I- Quantification of environmental impacts
Since the environmental
impacts of businesses are not reflected in prices, there are many external
costs.
This is one of the main
challenges of the environmental pillar.
It is difficult to calculate
the overall costs of waste, carbon dioxide and reclaimed land. Indeed, not all
companies are responsible for the waste they produce.
Progress metrics can be
tracked and reported through benchmarking externalities.
Various forms of energy
consumption, including the consumption of green forms of energy, directly
affect the environmental sustainability of a region.
This is because it influences
the release of harmful chemicals and greenhouse gases into the atmosphere.
Metrics for tracking each
company's energy consumption are important because of the significance of
energy use within each company.
Companies are beginning to use
wind and solar power as alternatives to conventional energy sources.
Added to “ GreenBiz” report
are new measures of water pollution and loss due to leaking pipes or water
lines. This is in addition to the measure of water use.
The costs of natural resources
lost due to heavy metal and pesticide pollution or excessive fertilizers
causing algae blooms is considered water pollution.
II- Measurement of social and
ethical performance
Customers, employees, business
leaders, and investors all care about a company's environmental, social and
governance practices.
It's difficult to compare ESG
performance between companies or over time within one company.
This is because comparing
effectiveness is harder than comparing profitability. Measures of ESG efforts
include corporate philanthropy and building a community.
The ESG KPI includes the
number of employees volunteering in their community, the percentage of workers
involved in volunteering programs and other metrics.
A company's ethics and compliance
indicators include concerns like environmental regulations, labor laws, human
rights and more.
Checking for compliance with
safety laws, management diversity, or regulations is crucial.
Measuring ESG efforts with ESG
KPIs — or Environmental, Social and Governance Key Performance Indicators —
measures changes in ESG compliance, risk management practices, workers and the
environment.
III- Quantification of economic
performance
ESG criteria are now
considered essential when measuring investment performance.
This has led to the creation
of specific metrics used to determine ESG performance.
Dealing with so many issues, the ESG section
requires investors to consider harder to measure metrics.
Tracking success and progress
comes in many forms, including with measures of a qualitative or quantitative
nature. Businesses use metrics to measure crucial aspects of their performance,
including employees, revenue, profits and customers.
Companies need to provide
exceptional products and services to stay competitive.
Success requires fruitful
cooperation; this can't be measured by GDP. Instead, this is measured by how
successful the growth of GDP is.
The global overhaul of supply
chains has disabled labor customers.
The advance of capitalism and
sophisticated technology has spurred the intensification of global consumerism.
Businesses should focus on
producing prosperity, being significantly instrumental in the economy and
society (a business that contributes to this is sustainable).
Corporations are cyclical
interlocutory arrangements established between people and groups of people.
The organizational policy must
be centered on the objective to be achieved and share its proposals with the
network of employees.
Business leaders invariably
tackle complex systems.
Management can only guarantee
positive results through supervision and forecasting.
