This article was written as an expansion of our white paper “Choosing Sustainability Management Software for your Business” published in July 2011. Enjoy:
We started with the axiom “if you want to manage it, you have to measure it”. So now that you’ve given some thought to the software solution that you want to purchase, it’s critical for you to come up with your specific measurements. We’re not just talking about your carbon footprint or how many gallons of water you’re using. We’re talking about the primary way that you’ll keep score for yourself and your employees so that everyone can tell if you’re actually doing better. We’re talking about picking your Key Performance Indicators.
Type “Key Performance Indicators” into your Google search and you’ll get 6.4 million results (and counting). With so much written elsewhere on them, we thought it would be useful to give you some suggestions on what you might want to consider implementing as your key sustainability performance indicator. These “measurements of performance” are not a one-size-fits-all measurement – you have to figure out what makes sense for your business.
The most commonly used measures reflect your company’s Green House Gas (GHG) emissions. These may be represented as an absolute measure of your firm’s emissions (usually in tons) or in relative intensity, such as emissions per employee, emissions per retail area, or emissions per unit of production. These GHG totals will frequently be provided as “CO2e,” or “Carbon Dioxide Equivalent,” given that CO2 is the most commonly known green house gas ahead of others such as methane, Volatile Organic Compounds (VOCs), and a host of other emissions.
A second form of sustainability KPI revolves around the use of energy, water, and other inputs to a company’s business process. This might include data on total energy or water usage or may again break down the metric on a relative intensity level. Due to the wide variety of potential inputs and outputs for a firm’s processes, there isn’t really a standard emission measure.
A third major form of sustainability KPI is focused around packaging and waste. This may take the form of the amount or weight of packaging involved in business operations. Or it may manifest itself as part of a “Zero Waste” pledge taken by a firm that is seeking to reduce, reuse, and/or recycle the byproducts of their business operations.
A fourth and (for now) final form of sustainability KPI is that which is customized and specific to your individual business. You know how you measure success financially, for employee performance, for sales performance, for safety performance. Maybe these measurements are part of an intensity ratio based on a per-revenue-dollar basis, a per-billable-hour basis, or maybe they are simply expressed in absolute values (total hours of lost productivity due to accidents). Maybe you can re-use those same measures for sustainability KPIs, or maybe you need to identify new ones.
To assist with getting you started on identifying your own KPI’s, here are some quick examples that fit each of the four types mentioned above. You could find many more from reviewing the Corporate Social Responsibility reports of the companies mentioned below as well as by reviewing your competitors, your partners, your suppliers and your customers own statements. No matter what approach you decide to take, figure out the measures that will be the right ones for YOU.
Now that you’ve read this article, tell us what you think! And be sure to check out the full white paper.