CSIN National ConferenceMarch 2, 2010

The Courtyard by Marriot

David Simpson

Can You Measure Your Way to Sustainability?

The importance of measurement

The value of measurement as a response to the sustainability challenge rests on the assumption that more measures and information will lead to better sustainability management inside the company

“What gets measured gets managed…”

“If you don’t know where your are going, you won’t be able to define where you are heading..”

Measurement Failure: BP Explosion (Texas)March 23, 2005

One of the most serious workplace disasters in the US:15 deaths; 170 serious injuries

What Went Wrong?

BP arguably failed:

• To listen• To fully understand• To respond

Lesson: Measurement alone will not get us to a sustainable future.

Measurement and Accountability

In order to plot a successful path towards sustainability, measurement must be tied to an overarching accountability framework.

Accountability as a Concept

AGENT

P P

(representative model) (stakeholder model)

Principles of Accountability

Inclusiveness

ResponsivenessMateriality

• Do they invite the participation and active engagement of both internal and external stakeholders in the design and analysis of the measures?

• Are measures transparent and accessible?

• Does the process allow stakeholders to influence how measures are used and interpreted?

• Are stakeholders involved in identifying issues and analyzing outcomes?

Inclusivity:Do Measures Reflect Stakeholders Interests?

Are you listening to us?

Traidcraft – A ‘fair trade’ company which aims to fight poverty through approaches to trade that help poor people in developing countries.

• ‘Fair wages’ - an important indicator of success

• No universal understanding of what ‘fair’ meant

• At heart of debate was varied interpretations of the company’s values, ‘fairness’, and so what constituted suitable measures to calibrate performance.

• Often the debate itself can be valuable

Inclusiveness – Case Study

• Are measures relevant and significant to stakeholders?

• Will measures help to influence the decisions, actions and performance of an organization or its stakeholders?

• Do measures reflect a comprehensive and balanced understanding / prioritization of important sustainability issues?

Materiality:Are the Measures Relevant?

Do you really get what’s important?

11

Case Study -

11

• Focus on the most relevant and significant issues

• Don’t let the tail wag the dog (ie. Keep eye on issue not the measure – finance v.s operations)

• Don’t shy away from qualitative data (it can often be more material)

• Use appropriate time horizons (short/long) to determine impacts.

•Don’t start using GRI indicators as a pick and choose menu.

Measures and Materiality

• Are measures linked to decision-making?

• Do measures respond to the needs, concerns and expectations of stakeholders?

• Are measures contextualized?

•Are meaningful targets set for measures which stakeholders can agree with?

Responsiveness:Are Measures Linked to Actions?

Are you ready to respond?

Vancity – Financial Services CU in Vancouver

• Develops measures and reports back on their performance. Linking each measure to an executive in the company.

• Measure development process embedded into governance function.

• Measures integrated into the business strategy and planning process – not just the sustainability department.

•Channel measures into learning and improvement.

Responsiveness – Case Study

Conclusion:

• An overemphasis on measurement may simply lead us down the garden path.

• Accountability mechanisms lie at the root of the effective measurements and need to be hard-wired in to sustainability plans.

• A measurement and evaluation function is part of an accountability framework but it also requires:– Adequate disclosure and transparency– Meaningful participation; and – A feedback and complaints handling process when

measures are being wrongly used or interpreted