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Measuring Corporate Sustainability Across Sectors: How Do You Do It? State of Green Business 2008, Pt. 3

Shannon Arvizu | Friday February 8th, 2008 | 0 Comments

In a continuation of our analysis of the State of Green Business 2008 report by GreenBiz.com, we look at how to track corporate environmental sustainability practices across sectors. For this, we look to the work of Innovest Strategic Value Advisors. Innovest provides a rating service called the “Intangible Value Assessment” (IVA). For the sake of this report, the score of each sector over the past eight years was averaged to look at long-term patterns. So what indicators are used to measure “intangible value” of corporate sustainability? And what are the results?


The report examined 8 categories (of 2000 companies over 50 sectors) to measure progress:
1. Strategy (stated policies, integration with the core business, link to environmental profitability)
2. Governance (board structure, senior environmental officer, environment as a factor in compensation)
3. Management Systems (existence, number, and qualification of environmental staff, ISO 14001, environmental key performance indicators)
4. Audits (their existence, adequacy, frequency, impartiality)
5. Accounting (environmental reporting and accounting)
6. Training and Development
7. Certification (signatory to Ceres or other relevant codes)
8. Products and Materials (conducting life-cycle analyses, supplier environmental screens, eco-labels)
The results: “Steady progress among companies in the quality of environmental management and governance.” Average scores improved from 28.64 in 2000 to 37.54 in 2007.
Essentially what we are looking at here is the gradual diffusion of new management practices in the corporate world. When sociologists look at the evolution of corporate practices, we often ask, “To what extent are these new practices a reflection of a change in core values and beliefs? Or are they akin to what is called a ‘ceremonial facade’ used to maintain the legitimacy of the corporation?” The best way to answer these questions is look at how these practices lead to a change in outcomes.
This report concludes that these results show an “unmistakable path” that we are evolving “into a world in which companies’ environmental impacts will become less external and more core to their bottom-line success.” Perhaps, but I think this still remains to be seen until we see indicators of overall sector environmental performance. Unfortunately, the data to assess this is non-existent as of yet.


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