By Tim Reeve
September 22, 2011 - How many
times have we heard it, "You can't manage what you don't measure"?
It's a management consulting mantra that is repeated so often
you could almost tune it out.
"Yes, of course" we affirm to our peers and
colleagues. But inwardly most of us would agree that developing
good key performance indicators (KPIs) and accurate tracking
mechanisms are generally underdeveloped across the triple bottom
line, and definitely in their infancy when it comes to sustainable
purchasing.
Yet the reality is that metrics are a key success
factor in building out a solid sustainable purchasing program,
providing a clear indication of program strengths, weaknesses, and
by extension, areas for future development and improvement.
Nonetheless, at Reeve Consulting our experience has
been that the development and measurement of quality metrics is
often overlooked or identified as a future priority.
We know clients face organizational challenges to
implementing quality measurement systems, such as a prioritization
of policy and procedure at the expense of performance tracking, or
difficulty measuring the 'green-ess' of products and suppliers,
which can be time intensive and confusing. Further, traditional
accounting systems often don't consider sustainability
measures.
While we won't attempt to address all these issues
in a single blog post, some of our recent work has us compiling a
set of useful resources for developing customized metrics for
sustainable purchasing reporting and management systems, both for
measuring overall program performance and specific aspects - such
as purchasing categories (e.g. vehicles). We've shared a collection
of these below.
To get started, we've also created a short list of
key tips for developing effective metrics, which we encourage our
clients to consider at the outset.
Key Tips for Developing Effective
Metrics:
1. Link to corporate sustainability
initiatives - An important step in customizing a set of
metrics is to ensure they are linked to corporate sustainability
objectives and reporting systems. For example, if your corporation
is concerned with minimizing waste, then sustainable purchasing
metrics should include performance measures related to the amount
of waste diverted by buying products with reusable or reduced
packaging.
2. Realistic to measure - Also,
ensure that you will be able to realistically measure the outcomes
of all metrics overtime. Building on the earlier example, if waste
reduction is measured at the corporate level, set a metric that
requires measurement of packaging reduction in a few product
categories, rather than all product categories, the latter being
more time consuming and difficult to measure.
3. Plan to expand - Don't get
bogged down in the development stage by trying to define a
comprehensive set of metrics and reporting processes. Plan to
expand your metrics and performance reporting with time. Start with
realistic metrics to ensure early success in reporting.
Helpful Resources for Developing Customized
Metrics
Metrics for tracking at the Sustainable
Purchasing Program Level
- The Global Reporting Initiative
(GRI) provides high-level performance indicators
that have been adopted by many corporations across the globe. You
can also view the GRI Product Responsibility Indicator guide HERE. You may want to align your tracking and
reporting systems with relevant GRI metrics.
- The Vancouver Olympic Organizing Committee's
Sustainability Report includes metrics for sustainable
purchasing practices, including Aboriginal purchasing metrics. The
Organizing Committee was well recognized and rewarded for their
sustainability management and reporting, which is considered a
leading practice amongst sustainability practitioners. This report
includes sample metrics and targets for sustainable
purchasing.
- Kaiser Permanente, a USA-based
healthcare organization that Reeve Consulting has interviewed on a
few occasions around their best practices, has recently developed
the PS Annual EPP Success Story Achievements document that outlines
the metrics they're tracking and reporting with regards to EPP
(environmental preferable purchasing). This includes metrics for
vehicles and office IT equipment.
Metrics for tracking impacts at the Product
Level
- Third-party Eco Label standards can also be
used to identify metrics. For example, the key environmental
attributes (e.g. toxicity, material utilization) of the individual
standards developed by Canada's EcoLogo program for different
products could be used to determine what you track for specific
product categories, such as office equipment, furniture, etc. The
Responsible Purchasing Network has outlined a
detailed list of other third-party eco label standards that you may
want to consider.
- The Responsible Purchasing Network also has a
wide variety of calculators that can be used to measure the impacts
of your sustainable purchasing practices. They are product
specific. It is recommended that you try using existing online
calculators to help you measure the impacts of specific product
categories as a starting point. For example, they have an Office Electronics Calculator, so you may want
to develop metrics for this product category, knowing there is a
calculator in place to help you assess outcomes.
E3 Fleet Rating is designed to
evaluate and recognize performance, and allows fleets to be rated
at the Bronze, Silver or Gold level of performance. E3 Fleet Rating
uses a point-based Rating System Checklist for rating
fleet performance, with points for fleet management practices and
energy/emissions performance.
Look to your suppliers to help develop reasonable metrics. Many
of your suppliers may already be tracking the environmental impacts
of their products. Consult them to learn what data they can provide
and then set metrics related to this data.
For example, Cascades is tracking valuable data related to their
paper products (e.g. tissue) that could be used to measure the
impacts of buying more green cleaning products. As the following
link shows, Cascades can provide data for water usage, recycled
content in packaging, reduction in the use of trees, etc. that is
related to the products they manufacture. Click HERE for details
Tim Reeve is a sustainability expert
whose firm, Reeve Consulting specializes in sustainability
strategies and programs for the Olympic Games, major sporting
events and leading private and public sector clients. He is a
co-founder of the Sustainability Purchasing Network (SPN), a
networking and training association for supply chain and
sustainability professionals.