Quantifying the unquantifiable in sustainability
Sustainability measurement is important because it enables us to understand the environmental burdens of our actions, set targets to reduce this and monitor our progress in these endeavours. We use a variety of measures: fuel consumption, diversity metrics, waste to landfill, etc. Yet there are markers of sustainability that are not so easily quantified, and for these our measurement, and the subsequent benefits, are significantly limited.
These ‘unquantifiables’ occur across the triple bottom line so impact our understanding of every sustainability theme. Examples include the measurement of collaborations – how do you quantify the benefit of knowledge sharing, cooperation and countless other impacts of collaborative working? Or diversity – the value of having a breadth of experience and perspective on a project?
Where we are now?
The current state of affairs is varied. Certain characteristics, particularly those more closely aligned with the strategic success and profitability of a company, are often clearly measured across sectors with depth of understanding to back up the numbers. However, those areas with less obvious links to traditional ideas of business success have often had less invested in their measurement. This is likely due to the perceptions of those involved: perceived unimportance and lack of understanding in how the metrics fit into the classic corporate landscape, or perceived difficulty of the task leading to deferment.
Benchmarking organisations such as the CDP, DJSI and FTSE4Good rely on quantifications of sustainability. Quite often there are internal processes, such as supplier surveys, which require evidence for ‘scoring’ purposes, but the processes by which a policy or conversation is converted into a ‘score’ on which an organisation is then judged is largely unclear. Neither the processes or evidence are shared with others in their industry or field, so there are silos of potentially good measurements and metrics however no way to access or learn from the best practice.
What are we trying?
Ernst & Young have developed a technique that quantifies sustainability across ESG themes called Sustainable Value Added. This model calculates the CSR benefits of a given action in the ESG and economic outlays of that action and the overall opportunity costs of all actions in the context of general economic landscape in a numerate method of adding gain and subtracting loss/harm. The direct link between sustainability and financials in this method holds potential from which FM sustainability measurement could draw to illustrate the business case of sustainability initiatives. This method would help develop a culture in which the financial benefits of SFM are quantitively represented therefore more recognised and acted on.
The problem with tying ESG ‘unquantifiables’ to their financial metrics is that the true benefits of them may not be as intrinsically linked to their financial benefits as this method assumes. For example, increasing the apprenticeship offering, or gearing it specifically towards disadvantaged groups, not only provides workforce but social mobility within that community. This social mobility, and the other benefits unmentioned, would be unmeasured in the EY method, yet is a key societal gain from the apprenticeship and an important metric for the sustainability offering of that company.
In order to fully understand our progress when improving sustainability, we must be confident in our measurement of it. There is a clear appetite for quantitative measurement of sustainability in corporations – especially when these metrics are tied to financials. Companies are already judged on their performance and quantified in their brand, so the knowledge must exist; but barriers also exist that create silos of this knowledge. Making quantifiable sense of qualitative data is inherently difficult, but knowledge sharing and a commitment to improvement can make a vast difference in improving our measurement capabilities.