Measure it!
“If you can’t measure it, you can’t improve it. ”
Following Peter Drucker’s business management famous quote, we immediately refer to the tools that are universally accepted and used to measure in sustainability performance accounting. One of the more well known emission metric is the Global Warming Potential (GWP), which has become the default metric for transferring emissions of different gases to a common scale.
Global Warming Potential
The GWP for a time horizon of 100 years from the IPCC was adopted as a metric to implement the multi-gas approach embedded in the UNFCCC and made operational in the Kyoto Protocol.
When it comes to climate action, effective measurement, reporting and verification (MRV) of emissions and emissions reduction is critical to help countries and organizations not only understand GHG sources and trends, ensuring transparency, good governance, accountability, and credibility of results, but also for building confidence that resources are being utilized effectively.
In the world of corporate sustainability the path forward involves creating environmental, social and economic value over the long term through sustainability-oriented strategies, business models, investments and management tools. There are different ways to ensure companies can measure progress and track relevant goals, being one of them using environmental sustainability metrics. These pull of companies that are showing a growing commitment to sustainability efforts publicly disclose targets and data based of selected metrics.
In a non standardised arena every company or organization decides which are the key metrics they commit to tackle. In general most of them include at least the following five metrics for tracking and reporting purposes.
Climate risk
Carbon emissions
Energy consumption
Water usage
Waste and pollution
Nevertheless, to equip themselves to survive and thrive, businesses usually adopt one or several management frameworks. Moreover, the undeniable need for sustainable development has generated the establishment of an array of sustainability frameworks that are designed to be the guidance for all organizations to move the world towards more sustainable future. Transparency and alignment are critical to establishing a common language across industries and governments to develop strategies and measure progress. Therefore adhering to a framework that provides clear expectations and guidance on how to measure, report and verify progress against the achievement of targets seems the sensible approach to follow.
With this lengthy introduction we are revealing the Science Based Targets Initiative’s Progress Framework as one of the contestants. What is it about? The SBTi independently assesses and approves companies’ targets in line with its strict criteria, which is another way of certifying the company’s measurement system, which is inline and adds up to the certification schemes discussed at the previous blog, Certify it!
The Science Based Targets initiative (SBTi) is a collaborative effort between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).
Zooming into the SBTi progress data dashboard, 16 companies in the chemicals sector category across the globe have joined the initiative adopting the framework. It is very interesting to compare the different approaches. Companies choose as a target between 1.5C, 2C and well below 2C, within a timeframe. This one is sometimes divided into sub blocks, but for most of them the horizon is set up to 2030, and only a couple of them are setting the targets to 2050.
Targets can be absolute or intensity, and the targeted percentage varies from 14% to 100% covering one of the scopes or a combination of two or all three. In short it is a very diverse approach.
An absolute target refers to a target that aims to reduce GHG emissions by a set amount.
An intensity target is a normalized metric that sets a company’s emissions targets relative to some sort of economic output.
To spur further action in the sector, the Science Based Targets initiative has launched a project to develop guidance and Sectoral Decarbonization Approach (SDA) methods for chemical companies in setting ambitious decarbonization targets.
Moving on, we explore deeper into the more specific solution driven frameworks, and we come across The Circular Transition Indicators (CTI), which has been shaped by WBCSD and 30 companies to support business need for a universal and consistent way to measure circularity, in order to credibly demonstrate circular performance increase. The framework does not evaluate the environmental and social impacts of the company’s circular activities. However, understanding mass flows is a mayor step to knowing their impacts. Companies may chose to assess one of more of the indicators. The latest V2.0 provides 3 different indicators.
Resource: Circular Transition Indicators V2.0 Metrics for business, by business 1 (wbcsd.org)
6 leading chemical companies are part of the case studies using the CTI tool.
Lastly, we move from the generic and solution specific frameworks and briefly cover the one specific for the industry, Cefic’s Sustainable Development Indicators.
How does the chemical industry measure up? The list of Sustainable Development Indicators are organised around the four sustainability focus areas of the Cefic’s Sustainability Charter (Create, Conserve, Connect and Care) and aim to represent all key industrial activities. It is best described as work in progress in order to create a measurable set of indicators that connect the SDG sectorial roadmap with the contribution to the European Green Deal.
The trend to move towards a more sustainable world is clear, being able to measure progress in an accreditable way is a must. This fact represents a massive opportunity for developing certifying, measuring frameworks and digital tools to navigate an increasingly standardised sustainability arena. Data based supply chain visibility will strengthen trust in sustainability solutions.
Moreover, it is important to acknowledge the fact that similar forms of metrics and indicators, like for example in the case of energy, water and waste, convey in the different efforts to create transparency and alignment, proving a solid base for further development.
