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MEASURING PROGRESS TOWARDS SUSTAINABILITY
PRINCIPLES, PROCESS, AND BEST PRACTICES
Joseph Fiksel
Jeff McDaniel
Catherine Mendenhall
Battelle Memorial InstituteLife Cycle Management Group
505 King Avenue
Columbus, Ohio 43201-2693(614) [email protected]
mailto:[email protected]:[email protected] -
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ABSTRACT
A number of leading companies in the U.S., Europe and Japan have made a commitment tobecome sustainable enterprises, and have launched proactive programs to improve theenvironmental and social performance of their products, processes, services, and facilities.However, one of the key challenges faced by these companies is how to track their progresstowards sustainability and communicate it to both employees and other important stakeholders.This paper is intended to assist business decision-makers who wish to initiate continuousmeasurement and improvement of their triple bottom line, i.e., the economic, environmental,
and societal performance of their products, facilities, and enterprise. First, a set of guidingprinciples is presented, suggesting that performance measurement should: 1) focus on bothresource and value indicators, 2) explicitly represent the triple bottom line, 3) consider the fullproduct life cycle, and 4) combine both leading and lagging indicators. Next, a comprehensiveperformance measurement process is described, including specific steps for planning,implementation, and review, based upon established practices within the business community.Finally, examples are given of five well-known companies that are recognized leaders in thefield of sustainability measurement. The intent of this paper is to provide both a conceptual
understanding of the state of the art, and a survey of best practices across several industries, thuscreating a pragmatic foundation for establishing a customized sustainability measurementprocess within any company. The paper is based upon Battelles experience in developing andimplementing performance measurement processes for a variety of industrial clients, includingseveral leaders in the sustainability movement. In particular, the performance measurementprocess is based on the results of a multi-year program sponsored by the Electric Power ResearchInstitute (EPRI).
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INTRODUCTION
As the new millennium dawns, many leading companies in the U.S., Europe and Japan are responding tothe challenges of global population growth and environmental pressures by adopting a commitment tosustainability (Hart, 1996). Business leaders speak of sustainable development, sustainable growth,sustainable products, sustainable processes, and sustainable technologies. Many have launched proactiveprograms that include life cycle accounting, design for eco-efficiency, community outreach, cleantechnology development, and a variety of other initiatives. In 1999, a group of U.S. companies includingDuPont and General Motors collaborated in supporting a high-visibility National Town Meeting on
Sustainability. Their motivations are not purely altruistic recent research has demonstrated that pursuitof sustainability can not only result in environmental improvements and societal benefits, but can alsoincrease economic value for the firm (Kiernan and Martin, 1998; Dixon, 1999).
Yet few, if any, companies can respond definitively to the question, Which of our products, processes,services, and facilities are sustainable? Answering this question requires the ability to measuresustainability in a quantitative, or at least qualitative fashion. However, measuring sustainability differsfrom measuring other dimensions of business performance in several important respects. First, thispractice is relatively new, so that there is a lack of commonly accepted or mandated measurement
standards. Second, sustainability is complex and multi-faceted, covering a broad spectrum of topics fromhabitat conservation, to energy consumption, to stakeholder satisfaction and financial results. Finally,measurement of sustainability extends beyond the boundaries of a single company and typically addressesthe performance of both upstream suppliers and downstream customers in the value chain.
While many firms are beginning to address this challenge, so far the main focus has been on the choice ofappropriate performance indicators. For practitioners of performance measurement, there are manyadditional issues that need to be addressed , including the timing, data requirements, accountability
assignments, communication, and pragmatic utilization of these indicators. We argue that sustainabilityperformance measurement(SPM) must be approached as a systematic business process in order to beintegrated effectively into company strategic planning and day-to-day operations. This paper sets forthsome fundamental principles for SPM, and describes a three-phase process for planning, implementing,and reviewing an SPM process. The focus is on the initial planning phase, which begins with articulationa sustainability policy and concludes with establishment of specific performance targets.
The paper illustrates the application of the SPM principles and process by drawing upon industry bestpractices. Some important lessons can be learned from the companies that have already begun their
journey towards sustainability, and are already measuring and reporting on their performance. A reviewof publicly available data shows that The Body Shop, BP Amoco, Collins & Aikman Floorcovering,Monsanto, and Volvo are applying these principles and following most of the SPM process steps.Analysis of their policies, objectives, performance indicators, and targets provides a number of insightsabout how the above-mentioned challenges can be addressed.
It i h th t th h d b t ti t d h ill h l th i t d l
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SUSTAINABILITY MEASUREMENT PRINCIPLES
Four fundamental principles can help companies address the challenges associated with measuring andreporting sustainability. These are:
1. Address the dual perspectives of resource consumption and value creation.2. Include economic, environmental, and societal aspects.3. Systematically consider each stage in the product life cycle.4. Develop both leading and lagging indicators.
RESOURCE AND VALUE
The first principle of sustainability measurement is that evaluations should
address the dual perspectives of resource consumption and value creation.
A sustainable organization should strive to minimize resource consumption while maximizing valuecreation. Here, resources are defined broadly to be natural or anthropogenic stocks that are required forthe creation, use and disposition of a product or service. Examples of resources include materials, energy,labor, and land. Value is defined as a condition, attributable to a companys activities, which benefits oneor more of the organizations stakeholders (Fiksel et al, 1998). Examples of value creation includeincreased profitability, reduced pollution, improved nutrition, and liberation of time. Figure 1 listsgeneral categories of performance associated with resource consumption and value creation theseprovide a foundation for any company to select appropriate performance indicators.
Resource
Energy
Material
Water
Land Waste
Cost
Human capital
Value
Functional performance
Information content
Customer satisfaction
Environmental quality Economic value added
Business competency
Human health
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TRIPLE BOTTOM LINE
The second principle of sustainability measurement is that evaluations shouldinclude economic, environmental, and societal aspects.
Effective sustainability measurement should consider the complete triple bottom line of economic,environmental, and societal performance (Bennett and James, 1999). These aspects need to be integratedand balanced in order to obtain a comprehensive understanding of product or service sustainability fromthe perspective of different stakeholders. For example, an automobile consumes economic resources interms of operation and maintenance costs, environmental resources in terms of fossil fuel, and societal
resources in terms of personal time spent driving. It also creates economic and social value, although itmay detract from environmental quality. Today, most performance measurement frameworks focusexclusively on economic or environmental performance, and very few address societal concerns (James,1997). However, based on the recent resurgence of attention to social responsibility, we anticipate anincreased focus over the next decade on measuring the societal impacts of products and services.
LIFE CYCLE CONSIDERATION
The third principle of sustainability measurement is that evaluations shouldsystematically consider each stage in the product life cycle.
Resource consumption and value creation take place throughout the life cycle, including the supply,manufacturing, use, and disposition of a product. Historically, companies have focused almost exclusivelyon their internal operations and have not considered the implications associated with activities of theirsuppliers or customers. Yet an evaluation that focuses exclusively on one life cycle stage (e.g.,manufacturing) may fail to capture significant product benefits or impacts that occur in either upstream ordownstream stages (Fiksel, 1996). Referring again to the automobile example, designers have recentlybegun to consider the end-of-life stage, and the potential impacts of disassembly, recycling, recovery,refurbishment and re-use. In applying life cycle thinking, it is important to consider not only the physicallife cycle of the product, from cradle to grave, but also the life cycles of relevant facilities and capitalequipment both inside and outside the enterprise.
LEADING AND LAGGING INDICATORS
The fourth principle of sustainability measurement is that evaluations should
combine both leading and lagging indicators of performance.
Lagging indicators (also referred to as outcome indicators) are measures of the results or outcomes (e.g.,reduction in material intensity) that are attributable to improvements in a companys business processes.Most companies use lagging indicators to report results and they are preferred by the general public and
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SUSTAINABILITY PERFORMANCE MEASUREMENT (SPM) PROCESS
Public discussion about measuring sustainability thus far has focused on what should be measured. Forindustrial practitioners, this question is not sufficient, since it addresses only one component of aperformance measurement process. Other important issues include how frequently to measure, whoshould be accountable for measurement, and how the results are to be utilized. In other words,sustainability performance measurement should be viewed as an ongoing business process, i.e., a set oflogically related tasks or activities undertaken to achieve a defined business outcome. By understandingthe entire performance measurement process, practitioners can identify and use the indicators and metricsthat are most appropriate for their business.
SPM PROCESS OVERVIEW
A variety of performance measurement processes have evolved in industry practice. These processesgenerally consist of a series of steps that can be grouped into three phases: Plan, Implement, and Review(Baker, 1999). Companies have applied these steps to track a broad range of activities, includingenvironmental management, facility operations, and technology development programs. Based uponrecent work sponsored by the Electric Power Research Institute (EPRI), Battelle has codified generallyaccepted industry practices into the process model shown in Figure 2. The process involves a three-phase
structure ofPlan,ImplementandReview, which is analogous to the ISO 14031 framework forEnvironmental Performance Evaluation. While the general model is universal, the actual sequencing andimplementation of these steps will vary from company to company due to their differing businessstrategies, environmental impacts, and organizational structures.
ContinuousImprovement
1. Develop
Sustainability
Policy2. Identify
Major Aspects
3. Establish
Objectives
4. Select
Indicators
& Metrics
10.Gather
Feedback
6. Obtain
Support
7. Integrate
with Business
Processes
5. DetermineTargets
8. Track &
Report
Performance
11. Review
Planning
Steps
9. Improve
Performance
Plan Phase
Implement Phase
Review Phase
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determine the scope of measurement, which can be as narrow as a specific product, or as broad as theentire enterprise. The Plan phase steps are
Step 1. Develop Sustainability Policy. If it does not already exist, the company must articulate asustainability policy. This statement generally provides the basis for a strategic transformation ofthe business from a linear model of development to a more holistic, cyclical model.
Step 2.Identify Major Aspects. The second step answers the question, What aspects of ourperformance are most important? The aspects of sustainability are often expressed in terms ofthe categories illustrated in Figure 1.
Step 3.Establish Objectives. For a subset of the aspects identified in Step 2, the company must establish
improvement objectives. It is advisable to select a small number of key aspects that provide thebasis for sustainability objectives.
Step 4.Select Indicators & Metrics. The most challenging step is selecting sustainability indicators thatcorrespond to the stated objectives. To select appropriate performance indicators, a companymust assess how each of the major activities within the scope of measurement (e.g., Product useby customers) contributes to the selected aspects (e.g., Energy consumption). Quantitative orqualitative metrics must be associated with each selected indicator.
Step 5. Determine Targets. To complete the Plan phase, managers must agree on specific performancetargets that will represent milestones for short and long-term sustainability improvements.
Once a performance indicator framework has been fully designed, the actual process of measuring,tracking and reporting performance begins. To assure an effective measurement framework, it isimportant to understanding the challenges that will likely be encountered during theImplementphase.For instance, many indicators that might be valuable for decisions-making cannot be tracked easily, e.g.,the quantity of greenhouse gases emitted during the life cycle of a product system could be valuableinformation, but quantifying this indicator may be a burdensome exercise. Similarly, quantitativelyassessing the contribution of a product to a consumers health or well-being might be technicallyinfeasible, although qualitatively assessing the relative value of one design option versus another may bea viable approach. The steps in theImplementphase are obtaining support, integrating with otherbusiness processes, tracking and reporting, and initiating improvement efforts.
Step 6.Obtain Support. Following the development and demonstration of the measurement framework,the support of line managers must be obtained for successful implementation.
Step 7.Integrate with Business Processes. The tools and procedures associated with sustainabilitymeasurement need to be integrated with existing systems and processes.
Step 8.Track & Report Performance. The accountable organizations track their progress toward thespecified targets, and report results to senior management and external stakeholders.
Step 9.Improve Performance. Based on the results of performance measurement, organizational teamsfocus on product, process, or operational changes that will improve performance.
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Step 10.Gather Feedback. Soliciting organizational feedback on the measurement process itself willoften reveal drawbacks or gaps in the existing framework.
Step 11. Review Planning Steps. The company should periodically review and refine the selectedaspects, indicators, metrics, and targets of value.
Since most companies are just beginning to address the challenge of measuring sustainability, this paperfocuses on the Plan phase. The intent is to help practitioners develop a framework of indicators, metrics,and targets that will prove most helpful to their company. Therefore, the next section describes the fivesteps of the Plan phase in more detail.
STEP 1: DEVELOP SUSTAINABILITY POLICY
The first step in the Plan phase is developing a sustainability policy, which articulates the companysoverall aims and principles of action with respect to its economic, environmental, and societalperformance. The goal is to create a policy that both supports the business strategy and addresses theconcerns of company stakeholders.
The activities of a company affect multiple stakeholders in different ways. For example, community
groups might be concerned about air emissions or other releases from manufacturing plants, whileemployees have interests ranging from safety to the companys image and stewardship activities. Insurersand lenders may be concerned about environmental costs and potential liabilities, while non-governmental organizations and interest groups are concerned with issues such as labor conditions,greenhouse gas releases and the use of renewable energy sources. Finally, shareholders and investors areinterested in new technology investments, and how sustainability influences creation of economic valuefor the firm.
Although stakeholders are important, the company retains a great deal of discretion regarding the
emphasis of its sustainability initiatives. The companys overall business strategy should influence howthe sustainability policy and the remainder of the SPM process are designed. For example, a companythat has developed a strong brand identity might consider focusing on environmental and social issuesthat could damage their image. As examples, Nike and Levi-Strauss revamped their productresponsibility efforts after receiving negative media coverage related to the activities of major suppliers.
This assessment of the business strategy answers questions such asq How does the company define success?q
What are its specific short and long-term business goals?q How can environmental and societal concerns support or hinder efforts to achieve these goals?q How could SPM results help the company achieve its strategic, tactical, and operational goals?
Synthesizing an understanding of stakeholders concerns with these business strategy issues enables thecreation of an effective sustainability policy.
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pertain to overall company practices. Examples of such company-wide aspects include managementsystems implementation (e.g., ISO 14001), auditing programs, and community development.
Table 1. Aspects of Product Sustainability
Economic Environmental Societal
Direct
Raw material cost
Labor cost
Capital cost
Material Consumption
Product & packaging mass
Useful product lifetime
Hazardous materials used
Quality of Life
Breadth of productavailability
Knowledge enhancement
Employee satisfaction
Potentially Hidden
Recycling revenue
Product disposition cost
Energy Consumption
Life cycle energy
Power use during operation
Peace of Mind
Perceived risk
Complaints
Contingent
Employee injury cost
Customer warranty cost
Local Impacts
Product recyclability
Impact upon local streams
Illness & Disease Reduction
Illnesses avoided
Mortality reduction
Relationship
Loss of goodwill due tocustomer concerns
Business interruption due tostakeholder interventions
Regional Impacts
Smog creation
Acid rain precursors
Biodiversity reduction
Accident & Injury Reduction
Lost time injuries
Reportable releases
Number of incidents
Externalities
Ecosystem productivity loss
Resource depletion
Global Impacts
CO2 emissions
Ozone depletion
Health & Wellness
Nutritional value provided
Food costs
Companies have applied a variety of approaches to perform review and select the aspects that are mostimportant for performance tracking. One recommended approach involves a sequence of three tasks:
1. Identify all aspects of sustainability that are potentially important2. Assess or estimate the magnitude of these aspects using available indicators3. Rank the aspects in terms of relative importance.
Completing the first task requires activities such as conducting brainstorming sessions, reviewingprevious successes and problems, and interviewing stakeholder organizations. Assessing the magnitudeof the sustainability aspects identified requires either quantifying them in terms of resource or valuemetrics, or at least qualitatively rating them on a semantic scale. Finally, the organization is left todetermine the most significant environmental aspects by assessing their relative importance, which can beaccomplished through various group voting techniques. Having determined which aspects are mostsignificant decision makers can then proceed to select the few that merit performance tracking
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q Eliminating usage of toxic materialsq Increasing material utilization ratiosq Improving the ecosystem quality on managed propertiesq Reducing the costs of waste management activitiesq Developing inherently clean and safe technologiesq Increasing employee satisfaction and well-beingq Supporting reduction of poverty in developing countries
As shown by these examples, objectives should address the triple bottom line, and should be orientedtowards either resource conservation or value creation.
STEP 4: SELECT INDICATORS AND METRICS
Once managers have agreed upon the critical objectives, they can proceed to select the performanceindicators and accompanying metrics for their sustainability program. The indicators and metrics help tomake the sustainability policy actionable by providing specific guidance to managers and decision-makers. They also help to demonstrate a tangible commitment to external stakeholders.
Performance indicators
A sustainability performance indicator (SPI) is defined as a quantifiable attribute of an enterprisesactivities that characterizes the potential contributions of these activities toward the enterprisessustainability objectives. Examples of SPIs include air emissions, stakeholder satisfaction ratings,contributions for conserving habitat, and revenues associated with clean technology applications. Notethat it is important to have a balanced set of both leading and lagging indicators; neither are sufficient ontheir own. Examples of lagging and leading sustainability indicators are shown in Figure 3.
No. of eco-efficiency audits
No. of process re-designs
% of employees receiving
sustainability training
Businessprocess
indicators
Sustainabilityoutcome
indicatorseffects
Leading examples
Mass throughput reduction
CO2 emission reduction
Stakeholder satisfaction
Lagging examples
Needed to motivate Needed to provide
feedback
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Several criteria can help managers choose the most appropriate set of performance indicators. Thefollowing selection guidelines have proven useful in a variety of industries.
1. Comprehensive. Does the set of performance indicators address all of theorganizations major aspects and objectives?
2. Controllable. Can the organization, group, manager or employee significantlyinfluence the desired results?
3. Cost-Effective. Can the necessary data be obtained from existing sources orotherwise easily collected?
4. Manageable. Is the set of indicators limited to the minimal number requiredto meet the other criteria?
5. Meaningful. Will individuals throughout the organization and externalstakeholders easily understand the indicators?
6. Robust. Do the indicators address inputs and processes (leading indicators)and outcomes (lagging indicators)?
7. Timely. Can measurement occur with sufficient frequency to enable timely,informed decision-making?
These guidelines support successful implementation by avoiding commonly experienced problems. Forexample, if managers are held accountable for indicators that they cannot significantly influence,resentment or apathy can easily result. Similarly, some personnel evaluation programs have falteredbecause an unwieldy number of indicators made the program overly complex.
Performance Metrics
A performance metric defines a specific means of measuring and tracking a performance indicator. Ingeneral, a variety of metrics can be chosen for any given performance indicator. For instance, potentialmetrics for solid waste include annual volume (tons/year), annual improvement (% reduction), or quantityavoided (tons recycled/year).
Metrics can be classified in several different ways. For example, qualitative metrics are those that rely onsemantic ratings based on observation and judgement, while quantitative metrics are those that rely onempirical data. A second important distinction is between absolute and relative metrics. Absolute metricsare defined with respect to a fixed measurement scale, e.g., total annual hazardous waste generated.
Relative metrics are those that are defined with respect to another metric or variable, e.g., total hazardouswaste per unit of energy produced. Another approach is to use time-based relative metrics, i.e., thosewhich compute the change in a particular quantitative metric over a given time period; for example, thepercent reduction of total hazardous waste from 1992 to 1993."
Finally, several companies are striving to use normalizedmetrics, which measure sustainabilityf i f d i N li i bl bili i b l
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STEP 5: DETERMINE TARGETS
After the indicators and metrics have been identified, the company is ready to commit to short or long
term targets, which establish what level of performance it intends to achieve. In brief, indicatorsdesignate a measurable dimension of performance, metrics provide a means of quantifying the indicators,and targets provide a basis for tracking and assessing improvement.
Companies sometimes choose not to set targets until they have established a baseline performance levelagainst which progress can be measured. A thorough understanding of current capabilities minimizes therisk of over-commitment. However, establishing targets cannot be delayed indefinitely because thesetargets guide decision-making efforts and support stakeholder communication. Managers can evaluate
their options relative to these targets, and stakeholders can better assess a companys performance basedupon their ability to achieve stated targets. The challenge faced by operating managers at a mid-size U.S.electric utility demonstrates the necessity of explicit targets. The company had committed to reduce thenumber of air opacity exceedances; however, the company had not set a target level of performance.Without this guidance, the managers took incremental steps to marginally improve compliance but did notsignificantly alter their established practices because they did not know whether further changes werewarranted. Thus, improvement efforts can flounder unless explicit targets are established.
REMAINING STEPSThe fifth step concludes the Plan phase. Afterwards, companies begin using the set of objectives,indicators, and targets to report and improve their performance. As described at the beginning of thissection, these steps can be organized into an implementation phase and a continuous improvement phase.
BEST PRACTICE COMPANIES
A review of recognized sustainability leaders shows that at least a few companies are applying the SPM
principles and process steps. Since only a small number of companies have publicly stated asustainability policy, other companies will find the experiences of these leading companies valuable asthey progress on the path towards sustainability.
The authors chose five companies for this evaluation: BP Amoco, Collins & Aikman Floorcoverings,Monsanto, The Body Shop, and Volvo. Each of these companies represents a different industry, and hasdemonstrated some innovative approaches to sustainability measurement. The analysis revealed thatthese companies are generally applying both the principles and the process steps to report their
sustainability performance. However, some gaps were also uncovered in each program.
One important caveat is that this study was based exclusively on publicly available data, e.g., thecompanies annual reports and web sites. Since externally published measures nearly always focus oncorporate level performance, this analysis is limited to company-wide performance indicators.
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statements on the company's environmental, animal protection, and social/stakeholder performance, wasrecognized by an award from UNEP (the United Nations Environmental Programme).
BP Amoco is committed making a positive contribution to society. They take environmental precautionsand support community development for areas in which they operate. BP Amoco believes that there isnot a trade-off between financial performance and standards of care, but rather believes that the two areasare mutually reinforcing. Environmental issues considered by BP Amoco include climate change, airquality, and renewable energy technologies.
Collins and Aikman Floorcoverings has demonstrated that environmental sustainability can also yieldadvantages in cost-effectiveness. They are the only carpet manufacturer in the world reclaiming old
carpet and recycling it into new, high-performance carpet. Collins and Aikman understands theimportance of addressing the triple bottom line, and has instituted several programs to improveperformance. They have also formed a sustainability laboratory comprised of outside experts.
Monsanto has embraced sustainable development as part of its core strategy, and a few years ago spunoff its chemical manufacturing operations to focus on life science-based businesses. To create value forstakeholders, Monsanto is designing products that use fewer raw materials, produce less waste, requireless energy, and enable users to be more productive. Moreover, the company hopes to use its productdevelopment expertise to create new markets for sustainable products in agriculture and nutrition.
Volvo is currently working towards becoming a world leader in the transportation equipment industry,based on its performance in the areas of safety, environmental care, and quality.1 The company intends togain competitive advantage and contribute to sustainable development through environmental programsthat are characterized by a holistic view, continuous improvement, technical development, and resourceefficiencies.
APPLYING THE PRINCIPLESThe authors first evaluated whether and how the best practice companies had applied the foursustainability performance measurement principles. As summarized below, each of the evaluatedcompanies is following these guidelines but their approaches vary.
1. Address the dual perspectives of resource consumption and value creation.2. Include economic, environmental, and societal aspects.3. Systematically consider each stage in the product life cycle.
4. Combine leading and lagging performance indicators
RESOURCE AND VALUE
All of the companies reviewed in this paper track and report how their operations consume resources and
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customer satisfaction. In contrast, the environmental reports of most organization focus mainly on theresource side, and more specifically, tend to only report reductions in environmental burdens.
Table 2: Noteworthy Approaches to Measuring Resource and Value
Financial Indicator Environmental Indicator Societal Indicator
Resource Monsanto uses Total CostAccounting to trackenvironmental expenditures.
BP Amoco records thetotalamount of discharges towater, broken down byproduction process.
Collins and Aikmanmeasures employeesatisfaction by trackingsurvey results, retention rate,
and internal promotion rate.
Value Monsanto demonstratedincreased eco-efficiency ofone manufacturingimprovement, whichsaved$6 million in raw materialsusage, decreased wastehandling, and increased
manufacturing capacity.
Volvo tracks how managersincorporate life cycleassessment tools into majorproduct developmentprograms.
The Body Shop reportssocietal indicators includingthe results of EthicalAuditing, ISEA principles,Social Auditing, andCustomer, Employee, andStakeholder Satisfaction
surveys
THE TRIPLE BOTTOM LINE
All of the reviewed companies utilize the triple bottom line to some extent, as shown in Figure 4.
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Indica
torComposition
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However, Figure 4 also reveals important differences and similarities among the types of indicatorspublicly reported by these companies.
All of the companies emphasize environmental performance, as environmental indicators comprisehalf or more of the total indicators reported.
The Body Shop emphasizes societal indicators more than the other companies. The practice ofmeasuring societal performance has reemerged during the past couple years and many companies aregrappling with how to measure this dimension of performance (Zadeket al, 1997).
Financial indicators receive relatively little attention. In some ways, the lack of focus on economicperformance is understandable because these companies are public corporations and thereforeproduce a separate annual financial report with in-depth accounting results. However, this lack of
financial indicators is indicative of the fact that many companies do not adequately convey the costsand benefits of their environmental and sustainability programs. These programs can increaserevenues, lower operating costs, and improve asset utilization, but relatively few companies havedeveloped the capabilities to effectively track and report those benefits.
LIFE CYCLE CONSIDERATION
As with the other principles, all of the companies have considered the impacts of their products or
processes at life cycle stages other than the manufacturing stage. The tools and methods used by the bestpractice companies range from traditional life cycle analyses (LCA) to simpler, more qualitativeapproaches. By considering upstream and downstream activities, these companies are able to leveragetheir design, production, and logistics capabilities to improve the overall impacts associated with theirproducts, services, and operations.
Table 3. Approaches to Life Cycle Consideration
Company
Life Cycle
Perspective Description
The BodyShop
Yes
Has established LCA scheme that consists of six sections: origins offeedstocks, methods of extraction and/or cultivation, processing, resourceconsumption, waste generation, and distribution. One effort analyzed thecompanys forecasting and planning processes to reduce the waste due toobsolete and excess inventory.
BP Amoco YesHas environmental programs to reduce habitat loss from upstreamdevelopment activities. Since the implementation of these programs,
habitat loss has decreased 70%.
Collins andAikman
YesThrough a five-year effort, created a carpet backing system that is madewith 100 percent reclaimed content. This flooring product is the first thatis recyclable back into itself in a closed-loop fashion.
Has integrated life cycle considerations into technology developmentprograms For example working with the U S Dept of Agriculture to
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LEADING AND LAGGING INDICATORS
All of the companies report the use of both leading and lagging indicators. Since leading indicators tend
to be internally-focused, it is not surprising that the majority of externally-reported indicators were in thelagging (i.e., outcome-oriented) category. Some particularly effective examples of combining leading andlagging indicators are presented in Table 4. These examples are a good illustration of how businessactivities can be linked to sustainability results. For example, Volvos leading indicator is the number ofR&D programs addressing material recycling, while related lagging indicators include the total quantityof material and number of parts recycled.
Table 4. Effective Use of Leading and Lagging Sustainability Indicators
CompanyBusiness
Activi tiesLeading Indicators
(Metrics)Sustainability
ResultsLagging Indicators
(Metrics)
The BodyShop
EmployeeSatisfaction
Survey (scores)Lower
absenteeismRate (%)
BP AmocoRisk assessment& management
Programs (scores)Enhanced
public opinionSurvey (scores)
Collins andAikman
Water recyclingprogram
Status (qualitative) Decreasedwater use
Rate (gal/yd2 carpet)
Monsanto Audits Program (scores)Improved
complianceFines ($ and #)
VolvoLife Cycle
AssessmentsPrograms (#)
Increasedrecycling
Quantity (kg)Items (#)
In summary, each of the best practice companies is, to varying degrees, implementing each ofsustainability measurement principles. Moreover, some of their measurement practices are particularlynoteworthy. For companies beginning sustainability programs, these examples demonstrate how they cantackle the unique challenges of measuring and reporting sustainability performance.
SPM PROCESS IMPLEMENTATION
The next part of the analysis addressed how companies actually developed their performance
measurement programs. Because this study was based on publicly available information, the specific pathundertaken by each company was not evaluated. Rather, the analysis focused on whether or not thecompanies had completed each of the process steps shown in Figure 2 (page 5).
STEP 1: DEVELOP SUSTAINABILITY POLICY
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The Body Shop
is dedicated to the pursuit of social and environmental change. It has aholistic mission statement, embracing human and civil rights, ecological sustainability
and animal welfare.
BP Amocos goals are simply stated- no accidents, no harm to people, and no damage
to the environment. We will continue to drive down the environmental and health impact
of our operations by reducing waste, emissions, and discharges, and using energy
efficiently. We will produce quality products that can used safely by our customers.
Collins and Aikman believes that business can and must play a leadership role intransitioning from exploitive to sustainable manufacturing systems so that people,
business, and the environment can prosper.
The conditions of our world- the stresses being placed on natural and social systemsthat sustain us- eventually will require all of us to solve the sustainable development
puzzle. Monsanto is determined to be a leader among businesses in this effort. Wecommitted to this course several years ago, and we think our scientific and technological
skills can provide us special opportunities to have an impact.
Environmental Care is a Volvo Core Value. Volvo is to be ranked as a leader in termsof Environmental Care among the worlds top producers of automotive and transport
products, equipment, and systems. Volvos environmental programs shall be
characterized by a holistic view, continuous improvement, technical development, and
resource efficiency. Volvo shall, by these means, gain competitive advantage and
contribute to a sustainable development.
STEP 2: IDENTIFY MAJORASPECTS
Before deciding which indicators to track, each company underwent a process of evaluating how itsproducts, processes, and business activities could and did affect the environment. However, their processfor determining which interactions were the most significant was not publicly disclosed. Severalimportant findings emerged and are shown in Table 5,
q Only two companies (BP Amoco and Collins &Aikman) track the revenues associated with theirsustainability efforts.
q While all of the companies are reporting at least one dimension of economic performance, noneare currently tackling the complex issue of measuring the externalities associated with theircompany.All f h i ki id i f i l i di i f
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Table 5: Sustainability Aspects Examined2
AspectThe Body
Shop BP AmocoCollins and
Aikman Monsanto Volvo
Direct Solar PowerRevenues
Green ProductRevenue
EnvironmentalR&D
HiddenEnv. Costs,
StockDisposals
Env. Costs Env. Costs
ContingentEnv.
Disasters,Fines
Fines andSuperfund Sites
Relationship CustomerSatisfaction
PublicConcern
Economic
Externality
MaterialWater
Recycling,
LCA
WaterRecycling
Water andWaste
Recycling
WaterRecycling,
LCA
WaterRecycling,
LCA
Energy
Energy,Fuel,
RenewableEnergy
Energy, SolarEnergy.
Clean Fuel
Energy,Non-fossil
Fuels
Energy,Fuel
Energy,Fuel
LocalEffluent
Discharges,Landfill, Spills
Discharges,Oil Spills,
Habitat Loss,Hazardous
Waste
Dyeing WastesHazardous
Waste,Spills
HazardousWaste
Regional Incineration
HydrocarbonEmissions,Injection
Wells
Air EmissionsAir Emissions,Injection Wells
NOx, SO2,Solvents
Env
ironmental
Global CO2Greenhouse
Gases,CO2
CO2 CO2CO2, CFC11,Greenhouse
Gas
Quality ofLife
EmployeeCustomer
EmployeeSurveys,
Retention,Promotion
Assessments,Teams
Surveys
Peace ofMind
Social Audit
cietal
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While the lists of indicators summarized in Table 5 are fairly extensive, they are not complete. Forexample, the table does not show organizational indicators such as audit scores, management systemcertifications, and risk management programs. These process indicators are equally important and oftenlead to several dimensions of improved performance.
One final point is that nearly all of the sustainability aspects reported by the companies had correspondingindicators and metrics for tracking performance (see Appendix for details). This seemingly obviousconnection is often not made - many companies have identified important environmental and societalaspects, but have not developed the means to measure their performance relative to those aspects.
STEP
3: ESTABLISH
OBJECTIVES
Each of the companies completed the third step of establishing improvement objectives. While all of thecompanies had one or more environmental objectives, some lacked societal and financial objectives.Examples from each company are listed in Table 6 and a complete list of objectives is provided in theAppendix.
As with Step 2, a positive finding was that performance indicators supported each stated objective. Thus,the clich, What gets measured, gets managed, applies equally well to sustainability objectives. Theimprovement path for these companies includes stating what they intend to achieve and having a specificmeans for assessing their progress towards these goals.
Table 6. Triple Bottom Line Objectives
Company Financial ObjectiveEnvironmentalObjective Societal Objective
The Body
Shop
To increase the
proportion of recycledplastic accessories
To follow social and
ethical best practices
To provide learning anddevelopment programs
BP Amoco To reduce greenhousegas emissions
To reduce fatal accidentsin operations
Collins andAikman
To make the industrysfirst green competitive
product
To increase overallmaterials efficiency
Monsanto To create value whilereducing waste
To improve soil quality To enable better health,better nutrition,improved quality of life
Volvo To track environmentally To take account of To involve all employees
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STEP 4: SELECT INDICATORS AND METRICS
Once a company understands its important aspects and has established sustainability objectives, the
decision-makers can specify indicators and metrics for tracking performance. Of course, all of thecompanies reported indicators and metrics, but additionally each of them have a few metrics that are insome way distinct from the ones commonly used by industry.
As shown in Table 7, these innovative metrics often are able to convey the companys implementation ofits sustainability policy more effectively than conventional metrics. For example, a unique feature ofMonsantos program is its approach to measuring the companys ability to conserve habitat. Mostcompanies use annual contributions to conservation organizations as their indicator for wildlife habitat
preservation. Instead of using this leading indicator, Monsanto quantifies the increase in yield fromusing their seeds. Based on the yield improvement, the company reports the amount of land that can beprotected rather than used for farmland.
Table 7. Examples of Innovative Performance Metrics
Indicator Conventional Metric Innovative Metric
Wasteproduction
Tons/year % compared to industry benchmark per unit of product(Collins and Aikman)
Energy kWh per annum Relative reduction and % reduction (Volvo)
Wildlifehabitat
Amount of moneydonated to conservationorganizations
% increase in yield from seeds(reducing the need for more farmland)(Monsanto)
Educationprograms # of facilities withprograms % promoted from within company (Collins andAikman)
Stakeholderperception
Scores on surveys Scores on Ethical, Social, Customer, Employee, andShareholder Audits(The Body Shop)
Employeesatisfaction
Surveys Results of frequent employee surveys, with scorescompared to external norms.(BP Amoco)
While using innovative indicators and metrics might be the preferred choice for company decision-makers, many external stakeholders are advocating that companies standardize their sustainabilityperformance reporting process. Unlike financial reports, sustainability results generally cannot be easilycompared between companies or industries As shown in Table 8 comparing the results of the best
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energy consumed per unit of output, are widely applicable. However, indicators for material intensity,such as materials consumed per unit of output, are more relevant in some industry sectors than others.Additionally, the amount of effort required to measure some of the standard indicators was sometimes
considerably more extensive than previous reporting efforts (NTREE, 1999).
Table 8: Comparing Sustainability Performance
Indicator Metric #1 Metric #2 Metric #3 Metric #4
CO2
Emissions
Company total
Tons
(Body Shop)
Company total
Billion pounds
(Monsanto)
Total from BP and
equity partnersMillion tonnes(BP Amoco)
Normalized amount
Lbs/yd2
of carpet(Collins & Aikman)
EnergyConsumption
Relative reduction,%(Volvo, Collinsand Aikman)
Normalized use,kWh per 1,000units(Body Shop)
Total,million gigajoules
(Monsanto)
STEP 5: DETERMINE TARGETS
The final step in the performance measurement process is developing a set of targets that states thedesired level of improvement. Sometimes, performance measurement programs falter because of a lackof clear targets. Targets enable external stakeholders to assess the companys progress, and provide clearguideposts for internal decision-makers. As shown in Table 9, the best practice companies have at leastsome specific targets but gaps exist. The data visualization methods of BP Amoco and Volvo are
noteworthy because they clearly communicate the level of achievement.
Table 9. Sustainability Targets
Company Set Targets? Comments
The BodyShop Some The Body Shop has stated explicit targets for several of its indicators
BP Amoco Some Progress towards selected targets is shown graphically
Collins andAikman
Some Targets for energy usage, water usage, air emissions, and waste arepublished
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REMAINING STEPS
Much of the specific information about how the companies implement and improve their performancemeasurement process is not publicly available; however, two points are observable and worth noting. Thefirst point concerns how companies report their performance (implementation). Each of the best practicecompanies reports its current and historical levels of performance so that external and internalstakeholders clearly understand how much the company has improved (see Table 10).
Table 10. Use of Trend Data
Company Trends Comments
The Body Shop Yes Since 1991
BP Amoco Yes Since 1993
Collins and Aikman Yes Since 1993
Monsanto Yes For on-site, air, injection, POTW, and offsite releases and
chemical spills, from 1995-1997
Volvo Yes Some trends graphed since 1989, though most from 1995 topresent
The second important point is relative to the companies continuous improvement efforts. To support thiseffort, three of the best practice companies externally report their performance relative to otherorganizations. As with the trend data, these benchmarks help stakeholders evaluate how the company is
progressing (see Table 11).
Table 11. Sustainability Benchmarking Practices
Company Benchmark? Comments
The Body Shop Yes Reports energy efficiency relative to several benchmarks,
including emissions per unit of GDP in the UKBP Amoco Yes Provides benchmark data for Social and Safety Reporting
Collins and Aikman Yes Reports performance relative to other companies in their market sector
Monsanto No If conducted, not publicly reported
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SUMMARY OF FINDINGS
Some important lessons can be learned from the companies that are already tackling the challenge ofmeasuring and reporting their path towards sustainability. A review of publicly available data shows thatThe Body Shop, BP Amoco, Collins & Aikman Floorcovering, Monsanto, and Volvo are applying thefour principles and following most of the measurement steps. For example, all of these companies:
q Measure and report the three dimensions of sustainability: economic, environmental, andsocietal.
q Report their efforts to conserve resources and create value.q Consider the entire life cycle of their products and services, rather than concentrating
exclusively on their core operations.q Track both leading and lagging indicators.q Have a clearly articulated sustainability policy.q State how company activities can hinder or enable sustainability, and how the company
intends to improve performanceq Measure and report innovative metrics that are relevant to their organizations program
While each of these companies measurement programs is commendable, some important differencesexist.
q As expected, the choice of measures of value generated by company activities varies widely;for example, Collins & Aikman measures air quality improvement due to VOC reduction,while Monsanto measures soil conservation due to improved agricultural practices.
q Only one company, The Body Shop, has applied an extensive stakeholder auditing process tomeasure societal performance and is attempting to quantify many societal indicators byscoring Stakeholder Perception.
q The specific indicators used by companies vary considerably and thus the measurementresults are not directly comparable.
q Only two companies, BP Amoco and Collins & Aikman, publicly track the revenuesassociated with their sustainability efforts.
q One company, Monsanto, states few targets for company-wide future performance because ofsignificant variations between the types of value created and wastes generated by the differentbusiness units.
q Three of the companies benchmark their progress relative to competing firms (se Table 11).
Finally, one of the dominant themes that emerges from these similarities and differences is the continuedfocus of sustainability measurement on the environmental dimension. This focus is a legacy of historicalpractices, and continues to occupy most of the attention of external stakeholders. As mentioned earlier,the practice of societal reporting is relatively new and being led by a few path breaking companies,including The Body Shop.
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THE STRATEGIC IMPORTANCE OF SUSTAINABILITY MEASUREMENT
The newfound awareness of sustainability within the business community signals an emerging synthesis
between traditional business values and the concepts of environmental and social responsibility.However, for sustainability to become integrated into company strategies and operations, a systematicperformance measurement process is essential. To support this transformation, this paper has presented aset of principles, a systematic process, and a number of best practice examples. This research hasdemonstrated that:
1. SPM is a rapidly evolving practice2. SPM is valuable for demonstrating progress to both internal and external stakeholders
3. Leading companies are already addressing many of the challenges associated with measuring andreporting economic, environmental, and societal performance4. More importantly, SPM helps company employees make decisions that reduce resource
consumption while creating value across throughout their supply chain
The sustainability performance measurement principles, process, and best practices outlined in this papercan help companies as they take on the complex task of moving from resource intensive operations tomore eco-efficient, value-maximizing organizations. SPM practices will play an increasingly importantrole as environmental and societal considerations begin to permeate business activities. Already,
companies in the automotive, chemical, energy, food production, packaging, and other industries areusing this type of information to improve their decision-making efforts. For example,
q Designers assess how the sustainability profiles of competing product concepts compareq Marketers analyze how their product or service satisfy their customers by lowering the cost of
ownership and creating tangible and less tangible benefitsq Production managers apply life cycle costing methods to quantify hidden environmental costsq Strategic planners assess the consequences of environmentally driven scenarios.
The need for sustainability awareness is becoming an imperative, as global pressures intensify. Theworld population will soon surpass six billion, while concerns about climate, water, land, and habitatpreservation continue to mount. Rapidly developing economies around the world are creating growingmarkets for goods and services. These conditions are creating opportunities for companies tofundamentally change how they engage suppliers, operate facilities, and service customers. In addition tonew technologies, new production methods, and new management systems, these companies will need anew language to communicate their performance goals and progress. A well conceived sustainabilityperformance measurement process will respond to that final, fundamental need.
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BIBLIOGRAPHY
Baker, K. The Development of Organization and Program Performance Indicators. Pacific NorthwestLaboratory. 1999.
Bennett, Martin, and James, Peter. Sustainable Measures: Evaluation and Reporting of Environmentaland Social Performance. Greenleaf, Sheffield, UK. 1999.
The Body Shop web site. The Values Report, 1997. http://www.the-body-shop.com/aboutus/values.html,(June 23, 1999).
BP Amoco web site,Environmental and Safety Report, 1998. http://www.bpamoco.com/reports/enviro/,(June 21, 1999).
BP Amoco web site,Health, Safety, and Environmental Data, 1998.http://www.bpamoco.com/reports/enviro/, (June 22, 1999).
Bridger, Mac. Carpet In/ Carpet Out: The Continuing Journey at Collins and Aikman. IndustrialEcology IV, The Future 500 Conference, April 29, 1999.
Canadian Institute of Chartered Accountants. Reporting on Environmental Performance. CICA, Toronto.1994.
Collins and Aikman, Catalyst: Elements of Change, 1998.
Collins and Aikman web site,Environmental Statement, 1999.http://www.collinsandaikman.com/environmental/index.html, (June 24, 1999).
Collins and Aikman, Practical VisionInteriors and Sources Magazine, 1998.
Dixon, Frank, Environmental Leaders Achieve Superior Stock Market Performance in the ElectricUtility Sector, The Annual Public Utility Reporters Environmental Conference, New Orleans,
LA.May 25, 1999.EPRI. Environmental Performance Measurement: Design, Implementation, and Review Guidance for the
Utility Industry. TR-111354. 1998.
EPRI. Environmental Performance Measurement: A Framework for the Utility Industry. TR-106078.1996.
Epstein, Mark J.Measuring Corporate Environmental Performance: Best Practices for Costing andManaging an Effective Environmental Strategy. Institute of Management Accountants,
Foundation for Applied Research. Irwin, Chicago, IL. 1996.Fava, James, and Smith, Joyce.Integrating Financial and Environmental Information for Better
Decision Making. Journal of Industrial Ecology. Winter 1998.
Fiksel, Joseph; McDaniel, Jeff; and Spitzley, David. Measuring Product Sustainability. The Journalof Sustainable Product Design. 1998.
http://www.the-body-shop.com/aboutus/values.htmlhttp://www.the-body-shop.com/aboutus/values.htmlhttp://www.bpamoco.com/reports/enviro/http://www.bpamoco.com/reports/enviro/http://www.bpamoco.com/reports/enviro/http://www.bpamoco.com/reports/enviro/http://www.collinsandaikman.com/environmental/index.htmlhttp://www.collinsandaikman.com/environmental/index.htmlhttp://www.collinsandaikman.com/environmental/index.htmlhttp://www.bpamoco.com/reports/enviro/http://www.bpamoco.com/reports/enviro/http://www.the-body-shop.com/aboutus/values.html -
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Indicators Task Force. A Report on Canada's Progress Towards a National Set of EnvironmentalIndicators. Environment Canada, Ottawa. 1991.
James, Peter. The Sustainability Cycle: A New Tool for Product Development and Design.Journal forSustainable Product Design. July 1997.
Kiernan, Matthew, and Martin, James, Wake-Up Call for Fiduciaries: Eco-Efficiency DrivesShareholder Value, Todays Corporate Investor. December 1998.
Metcalf, K.; Williams, P.; Minter, J.; and Hobson, C. Environmental Performance Indicators forEnhancing Environmental Management. Total Quality Environmental Management. Summer,1996.
Monsanto web site, Sustainable Development Report, 1997.http://www.monsanto.com/monsanto/about/sustainability/default.htm, (June 15, 1999).
National Round Table on the Environment and the Economy.Measuring Eco-efficiency in Business:Feasibility of a Core Set of Indicators. Renouf Publishing, Ottawa, Ontario. 1999.
OECD. Towards Sustainable Development - Environmental Indicators. OECD Code 971998031P1. July1998.
Ranganathan, Janet, and Ditz, Daryl. Measuring Up: Toward a Common Framework for TrackingCorporate Environmental Performance. WRI, Washington, DC. 1997.
Sustainable Systems Associates Ltd. Applying Sustainable Development to Business: Realizing theBenefits. Queen's Printer for Ontario, Ontario, Canada. May, 1998.
Volvo web site,Environmental Report, 1998. http://www.volvo.com/environment/index.htm, (June 17,1999).
Zadek, Simon; Pruzan, Peter; and Evans, Richard. Building Corporate AccountAbility: EmergingPractices in Social and Ethical Accounting, Auditing and Reporting. Earthscan, London. 1997.
1999 G i f d k C f
http://www.monsanto.com/monsanto/about/sustainability/default.htmhttp://www.monsanto.com/monsanto/about/sustainability/default.htmhttp://www.volvo.com/environment/index.htmhttp://www.volvo.com/environment/index.htmhttp://www.volvo.com/environment/index.htmhttp://www.monsanto.com/monsanto/about/sustainability/default.htm -
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A1
APPENDIX SUMMARIES OF SPM PROGRAMS
THE BODY SHOP
Aspec t Object ive Ind icatorLeading/Lagging Metric Target
AirConserve natural resources andcontrol air pollution
CO2 emissions Lagging Compensation for CO2
emissions via tree planting
Tons emitted
Compensate for all CO2 emissionsthrough tree planting or otherinitiatives by the year 2010
Air freight Leading % reductionBy 2000, reduce proportion of exportfreight going by air to no more than2.5% of total export freight
Electricityconsumption
Lagging % reduction kWh
By the year 2000, all UK shops willreduce energy use to 35,000 kWh perannum
Gas consumption Lagging
kWh Total use per 1,000 packs
distributed from warehouse
% increase in efficiency
Electricity generationby renewable sources
Lagging % increase
Energy Conserve energy resources
Fuel use Lagging Liters
Water consumption Lagging m3
m3 per 1,000 unit packsdistributed from warehouse
Effluent treated Lagging m
3
Monthly burden to sewer
Water
Conserve water and controlpollution
Improve utility modeling
Discharges to water Lagging Number ecological waste
water treatment systemsestablished
Ecological wastewater treatmentsystems will be established at UK andUS sites by the year 2000
Investigate transfer of treated waterto surface water instead of sewers in1998.
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THE BODY SHOP (continued)
Aspec t Object ive Ind icator
Leading/
Lagging Metric Target
EMAS certification Leading #sites certifiedBy August 1998, all principal UKoperating sites will be audited andverified to EMAS standards.
Recycling Lagging Tons of waste recycled (by
material)
Disposal to landfill Lagging Tons
Disposal incinerated Lagging Tons
By 2000, all solid waste arising fromwaste water treatment atWatersmead will be utilized on-sitethrough ecological treatmentprocesses
Waste
Dispose waste in the safestpossible way
Increase proportion of recycledplastic accessories
Increase recovery of plastic
Increase in-store refill
Implement a system formonitoring waste produced on
behalf of The Body Shop by thirdparty manufacturers Spills Lagging Numbers
Social audit process Leading Scores
Ethical audit Leading Scores
Supplierenvironmental rating
Leading Scores
Customer satisfaction Lagging Scores
Employee satisfaction Leading Scores
Shareholdersatisfaction
Leading Scores
Absences Lagging Rate per 1,000 employees
Socialresp
onsibility
Follow social and ethical bestpractices
Improve environmental rating ofmaterials suppliers
Continue dialogue withemployees
Create equal opportunities
Provide learning anddevelopment programs
Accidents Lagging Rates per 1,000 employees
Audits Leading Scores
Environmentalexpenditure
Leading $ (not in place as of 1998)By 1998, the Body Shop willinvestigate the implementation of afull cost accounting system
LCA Leading Number of assessments % decrease in raw
materials purchasedEnvironmental
ManagementPerformance
Conserving natural resourcesand controlling pollution
To become a sustainablebusiness
Implement best practices inenvironmental management
Stock disposals Lagging % of costAnnual stock disposals will be nomore than 2% of the cost of ex-
warehouse sales by end of 1997
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BP AMOCO
Aspec t Object ive Ind icato rLeading/Lagging Metric Target
On-siteemissions
Lagging
Tons/year Emissions per unit of
throughput
% reduction
CO2 emissions Lagging Emissions per unit of
throughput
Tons/year,
Establish baselines of emissions
Create short and long term targets forimprovement
Hydrocarbonemissions
Lagging Emissions per unit of
throughput
Tons/year
Lower annual hydrocarbon emissions165,000 tons by 2001
Air
Reduce greenhouse gas emissions
Achieve year-on-year reduction of air
emissions per unit of throughput
Reduce hydrocarbon emissions
Greenhouse gasemissions
Lagging Emissions per unit of
throughput
Tons/yearEnergyconsumption
Lagging
Solar energyproduction
Lagging
Megawatts % increase $ of solar energy revenue
Increase solar turnover to 1 billion by 2007
Fuel production Lagging Million tonsBecome an unleaded company in the nextthree years
EnergyUse
Clean fuelprogram
Leading CitiesTake clean fuel program into more than 40cities worldwide over the next two years
Waterconsumption
Lagging
WaterAchieve year-on-year reduction ofwater consumption and discharges
per unit of throughput Discharges towater
Lagging Tons/year by process
Environmentaldisasters
Lagging Number
Habitat loss Lagging % reduction Number of programsLand
Environmentalconservationprograms
Leading Financial contributions for
protecting habitat
% reduction in habitat loss
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BP AMOCO (continued)
Aspec t Object ive Ind icato rLeading/Lagging Metric Target
Hazardous waste Lagging
Recycling Lagging
WasteAchieve year-on-year improvementby reducing sum of waste emissionsper unit of throughput
Releases toinjection wells
Lagging
Peoplemanagementappraisals Leading
Scores Feedback
Socialinvestment
leading #of projects
Days away fromwork
Lagging Days per 200,000 hours % improvement
Employeesatisfaction Leading
Scores FeedbackSo
cialResponsibility
Create trust and mutual advantage inall relationships
Reduce fatal accidents in operations
Peer reviews andself-assessments
Leading Scores #performed
Audits Leading Scores
Risk assessmentand managementprograms
Leading ScoresBecome ISO 140001 certified at major sitesand publish verified site improvementreports
Environmentaloperating costs
Lagging $ millions
Public opinionsurveys
Lagging Scores
Fines Lagging Number CostE
nvironmentalManagement
Performance
Drive down environmental and healthimpacts of operations
Oil spills Lagging Number Gallons spilled
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COLLINS AND AIKMAN FLOORCOVERINGS
Aspec t Object ive Ind icatorLeading/Lagging Metric Target
Decrease total air emissionsTotal airemissions
Lagging Lbs/yd2of product % reduction
Realize a 90% overall reduction in total airemissions during the years 1993 to 1999
Decrease green house gasemissions
CO2 emissions Lagging Lbs/yd2of product % reduction Comparison to industry average
Achieve a 37% overall reduction in CO2emissions during the years 1993 to 1999Air
Reduce problems associated
with VOC emissions
Total VOC
emissionsLagging
% reduction
Mg/m
2*hr
Comparison to industry average
Lower energy consumption Energy usage Lagging mBTU/yd
2of product
% reduction
Achieve a 37% overall decrease innormalized energy use during the years1993 to 1999
Energy
Employ non-fossil fuel energysources
Water usage Lagging Gal/yd
2of product
% reduction
Comparison to industry average
Realize a 45% overall reduction innormalized water use during the years 1993
to 1999
Water recyclingprogram
LeadingWater Decrease water consumption
Solution dyedyarn usage
Lagging Percentage
Waste reduction Lagging Lbs/yd
2of product
% reduction
Achieve a 82% overall reduction innormalized waste generation during theyears 1993 to 1999Material
utilizationIncrease overall materialsefficiency
Closed loop-recycling Lagging Comparison to industry average
EmployeeSurveys
Leading Scores Comparison to top-ranked
companies
Retention rate Lagging Comparison to industry average
SocialResponsibility
Promotions fromwithin
Lagging Percentage
Financial Become a sustainable companyCompetitivenessof green products
Lagging Revenues from green products
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MONSANTO
Aspect Object ive Indicator
Leading/
Lagging Metric TargetOn-siteemissions
Lagging Thousand poundsAir Improve air quality
CO2 emissions Lagging Billion pounds
Energyconsumption
Lagging Million giga-joulesEnergy Reduce energy use
Fuelconsumption
Lagging % reduction
Water
Improve water quality
Reduce water use
Waterconsumption Lagging Liters saved per hour
Land
Improve soil quality
Make land as productive as possible;feeding people, protecting habitat
Soil conservation Lagging Billion tons lost
Hazardous waste Lagging % reduction
Recycling Lagging Waste to product
Tons
Releases toinjection wells Lagging Thousand poundsWa
ste
Create value /reduce waste
Increasing efficiency throughout the life-cycle of products
LCA Leading
Reduction in waste
Reduction in disposal costs
Reduction in footprint
Complete streamlined LCAevaluations for at least three majorproduct uses in 1998
Socialresponsibilityassessment
Leading #of activities
feasibility of activities
Social
responsibility
Enable better health, better nutrition,improved quality of life
Support enhanced personal productivity Medicinal drugaccess programs Lagging #served
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MONSANTO (continued)
Aspec t Object ive Ind icato rLeading/Lagging Metric Target
Audits Leading Scores
Sustainabledevelopment teams
Leading Percent participation
Information sharingnetworks
Leading Success stories
Fines Lagging Number
Amount ($)
Environmentalexpenditures
Lagging Total costs ($)
Chemical spills Lagging number
Responsibility forsuperfund sites
Lagging Number of sites
EnvironmentalManagemen
tPerformance
Decrease product impact
Minimize numbers of incidents
Technology programs Lagging % increase in crop yields
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VOLVO
Aspec t Object ives Ind icatorsLeading/Lagging Metrics Targets
Total solventemissions
Lagging
% reduction Emissions/net sales Tons
In 1998, achieved target of a 25% solvent emissions reduction
SO2 equivalents Lagging TonsOver the next five years, atmospheric emissions attributable to theGroups transport operations will decrease by 5% per ton-kilometer
NOX emissions Lagging % reduction Emissions/net sales Tons
In 1998, achieved 5% reduction of NOx emissions
Greenhousegas emissions
Lagging Tons
CFC11equivalents
Lagging Kg
Air
Minimize thequantity of airemissions
Reduce totalatmosphericemissions
attributable totransportoperations
Lower contributionto greenhouseeffect of CO2emissions frombuses
CO2 emissionsduring usephase
Lagging % reduction Emissions per ton-
kilometer per vehicle
Compared with 1995, the contribution to the greenhouse effect of CO2emissions from buses sold in 1999 shall be 11% lower in the case of citybuses, and 4% lower in the case of intercity buses and tourist coaches
Energyconsumption
Lagging
% reduction Consumption/ net
sales
Tons
In 1998, achieved target of a 10% reduction in energy consumption
Energy
Minimize the
energy consumedby our products
Become a worldleader in thedevelopment oflow-emission gasturbines (smallerthan 10 MW)
Fuelconsumption
Lagging % reduction
Fuel consumption of new cars sold in the EU in 2008 shall be 25% lowerthan in 1995
The average fuel consumption of engines complying with Euro2 standardshall be 5% lower in 1999 than in 1995.
WaterLower water
consumption
Water
consumptionLagging
% reduction
Consumption/netsales
Water consumption shall be reduced by 30% over a five-year period.
In 1998, achieved target of a 10% water consumption reduction
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VOLVO (continued)
Aspec t Object ives Ind icato rsLeading/Lagging Metrics Targets
Noise Lagging dB(A)Reduce the noise level of Volvo wheel loaders by 4-5 dB(A)from present levels by the year 2002
Hazardouswaste
Lagging Tons
Lagging Kg #of items recycled
Create dismantling instructions that simplify the recycling ofthe Volvo 5000 and 7000 bus models in 1999
Reduce waste to landfill by 10%
Improve control of chemicals
Minimize consumption of rawmaterials and production of wasteand residual products
Facilitate safe waste management Recycling
Leading recycling researchWaste
Address complete product life cycle,including energy and raw materialconsumption, and waste and by-products generation
Develop intelligent transport solutionswith low environmental impact
LCA Leading #programsIn 1998, achieved target of integrating LCA in ten majorproduct development projects
Socia
l
Responsibility
EmployeeSurveys
Leading
Scores Comparison to top-
ranked companies
1999 Greening of Industry Network Conferencei di
-
7/28/2019 Sustainability Measurement GIN
36/36
Best Practice Proceedings
A10
VOLVO (continued)
Aspec t Object ives Ind icato rsLeading/Lagging Metrics Targets
Audits Leading Scores Number of audits
Complete environmental audits in all majority-ownedproduction plants
Taking a leading position regardingenvironmental standards, whereverwe operate
Ensuring a similar degree ofenvironmental concern is exercisedby our working partners
Europeanenvironmentalcertifications
Leading Number of products
and plants withcertifications
By 2001, marine and industrial equipment will be inaccordance with EU standards
Parts of truck product range shall comply with Euro3
Involve all employeesEnv. trainingprograms
Leading #employees who
have completedprogram
Establish and implement global communication program in1999
Enhance the skills of its personnel within its corporatestructure in Sweden no later than 1999
Develop new services for electronic information processingand a globally integrated infrastructure in 1999
Formulate, communicate and monitorclearly-defined goals
Environmentalmanagementprograms
Leading
#of plants andunits that haveimplemented
programs
Establish environmental management systems in 40 of theGroups units
Ensure that 75% of all Volvo employees are satisfied with
the companys environmental management program.
Env. Relatedinvestment
Lagging
Environment-related investmentas % of totalinvestment
EnvironmentalManagementPerform
ance
Track variation of environment-related investment and productdevelopment costs
Env. RelatedR&D
lagging
Environment-related R&D costsas % of total R&Dcosts