Sustainability Metrics: Which Ones Matter?

image: environmental metrics?The past year has seen a significant shift in eco awareness and the debate on climate change.  In the world of business and finance, climate change has developed from a sidebar topic to a mainstream conversation.  Accompanying climate change discussions are questions as to which sustainable business strategies to implement and simultaneously see results in the bottom line.  A corporate sustainability plan is one way for growing businesses to drive efficiencies into existing business process and to create access to new opportunities.  

However, using metrics as guidepost for measurement, several questions surface: Which metrics matter?  Are traditional business metrics and business sustainability measures distinctly different?  Should they be compartmentalized or brought under a common understanding?  

Our sustainability consulting finds leading companies are adopting more comprehensive definitions of sustainability and business sustainability strategies that run consistently through all core business functions.  The post, Using Sustainability Metrics to Drive Business Performance, Innovation and Stakeholder Satisfaction, addresses key metrics used to tie sustainable business strategies to bottom line performance.  In addition, a new study, Finding Common Ground on the Metrics that Matter, addresses several key areas highlighting the challenges of sustainability metrics:  

  • Disconnect of which corporate ESG information is tracked by companies and how it is –or isn’t –consistent with analogous information sought by investors, researchers and other stakeholders. 
  • Identifies environmental and social metrics that are meaningful to investors, companies and researchers.
  • Highlights the data mismatches between available corporate data and research needs.
  • Suggests a way forward which could both reduce data gaps. 

Performance measures have always been a part of business.  Over time, business executives have learned to incorporate metrics most applicable to their stakeholders.  Leading organizations are now embracing more advanced performance management practices to include business sustainability indicators.  

This report explores and documents the extent to which corporate ESG information tracked and managed internally by companies is consistent with analogous information sought by external parties, and in particular, by ESG investors and the research companies that serve them.   The full report can be found here

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