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EHS MANAGEMENT BLOG

Measuring Corporate Sustainability: 7 Sustainability Indicators to Track

How do you measure corporate sustainability?

Unfortunately, there’s no single metric that tells the whole story. In fact, research from the Earth Institute Research Program on Sustainability Policy and Management at Columbia University uncovered 557 distinct sustainability indicators in use today.

You don’t need to track all of these indicators — nor should you try to! — but you do need to look at several different indicators in order to get a clear picture of your company’s performance.

In this post, we’ll discuss seven of the most commonly used sustainability indicators so you can get a better idea of what you should focus on.

What is a sustainability indicator?

A sustainability indicator is a metric that measures an organization’s ability to deliver long-term stakeholder value. Sustainability indicators often relate to environmental performance, but can encompass social, governance, and economic metrics as well.

Top 7 Sustainability Indicators to Track

1. Energy

Energy consumption is the key indicator most organizations use to gauge their overall efficiency. Obviously, the less energy you use, the lower your environmental impact and operational costs.

In fact, even a modest 10% improvement in energy efficiency across the board could save American businesses $35 billion a year, according to EnergyStar.gov.

One popular energy consumption metric is electricity usage, because it applies to every industry and is relatively straightforward to track using utility bills or meters. In addition, many organizations report on other types of fuel used, renewable energy initiatives, and energy mix.

2. Emissions

Emissions measures the release of gases and particles, most often carbon dioxide (CO2) and other greenhouse gases, related to your operations.

With global concerns about climate change increasing, monitoring your emissions can provide valuable insights on how to reduce your carbon footprint.

Some examples of commonly used emissions metrics include aggregate greenhouse gas emissions, breakdowns by specific GHG, carbon emissions by use (facilities, travel, etc.) and other carbon intensity measures.

3. Water

Water shortages already affect every continent, and water scarcity listed as one of the three global systemic risks of highest concern by the World Economic Forum.

As such, knowing how dependent your organization is on water is crucial to help you predict and prepare for future climate risks. Companies that are able to monitor and reduce their demands for freshwater will be in a better position to survive global water shortages.

Common water usage and consumption metrics include total water use, as well as sources of water such as amount of groundwater, surface water, and municipal water.

4. Materials

Materials refers to the amount of resources your organization uses, such as metals, minerals, lumber, and fossil-fuel products.

Tracking your materials usage is important for sustainability because it has a direct impact on the environment. Global material use has been linked to serious environmental problems such as habitat destruction, biodiversity loss, overly stressed fisheries, and desertification, according to the US EPA. The more raw materials you use, the greater your impact on the environment.

5. Waste

Waste refers to unwanted or unusable materials that have no business value and require disposal. Examples of waste include solid waste (trash), wastewater, and hazardous or radioactive materials, to name a few.

All this waste can have serious environmental impacts, including air pollution, water contamination, and resource depletion. Obviously, reducing the amount of waste you generate can help reduce your environmental impacts — not to mention your operational costs.

Tracking waste can also tell you a lot about your organization’s overall operational efficiency. The more efficient your processes are, the less waste there will be.

Many organizations track waste using metrics like pounds of solid waste sent to landfill, amount of waste diverted from landfill, and recycling rates.

6. Injuries

Monitoring safety performance is another way to measure corporate sustainability. How well an organization promotes worker health and prevents harm can be a good indicator of its ability to deliver long-term stakeholder value.

As such, injury rate is often viewed as a marker of management quality. Studies show that organizations with leaders who prioritize worker safety have lower rates of occupational diseases and injuries. These organizations also see better productivity, higher profits, fewer workers compensation claims, and less absenteeism and turnover.

Three of the most commonly reported metrics from worker health and wellness are lost-time incident rate, recovery time, and personal injury rate.

7. Pay equity

Income inequality can have harmful social, economic, and political effects. And according to the World Inequality Report 2018, income inequality has increased globally in recent decades.

Pay equity, on the other hand, refers to paying employees fairly. This includes closing race and gender pay gaps, involving more women in leadership roles, improving corporate governance and reining in out-of-control executive pay.

The most sustainable companies typically have a lower CEO-to-average-worker pay ratio, more women on their boards, and a link between sustainability measures and executive pay, according to the Corporate Knights Global 100, an index of the most sustainable corporations in the world.

Your next steps

So there you have it — 7 sustainability indicators to track in order to drive more sustainable consumption and better financial performance. To learn more, read this article on the future of sustainability or check out our corporate sustainability software.

 

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