Why a Sustainability Scorecard?
Scorecards provide on-going monitoring of the organization's progress toward prioritized goals and target(s). We see the Sustainability Scorecard to be a monthly reports based on "hard" measures.
Scorecards provide on-going monitoring of the organization's progress toward prioritized goals and target(s). We see the Sustainability Scorecard to be a monthly reports based on "hard" measures. (Note 1)
Benefits of the Sustainability Scorecard
(In no particular order)
- Progress is tracked on an on-going basis: traditionally sustainability has been reported once a year, often through responses to interview questions. Annual reporting does not allow the organization to see and react to on-going activities.
- Risk reduction: Many huge fines levied on businesses are the result of mistakes, lack of supervision or poor training at fairly junior level. These mistakes do not conveniently occur just before your annual assessment...and are often the result of accumulating smaller mistakes. The Sustainability Scorecard not only provides on-going monitoring, but also brings more awareness to the people in the organisation who manage and potentially cause the problem.
- A single view of the truth: The Sustainability Scorecard is just one view of the overall Corporate Scorecard. The Corporate Scorecard includes specialized views - such as sustainability, risk, etc. With the scorecard, executives can see all aspects of performance in the same meeting, with the same team...not separate a discussion on performance, and sometime later a conversation on sustainability...and sometime later (with a different team), on risk...and learn the interconnections. Annual assessments are apart-from, not a part-of, on-going operations.
- The measures are quantitative: the measures on the sustainability scorecard are based on the hard facts that are generated by on-going activities. These same measures may be also used in some of the other views. This means:
- The data is reliable: executives can trust the number they are seeing this period is related to what they saw last period. They can make trust-worthy decisions based on what they see.
- The data is repeatable: The same results would be reported for the same performance at any location, anywhere in the world. Interview questions are not repeatable across organizations or time.
- The measures are benchmarks: For a measure to serve as a benchmark, it must be collected and reported in exactly the same way in every organization. Only in this way can executives compare their performance against other organizations. Interview-based results cannot serve as benchmarks - they lack to required consistency.
- On-going reporting: Because the measures are pulled from the transaction systems - i.e. people do not have to stop their day-jobs to get the data - the scorecard can be produced every month without any drag on the organization. It is apart-of, not apart-from, the job. This means that it is effortless to maintain the scorecard.
- Provides clear communication to all stakeholders: The measures can be put into all the different sustainability scorecards (B-Corp, UN-SDG, Future-Fit, etc.), so different stakeholders can view the performance in their preferred context(s).
- Allows for navigation: Executives need to navigate their organizations - turn them right or left based on events and opportunities. The sustainability Scorecard provides them with the tool to make on-going navigational decisions to improve sustainability.
- Allows for valuation / ROI of the organization: based on the Future-Fit Business Benchmark metrics, we can calculate the value created by your sustainability initiatives.
- Builds employee engagement: The Sustainability Scorecard cascades down to the departments, teams and individuals. As such each person can understand their purpose -their contribution to Sustainability, see their on-going progress, make informed decisions about what to do, and socialize their work.
- Sustainability gap analysis: Quantifies the monthly gap between actual and target performance.
- Initiative gap-closing potential: Provides a tool to asses the gap-closing potential of sustainability projects
- Links sustainability projects to their improvements: Allows the organization to see if projects are making the difference they chartered to accomplish.
- Community learning: As we gather data within and across organizations, we develop system-wide knowledge to understand the collective impact, develop the shared measures, and help solve societal issues.
Note 1 - Scorecards: In the world of sustainability scorecards, we incorporate design criteria:
- An organization's scorecard's goals link to one or more of the established sustainability goals (i.e B-Corp, UN-Sustainable Development Goals (SDG), GRI, <IR>, SASB, etc.)
- The scorecard is populated with data that comes from existing reporting systems in the organization (not interviews, external assessments or audits)
- Multiple targets are set - near term, long-term and triple-bottom-line break-even.
ESG is becoming a regulated requirement - but it is just a category of OKRs within your OKR structure. This video explains the mechanism behind measuring ESGs through OKRs
In this series of videos I'll walk you through where that misinformation came from, why it is wrong, why you should include OKRs, and how to include OKRs