Measuring Environmental Performance
In a corporate climate that embraces the adage that “what matters gets measured,” the ability tomeasure and evaluate environmental performance allows environmental staff to demonstrate thevalue of its programs and gain equal footing with other business objectives. The process ofmeasuring environmental performance entails developing goals, creating metrics by which toevaluate progress toward achieving these goals, and utilizing Environmental ManagementSystems (EMS) to demonstrate achievement of these objectives. In addition, companies mayrealize improved return on investment (ROI) for environmental initiatives, though quantifyingthis affect can be difficult. This article outlines the process through which companies canevaluate environmental performance.
Goal Setting For Environmental Performance
Setting environmental performance goals lays the foundation for future program evaluation. Intheir article titled “Environmental Performance in Industry: Hidden Risks and Value Potential forStrategic Investors,” Martin Whittaker, Ph.D. and Matthew Kiernan, Ph.D. describe the cyclicalmanner in which setting and achieving environmental management goals can enhance overallbusiness performance. Setting environmental goals leads to improved environmentalperformance, which can lead to expedited permitting with regulators and in turn create fastertimes-to-market for new facilities and products. This success may contribute to additional marketshare and profitability. If the success is viewed as related to the underlying environmental goals,then the corporate view of the environmental management program can be enhanced.
Environmental management goals fall within categories such as achieving compliance,recognizing business opportunities, and answering public expectations. Effective goals bearseveral characteristics. First, managers must express goals positively. “Execute this process well”is a better goal than “Don’t perform this process badly.” Second, goals should be precise andmeasurable so that progress toward them can be tracked and evaluated to determine the relativesuccess of environmental performance. Concrete goals include the following:
- Reduce hazardous waste by 25 percent by 2003
- Reduce SARA reportable releases by 35 percent by 2005
- Recycle 50 percent of alcohol solvent
Environmental management goals typically derive from broad company policies, includingmission and vision statements, as well as corporate financial goals. The goals should considercosts and savings associated with achieving each objective and anticipate operational changes thatcould affect these aims. They must also consider public perception and the impact the goalscould have on customers. Setting concrete goals for environmental performance provides auseful internal means for evaluating EH&S program success.
Metrics For Environmental Performance
In order to develop metrics, organizations must determine which environmental goals areappropriate for evaluation via metrics. Three environmental strategies often tracked via metricsinclude energy use and related carbon dioxide (CO2) emissions reduction, nonrenewable rawmaterial use reduction, and chemical emissions reduction.