Globally, responsible businesses are taking the lead in embedding sustainability in their operations. It is now time to scale this initiative and integrate measurability as a key element in business sustainability blueprints.
The landmark report by the Intergovernmental Panel on Climate Change (IPCC) in 2018 was a powerful clarion call for climate action. Underscoring the unprecedented and immediate need for collective effort to limit global warming, the report emphasizes the role of businesses as an important factor. The quantifiability of the 1.5-degree-Celsius goal and the measurable steps to achieve it as outlined in the report have created a global sustainability mission that combines social, environmental and economic dimensions. To save the world, we must strive to move the needle across all three targets.
For a business, a measurable sustainability target is a powerful starting point. The concept of measurability is embedded in business thinking, in the form of audits, quarterly and annual reports. Metric-based decision-making enables corporates to vigilantly course-correct towards desirable outcomes. Similarly, measurability must be the lens through which businesses engage, deliberate courses of action, and ultimately achieve sustainability goals.
Pre-Assessment and benchmarking
The starting point of measurability is understanding the current sustainability status quo and benchmarking the intended goals. A pre-assessment entails analysis of the current environmental, social and economic impact and then contextualizing it with the purpose and overall strategy of the business. The most common performance metric is the mitigation of CO2 emission. With quantification of larger, long-term impact on society, a business can proceed to the next level – making informed decisions to create a more sustainable ecosystem. Considering the immensity of the 1.5 C goal (e.g. reducing greenhouse emissions to net-zero by mid-century), challenging but realistic targets need to be set for measuring performance. These can be distilled down to specific key performance indicators for employees, operations, and the enterprise at large.
Track of progress and proof of impact
Once underway, sustainability needs to be tracked vigilantly so that material issues that arise are addressed swiftly. The short and medium-term milestones also need to be mapped out; these can be examined for delays or inefficiencies. At the same time, an understanding of what is working well for one department can be replicated in others.
Measurability drives action in an organisation. After all, what gets measured properly, gets managed properly and eventually gets done properly. Measurable metrics directly impact a business’s current performance and set the tone for the future as well. Consistent measuring of progress provides clarity on the level of performance or the lack of it. Moreover, tracking progress and communicating milestones within and outside the organisation creates a culture of accountability and transparency.
Having a metric also offers two benefits. If underperforming, a company can realign its resources by immediately assessing if there is a lag at any point between intention and outcome. On the other hand, targets achieved ahead of schedule must be made even more ambitious. After all, environmental responsibility is not a one-time campaign to be executed and then forgotten; it is a new transformative agenda for businesses across the globe. Charting a new course is also good for the bottom line. Business sustainability always goes hand-in-hand with long-term profitability and provides a clear incentive to strive to be greener and more sustainable. Customers want products that have a low carbon footprint; employees look up to businesses that can deliver social good on a substantial scale. Climate Action is also part of the United Nations’ Sustainable Development Goals (SDGs). Achieving them can unlock an estimated $12 trillion in potential growth and generate or retain millions of jobs.
Leading by Example
Responsible business must also define how operations are powered, raw material is sourced, new products are created, and supply chains are made resilient against climate change. A measurable sustainability-oriented approach is, therefore, at the core of business growth and resilience. Responsible businesses around the world have already started on this path to sustainability. An example is the Ford Motor Company’s measurable sustainability goals: it plans to use 100 per cent renewable energy for all manufacturing plants by 2035 and achieve zero air emissions from its facilities. With these measurable goals, it is streamlining its portfolio, improving fuel efficiency, and lowering emissions, energy use and water consumption. To increase transparency about the resiliency of its climate change strategy, Ford recently published a Climate Change Scenario Report.
Despite the climate and business benefits of such plans, greening the business strategy does not get the attention that it deserves. According to a 2018 PwC report, only 27 per cent of 700 global companies include the Sustainable Development Goals into their business strategy. The corporate world is an integral stakeholder in the journey towards a sustainable future. It is incumbent upon all of us to not only scale up our efforts but also embed measurability in every step of the way. The time window to curb global warming is slowly shutting. We do not have an option to be oblivious.
The time to act is now or never.
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