Between 2007 and 2011, companies that reported on their sustainability efforts outperformed the broad S&P 500 Index.1 Having invested considerable levels of effort into estimating the potential benefit of projects, it is important that a similar level of discipline be exercised toward measuring the results achieved.
The Importance of Measuring Impact
Effectively measuring the results achieved will be essential to program success for several reasons:
Recognition of the Benefits Generated: similar to the process of assessing projects, it is important to accurately calculate the full spectrum of benefits each project actually generates. Having reliable data that substantiates the benefits generated will ensure the value of the project undertaken is not debated.
Reliability of Project Assessments: measuring the results allows us to compare our initial estimates with the actual outcomes. From that, we can figure out if our projections were too conservative, too ambitious, or right on target. We can also make adjustments to how we generate estimates during the next cycle to increase accuracy. As the reliability of estimated values is perceived to increase over time, so will leadership’s confidence.
- Meeting Regulatory Requirements: government-imposed reporting requirements are expanding all of the time. While the data collected and analyzed may not be essential today, being prepared by developing reporting capacity in advance will eliminate the need to scramble when the time finally comes. For example, by 2017 7000 EU companies with more than 500 employees will be required to include a range of sustainability factor within their financial reports.2
Process Improvement: by measuring results, it becomes easier to determine what worked and what didn’t. By identifying underlying or systemic issues, the process of adopting and implementing projects can be better improved over time.
Program Advancement: with clear, accurate and measurable results available, it’s easy to communicate the benefits the program has generated. That will support the Program’s perceived importance as its value is demonstrated to organizational leaders, employees and other stakeholders alike.
The Process of Measuring Impact
Like with data collection and project assessment, taking stock of results will hinge on the measurement capacity developed during the Program Setup module. To maintain the credibility of the numbers captured, keep these ideas in mind:
- Use consistent measurement techniques before and after project implementation.
- Reuse the processes employed during Data Collection, where possible.
- Consider a third party review, especially when the reliability of information is being questioned. When securing government incentives or performing regulated reporting, that may be a legal requirement.
In addition to measuring the outcomes of each project individually, it is a good idea to look at the results of the group of projects as a whole. Those aggregated results can be measured against the overall objectives and the program vision to help ensure the program is on track. Looking at the bigger picture can help identify both the areas for improvement and the biggest contributors to success.
1. Read more about how companies that reported on their sustainability outperformed in the Governance and Accountability Institute’s report, 2012 Corporate ESG/Sustainability/Responsibility Reporting: Does it Matter?, December 2012.
2. Learn more about the new EU laws by reading It’s the Law: Big EU Companies Must Report on Sustainability on GreenBiz.com here: http://www.greenbiz.com/blog/2014/04/17/eu-law-big-companies-report-sustainability