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August 6, 2007 
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What Gets Measured — Metrics for Sustainability Success
In a previous issue, I discussed the importance of setting goals. But you can't know where you're headed without knowing where you are. Goals are useless without metrics.
It's fast becoming a requirement to have data on social and environmental performance. (For a good quick review on the evolution of thinking on green metrics, see this article from a few years back by Richard MacLean). Operating without CSR data is like having a "Balanced Scorecard" (a well-regarded tool for managing a business) with part of the proverbial dashboard blank. How well can you run your company with no information? 
As closely related as metrics are to goals, they're clearly also a sub-set of reporting (a topic for another issue). But metrics are fundamentally a tool for managing a business and guiding smart execution; they can drive improved performance just as measuring cash flow helps companies seek profit. The most basic environmental metrics capture your own operational footprint. This "in the fence line" data on energy, resources, water, and so on, should be second nature. Beyond that basic requirement (which, granted, most companies don't have down yet), I'd suggest a few other dimensions to consider. Companies should capture data on:
What are your favorite metrics? Tell me about them! ~Andrew Winston, Founder, Winston Eco-Strategies, Co-author, Green to Gold (Read his "Eco-Advantage" blog here.) Comments or questions? Join Andrew and other readers online at the Eco-Strategies Forum. Supplier Metrics: Tracking the (Entire) Mirra Chair 
What's in an office chair? Furniture manufacturer Herman Miller decided it needed to know. As part of its wider commitment to sustainability, the company unleashed an aggressive Design for Environment program that required suppliers to share information on each component, right down to the chemical level. With the help of McDonough/Braungardt, Herman Miller rated every component so designers could avoid toxics in their designs. In 2003 the company unveiled the Mirra Chair — one of the first products ever designed from the ground up based on exact environmental impact data. With the Mirra snapping up awards and market share, you can bet suppliers are taking a second look at how best to deliver materials that meet Herman Miller's stringent standards.
"Levels": Interface's EcoMetrics and GE's PowerSuite 
The cliché "what gets measured gets managed" is at the core of Interface's sustainability efforts. The famed flooring manufacturer uses key environmental indicators, called EcoMetrics, to assess its progress in greening the company. Managers collect performance data in the four areas of waste, energy, water, and carbon intensity, not just at the global (companywide) level but at the local (facility) level as well. With information on multiple levels, the company can manage its environmental issues at whatever scale is most cost-effective and strategic. That's just good business.
Another great example is GE's PowerSuite, designed to allow individual operations to own, track, and manage their environmental data and to monitor real-time performance. Managers can see a dashboard of metrics (click for a screenshot) on, say, water and air permit compliance at nearly any level imaginable - from global down to a specific manufacturing line within a factory. ______________________________________________ Join the New Wave of Sustainable Brand Leaders
Absolute vs. Relative: Bristol-Myers Squib 
Bristol-Myers Squib is a leader in CSR reporting, and its extensive use of metrics is one of the reasons. You won't find many companies that capture more data on their business. Click on the graph to the left to see how they present data on key environmental performance indicators in multiple ways. The absolute measurement is critical for metrics like greenhouse gases - climate change is an issue tied to total levels. But relative metrics, or measures of "intensity," help a company see how it's managing its own growth (and may be more applicable on some environmental issues). Both are useful.
Metrics for the Big Picture: DuPont's "SVA/lb." 
Scroll about half way down this speech from DuPont Executive Vice President John Hodgson and you'll find a reference to an unusual metric that says a lot about the company. "Shareholder value added per pound," or SVA/lb, measures how well each business unit is creating value given the amount of resources it uses. It focuses managers on the simple, but elegant truth - they need to create value while using less stuff. Blunt? Yes, but effective. The metric fits DuPont's historic position as a chemical company that uses a great deal of resources to make its products. But it also reflects what DuPont wants to become - a more knowledge-based, rather than resource-intensive, entity.
Tools & Frameworks GRI Performance Indicators One of the leaders in setting standards for reporting, the Global Reporting Initiative has laid out what it considers the most critical metrics. Click through to use their metric search tool. They've created an interesting divide between...
In this tool, GEMI doesn't recommend particular metrics, but offers a process and framework for thinking about which metrics work for your company. Since there's no one answer for every organizations or culture, having a method to refine and choose your metrics can be very helpful. Blogger Seth Godin Has the Final Word... 
What's in a number? Business and marketing guru Seth Godin has a unique take on the usefulness — or not — of metrics in general."
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Eco-Advantage Salon Tour! Andrew's Eco-Advantage Salon Tour is coming to a city near you. Watch here for information on our next locations, dates, and participants. Denver and Portland are next up. Save the date! Denver: Aug. 22, Oxford Hotel Portland: Aug. 23, DoubleTree Lloyd Center Program 
Find Peers and Partners If you haven’t already joined the fastest growing online sustainable business community, create a profile now and start connecting. Books & Media "No executive can afford to ignore the green wave sweeping the business world. [Co-authors] Esty and Winston show how to make sustainability a core element of strategy-and profit from it." -Chad Holliday, CEO, DuPont Solution Providers |
This work is licensed under a CreativeCommons License. Copyright Sustainable Life Media Inc. 2007
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