporting for M&S. We’ve
provided the reports on this week’s web page for the past several years. You can see that in
2013 they were quite extensive with many goals and results organized under seven “Pillars.”
In 2014 they tried to be more concise, and they reorganized the goals under four headings
– Inspiration, Intouch, Integrity and Innovation. In 2015, they reorganized the goals once
again under the more traditional categories of Economic, Environmental, Social, and
Supply Chain, saying it was in response to reader comments. In 2016 they stuck with the
same categories, but the four Is (Inspiration, etc.) appear here and there as a theme for the
company. As you can see, striking the right balance between splash and professionalism
can be a challenge, even for a well-heeled company such as M&S.

We encourage you to delve into materiality and metrics of M&S this week. How do they
compare with other companies you have studied so far this semester?

References:
Catalyst. (2016). Pyramid: Women in S&P 500 companies. New York: Catalyst. Retrieved
from: http://www.catalyst.org/knowledge/women-sp-500-companies
Ceres. (2016). The Ceres roadmap for sustainability. Retrieved from:
https://www.ceres.org/resources/reports/the-ceres-roadmap-for-sustainability-
revised-expectations/view
Corporate Knights. (2016). 2016 global 100 results. Retrieved from:
http://www.corporateknights.com/magazines/2016-global-100-issue/2016-global-
100-results-14533333/

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European Federation of Financial Analysts Societies (EFFAS). (2009). KPIs for ESG: Key
performance indicators for environmental, social and governance issues, Version 1.2.
Frankfurt: EFFAS.
Forbes. (2016). The worlds biggest public companies. Forbes. Retrieved from:
http://www.forbes.com/global2000/list/
Global Reporting Initiative (GRI). (2013a). G4 sustainability recording guidelines: Reporting
principles and standard disclosures. Amsterdam: Global Reporting Initiative.
Global Reporting Initiative (GRI). (2013b). G4 sustainability recording guidelines:
Implementation manual. Amsterdam: Global Reporting Initiative.
Marks & Spencer (M&S). (2014). Your M&S: Plan A Report 2014. M&S. Retrieved from:
http://planareport.marksandspencer.com
Marks & Spencer (M&S). (2015). Plan A Report 2015. M&S. Retrieved from:
http://planareport.marksandspencer.com/M&S_PlanAReport2015.pdf
Marks & Spencer (M&S). (2016a). Plan A Report 2016. M&S. Retrieved from:
http://corporate.marksandspencer.com/plan-a/our-
approach/89db73e54804477bb1e2b52e09306e43
Marks & Spencer (M&S). (2016b). Human Rights Report. M&S. Retrieved from:
https://corporate.marksandspencer.com/documents/plan-a-our-approach/mns-
human-rights-report-june2016.pdf
Moffat, A. & Newton, A. (2010). The 21st century corporation: The Ceres roadmap to
sustainability. Ceres. Retrieved from: http://www.ceres.org/resources/reports/ceres-
roadmap-to-sustainability-2010
Murninghan, M & Grant, T. (2013). Redefining materiality II: Why it matters, who’s involved,
and what it means for corporate leaders and boards. Accountability. Retrieved
from:
http://www.accountability.org/images/content/6/8/686/AA_Materiality_Report_Aug
2013%20FINAL.pdf
Nichols, W. (2013a). How M&S is making sustainability pay - part one. businessGreen.
Retrieved from: http://www.businessgreen.com/bg/feature/2286363/how-m-s-is-
making-sustainability-pay-part-one
Nichols, W. (2013b). How M&S is making sustainability pay - part two. businessGreen
Retrieved from:
http://www.businessgreen.com/print_article/bg/feature/2286369/how-m-s-is-making-
sustainability-pay-part-two

Questions for this week:

1. Materiality Thread: What are some of the most important material issues to M&S as
they relate to their stakeholders? How are they communicating about these issues,
and how are they tracking their progress? Where they have not made progress,
what kinds of explanations are they providing? How does this compare with other
companies we have studied so far this semester?
2. Metrics Thread: What types of metrics is M&S using to track important aspects? Are
they clearly identified and explained? Can you find metrics that are qualitative
rather than quantitative for certain types of results? If so, how are they explaining
these metrics? What are the key metrics for their environmental reporting? What
about their social reporting?

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3. Business Case Thread: Besides the overall net savings number, what evidence can
you find to support the M&S business case for sustainability? How do they relate their
sustainability metrics to financial gain? How do they use their metrics to speak to
consumers regarding the value of the M&S sustainability programs?
4. Ceres’ Key Expectations Thread: Compare the Ceres Key Expectations in the
appendix to this case to the items reported in M&S. Are there any that are missing? If
so, can you find a reasonable explanation? Or, are they combined with other items
that are reported?

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www.ceres.org/ceresroadmap
The race toward a sustainable future
is on—and the competition is fierce.
Since the 2010 release of the Ceres Roadmap—
a strategic vision and practical framework for
sustainable corporations in the 21st century
economy—the economic, environmental, social
and political landscape has shifted. And with the
urgency of global environmental and social threats
increasing, integration of sustainability into core
business systems and decision-making, and
capturing the competitive advantage this offers,
becomes ever more critical.
The Ceres Roadmap presents 20 expectations in
the areas of governance, stakeholder engagement,
disclosure, and performance that companies should
seek to meet by 2020 in order to transform into truly
sustainable enterprises. As we pass the halfway
point on the road to 2020, it is an important time
to take stock of our changing world and refresh the
Ceres Roadmap expectations themselves to reflect
global sustainability trends.
Among the key changes we’ve seen in the past
few years:
! Business impacts of wide ranging environmental
and social threats are bigger than ever and
cannot be ignored. Over the past five years, the
World Economic Forum has consistently ranked
both climate change and the global water crisis
among the top five global risks.
! The international community is coming together
to take action. From the United Nations’ recent
release of the Sustainable Development Goals
to the historic global climate agreement in Paris,
governments from across the world are taking
strong steps to reduce reliance on fossil fuels,
build a low-carbon economy and provide decent
work and economic growth for all.
20 EXPECTATIONS FOR CORPORATE SUSTAINABILITY LEADERSHIP BY 2020
ACCOUNTABILITY: In order to realize meaningful and long-lasting sustainability performance improvements, companies must
institute accountability mechanisms that integrate sustainability considerations into core business systems and decision-
making. The first three areas of the Ceres Roadmap expectations—Governance, Stakeholder Engagement and Disclosure—
are focused on companies establishing and formalizing accountability for sustainability across the entire enterprise.
GOVERNANCE F0R
SUSTAINABILITY
VISION: Companies will embed sustainability from
the boardroom to the copy room and will manage
their entire value chain for sustainability.
G1 BOARD OVERSIGHT
Corporate boards will provide formal oversight for
corporate sustainability strategy and long-term
performance. Sustainability considerations will be
integrated into board discussions on strategy, risk
and revenue.
G2 MANAGEMENT ACCOUNTABILITY
The CEO and company management—from C-Suite
executives to business unit and functional heads—
will be explicitly accountable for achieving
sustainability goals.
G3 EXECUTIVE & EMPLOYEE COMPENSATION
Sustainability performance results will be a core
component of compensation packages and incentive
plans for all executives and employees across the
business. Companies will include sustainability
criteria in all employee performance assessments.
G4 CORPORATE POLICIES & MANAGEMENT SYSTEMS
Companies will embed sustainability considerations
into corporate policies and risk management systems
to guide day-to-day decision-making.
G5 PUBLIC POLICY
Companies will clearly state their position on
relevant sustainability public policy issues. Any
lobbying will be done transparently and in a manner
consistent with the company’s sustainability
commitments and strategies.
PERFORMANCE
See other side for Performance Expectations
Appendix to Case
A STRATEGIC VISION AND PRACTICAL FRAMEWORK
FOR SUSTAINABLE CORPORATIONS IN
THE 21ST CENTURY ECONOMY
! Roles and responsibilities of companies to
protect human rights have been defined. With
an unprecedented move by the United Nations’
Human Rights Council, the international
community endorsed the Guiding Principles
on Business and Human Rights, and in 2015
the world’s first comprehensive guidance for
companies to report on how they respect
human rights was released.
! Investors are putting their money into sustainable
companies. From 2012 to 2014, sustainable
investments grew by 76 percent1 and assets of
mutual funds using environmental, social and
governance (ESG) metrics grew by more than
200 percent.2
Just as the global landscape has shifted, we are also
seeing promising, yet incremental, improvements
in how companies are integrating sustainability
into strategic decision-making. In our 2012 and
2014 assessments of corporate progress toward
meeting the Ceres Roadmap expectations, we
saw improvements across critical areas, including
board oversight of material sustainability issues,
proactive corporate engagement of investors on ESG
risks and opportunities, and heightened focus on
environmental and social performance of suppliers.
We also found that sustainability challenges are
providing tremendous opportunities for companies
to improve competitiveness, realize large savings
through energy productivity, access and retain the
best employees, strengthen value chains, and in
many sectors, reap the benefits of clean technology
and clean energy investments.
The revised Ceres Roadmap expectations presented
here remain consistent with the original vision and
commitments put forward in 2010—but acknowledge
the changing context and our improved understanding
of effective strategies for becoming a sustainable
corporation.
STAKEHOLDER
ENGAGEMENT
VISION: Companies will regularly engage in robust
dialogue with stakeholders across the whole value
chain, and will integrate stakeholder feedback into
strategic planning and operational decision-making.
S1 MATERIALITY ASSESSMENT PROCESS
Companies will regularly conduct a formal materiality
assessment process to determine the most relevant
sustainability issues for the business. Companies
will engage both internal and external stakeholders
in the materiality assessment process and consider
stakeholder concerns in the setting of priorities.
S2 SUBSTANTIVE STAKEHOLDER DIALOGUE
Companies will systematically identify a diverse
group of stakeholders and regularly engage with
them in a manner that is formalized, ongoing,
in-depth, timely, and involves all appropriate parts
of the business. Companies will disclose how they
are incorporating stakeholder input into corporate
strategy and business decision-making.
S3 INVESTOR ENGAGEMENT
Companies will disclose, and engage with investors,
on material sustainability information regarding strategy,
risks, performance and commitments. Companies will
communicate information on sustainability risks and
opportunities for the business during annual meetings,
analyst calls and other investor communications.
S4 C-LEVEL ENGAGEMENT
Senior executives will participate in stakeholder
engagement processes to inform strategy, risk
management and enterprise-wide decision-making.
S5 STRATEGIC COLLABORATION
Companies will collaborate within and across
sectors and civil society to innovate, scale and
open source sustainability solutions.
Some highlights of the revised expectations include:
! Adjusting the Board Oversight expectation under
Governance to reflect key learnings from Ceres’
recent collaboration with corporate board members
and governance experts, and an expansion
of the expectation linking compensation with
sustainability metrics to include all employees,
not just executives;
! Expanding the focus on Investor Engagement
to include what companies should communicate
to investors and how to engage this critical
community;
! Underscoring the urgent need to limit temperature
increases to well below 2 degrees Celsius through
Performance commitments to reduce greenhouse
gas emissions, procure renewable energy and
improve energy productivity;
! Acknowledging the escalation of global water
risks with an expansion of the Water Management
expectation to address both direct operational
and supply chain impacts within regions of high
water risk; and
! Supporting the international community’s
collective effort to define the role of business in
protecting human rights through the expectations
covering Human Rights and Supply Chains.
The Ceres Roadmap is a resource to help companies
re-engineer themselves for success in a world beset
with unprecedented environmental and social
challenges that threaten the economy and local
communities. It is our hope that the Ceres Roadmap
expectations will guide companies toward corporate
sustainability leadership, and ultimately, promote
an accelerated transition toward a more sustainable
global economy.
1 US SIF. “SRI Basics.” Retrieved from: http://www.ussif.org/sribasics.
2 US SIF. “Sustainable & Responsible Mutual Fund Chart.” Retrieved
from: http://charts.ussif.org/mfpc/.
DISCLOSURE
VISION: Companies will report regularly on their
sustainability strategy and performance. Disclosure will
include credible, standardized, independently verified
metrics encompassing all material stakeholder concerns,
and details of goals and plans for future action.
D1 STANDARDS FOR DISCLOSURE
Companies will disclose all relevant sustainability
information using the Global Reporting Initiative (GRI)
Guidelines as well as additional sector-relevant
indicators.
D2 DISCLOSURE IN FINANCIAL FILINGS
Companies will disclose material sustainability
risks and opportunities, as well as performance data,
in financial filings.
D3 SCOPE & CONTENT
Companies will regularly disclose trended performance
data and targets relating to global direct operations,
subsidiaries, joint ventures, products and supply
chains. Companies will demonstrate integration of
sustainability into business systems and decision-
making, and disclosure will be balanced, covering
challenges as well as positive impacts.
D4 VEHICLES FOR DISCLOSURE
Companies will release sustainability information
through a range of disclosure vehicles including
sustainability reports, annual reports, financial filings,
corporate websites, investor communications and
social media.
D5 VERIFICATION & ASSURANCE
Companies will verify key sustainability performance data
to ensure valid results and will have their disclosures
reviewed by an independent, credible third party.
www.ceres.org/ceresroadmap
THE CERES ROADMAP FOR SUSTAINABILITY
20 EXPECTATIONS FOR CORPORATE SUSTAINABILITY LEADERSHIP BY 2020
PERFORMANCE: Performance is about achieving on-the-ground results, reducing carbon emissions,
conserving water and other natural resources, protecting human rights, building a supply chain
that meets high environmental and social standards, designing products that not only minimize
sustainability impacts throughout their lifecycle, but also serve as solutions to key sustainability challenges,
and proactively engaging a diverse workforce.
The five sections that follow focus on building the systems across a corporation’s value chain
to enable ongoing performance improvements in three priority environmental and social impact areas:
Climate Change: Companies
support climate stabilization
at well below a 2 degree
Celsius increase and will
contribute to the additional
$1 trillion per year needed
in clean energy investment globally—
what Ceres calls the Clean Trillion.
Companies will establish comprehensive
strategies that address carbon and
non-carbon GHG emissions, as well
as the resulting impacts of climate
change, across the entire value chain.
P1 OPERATIONS
VISION: Companies will invest the necessary resources
to achieve environmental neutrality and to demonstrate
respect for human rights in their operations.
Companies will measure and improve performance
related to GHG emissions, energy efficiency, facilities
and buildings, water, waste and human rights.
P1.1 GREENHOUSE GAS EMISSIONS
& RENEWABLE ENERGY
Companies will reduce scope 1, 2 and 3
greenhouse gas (GHG) emissions by at least
25 percent by 2020 (from a 2005 baseline)
and will do that through the improvement of
energy productivity, reducing electricity demand,
direct procurement of renewable energy, and
low-carbon transportation strategies.
Companies will obtain at least 30 percent
of energy from renewable sources by 2020,
on the road to 100 percent renewable energy
procurement by 2030.
P1.2 FACILITIES & BUILDINGS
Companies will ensure that both owned and
leased buildings, as well as new construction
and franchised facilities, meet rigorous green
building standards. When siting facilities,
companies will follow best practices that
incorporate sustainable land-use and smart
growth considerations.
P1.3 WATER MANAGEMENT
Companies will assess water-related impacts
and risks across all direct operations and the
supply chain. Companies will set quantitative
and time-bound targets for addressing and
mitigating impacts, as well as supporting,
in collaboration with other stakeholders, efforts
to improve overall watershed health, with
priority given to operations and suppliers
in high water-risk regions.
P1.4 WASTE
Companies will design (or redesign, as
appropriate) manufacturing and business
processes as closed-loop systems, reducing
toxic air emissions and hazardous and non-
hazardous waste to zero.
P1.5 HUMAN RIGHTS
Companies will have a formal human rights
policy that covers all direct employees, as
well as employees of suppliers and clients.
The policy will be aligned with universal
standards, including the ILO Core Conventions
and the Universal Declaration of Human Rights.
Companies will conduct regular human rights
due diligence assessments and disclose
management systems in place for
implementation.
www.ceres.org/ceresroadmap
Natural Resources:
Companies protect,
conserve and replenish
natural resources—
including water, land,
plants and minerals—
across their global operations and
supply chains. Companies will establish
policies, programs and commitments
that safeguard the health of broader
ecosystems, and give priority to
operations in high-risk regions.
PERFORMANCE
P2 SUPPLY CHAIN
VISION: Companies will ensure that suppliers meet the
same environmental and social standards—including
disclosure of goals and performance metrics—as the
company has set for its internal operations.
P2.1 POLICIES & CODES
Companies will set supply chain policies
and codes aligned with their own social and
environmental standards, as well as universal
standards including the ILO Core Conventions
and the Universal Declaration of Human Rights.
P2.2 PROCUREMENT PRACTICES
Companies will have in place comprehensive
procurement and sourcing strategies that
include both social and environmental criteria
in procurement and contracting.
P2.3 SUPPLIER ENGAGEMENT
Companies will have in place comprehensive
capacity building programs for suppliers to
ensure alignment with social and environmental
expectations and will incentivize supplier
goal setting and performance improvements.
Companies will also have in place strategies
to ensure suppliers beyond Tier 1 are meeting
sustainability expectations.
P2.4 MEASUREMENT & DISCLOSURE
Companies will measure and disclose supplier
social and environmental performance data
and will set targets for improved supplier
performance in line with the companies’
own operational targets.
P3 TRANSPORTATION &
LOGISTICS
VISION: Companies will systematically minimize
their environmental impact by enhancing the
efficiency of their logistics systems and minimizing
associated GHG emissions. Companies will prioritize
low-carbon transportation systems and modes, and
minimize the carbon footprint of company business
travel and commuting.
P3.1 TRANSPORTATION MANAGEMENT & MODES
Companies will develop transportation criteria
to reduce the impact of logistics and fleet
operations. Companies will design logistical
systems to prioritize efficiency and low-carbon
transportation modes and low-carbon fuel
options, especially fleet electrification
where feasible.
P3.2 BUSINESS TRAVEL & COMMUTING
Companies will decrease the impact of
business travel and employee commuting
through incentives that reduce travel and
promote the use of low carbon transportation
options. Companies will provide workplace-
charging infrastructure for employees and
facilitate other low-carbon commuting options.
Fair, Safe and Equitable
Workplaces: Companies
protect the human rights
of employees thereby
creating fairer, safer and
more equitable workplaces
across operations and global supply
chains. Companies will align policies
and management systems with
universal standards, and disclose
performance in both direct and
indirect operations.
P4 PRODUCTS & SERVICES
VISION: Companies will design and deliver products
and services aligned with sustainability goals by
innovating business models, allocating R&D spending,
designing for sustainability, communicating the
impacts of products and services, reviewing marketing
practices and advancing strategic collaborations.
P4.1 BUSINESS MODEL INNOVATION
Companies will innovate business models
to reduce material inputs and prioritize a
transition to sustainable products and services.
P4.2 R&D & CAPITAL INVESTMENT
Companies will use sustainability as an equally
weighted filter through which all R&D and
capital investments are made.
P4.3 DESIGN FOR SUSTAINABILITY
Companies will approach all product development
and product management decisions with full
consideration of the social and environmental
impacts of the product throughout its lifecycle.
Companies will design products and services
that not only minimize negative environmental
and social impacts, but also serve as solutions
to key sustainability challenges and accelerate
the transition towards a circular economy.
P4.4 MARKETING & CONSUMER ENGAGEMENT
Companies will align their marketing practices
and product revenue targets with their
sustainability goals, and will engage consumers
to educate and build awareness on sustainability
issues to influence consumer behavior change.
P5 EMPLOYEES
VISION: Companies will foster a diverse, inclusive and
engaged work environment that holds sustainability
considerations as a core part of recruitment, training
and benefits.
P5.1 RECRUITMENT
Companies will incorporate sustainability
criteria into recruitment protocols for all
new hires.
P5.2 TRAINING & DEVELOPMENT
Companies will develop and implement formal,
and job-specific, training on key sustainability
issues for all executives and employees, and
facilitate coaching, mentoring and networks
for sustainability knowledge sharing.
P5.3 DIVERSITY
Companies will build a diverse and inclusive
board and workforce. Companies will provide
formal diversity training, employee resource
groups and advancement opportunities, and
will identify a senior executive or executive
committee with formal responsibility for
diversity and inclusion.
P5.4 SUSTAINABLE LIFESTYLES
Companies will promote sustainable lifestyle
choices across their community of employees
through education and innovative employee
benefit options.