Small-medium business sustainability metrics yalonis-SEC5.12

Sustainability Performance Metrics: Measuring what Matters for SME’s

Presentation to Sustainable Enterprise Conference

Chris Yalonis, Managing Partner, Sustainametrics415-309-0331

Content

• About Sustainametrics• Why measure sustainability performance?• Design: alignment with business ops and goals• Most critical measures• Best practices• Reporting

About Sustainametrics• Sustainability intelligence and consulting firm helping

SME’s, colleges and government entities green their operations and products/services.

• Our Core Competencies – Sustainability plan development– Green Certification– LCA, product design, voice of the Green

customer– Materials, Water and Waste Management– Energy and Greenhouse Gas Management– Training and workshops, green team facilitation

• 150 years of experience in sustainability, energy, lean manufacturing, eco-branding, LEED certifications, environmental engineering

• Can act as outsourced Sust. Director but with deeper experience, team resources, network connections

• Sustainability plan and program set-up for Green Seal

• San Francisco Scavenger: LEED Silver certification application and execution assistance

Clorox Greenworks

• Market research, product formula tests, market tests with 1000 household online community

Columbia College

• Strategic Sustainability Plan development and Stakeholder education/ engagement.

City of Napa

• Sustainability Plan for City Govt Ops and Community

Why Sustainability Intelligence?• Just like business intelligence has become a critical

management tool, sustainability intelligence is evolving as a foundation that integrates the triple bottom line and provides insight in making better system level decisions

• Sustainability practice leaders are drowning in information, starved for knowledge

• Battle for human and financial resources requires ROI, quantitative justification

• Self control and empowered individuals, teams, communities require that they know:– What is expected– What resources are available– How they are doing against expectations

The role of metrics in strategic planning and execution

– Metrics should be a reflection of goals and strategic plan

– Requires a baseline and feasible targets, resources

– Must install a sustainability operating system (SOS)

• SMART goals• Action plan• Owner/governance• Funding• Schedule• Rewards/incentives• Reporting

What makes a a SMART Metric?

Common Economic Practices/Indicators

• Economic– Planning

• Business Plan• Succession Plan• Marketing Plan• Strategic Plan

– Performance• Investing in Capital• Growing Profits• Positive Cash Flow

– Practices• Employee Professional Development• Standard Accounting Principles

Environmental Practices/Indicators• Environmental

– Watts (Energy)• Review Gas and Electric Bill for the purpose of reducing consumption• Adopt written goals about reducing energy consumption

– Water• Review monthly bills for the purpose of conservation• Install new or retro fit appliances

– Waste• Measure production• Purchase/sell products with reduced packaging• Reuse items and recycle as much as you can

– Wheels (Transportation)• Incentives/Reduce barriers for use of alternate modes of

transportation• Explore telecommuting/online meetings/teleconferencing

Social/Community Practices/Indicators

• Social Responsibility– Family Friendly Policies

• Paid or unpaid leave for birth/adoption of a child• Paid or unpaid leave for care of a dependant• Provide a group health plan for employee participation

– Civic Participation/Corporate Responsibility• Make cash or in-kind contributions to local non-profits• Match Employee contributions to local organizations• Internship opportunities for local youth

– Volunteerism• Give employees time off to volunteer in schools or with agencies• 100% of senior management serve on the board of a local non-

profit.

Examples of functional areas and metrics:

Energy/climate GHG-climate neutrality, watts/therms/sq ft. or unit or employeeEnergy efficiency, GHG/$, use calculators from EPA or cleanair-coolplanet.org for energy bill-co2 conversion ratios

Materials % of purchases from sustainable sources Processes % of employees paid market based living wage/benefits

LEED qualified building/remodels Products/services % of sales from sustainable/green products/services

Customer satisfaction ratings of LOHAS/Green product customers, impact of sustainable features and company behavior/reputation

Waste Diversion rates, reduction of absolute waste levels/unit or employee Partners/supply chain % of suppliers who meet defined sustainable index thresholds Community Profits/time donated

Local sourcing as percentage of total procurement

5 W’s X 5 P’s (5 Work Plans model)Simple frame to review company’s sustainable practices

Watts Waste Water Wheels Wellness

Products

Process

People

Purchasing

Plant (buildings)

For each cell, assess what is working and not, design SMART

goals/metrics, report

3 Key boundaries of Footprint Measures

Company GHG Emissions

Product Impact Tools

LCA and “Hot Spots”

Best Practices in Using Metrics

• Ensure a balanced scorecard in your metrics-cover range of performance measures-soft and hard

• Use the right scale and units (ie. CO2 /square ft)• Get ownership in use and maintenance of ongoing updates and reports• Keep the number of metrics to 5-7, a manageable amount to keep

attention• Combine metrics that are leading (energy conservation and efficiency

measures) and lagging (energy use)• Draft your reporting in advance and map data gathering to it• Align reporting to your industry reporting protocols and green

certifications (LEED, GRI, Green Seal, STAR)• Publish Web based dashboards to make them memorable to employees

and stakeholders

Keep Reporting Concise and Memorable

Align metrics with attaining/retaining Certifications/Eco-Labels most important to your customers

Savings on Investment Return on InvestmentOutcomes based on savings to the budget

Outcomes based on financial benefit on the bottom line

Focus on eliminating waste and improving processes

Focus on systems approach and long-term growth

Measurement by cost savings Measurement by statistical analysis

Diminishing returns Potential increasing returns

Measure ROI + SOI

Use Dashboards (Credit 360 example)

- Software for Carbon management vs sustainability intelligence-ISSP report on reporting software- Favorites for SMB’s- Credit 360, IReuse

iReuse Performance Tracking

Take-aways

• Start small, at the level you can maintain the effort

• Go through all the steps of planning and design: Assess, set goals and accompanying SMART metrics

• Assign owners of reports and update data• Measure Cost Savings and ROI• Report out key 5-7 KPI’s with dashboards

Thank you!

• chris.yalonis@communiquepartners.com• 415-309-0331

Reference materials• Sustainability Planning, Darcy Hitchcock and Marsha Willard, Pages 65-79• Ecological Intelligence, Daniel Goleman• ISSP 2010 Directory of Sustainability Planning & Reporting Tools, LCA tools

– http://www.sustainabilityprofessionals.org/resources/general-resource• Standards

– http://www.greenbiz.com/print/43386