This article is part of the “How to Be A Green Changemaker?” series on the Zerwaste blog. In this post, we will try to establish what metrics you need to consider to monitor your sustainability efforts[1]. What are the right sustainability KPIs for your business?
Welcome back to the green changemaker Journey!
In a previous article, we mentioned the importance of defining your priorities based on current regulations. But we also know how important it is to build your roadmap and to define your focus based on the current situation in your company. This is what you do through the VSM (or VSMc) but of course, you need to know which specific elements you want to evaluate in the process. Indeed, you need to understand your level of maturity towards different environmental, social, and economic metrics. Those are called sustainability KPIs.
Constant monitoring of those KPIs compared to your internal desired goals is a great way to foster sustainable performance across your entire business.
Sustainability KPIs are usually used in a sustainability report to collect, track, analyze, and, of course, report sustainability data. It is key for your business as it allows you to proactively identify opportunities, mitigate risk and promote transparency.
As KPIs help organizations measure progress towards goals, it is therefore key to identify what the internal strategy is and what the associated goals are before starting your KPIs’ selection process.
The Three Pillars for Sustainability KPIs
When we speak about sustainability, we often think about environmental metrics related to the following categories related to the following environmental goals and to enhance these impacts through the dissemination of best practices:
- Materials (e.g., improve the use of renewable materials)
- Energy (e.g., reduce energy consumption (fuel, electricity…)
- Water
- Biodiversity
- Emissions (e.g., reduce gas emissions)
- Effluents and waste (e.g., divert waste from landfills and improve waste management)
- Products and services (e.g., collaborating with other industries to transform waste into resources)
- Compliance
- Transport
- Overall
- Supplier environmental assessment
- Environmental grievance mechanisms
However, let us not forget that sustainability includes three pillars: environmental, social, and economic. So, it is crucial when establishing your sustainability KPIs to consider all three.
A few examples of social goals are:
- Employees’ acceptance of organizational change
- To guarantee the quality of environmental and work conditions
- To guarantee the respect for the human rights
- To participate in the social initiative and maintain a high level of responsibility
And the economic goals could be:
- To increase the return on investment
- To increase the revenues associated with sustainability dimensions
- To promote an innovative technology
- To guarantee the quality of the process
If you want a good balance in your sustainability reporting, try to select goals from those three pillars.
Once your targets have been identified, you will have to choose the measurable and quantifiable values that demonstrate how effective your organization is in attaining them.
Please note that in this article, we will focus on sustainable objectives but the following principles on how to choose the right KPI will also apply to other processes or departments.
What to Consider When Building your KPIs
So, what are the principles to keep in mind when you build sustainability KPIs:
- Match KPIs to your industry, but also your core business principles and strategies, in other words to the goals identified previously.
- Choose impactful KPIs related to internal safety, health, or environmental risks within your company.
- Select manageable KPIs and begin with two or three manageable categories.
- Ensure the KPIs are measurable. We will get back later to the importance of having the right measurement tools, but in any case, you must make sure that the data is available.
- Make sure KPIs can be improved, otherwise, there is no point in monitoring them.
- Understand what is important to your stakeholders and choose meaningful KPIs for your customers, supply chain partners, the local and global community, and your employees.
Below you will find a non-exhaustive list of KPIs coming from the “EPA Framework for Sustainability Indicators,” this list might not be adapted to your operation. In a future article, we will dig deeper into KPI tracking and prioritization. We hope this one helped you identify and establish metrics to monitor sustainability efforts, and what are the sustainability KPIs that you currently put in place.
See you next week to build tomorrow is sustainable, circular, and a waste-free world!
| POVERTY | Unemployment rate Poverty index Population living below the poverty line |
| POPULATION STABILITY | Population growth rate trend Population density |
| HUMAN HEALTH | Average life expectancy Access to safe drinking water Access to basic sanitation Infant mortality rate |
| LIVING CONDITIONS | Urban population growth rate Floor area per capita Housing cost |
| COASTAL PROTECTION | Population growth Fisheries yield Algae index |
| AGRICULTURAL CONDITIONS | Pesticide use rate Fertilizer use rate Arable land per capita Irrigation percent of arable land |
| ECOSYSTEM STABILITY | Threatened species Annual rainfall |
| ATMOSPHERIC IMPACTS | Greenhouse gas emissions Sulfur oxide emissions Nitrogen oxides emissions Ozone-depleting emissions |
| GENERATION | Municipal waste Hazardous waste Radioactive waste Land occupied by waste |
| CONSUMPTION | Forest area change Annual energy consumption Mineral reserves Fossil fuel reserves Material intensity Groundwater reserves |
| ECONOMIC GROWTH | GNP National debt Average income Capital imports Foreign investment |
| ACCESSIBILITY | Telephone lines per capita Information access |
[1] How to establish metrics to monitor sustainability efforts, Environmental Responsibility Best Practices, PPAI (July 2018)
