How to Measure Sustainability Program Performance

Tags: Green Logistics

For many companies, sustainability has become a burning platform for exploring smarter ways to move product through the supply chain. Sustainability principles dovetail with transportation and logistics best practices to rationalize natural resource and raw material consumption, and ultimately reduce operating expenses.

In addition to the economics of eliminating environmental waste, an element of risk mitigation and competitive differentiation also exists in green matters. Given the global landscape, and steps progressive countries and companies around the world have taken to reduce their environmental footprint, regulations will inevitably become more demanding. If companies are not in a position to react to changing legislation, they will inevitably fall below the curve—especially in terms of being able to differentiate brand image and awareness among a more socially conscious consumer base.

On the service side, companies are now specifying that prospective supply chain partners demonstrate sustainability and corporate social responsibility initiative before bidding on their business. In effect, they are creating a baseline expectation at the outset of contractual relationships.

Many companies are considering ways to improve fleet fuel efficiency, and exploring more intelligent and efficient ways to manage freight—i.e., modal shifts and collaborative distribution models—as they look to establish sustainability standards they can measure, then improve upon. But there is always room for improvement. Here are three steps companies can take as they establish or adapt their corporate sustainability programs:

Step 1. Strategic planning and alignment. Assess the internal and external sustainability landscape to define your company's strengths, weaknesses, opportunities, and threats, as well as cultural values that may support your sustainability objectives. Recognize the voice of the customer, stakeholder priorities, and material issues that need improvement so you know where to focus your effort.

Step 2. Solution engineering. Define the sustainability assessment boundary or scope, then establish a baseline for measuring and improving performance.

Step 3. Operational excellence. Monitor performance. A lot of sustainability initiatives are driven by data capture, so make sure you talk about data compliance and communication, and identify pitfalls. Be specific about quantification and reporting—how to determine if sustainability has improved, and how to quantify, report, and communicate those results.

5 Guiding GHG Principles

The World Resource Institute's landmark Greenhouse Gas Protocol has published a corporate guide to help underpin greenhouse gas (GHG) accounting and reporting efforts. Its five principles include:

  1. Relevance. Ensure the GHG inventory appropriately reflects the company's GHG emissions, and serves the decision-making needs of users—both internal and external to the company.
  2. Completeness. Account for and report on all GHG emission sources and activities within the chosen inventory boundary. Disclose and justify any specific exclusions.
  3. Consistency. Use consistent methodologies to allow for meaningful comparisons of emissions over time. Transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series.
  4. Transparency. Address all relevant issues factually and coherently, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used.
  5. Accuracy. Ensure the quantification of GHG emissions is systematically neither over nor under actual emissions, as far as can be judged, and that uncertainties are reduced as far as practicable. Achieve sufficient accuracy to enable users to make decisions with reasonable assurance of the reported information's integrity.