A Data-Driven Approach to Measuring Sustainability ROI

A Few Corporations Lead the Pack

In recent years, the realization that sustainable business practices can improve a company’s bottom line has prompted many companies to set their own sustainability initiatives as well as  align their targets to the Sustainable Development Goals (SDGs). The companies who stand out at the head of the pack are using data analytics to their advantage, not only to pinpoint areas for improvement and report on progress, but also to measure sustainability ROI.

For example, Siemens, the global manufacturing conglomerate, utilizes data-driven financial and sustainability analysis to determine the most profitable and impactful sustainability initiatives to implement. Siemens, ranked as 2017’s most sustainable company by Corporate Knights, has focused on renewable energy, energy efficiency, and environmental technology, reporting a quantified reduction of carbon emissions by more than 377 million metric tons.  

Johnson & Johnson also uses a data-driven approach to measure and annually publish its progress in meeting its five-year goals. The multinational company annually reports on progress toward its Health for Humanity 2020 Goals in a Progress Scorecard. For instance, Johnson & Johnson used data analytics to measure progress toward its SDG of impact on climate and water resources. Surpassing its goal of 20 percent absolute emissions reduction by 2020; the company has already reduced global carbon emissions by 21 percent since 2010.

70% of Professionals Struggle to Measure Sustainability ROI

Although Siemens and Johnson & Johnson have led as revolutionary examples, many companies still have trouble learning to measure sustainability ROI. An annual study from the Ethical Corporation suggests that only 30 percent of business professionals are measuring the ROI of their sustainability initiatives.

The Responsible Business Trends report indicates that while more than half of business professionals believe sustainability drives revenue and two-thirds believe it drives savings, more than half are still unsure about whether or not their company is accurately measuring this growth. If the majority of professionals recognize the value in sustainability initiatives but fail to prove it, they have little hope in gaining buy-in for future efforts. How can they add more fuel to the fire?

Data Fuels the Fire

To better predict and measure the success of sustainability initiatives, companies need accurate and timely data. Of course, it isn’t always easy to unify disparate data sources from several internal departments and external sources. Nevertheless, professionals will remain in the dark about the fiscal impact of their initiatives until they can gather the data they need from human resources, facilities, utilities, and more.

Once this data has been collected, professionals will have the tools they need to prove and measure sustainability ROI. Utility data in particular can help quantify savings from energy efficiency investments and renewable energy projects, in turn convincing stakeholders of the value in future efforts of the like. Balaji Jayaseelan, Global Environmental Sustainability Program Manager at Newell Brands, put it best:

“The greatest benefit of using utility data is that it’s irrefutable. As much as our core business values have embraced sustainability, the best way to move an initiative forward is to use data to demonstrate exactly how much money it will save or bring in returns. Then, there’s no debate necessary.”

Now, when someone across the meeting table expresses skepticism over the value of a sustainability initiative, professionals can prove each initiative’s impact on the company’s bottom line and shed light on the positive value of their programs.

To learn more about how utility data can help your organization better measure sustainability ROI, check out our eBook: Gaining Sustainability Buy-In with Utility Data.

You may also be interested in:

• The Corporate Sustainability Professional’s Guide to Better Data Management
• Top 3 Organizations Driving Corporate Energy Reduction
• Executives Say Data Analytics Have Greatest Potential Impact on the Bottom Line

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