Oct/Nov 2016 VOL 14 No. 5
Nicholas R. Hild, PhD.
In Part I in the last Journal issue, we learned that companies wanting to fill EH&S positions are interested in learning about an applicant's knowledge about ways to measure environmental sustainability. Since the use of the term, 'sustainability' has proliferated and is being applied to every kind of endeavor imaginable, it is important that a company knows how to focus their sustainability efforts on reducing the impact of their operations on the environment. They need to know that a EH&S applicant is focused on environmental sustainability and understands how to advance their efforts in reducing the company's impact on the environment. In other words, knowing what tactics and tools are available to implement and measure sustainable progress in greening the company's bottom line becomes crucial to a company's sustainability program.
Much of what we provide to our students about real-world sustainability comes from the literature and/or from guest lecturers from industry who are truly the experts in implementing sustainable practices in companies and organizations every day. Fortunately, there are also reputable sources who have done some of the research on how we measure sustainability today and some of the best are profiled here.
Perhaps one of the most knowledgeable researchers on environmental sustainability is Eric Nitzberg who most recently wrote about ways to measure environmental sustainability in The Stanford Social Innovation Review (Online) (January, 2016). What is important about his research is that he covers a broad array of survey tools available for corporations and non-profits which provide a level playing field for sustainability comparisons both within, and across industry sectors. His conclusions are that this cross-section of sustainability measuring instruments provides excellent information about the way a company manages and minimizes its impact on the environment.
But, Nitzberg also cautions that we should also consider such measuring tools with a certain cynicism because, most companies invest heavily in creating a positive public image, which may or may not be accurate (insofar as being a truly transparent portrayal of their environmental sustainability). Realize that companies are under no obligation to follow any type of standards when they write those reports so how would we evaluate the best answer to the HR interview question: what are ways you can suggest to measure our company's sustainability efforts?
It turns out, Nitzberg and several other academic researchers have found that there are organizations (like LEED, for instance) who have established some common standards to help companies and agencies answer this very question. Among these organizations are these that Nitzberg recommends for most businesses because their standards can be "measured" across many different types of industries and are relatively easy to manage from the staff level all the way up to the executive directors whose names go in the Quarterly and Annual Reports.
In no particular order, here then are four organizations which Nitzberg says offer good measurement tools for determining just how effective a company's sustainability programs are with a brief summary of their usefulness: First, the Global Reporting Initiative (GRI) is an international nonprofit that provides a framework for corporate sustainability reporting. Many large companies already use GRI's guidelines which cover the key areas of governance, environment, financial, and social impact.
Another sustainability assessment tool recommended by Nitzberg is B-Labs, a nonprofit that has created a comprehensive online assessment tool that offers certification to companies that earn 80 out of a possible 200 points on the assessment. They also offer an objective way of comparing corporate sustainability across different industries.
Sustainability Accounting Standards Board (SASB) is a US-based nonprofit that is creating accounting standards for sustainability. One way to understand its mission is to look at the universally agreed-upon standards that exist for financial accounting and reporting in the US today. SASB is working to create similar standards to account for sustainability. (See also IJAAP below)
And, finally, there is the Dow Jones Sustainability Indices (DJSI) which are indices that evaluate sustainability of the largest 2,500 companies in the world. To create them, Dow Jones partnered with RobecoSAM, a Swiss sustainable assets manager, which did (and does) the research that forms the indices' foundation. The indices are specifically focused on sustainability factors that will materially impact the company's financial performance—what RobecoSAM calls "financially relevant sustainability criteria." Thus the DJSI focus on sustainability factors that are expected to impact long-term financial viability of a company.
Currently, there are 59 different versions of the assessment tailored to different industries so, for that reason, the DJSI would seem to be a priority for job seekers to learn about if they want to be truly prepared to answer the question, 'what method would you recommend to measure our company's sustainability progress?'
Other Sustainability Measurement Sources
As noted before, there are numerous refereed Journal articles in the literature that deal with the concept of how to measure sustainability in companies and public agencies. One of the best that deals with measuring 'sustainability' is, An Extended Performance Reporting Framework for Social and Environmental Accounting by Kittiya Youngvanich and James Guthrie which appeared in the Journal of Business Strategy and the Environment, (2006). This particular paper is just one that deals most directly with measurement indices for industrial manufacturing companies but there are many more that will be of interest if you want to be up to date with measurement techniques for sustainability, some of which are written from a whole different point of view.
For instance, also appearing in a later Journal of Business Strategy and the Environment (October, 2007), is a rather 'quirky' sustainability paper titled, Dart Boards and Clovers As New Tools In Sustainability Planning and Control by Massimiliano Bonacchi. It takes a somewhat humorous approach to managing sustainability programs in some specific circumstances that are less flexible for use across a wide range of applications.
InderScience.com is an ONLINE publishing site, among others, which publishes some of the papers for the International Journal of Accounting, Auditing and Performance Evaluation (IJAAP). They frequently publish research papers on sustainability accounting methodologies one of which is, Integrative Management of Sustainability Performance, Measurement and Reporting by Stefan Schaltegger and Marcus Wagner, (2006). This refereed paper explains how sustainability indices can be crafted from standard financial accounting principles and would be important to financial analysts who have to provide reports on the financial impact of a company's sustainability programs. (See also SASB above)
Another Business Strategy and the Environment publication in March, 2009 featured a paper by Graham Hubbard titled Measuring Organizational Performance: Beyond The Triple Bottom Line which deals with the familiar 3-legged-stool of sustainability: social, environmental, and financial, the 3 critical elements which impact the greening of the bottom line. Many companies have adopted the principals of the Triple Bottom Line (TBL) in their sustainability programs and this paper helps to set standards for measuring that TBL. (See also Wikipedia for further explanation for a historical TBL perspective).
As noted earlier, there are hundreds of papers and literally dozens of measurement instruments that are covered in the literature, each having their own applications that may be specific to your needs. What I have recommended here, especially the four systems that came from the Nitzberg research, is meant to provide job seeking EH&S professionals with basic answers to the question: how do you measure a company's environmental sustainability? The information is provided here in the interest of ensuring that our environmental footprint gets smaller for the future of our children's, children's, children.