Aligning Environmental Metrics with Business Performance

Howard Brown

I have been working in the field of integrating business and environmental management since 1980. The growing community of people working in this field has made great progress in recent years. Environmental managers have, for example:

● Developed better techniques and software for tracking, managing, and reporting waste and emissions
● Incorporated waste reduction and recycling into vast numbers of industrial processes and business operations
● Demonstrated to investors that successful companies are the ones with good environmental performance commitments and records (and vice versa)
● Demonstrated to management that good environmental practices can reduce risk and costs
● Proven that companies can protect their brand and asset value through good, documented environmental performance and transparency
● Garnered the attention of investors and CEOs regarding these issues.

In spite of all of this progress, environment and business are still viewed as separate topics with separate (albeit more closely related) goals. The actual intersection at which good environmental and business practices become one – the point at which they become truly aligned – has eluded us.

As I have argued in previous Green Tie posts, I am now convinced that the ultimate key to aligning business and environment is managing resources, not just waste and emissions. Many of you have heard me say, “The more you use, the more you lose, no matter how good you are at managing what you are losing.”

As companies grow and use more, they generally waste more. I’m not just talking about waste as it is typically defined, as a byproduct of industrial processes (what’s hauled away or dispersed as air and water emissions). The definition of waste has to be expanded to mean the use of any resources that aren’t essential to delivering benefits to customers. By this definition, most of what goes into delivering our products and services is waste. But even if we accept that resource use is a decent proxy for environmental performance, what about business performance?

To get alignment you have to step back and look at the whole. Access to key resources will be the critical issue for business in the coming decades. Every nation and every business will be jockeying to secure supplies of the lowest-cost resources to meet their needs. In fact, the game of resource management and competition is already well underway. We are quickly reaching the point at which maneuvering with supplier contracts, influencing national economic policy, and other such techniques will not do the trick.

Finding truly innovative ways to deliver more value – to deliver more benefits to customers with less resources – will increasingly become the basis for controlling costs, reducing risks, pleasing investors, differentiating products and services in the marketplace, and gaining competitive advantage. This is the direction in which companies will focus innovation, as well as the method they will use to most effectively reduce environmental impacts.

 

About Howard Brown

Howard Brown is co-founder of dMASS Inc. and chairman of o.s.Earth. For more than 20 years as CEO of Resource Planning & Management Systems Inc., he worked with companies such as Duracell, General Electric Co. and Whirlpool Corp. to establish or enhance their environmental practices and performance. Follow him on Twitter at @BrownHowardJ.

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