In the Measurement Capacity section of Program Setup module, we explored the triple-bottom-line and what’s involved in developing the capacity needed to effectively measure economic, social, and environmental sustainability.
We will now put the capacity developed to work by collecting the data required to assess our sustainability. The first step involves determining what exactly to measure; that is, we will determine the scope of our data collection.
Collecting good data can be expensive and time consuming, so we need to balance what we would ideally collect with what is practical. To prioritize and determine the most important sources of impact to measure, we recommend using the following process.
*Note: in the case of measuring environmental sustainability, the process is officially called setting operational boundaries, and it is a key step involved in calculating a carbon footprint. For more information on carbon accounting terminology and practices, please refer to the Measurement Capacity section.
To learn more about sources of impact refer to “Setting Operational Boundaries” in chapter 4, page 27 of the GHGP here
Identifying All Applicable Sources of Impact
The sources of impact that are relevant will vary from one organization to the next based on any number of factors like the type, size and industry of the organization. At this stage, it is most important to build an exhaustive list of sources of impact without concern for whether or not they will be included in scope. With that said, effectively identifying all potential sources of impact can be a more challenging task than it might seem.1
Sources of Economic Impact: Because financial performance is so critical to organizations in general this pillar can be quite challenging to address. A great deal of investment, leadership and expertise are devoted to managing finances so adding to or changing what gets measured can be contentious. There is really no trick to deciding what is included within scope. The capacity and data are likely available to include additional sources of economic impact within scope; the more imposing barrier is likely to be the individuals that currently own the organization’s finances.
Sources of Social Impact: One technique for identifying sources of social impact is to build a stakeholder map. The process involves identifying all stakeholders both internal and external to the organization and defining all of the ways they can be impacted, positively or negatively, by the organization. Keep in mind, stakeholders are not limited to groups of individuals with whom the organization has a relationship; they include anyone that has an interest or concern related to the organization.
Sources of Environmental Impact: Similar to the technique just described, an organizational mapping exercise can be quite helpful toward identifying all sources of environmental impact. That involves creating a visual representation of all inputs and outputs related to the organization. Having a complete visual representation of the organization’s operation will make it easier to ensure nothing is missed.
Sources within each scope as defined by the GHG Protocol2
Consulting a representative(s) of each department or area – a Subject Matter Expert who has an in-depth knowledge of the relevant activities, stakeholders and resources involved – is another valuable tactic. As discussed in the Change Management section, engaging and involving staff is necessary for generating buy-in and shifting culture, but it is also critical to be sensitive through the approach. It is a good idea to keep the following in mind:
- Be respectful of staff time and effort being requested, especially if approaching individuals during a particularly busy or critical time. In some cases, the program’s needs cannot come first and any requests for support should be tempered accordingly.
- Be prepared to speak candidly and confidently about the effort the organization has undertaken, why it is a priority, and how the program will affect the organization and its people. Employees are most likely unfamiliar with the changes involved in adopting a program of this nature, and will naturally have questions.
- Thoroughly explain the need to identify sources of impact and the importance of each employee’s contribution to the process. That will help eliminate the assumptions individuals are likely to make when left to draw their own conclusions about why they are being asked for information.
Assessing the Importance of Each Source of Impact
To effectively establish what to measure, the next critical step is to determine which sources of impact are likely most important. Below are several criteria that should be considered as part of assessing the importance of each source of impact:
- Relevance: how related a source of impact is to the priorities and objectives of the program, decision makers, and the organization as a whole.
In a 2000 square foot medical office where energy costs are included within the cost of rent, measuring the risk of increasing energy prices isn’t likely to affect decision making.
- Simplicity: how easy a source of impact is for anyone to understand, regardless of their level of expertise.
A concrete measure of repeat business revenue is likely to be simpler than developing a new method for quantifying customer loyalty because no standard method exists.
- Practicality: the degree to which a source of impact can be measured without using a significant amount of time, money or other resources. The measurement capacity established as part of setting up your program will likely influence how practical it is to measure each potential source of impact.
At a small factory that manufactures sunglasses, it would be less practical to attempt to measure the impact of how their products are disposed of at their end of life versus the impact of shipping them to retailers.
- Reliability: how much a source of impact can be measured using unbiased, trustworthy and verifiable information and methods.
In an industrial plant setting, measuring productivity is likely to be more reliable than a less quantifiable source of impact like employee satisfaction.
- Influence: the degree to which a source of impact is controlled or can be directly affected internally.
A restaurant is more likely to be able to influence the travel methods employees use than it is able to influence the travel of its customers to and from their location.
There are two additional criteria that are more difficult to apply but may be worth consideration:
- Significance: how large the source of impact is in comparison to others. It can be difficult to estimate the significance of a source of impact before actually measuring its size, but sometimes a very basic assessment can be quite telling.
A manufacturing plant that sources components from dozens of suppliers to assemble air conditioners will likely assign greater significance to their production materials than the supplies they purchase for the office.
- Potential for Improvement: the magnitude of the potential improvement that can be made by addressing a source of impact. Again, it can be difficult to estimate the potential for affecting the source impact before understanding the feasibility of various projects, but sometimes a simple review of possibilities can provide a helpful indication.
Consider two organizations, each with a large fleet of vehicles. One consists of older vehicles and the other leases a fleet that was recently replaced. Due to the age, the potential for reducing the environmental impact of the older fleet is much greater.
Securing Buy-In and Adopting a Final Set of Sources of Impact
Having determined which sources of impact are most important, the final step is to finalize which sources of impact to include within the scope of the data collection to be performed.
To help facilitate the process of securing support, change management tactics should be carefully employed. Consult with the stakeholders, and secure the buy-in of those who will be involved in collecting data as well as those eventually using it to select among project options. Finally, remember that the scope defined is not set in stone and can be easily adjusted as necessary over time.
1. See Going Beyond the Waterfall: Managing Scope Effectively across the Project Life Cycle by Barbara Davis and Darren Radford for more on breaking down various scopes. Available in print.
2. The source of this diagram is chapter 4, page 26 of The Greenhouse Gas Protocol – A Corporate Accounting and Reporting Standard found here: http://www.ghgprotocol.org/files/ghgp/public/ghg-protocol-revised.pdf