The Value Of Incorporating Sustainability As A KPI
There are many reasons why incorporating sustainability into your company's key performance indicators (KPIs) is a good idea. With this blog post, we'll explore the value of including these metrics in your business and how they will help you measure success in ways that you may not have considered before.
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What Is Sustainability In Business?
Sustainability in business is the practice of creating long-term value for shareholders by managing resources and risks in a way that protects or enhances the environment. When done correctly, sustainability can improve your company's reputation, create efficiencies, and save money.
What Are KPIs?
KPIs are the numerical values that signal how well a company achieves its goals and objectives. They can be qualitative or quantitative, but they're often used to monitor business performance over time.
Why Track KPIs?
Tracking key metrics lets you know where you stand with your goal-setting process so that corrective measures can be taken if needed. To fully set up KPIs, you need to have clear operational definitions for every variable being tracked and a baseline measurement of these variables from which future measurements will be compared to see whether the KPI's value has increased or decreased overall.
Can Sustainability Work As A KPI Metric?
By incorporating sustainability into your company's KPIs, you can ensure that the decisions being made are moving in the right direction over time.
For example, let's say that one of your key performance indicators is to increase revenue by 20% each year for five years straight. At first glance, it may seem like including a sustainability metric would complicate things further since you're already trying to achieve another goal with this KPI. However, if we take a closer look at what "sustainability" actually means within this context, it starts to become clear how these two measurements can work together. When thinking about revenue growth through the lens of sustainability, three major variables need to be considered: The number of natural resources required to achieve that growth, the amount of waste and pollution generated as a result of producing or consuming those resources, and how this growth affects social factors such as human rights and equality.
From this example, it's easy to see how sustainability can be thought of as a way to complement other KPIs by providing an overall view of whether or not the company is moving in the right direction. So, if you're not already tracking sustainability as a KPI, now is a great time to start!
Creating Sustainability Awareness
Include Sustainability In Internal Training Programs
Including sustainability as a topic in your company's training programs is a great way to get everyone on board with incorporating sustainability into daily work. By making sure that employees understand how important it is for your business, they'll be more likely to contribute and make the right decisions while fulfilling their roles for you to achieve sustainable growth.
Include Sustainability In Your Mission Statement
Your mission statement should include words like "sustainable," "responsible," or "environmentally conscious" if this is something you want your company culture to value and prioritize moving forward. This will encourage all of your employees' actions when thinking about day-to-day tasks such as purchasing new materials, hiring talent, etc. These choices will help move towards achieving that particular goal.
Measure Sustainability In The Supply Chain
If you're looking to go beyond measuring sustainability within your own company and start tracking it throughout your entire supply chain, there are a few key metrics that you'll want to keep an eye on.
Incorporate Sustainability in Product Management
One of the most important things to consider is how sustainable your product design is when it comes to product management. Take a look at each stage of the product life cycle and ask yourself questions like: How easy is it to recycle this product? What kind of energy was used in the production process? Is toxic waste created during manufacturing or use? How many hours of labor were required to produce this product? By incorporating sustainability into your company's KPIs, you can ensure that the decisions being made are moving in the right direction over time. If you're unsure how to address product design with sustainability in mind, reach out to a product management consultant at 280 group to guide you in making sustainability a top priority.
In conclusion, by including sustainability as a KPI, you're making sure that your company is moving in the right direction over time regarding its impact on the environment and social factors. The benefits of doing this are many, so start tracking sustainability today!
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