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Gary Cokins
Gary Cokins
Founder and CEO - Analytics-Based Performance Management LLC

Analytics-Based Performance Managent LLC
Manager, Performance Management Solutions

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What is the ROI on Environmental Performance Management for Sustainability?

Posted almost 5 years ago

I apologize for possibly creating false expectations from this blog title that a financial return on investment (ROI) can be calculated for initiatives and actions to improve an organization’s environmental performance management. Sometimes the complex exercise of justifying actions based on their ROI is simply over-ridden by realizing that the actions are simply correct to do.

The Wall St. Journal article, “Sustainable Success” provides a series of points that makes taking actions prudent for all organizations. In the authors’ introduction they state,

“But here’s a lesson many executives have yet to learn: A commitment to improving social and environmental conditions in the developing countries where a company operates is the key to maximizing the profits and growth of those operations.”
I would add this applies to developed nations as well.

My belief is this. Commercial, not-for-profit and public sector organizations must now deal with the same compelling issues that consumers are acknowledging – a permanent high price of oil on the financial side with climate change and poverty on the social side.

Social and environmental responsibility are no longer an option. Organizations have reached the tipping point from complacent recognition of the sustainability (or green) movement to taking actions. Oil, carbon-dioxide emissions, global warming and poverty impact any organization’s social and environmental performance as well as its financial health.

This understanding has lead to the term “triple bottom-line” reporting: profit, people and planet. If you cannot measure, you cannot manage it. And once an organization has the appropriate measures, it can then analyze the information. The information technology for measuring and managing environmental performance now exists. For example, my employer SAS has a sustainability management offering. Our generations must fix the problems we created for our future generations.

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