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:
- 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.
- 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.
- 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.