Key CSR Metrics for Sustainability Advisors

leaf over business suit pocket implying corporate social responsibility

The Rise and Importance of CSR

Corporate Social Responsibility (CSR) is becoming one of the most important parts of any organization or business no matter what size they are, how much revenue they have, or what products and services they offer. As of this year, over 90% of the largest companies file annual sustainability reports (Forbes). Although you can read more about CSR here, in short, it’s the implementation of practices that elevate economic, environmental, social, and governance aspects of the company. 

photo from Putnam Investments

In the past, the idea of CSR or ESG was mostly a marketing ploy, but demand for real impact across many sectors has forced companies to mature in their approach to capturing their CSR metrics. This is a good sign, and there is even an increase in marketing on how companies are implementing sustainability and efficiency practices in their business. For example, see Chevron’s latest promotion: Doing More with Less. 

Source: Chevron, Linkedin

Sustainability Advisors Rising in Demand 

With global corporate leaders increasing their commitments to sustainability efforts, there is a rise in demand for sustainability consultants or advisors. These individuals plan and execute everything from sustainability initiatives like energy efficiency to corporate responsibility efforts like employee wellness programs or inclusion programs. 

Sustainability advisors, or whoever is in charge of CSR in-house will also have to implement appropriate metrics in order to ensure the company is staying on target with their goals, while also showing proof to their customers, shareholders, and employees that they are doing what they set out to do. 

 Key Current Metrics for Measuring CSR Efforts

Types of metrics used depends on the type of CSR program. We’ll look at different metrics from this paper on Sustainability Policy and Management from the Earth Institute at Columbia University published in 2014.  

1. Environmental Metrics – These metrics focus on things like greenhouse gas emissions per dollar of revenue or per product produced, amount of wastewater products, or amount of materials or bi-products that are reused or recycled. 

Some of the sub categories and the number of metrics available are as follows:

  • Energy (37)
  • Emissions (35)
  • Disclosure (30)
  • Water (24)
  • Materials (23)
  • Effluents and Waste (19)
  • Biodiversity (10)

“Carbon dioxide emissions are arguably the most well understood metrics from

the vantage point of the general public, as terms like “carbon footprint” have become part of everyday language.”

  • Sustainability Policy and Management from the Earth Institute at Columbia University

An example of a company embracing sustainability metrics, is BMW who has been working on sustainable transportation strategies.

2. Social Metrics – Social metrics relate to anything having to do with an organizations’ performance in equality and social justice. However, the metrics for this category are much more complicated to keep track of in comparison to environmental metrics. With that said, there are still ways for organizations to measure social metrics. 

Some of the sub categories and the number of metrics available for each category are as follows:

Private Sector

  • Human Rights & Resources (40)
  • Performance in Products,
  • Production & Supply Chain (20)

Public Sector

  • Safety & Health (84)
  • Population (12)
  • Infrastructure (11)
  • Budget & Expenditure (9)
  • Education (7)

An example of a company embracing sustainability metrics, is Hilton. In her Forbes article, Careers Contributor, Dana Brownlee writes:

“Ranked #1 on the Fortune List of the 100 Best Companies to Work For, Hilton has implemented various initiatives designed to enhance employee engagement including the Hilton Senior Leadership Business Immersion program. Hilton’s Chief Human Resources Officer Matthew Schuyler describes the program as ‘an experience that connects senior leaders to the most fundamental aspect of the business – hotel operations. The three-day program entails working back of house, or what we refer to as ‘Heart of House,’ in departments including Housekeeping, Food & Beverage, Banqueting and Engineering.’”  

3. Governance Metrics – The research in this report found 196 governance metrics that are being used by organizations. These indicators track things like the responsiveness of a company to their investors, their shareholder rights, and the company’s board is structured fairly. In addition, things like executive salaries compared to an employee’s salary is an important governance metrics that is easy to implement. 

Some of the sub categories and the number of metrics available are as follows:

  • Transparency (121)
  • Equality & Fairness (36)
  • Efficiency (21)
  • Corruption (18)

An example of a company embracing governance metrics, is Buffer. This article in Entrepreneur discusses how Buffer gives importance to the standards and values that contribute to their work culture. The social media scheduling company places emphasis on transparency by revealing salaries to the whole organization, allowing the pay rates from various positions within the company to be made public. 

Metrics are Key in Tracking CSR Efforts

We know that CSR is not only a trend now, it’s expected for companies large and small to have a CSR program in place, and for someone to be tracking the metrics on every aspect of it, including environmental, social, and governance. Subcategories for each of these areas include things like carbon emissions per dollar of revenue, employee salaries, and investor relations practices. Organizations may have in-house sustainability officers, or outsource a sustainability consultant or advisor to implement and track their ESG efforts. 

“The role of business is to create and deliver products and services in a way that treats people fairly, meets individuals’ needs and aspirations within the boundaries of our planet, and encourages market and policy frameworks that enable a sustainable future.”

Source: Google images, Quinn & Partners

October 2, 2019

Leave a reply