Page 135 - Design for Environment A Guide to Sustainable Product Development

114 Cha pte r Se v e n

product design modification (see Chapter 5). A measurement system
that captures the sources and rationales for all aggregated scores will
allow “drilling down” for purposes of examining contributions of
individual components to overall performance. In general, no univer-
sal scoring scheme will suit the needs of diverse organizations, and
each company should develop a scheme that suits its business char-
acteristics and priorities.

Future Challenges and Opportunities
Environmental performance measurement remains a new and chal-
lenging arena, requiring significant commitment on the part of senior
management. The first hurdle that a company faces is establishing a
set of performance goals and indicators that are consistent with its
business philosophy. If common indicators can be adopted within an
industry, it will be easier for companies to benchmark their perfor-
mance and to communicate improvements to stakeholders. Such
industry-wide consensus is most easily reached on regulatory-driven
indicators (e.g., airborne emissions). However, multinational com-
panies must cope with international variations in regulations and
standards; for example, the United States has stricter standards than
Europe regarding incineration of solid wastes. Companies need to
decide whether their sustainability policies and goals will be applied
uniformly worldwide, or adjusted to reflect local constraints.
The breadth and complexity of environmental sustainability issues
makes it difficult to reduce the number of indicators, as evidenced
by the GRI Guidelines. It is tempting to try to aggregate various
performance indicators into an environmental index, which could be
used as a simple decision-making tool. However, as mentioned above,
aggregation raises a number of practical challenges. Efforts to weight
the indicators based on relative importance can potentially introduce
controversial value judgments. Indeed, performance metrics are much
more meaningful when considered separately, whereas the signifi-
cance of improvement in an aggregated index is unclear. Moreover,
an aggregated index may invite comparisons among dissimilar prod-
ucts or facilities, while concealing important differences.
Once corporate goals and indicators are selected, companies then
face the challenge of implementing environmental performance mea-
surement throughout their operations. In order to make genuine prog-
ress, a company will need to establish specific performance metrics
that can be “flowed down” to their operating managers, along with
targets for improvement, accountabilities, and programs of action. In
addition, a methodology needs to be established for normalization
(e.g., per unit of production) and “roll-up” of performance improve-
ment results to measure overall company performance. Implementa-
tion of such schemes will often encounter barriers, and companies
may require organizational alignment efforts to build understanding