Sustainability has long been seen as a soft issue — or at least too complex an issue to apply metrics. That is yesterday’s thinking as reaffirmed by all the speakers this week at New Metrics ’15. On the final day, in the second round of plenaries, Biogen, Johnson & Johnson, SASB and TruValue Labs shared their experience and learnings from establishing metrics and setting standards within their respective industries and a few common themes came to the fore.
1. Accurately measuring your business’s impact requires looking internally and externally.
Its not just about your own operations, but also your suppliers and supply chain, the impact of what you produce and how it is used (end of life). All of these factors must be assessed to truly understand the impact and footprint of your business. When J&J looked to understand the end-of-life impact of its liquid products, it soon realised there was no standard within the company and no rules by which to operate. Now however, it has developed the GAIA tool (Global Aquatic Ingredient Assessment), which categorises ingredients and products that are environmentally preferred all the way to ‘avoid if feasible.’ Integrating this tool into the existing R&D Product Development tool has supported the development and innovation of more sustainable products within the company’s established product development process.
2. Measurement accuracy is critical.
It may sound obvious, but determining how broad the sphere of influence is for one company can vary depending on the personal opinions of senior management. Deciding to use context-based goal-setting is increasingly common to ensure there is internal and external relevancy to goals. Setting measurement standards, and sticking to them, is critical to long-term transparency and goal achievement.
3. Filtering what’s relevant information vs just data provides the foundation for efficient use of resources and confidence in future reporting.
TruValue’s Hendrik Bartel shared with us that 90 percent of data that has ever been created was created in the last two years. We are overloaded by data yet still struggle to find the ‘right’ information. Why? Data is not information - information increases in value over time and data is static. Information helps companies, municipalities and investors drive change and reward improvement. New systems, such as cognitive computing, are enabling companies to parse through huge amounts of data very quickly to identify sustainability solutions earlier and more efficiently.
4. Measuring & reducing impact projects often lead to exponential innovation.
As highlighted by Biogen’s Johanna Jobin, the company’s path to achieving carbon neutrality seemed obvious to them. Biogen is in “the business of caring,” Jobin said. Caring for patients also means caring for the environment. Having achieved this after a rigorous process, the company quickly recognised maintaining this will get harder as the business grows. Therefore it needed to challenge the paradigm that producing more products produces more waste. How can companies grow their business with little or no exponential use of resources? A question yet to be answered.
5. Linking sustainability impacts to financial value through metrics — its finally here.
Eli Reisman from SASB (Sustainability Accounting Standards Board) reaffirmed what many sessions this week have asserted: There is demand for a standardised set of metrics to understand sustainability goals and impacts. SASB now has metrics and standards for 80 industries and continues to work on developing them further. The call for standardised metrics is being answered for investment funds and private investors, removing the risk of relying on immaterial metrics.