By Derrick Mains
Just a few years ago, sustainability was a PROFITS, planet and people movement focused on financial ROI and tangible, calculable bottom-line benefits. But an evolution has taken place. Businesses are now starting to recognize that green is multidimensional. It isn’t just a coupling of a reduced carbon footprint and ROI, it is about seeing you and your business from a global perspective, understanding impact and recognizing people as an intricate part of the shift toward sustainability.
Currently there are three separate indicators that are used to determine the sustainability of a company: Key Financial Performance Indicators (KPI’s), Environmental Performance Indicators (EPI’s) and finally, Social Performance Indicators (SPI’s). (Profits, planet and people, respectively.)
Yet the challenge with using traditional metrics in determining the sustainability of a company is that the data is static. To calculate how a company is performing you need to look at their past CSR reports, their current press releases and in the case of BP, the evening news.
Last fall BP was a darling of the market, being listed as number 18 on the prestigious NASDAQ OMX CRD Global Sustainability 50 Index that looks at hundreds of variables to determine overall sustainability. This spring, BP’s name and reputation have, understandably, disappeared.
Let’s equate this to something personal. We all know someone whose indicators were strong: They were in great shape, exercised, ate well and then all of a sudden – heart attack. In health as in business, sometimes the only way to know what went wrong is to conduct an autopsy, when the consequences of not knowing and not acting are too late.
What businesses need today is an EKG. They need to know when trouble is coming before it arrives, giving them time to mitigate risk before the company has a heart attack and needs surgery, or worse yet, an autopsy (unfortunately accidents happen and sometimes the odds are against us – but it’s a whole lot better to play in favor of the odds).
BP’s indicators had always been strong, but in a world of multi-tasking, high-stress workplaces, an overwhelming focus on ROI, and where open communication and reasonable challenges to management were ignored, the roulette wheel did not spin in BP’s favor.
So what can you do to give your business a check-up, to take the pulse of the company, to benchmark where you are today and to know where the indicators point?
Unless you are a public company with deep pockets and a demand for heavy transparency and indexing against competitors, you might not have a place to start – so benchmark against yourself.
You can start by simply assessing what you have – remember, you can’t improve what you don’t measure. First, look back one (or preferably two) years at your usage of energy, waste and water. What factors affected any changes (layoffs, expansion, increased revenues) and what factors will continue to have an effect on an ongoing basis? Some companies are much more transparent with the media and shareholders than they are with their employees. Don’t be afraid to share your data with the people who make up your company, because the truth is: They are one of the biggest indicators of the health of your company (from an economic, environmental and risk perspective). Ask them for suggestions on improvement, incent them for taking action and then turn around and do the same with your customers. Once you have a baseline, you have something to measure and track your progress against. Track it often and compare to performance indicators that others publish. Honesty is the best policy, and showing the market that you are benchmarking and improving your efforts toward sustainability is a step toward increased brand loyalty from your customers and employees.
Increased regulation is coming, and as you can imagine, industries like offshore drilling are going to experience a brunt of new safety, procedural and production regulation. Compliance can come from a corporate level, but to sustain sustainability, there must be a cultural change of transparency, accountability and engagement-a shift toward PEOPLE, planet and profits.
Derrick Mains is the CEO of GreenNurture, a corporate sustainability software company that empowers the people to make environmental change in the workplace. Derrick can be reached at Derrick@greennurture.com and followed on Twitter at @enviralmentalst. www.greennurture.com
[Image Credit: Alan Shaw]