The Need For Sustainability Metrics
One of the very first sustainability obstacles faced in the corporate world is, how do we measure it? That is of course after management has decided that the natural environment (which includes people), is really an issue for their enterprise. No small feat there! But let’s just say your company’s aboard. Now what?
Even after you’ve successfully attained management buy-in for undertaking a sustainability strategy, there’s the challenge of actually achieving it. How do we begin to determine what elements to tackle, and how can we track the actual progress. Therein lies the metrics question. While it may appear obvious for some organizations (particularly manufacturing), others may find this part pretty complicated.
This may be especially true when attempting to put to measure more qualitative aspects. For instance, “How do we measure our positive impact in a community?” Or, “Do we know the extent to which our organization is contributing to the climate crisis?” These might be things that are seemingly obscure for various enterprises. To that effect, it’s been said that you can only manage what you measure. So how do we do it? How can we measure the impact? That’s where sustainability metrics come in.
Finding the Right Measure
Fortunately, there are already a number of methods for establishing sustainability metrics. The first step is deciding what is most relevant to your organization and determining the benchmarks. Depending on the attributes, there are different approaches.
One of the bigger frameworks is the Global Reporting Initiative (GRI). Having first introduced sustainability reporting in 1997, the GRI is certainly well-versed in being able to capture and explain the various degrees and intricacies related to sustainability. It does however take a fair bit of understanding. As such, it requires you to surf the learning curve.
What Metrics Drive You
There are other possibilities for sustainability metrics. It really boils down to the main priorities of the organization. For instance, if a business is concerned with the impact of its local operations on the surrounding neighbourhood. It can look to environmental readings, but it may also want to consider measuring the health of the community.
In so doing, it can perhaps measure literacy and nutrition levels, student enrollments, and even average screen time. It can also investigate direct health correlations with childhood mortality rates, cancer cases, workplace accidents, etc. The possibilities are endless once the willingness it there.
Given the abundance of possibilities, it’s worth focusing on the organization’s values and principles. What metrics should it target? Delving into the company’s purpose and values can help determine which metrics are most pertinent to them. For example, energy consumed, waste produced (Is it really waste?), or space & inventory utilized.
The various elements each also represent an area for improvement. As the components are explored, they can serve as a source of innovation and competitive advantage for the organization. There really are plenty of potential wins!
So perhaps the issue for hesitation in sustainability reporting then is that there are too many possibilities. With so many options and directions to take it might prove overwhelming for those just starting out. If that’s the case, take a look at what some other institutions are already doing.
Some Institutional Providers
For instance, the first one that comes to mind is the Dow Jones Sustainability Index (DJSI), which attempts to quantify the Environmental, Social, and Governance (ESG) parameters within an organization. These may include (but are not limited to) water and energy consumption, CO2 emissions, human value capital, and environmental liabilities.
The ESGs are becoming an increasingly popular means of incorporating sustainability reporting within corporations. As a result, sustainability reporting is also helping to guide investments. This is well reflected in the Principals for Responsible Investments (PRI).
Sticking with Science
Another solid metrics provider is Sustainalytics, this one compiles several different incidences together. It also incorporates a firm’s financial health of course, and the combined assessment has been able to yield excellent returns (21.8% at the end of the first year).
Finally, there’s a new one on the block called simply Science Based Targets, and this one looks awesome!! It requires commitment and transparency, but it offers up a great return through phenomenal clarity.
When considering the ROI for engaging in sustainability metrics, it becomes necessary to dispel the myth regarding cost. The idea that being sustainable simply costs more and will degrade business strength and agility is simply incorrect (see Sustainability is Profitable). The sustainable path ultimately costs less and provides greater returns. The empirical data supports this.
Doing It Well
While having a sustainability strategy will save you money in the long run, it’ll only work where there’s a genuine commitment. If companies simply channel money for marketing, then that’s a different story. Indeed, there are plenty of organizations that have attempted to project a green image, without actually embodying the principles. This practice is called greenwashing. Not only is it lame, but it has been proven to be costly and detrimental.
On the other hand, companies that set clear missions and guidelines that include concern for more than merely the financial bottom line has been able to recoup the costs and increase the benefits.
The Triple Bottom Line
Some of the more obvious goodies include enhanced resource efficiency and reduced operating costs, improved environmental performance, ensured legal compliance, reputation gains, an upgraded learning organization, newly developed sources of innovation, and the possibility of sustainable growth. Plus all the countless indirect contributions that a sustainable mandate can provide. Did I mention employee motivation?
Regardless of your own personal motivation for reading this blog, I hope that I can at the very least offer you the notion that understanding and implementing the need for measuring and applying sustainability can not only present a competitive advantage in the business world but that it is also a growing (and critical) trend across society.
Thankfully, more and more firms are adopting the practice of accounting for the Triple Bottom Line (TBL). Namely: financial, social, and environmental. These are also referred to as the 3 Ps: People, Planet, and Profit.
As difficult as this may seem at the outset, achieving establishing sustainability metrics & reporting is highly doable. There are so many opportunities and evident wins! Ultimately, all organizations who aim to pursue operations in the long term will recognize the need, and gravitate to this new understanding. It will prove vital for both corporations and the planet at large.