2 Apr 2010

Tools for measuring corporate sustainability

Evidence proving the business case for doing CSR is a dime a dozen. We now have a number of publications that instruct companies on how to implement good CSR. Impact measurement is where the real value lies.

Companies are keen to measure the environmental and social impact of their business. Academics have been responding by developing a variety of financially-based sustainability tools.

Researchers at Queen's University Belfast (UK), Euromed Management School (France) and IZT - Institute for Futures Studies and Technology Assessment (Germany) have developed a value-oriented methodology to quantitatively assess corporate sustainability performance, called Sustainable Value.

Sustainable Value uses the same opportunity cost thinking that dominates the financial markets and is thus in line with managerial thinking. It allows a practical, integrated assessment of the use of economic, environmental, and social resources in monetary terms.

Put to test

The report Sustainably Successful? features the results of 28 companies that have trailed this approach as a way of analysing, monitoring and managing sustainability performance.

Indicators include non-financial assets, five types of emissions, water use, waste, the number of employees and the number of work accidents. These are expressed in monetary terms and benchmarked against the economy or industry.

A short summary of results shows strong distinctions between various sectors:

What do companies think of this tool?

BMW’s Sustainable Value Report 2005/2006 states “The importance and attractiveness of the approach in practice lies in the new scientific method which builds a bridge between value orientation and sustainability. The main advantage for companies is that the Sustainable Value presents sustainability success like economic success. This also helps, for example, SRI (Socially Responsible Investment) investors in their analysis. In the medium to long term, the Sustainable Value could become the basic element of a sustainability audit.”

The collaborative has also posted an audio tutorial, explaining underlying logic of this approach.

The European Academy of Business in Society (EABIS) and the SEABUS International Research Network host a number of publications on measuring sustainability.

Watch for future blog posts on other tools for measuring sustainability.

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