Why Metrics Matter in Business Sustainability

A similar post was originally published on the Straus Group blog for “Make a Difference Day,” sponsored by Strauss Group.

Can metrics help steer companies on a sustainable source? While awareness about humans’ and businesses’ impact on the environment has increased rapidly the past 40 years, much work needs to be done for the planet to remain viable for future generations. Over the years companies in a bevy of industries were quick to claim that they were working on issues from preserving forests to offering dignity to their workers. With the advent of the internet and now, of course, social media, companies cannot just SAY they are “sustainable” or responsible; they have got to PROVE it.

And the tools that allow companies to measure their progress on environmental and social issues are improving. One reason is because of regulations; but at the same time, companies that communicate with their stakeholders about not only their successes, but challenges, emerge as strong business leaders. That does not stop some companies from exaggerating their progress on sustainability, but it easier for stakeholders and investors to gauge who are ahead, and who are behind.

A recent report Brandlogic and CRD Analytics issued earlier this month demonstrates how the perception of what a sustainable company can be a stark contrast to the reality based on metrics. So who are some leaders? Many technology companies are in that group, including SAP, Cisco, Dell and IBM. They are among firms that are transparent about the effects their supply chains and operations have on the planet. These companies also stand out for their fluid communication with stakeholders via their web sites or social media platforms. Other companies that focus more on the social impact their people and products can offer, such as pharmaceutical giants Abbott Labs and Novo Nordisk, also appear as leaders in the Brandlogic-CRD Analytics survey.

Two companies in very different sectors, consumer packaged goods and logistics, emerge tall in my view. They follow a variety of sustainability reporting standards including the Global Reporting Initiative and Carbon Disclosure Project.

First is Unilever, the international food and consumer products company, for its shift to integrate sustainability within its business model and branding. The company has pushed for a global focus on food waste, established a foundation to assist one billion people on health and wellness challenges and weaned the company away from irresponsibly sourced palm oil. What is most impressive, however, is that the company backs up its Sustainable Living Plan with data. Stakeholders can visit the company’s site and learn whether the company’s various initiatives are on-plan, off-plan or have missed their target. The company’s pledge to be transparent, and discuss what the company has achieved rather than throw out talking points about “goals,” sets the bar high for other companies--and their public relations representatives--who are quick to talk about sustainability but shy about showing their actual progress.

UPS is another company that is open about its sustainability performance. The task is not easy for a company known for its trucks, airplanes and the impact its operations have on the world’s environment. Nevertheless, UPS does not shy away from discussing its greenhouse gas emissions, water consumption and waste the company generates across the globe. No one wants to admit they had a higher percentage of penalties within their total environmental inspections, but UPS is forthcoming about this data point and others where the company falls short. Yet at the same time, its global workforce enjoyed a safer workplace, and therein lies the strengths of UPS’ metrics: steady improvement and key performance indicators appropriate to the company’s core business. Becoming a sustainable and socially responsible global company is difficult for countless reasons, but metrics help hold these organizations accountable and offer more transparency.

Metrics are only part of the story as we gauge whether a company is truly a wise steward of the planet and its people. But they help paint a story about the direction to which a company is headed, and reduces self-promoting rhetoric that frustrates stakeholders and invites only more criticism instead of the much needed collaboration necessary to reverse environmental degradation, social injustices and corruption. You can bend the truth--it is possible, but harder, to manipulate numbers.

Leon Kaye, based in Fresno, California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter.

Photo of Wall Street courtesy Leon Kaye.