Monday, August 30, 2010

How do you measure sustainability?

How do you measure sustainability ? I have been fortunate to gain a little preview of the input supporting the soon-to-be-released report offering answers to this very question. The report has been compiled by  Ethical Corporation and is called "Social and economic impact: measurement, evaluation and reporting: A must-have guide for companies operating in emerging markets and vulnerable communities". This  report promises to offer answers to many of the questions that most CSR practitioners and observers have been seeking. If only there were a way to capture all of a Company's sustainability impacts in a clear and consistent measurement methodology, we would all be much wiser, and probably, much more sustainable. The Ethical Corp report promises to include "a break-down and analysis of impact measurement methods, tools and processes currently available" based on insights from a survey of 116 CSR professionals worldwide, 30 in-depth interviews, a review of 60 Sustainability Reports and will include case studies from Henieken, Vodafone. SAB Miller, Tata, Unilever, Nike and more. There have been some spectacular impact assessments produced, such as Unilever's economic impacts in Indonesia, published in 2005 and further studies in South Africa and Vietnam.  In fact, Unilever measure quite a lot, including their water footprint and more.

This focus on metrics and measurement is certainly welcome, as, beyond carbon footprinting and community giving, most companies haven't a clue as to how to calculate their sustainability impacts.

Some early results show that:   

67% of the 116 survey respondents said their do measure their company's impacts.
73% of respondents said they measure impacts primarily for the purpose of communicating to stakeholders.
72% of respondents said they measure impacts as a way to build reputation.

The top three indicators that are measured by comanies include (1) economic impact on communities, (2) community impact and employee engagement in volunteering activities within the community and (3)  job creation. Oops, only 9% measure gender equality.

There are many different measurement models out there, some more relevant than others, some partial, some more comprehensive, though there is very little consensus on metrics methodologies  that can be perceived from Company disclosures in the current state of CSR and sustainability communications.  However, I won't continue now. I will review this promising Ethical Corporation report when it is published and share more insights at that time.

In the meantime, what is YOUR company measuring ?

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict and author of CSR for HR: A necessary partnership for advancing responsible business practices available now on Greenleaf, Amazon and other online sellers. Contact me via  on Twitter or via my business website  (BeyondBusiness,  CSR consulting and Sustainability Reporting firm)


Anonymous said...

I'm a bit confused by the terminology here. Is the assumption that the terms "CSR" and "sustainability" are interchangeable?

Also, there's the fact that the title of the report implies that it's about neither of those things, but rather about "social & economic impact."

Clearly, measuring impact is a start on evaluating sustainability, but only just a start.
(And, of course, there's at least the possibility that there will sometimes be a Corporate Responsibility to do something that is not sustainable, which renders it very risky to use the 3 terms interchangeably.)

elaine said...

Hello Chris, Yes, generally CSR and Sustainability are used interchangeably these days, through there is a distinction. My take is that CSR has more of an internal focus - ensuring the business listens to stakeholders and accounts to them for its impacts, usually direct impacts - carbon footprint, responsible workplace, ethical marketing and ethics etc. Sustainability is more about the external focus (indirect impacts) - solving the world problems through a broader business contribution, often in partnership with other sectors of within sectors for example the Round Table on Sustainable Palm Oil. Things beyond the control of one single company but which all companies are dependent on. In this sense sustainability means both the sustainability of the planet and the sustainability of the business itself.
In both cases, measuring impact is a core element and serves as a way to manage and a way to disclose performance to stakeholders.
And as for the Corporate Responsibilty to do something not sustainable .. well, we would argue that if it's not sustainable (long-term), it's not good business, therefore why should there be a (voluntary) responsibility to do it ?

Hope that helps (though there are many different versions and definitions out there...)

Thanks for reading and comenting, elaine

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