The Era of Data: When to Dig Deeper and When to Stop

by | Dec 10, 2012

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I’m reminded of the Kenny Rogers song, “The Gambler,” which has the line: “Know when to hold ’em. Know when to fold ’em.” In the era of data overload, there’s a certain wisdom in knowing when to fold ’em, or in the context of sustainability measurement, when to stop digging and be satisfied with the numbers you have. The field of sustainability metrics is still young, and there is a general feeling of caution around understanding and trusting the data. The newness of the science incorporates an inherent suspicion in the data and companies get caught up in the quest to keep digging for concrete and provable numbers so they can be defended by any and all attack.

What’s the ROI of a carbon footprint?

But this costs money – potentially a lot of money. What’s the ROI of a carbon footprint? Well, it depends on how much time and money you’ve spent measuring it. If you’ve spent $50,000 and up to 6 months calculating the carbon footprint of your factory or of your top selling product line, I’m sorry to say that you’ve likely spent way too much on the process and you most likely will not recover that money for a very long time – if at all. The only benefit will be the insights you’ve gained along the way. And it’s also likely that you’re going to have to repeat the process more than once as the science, standards, and requirements of carbon footprinting evolves and solidifies.

So what is a company to do? There is no doubt that companies are feeling pressured to measure their carbon footprint. There’s the new cap-and-trade system in California. Retailers such as Wal-Mart and Marks & Spencer have, very publicly, put sustainability on the corporate agenda.  There is the ongoing threat of legislative mandates for environmental labeling in Europe. And there is the “keeping up with the Joneses” aspect of making sure your competition doesn’t get ahead of you in the sustainability showdown. Not to mention the many cost reductions that a company can make by identifying and reducing their environmental impacts. The question isn’t deciding whether or not to measure your carbon footprint, but how far to take it.

Up until recently, most carbon footprinting was done “by hand.” When I say that, I mean by one or more consultants with one or more Excel spreadsheets, and potentially one or more visits to the factory, the farm, and the distribution depot. There was, and still is, an influential school of thought that says that carbon measurement must be done onsite and in real time. The problem is that consultants often work on an hourly basis, so every visit to the factory, the farm, and the distribution depot is time logged and invoiced at an hourly rate. And in the end, there still ends up being a lot of uncertainty about the numbers that come out of the dozens of spreadsheets that are produced, even though the insights that the consultants interpret from the data may turn out to be very valuable.

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