Page 122 - Design for Environment A Guide to Sustainable Product Development

Performance Indicators and Metrics 101

FIGURE 7.2 Examples of environmental “footprint” and “value” aspects.

• Each individual and team in the company must have a means
of relating their own objectives to the achievement of these
metrics, so that they receive correct signals regarding their
contributions to shareholder value.
• A system must exist for tracking the achievement of perfor-
mance targets and providing appropriate recognition to those
responsible.
• As decisions are made at all levels of the company, a means
must exist for understanding their impacts upon the affected
performance metrics.
Thus, it is not sufficient to select and announce the metrics of
interest—they must be made operational through deliberate inter-
vention into the organizational culture, processes, and reward sys-
tems. Many companies define a small set of key performance indicators
(KPIs), such as revenue growth, that evaluate progress toward their
critical business goals. Having environmental indicators included in
these KPIs can provide a powerful incentive for genuine progress. To
accomplish this, companies are augmenting the conventional indica-
tors favored by external stakeholder-driven organizations. As dis-
cussed below, leading companies such as 3M, DuPont, and General
Motors have devised internal measurement tools that are value-driven,
reflecting the positive impact of sustainability improvements upon
shareholder value.
The principles of performance measurement are set forth in envi-
ronmental management systems standards such as ISO 14001 and
EMAS (see Chapter 3). They require that the organization evaluate its
environmental “aspects,” that performance goals be established by
senior management, and that progress toward these goals be moni-
tored using an environmental performance evaluation system.