New Metrics
Measuring True Impact:
Why Science Is Redefining Our Definition of a Sustainable Company

Big changes for better outcomes

Businesses today are realizing that to truly address the environmental and social challenges that affect our world, a major shift is required in the way they produce and market products and services.

The introduction of science-based sustainability goals is challenging businesses to rethink how they measure their impacts. Large-scale process changes require careful systems thinking — in order to define the social and environmental break-even point of business activity. Organizations must look at their entire “system value” — and understand the connection and balance between their business practices, society, and the environment.

We recently sat down with Martin Rich, co-founder and Executive Director of the Future-Fit Foundation, to dive deeper into why science-based targets are helping companies shift from doing less harm to no harm.

The need for a change

With a scientific framework in place, companies are acknowledging that simply doing less harm is no longer good enough. However, because the results of scientific analysis often point toward a fundamental shift in the way they operate, this approach is a scary proposition for many organizations.

According to Rich, “To achieve difficult goals, a business model must shift. I realize the fear because this may well look radically different to where you are today, but true business leadership is about spotting the challenges ahead and finding a solution to surmounting them.

“After all, Henry Ford didn’t focus on making horses go quicker, right?”

Shifting mindsets

Identifying the issues and implementing the change necessary for long-term viability are not one and the same. For companies to truly shift their mindset, CEOs and senior-level executives need to understand and champion the idea that companies that are simply focusing on reducing their operational footprint (although extremely important) may not be doing enough.

“Assuming the chief sustainability officer (or equivalent) is on board, the first real step is to ensure the buy-in of the CEO and CFO,” Rich said. “We need them to understand and champion the idea that business rooted in systems thinking is good business.

“This mindset has to be embedded in the way the company does business, not just something done on the side to look good. The idea, support and drive has to come from the top.”

Measuring true impact

The emerging influence of science on business strategy is helping company leaders better understand the impact that social and environmental challenges have on their current business model. Scientific data is establishing a more definitive idea of what a truly sustainable company looks like and helping to put goals in place for realistic, long-term success. Through this lens, consumers, employees, investors and all corporate stakeholders receive a clear view of which companies are making a real impact versus the ones simply doing less harm.

Says Rich, “Current extra-financial metrics lull decision-makers into believing that doing better than last year — or better than ‘the next guy’ — is sufficient (VW as Automobile Industry Group Leader, anyone?). “But given the scale and complexity of the problems we face as a species, being less bad is just not good enough. That’s why we need a new kind of metric. Rather than merely focusing on today’s best practices, we must measure the gap between where business is now and where it needs to be.”

The line in the sand

Without a sustainability benchmark grounded in scientific understanding, are we simply celebrating today’s success without planning for the needs of tomorrow? If so, then bigger questions need to be asked:

• What does a 4 percent reduction in carbon emissions really mean in the context of long-term sustainability?
• Are we only acknowledging relative improvement and not real progress?
• And how do we truly measure one company’s performance against another’s?

Or, as Rich puts it, “It’s hard to assess real progress if the destination is unclear. And until now, we’ve had no clear, credible and actionable definition of what being a truly sustainable company really means. Unfortunately, the 100+ corporate sustainability ratings in existence don’t hold the answer, because they focus on today’s best practices rather than tomorrow’s required practices.”

Looking into the future

If we are to truly move business thinking from doing less harm to do doing no harm, we have to begin to measure the success of a sustainable business differently than we are now. Moving forward, we need to agree on a minimum acceptable level of environmental and social performance every company must attain if society — and business — is to prosper long term. And science should help us chart our course.

To learn more about how companies are applying systems thinking to long-term viability, read our full conversation with Martin Rich and his compelling article on why it’s time for a new kind of metric.