March 11, 2010
How to Measure the ROI of Your Sustainability, CSR Efforts
Environmental sustainability and corporate social responsibility (CSR) among businesses are no longer “nice to have” ideologies. They are important parts of a company’s overall growth strategy. A recent PricewaterhouseCoopers study documented ways in which companies that report their sustainability efforts get better returns on their assets than companies that do not. Also according to a TIME poll conducted in 2009, 40 percent of consumers said they bought products or services because they liked the social or political values of the company. Nearly….
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Reader Comments
Attempting to measure the direct financial impact/return of sustainability has long been a bit of a “Holy Grail”. Mr. Murata’s comments are quite valuable, especially given that his position is top management for a multi-national manufacturer.
Another way of demonstrating the economic value/return on sustainability investments is to look at the risk reductions achieved through sustainability – or other environmental programs. By creating a baseline environmental risk cost/profile, risk reductions obtained from sustainability initiatives can then be judged against that baseline. More information about such a metric can be found here:
http://elmconsultinggroup.wordpress.com/2009/06/26/elm-announces-roi-metric-for-environmentalhseehs-risk-reduction/
Lawrence Heim | March 12th, 2010
One additional point that is often overlooked is shifting company culture towards more sustainable practices by activating the human resources of a company to drive sustainability forward.
I can build an extremely energy efficient LEED certified building and go all out on alternative energy and offsets – but if it’s -10 outside and my warehouse crew opens the dock doors (letting out all the heat)rather than going outside to smoke a cigarette then what good is all my effort.
It’s like building the safest car on the planet and then handing the keys to a 13 boy along with a bottle of whiskey and programming his GPS to the AutoBahn! Sustainability must include shifts in attitude and culture otherwise they will eventually be derailed.
Just two days ago I posted a presentation on SlideShare about Visceral Sustainability and for most of that time it has been one of the most views and viral pieces on the site. That is because people are now understanding that sustainability must be about people in order to succeed. Here is the presentation in case anyone is interested. http://www.slideshare.net/GreenNurture/visceral-sustainability
Great article it is refreshing to see Wall-Street really getting it!
Derrick Mains | March 17th, 2010
Thank you Mr. Sam Murata for sharing these examples of how to implement sustainability in todays business. It would also be great if we could add another value to ROI. Let’s call this the SROI or Sustainable Return on Investment. I am working on that idea right now. What if we would be able to include the sustainable value in the ROI? For instance, suppose I decide to cut a forest. If I did it the SROI would be zero for the forest. It is gone. But, if I cut half the forest and replant a whole new forest, my SROI could be 150. As a said, just preliminary ideas. Always open to other thoughts about this. Have a great and inspiring day.
Juan Felix | November 4th, 2010
Changing to a low flow faucets is a green gesture. Getting all to appreciate the value of a single molecule of water is transformational. I once “greened” now I try to transform. Try.
Peter Hetzel | June 3rd, 2011