sustainability metrics for small-mid size enterprises
TRANSCRIPT
Sustainability Performance Metrics: Measuring what Matters for SME’s
Presentation at the Sustainable Enterprise Conference, 2015
Chris Yalonis, President, Communique
Professor of Sustainability, Sonoma StateChair, San Rafael Chamber Green Committee
415-309-0331
Content
• About Communique• Why measure sustainability performance?• Design: alignment with business ops and goals• Most critical measures• Best practices• Reporting
About Communique
• Sustainability intelligence and consulting firm helping SME’s, colleges and government entities:
– Green their operations and products/services.
– Green Market Research– New Venture/product business plans,
market and competitive analysis– Sustainability goal setting, action plans,
Materials, Water and Waste Management
– Training and workshops, green team facilitation
Why Sustainability Intelligence?• Just like business intelligence has become a critical
management tool, sustainability intelligence is evolving as a foundation that integrates the triple bottom line and provides insight in making better system level decisions
• Sustainability practice leaders are drowning in information, starved for knowledge
• Battle for human and financial resources requires ROI, quantitative justification
• Self control and empowered individuals, teams, communities require that they know:– What is expected– What resources are available– How they are doing against expectations
Why Measure Sustainability Performance?
• Prove the business case for practices and initiatives, investments
• Establish baselines through assessments• Build consensus of what sustainability means to the
organization and how to measure success• Measure the impact of actions/programs• Authentically report organization’s progress• Engage/inform customers, employees, suppliers,
analysts, media, community
The Business Case: Operations
• Cost savings through efficiency and conservation measures (energy, water, waste)
• Process efficiencies• Supply chain enhancements• Product Design/functional enhancements• Incremental revenues from new markets• Brand appreciation-NPS and loyalty scores• Employee attraction and retention
The Business Case
Business Case
Business Case
Are Green Metrics important to your Customers?
• Do you:– Educate your customers through traditional and
social media– Dialogue with customers about sustainable practices?– Evaluate and prioritize what is most important to
customers?– Gained the interest of press in the success of your
green practices?– Host thematic tours and special events?
Marketing and Messaging
• Identify, collect, and archive powerful stories/measures of discovery and transformation in your business.
• Critical for validating your green credentials, internally and externally.
• Can be marketed in new exciting ways to differentiate your organization, enhance brand loyalty and increase your bottom line.
Communication to Stakeholders
The role of metrics in strategic planning and execution
– Metrics should be a reflection of goals and strategic plan
– Requires a baseline and feasible targets, resources
– Install a sustainability operating system (SOS)
• SMART goals• Action plan• Owner/governance• Funding• Schedule• Rewards/incentives• Reporting
What makes a a SMART Metric?
Common Economic Practices/Indicators
• Economic– Planning
• Business Plan• Succession Plan• Marketing Plan• Strategic Plan
– Performance• Investing in Capital• Growing Profits• Positive Cash Flow
– Practices• Employee Professional Development• Standard Accounting Principles
Environmental Practices/Indicators• Environmental
– Watts (Energy)• Review Gas and Electric Bill for the purpose of reducing consumption• Adopt written goals about reducing energy consumption
– Water• Review monthly bills for the purpose of conservation• Install new or retro fit appliances
– Waste• Measure production• Purchase/sell products with reduced packaging• Reuse items and recycle as much as you can
– Wheels (Transportation)• Incentives/Reduce barriers for use of alternate modes of
transportation• Explore telecommuting/online meetings/teleconferencing
Social/Community Practices/Indicators
• Social Responsibility/Wellness– Family Friendly Policies
• Paid or unpaid leave for birth/adoption of a child• Paid or unpaid leave for care of a dependant• Provide a group health plan for employee participation
– Civic Participation/Corporate Responsibility• Make cash or in-kind contributions to local non-profits• Match Employee contributions to local organizations• Internship opportunities for local youth
– Volunteerism• Give employees time off to volunteer in schools or with agencies• 100% of senior management serve on the board of a local non-
profit.
Examples of functional areas and metrics:
Energy/climate GHG-climate neutrality, watts/therms/sq ft. or unit or employeeEnergy efficiency, GHG/$, use calculators from EPA or cleanair-coolplanet.org for energy bill-co2 conversion ratios
Materials % of purchases from sustainable sources Processes % of employees paid market based living wage/benefits
LEED qualified building/remodels Products/services % of sales from sustainable/green products/services
Customer satisfaction ratings of LOHAS/Green product customers, impact of sustainable features and company behavior/reputation
Waste Diversion rates, reduction of absolute waste levels/unit or employee Partners/supply chain % of suppliers who meet defined sustainable index thresholds Community Profits/time donated
Local sourcing as percentage of total procurement
Employees Retention, wages relative to industry benchmarks, benefits relative to sustainability objectives (commute and wellness programs)
5 W’s X 5 P’s (5 Work Plans model)Simple frame to review company’s sustainable practices
Watts Waste Water Wheels Wellness
Products
Process/Production
People
Purchasing
Plant (buildings)
For each cell, assess what is working and not, design SMART
goals/metrics, report
3 Key boundaries of Footprint Measures
Company GHG Emissions
Product Impact Tools
LCA and “Hot Spots”
Best Practices in Using Metrics
• Ensure a balanced scorecard in your metrics-cover range of performance measures-soft and hard
• Use the right scale and units (ie. CO2 /square ft)• Get ownership in use and maintenance of ongoing updates and reports• Keep the number of metrics to 5-7, a manageable amount to keep
attention• Combine metrics that are leading (energy conservation and efficiency
measures) and lagging (energy use)• Draft your reporting in advance and map data gathering to it• Align reporting to your industry reporting protocols and green
certifications (LEED, GRI, Green Seal, STAR)• Publish Web based dashboards to make them memorable to employees
and stakeholders
Keep Reporting Concise and Memorable
Align metrics with attaining/retaining Certifications/Eco-Labels most important to your customers
Savings on Investment Return on InvestmentOutcomes based on savings to the budget
Outcomes based on financial benefit on the bottom line
Focus on eliminating waste and improving processes
Focus on systems approach and long-term growth
Measurement by cost savings Measurement by statistical analysis
Diminishing returns Potential increasing returns
Measure ROI + SOI
Use Dashboards (Credit 360 example)
- Software for Carbon management vs sustainability intelligence-ISSP report on reporting software- Favorites for SMB’s- Credit 360, IReuse
iReuse Performance Tracking
Take-aways
• Start small, at the level you can maintain the effort
• Go through all the steps of planning and design: Assess, set goals and accompanying SMART metrics
• Assign owners of reports and update data• Measure Cost Savings and ROI• Report out key 5-7 KPI’s with dashboards
Reference materials• Sustainability Planning, Darcy Hitchcock and Marsha Willard, Pages 65-79• Ecological Intelligence, Daniel Goleman• ISSP Directory of Sustainability Planning & Reporting Tools, LCA tools
– http://www.sustainabilityprofessionals.org/resources/general-resource• Standards
– http://www.greenbiz.com/print/43386