If you've no account register here first time
User Name :
User Email :
Password :

Login Now

How to Measure the ROI of Your Sustainability, CSR Efforts

muratta, sam, sanyoEnvironmental 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 half of Americans in the poll said protecting the environment should be given priority over economic growth, and this comes in the midst of a recession.

However, taking actionable steps to become a sustainable and socially responsible company also typically requires a significant amount of capital and resources investment. Therefore, it’s critical to be able to demonstrate the value and return on investment (ROI) that putting environmental and CSR reforms into practice will provide. So what are the best ways to measure the ROI of a company’s sustainability and CSR efforts and effectively convince senior management these activities are worth the investment?

1. Begin with small projects:

Consider making small reforms over time rather than tackling multiple, large projects simultaneously. Through gradual transformations throughout the organization, it becomes easier to not only secure funding for the sustainability and CSR efforts but to also benchmark their impact. For example, consider making a company-wide commitment to replace all dry-cell battery supplies throughout the office with rechargeable batteries. Then in three to six months measure how using rechargeable batteries has impacted overall energy costs and battery supply costs.

2. Poll your customers:

Customer surveys and polls can be useful in helping to gauge how changes in your organization’s sustainability and CSR practices affect their perceptions of your company and brand loyalty. Ask them if they notice and value any particular sustainability and CSR initiatives and how that has impacted their perceptions of the products or services your company offers. Once you’ve determined what specific sustainability or CSR initiatives your customers value most, you can then refine your offerings to meet their specific preferences.

3. Leverage the success of other companies’ green efforts:

Highlight the successes of other large organizations which have already made significant investments in their sustainability and CSR initiatives. By sharing examples of these types of success stories it will become easier to convince your management team of the importance of applying those same principles to your own organization. For specific examples of America’s most sustainable companies, a good source to reference is Newsweek’s “2009 Green Rankings”, a rating of the 500 largest U.S. companies on their sustainable practices.

4. Publicize your green initiatives:

Perception is reality. Therefore, publicizing your sustainability and CSR initiatives will add tremendous value and credibility to those efforts. Take advantage of opportunities to make others aware of your commitment to being conscious of the environment and a socially responsible company through all marketing, public relations and sales activities.

5. Have realistic goals:

Recognize that the tangible ROI benefits of your sustainability efforts won’t happen overnight, so it’s important to set realistic and achievable goals that can then be built upon over time.

Mr. Sam Murata serves as a President of SANYO North America Corporation as well as Vice President of SANYO Electric Co., Ltd. His clearly defined objectives include expanding the finished goods business and promoting SANYO’s brand image as “A Leading Company for Energy and Environment.” To learn more about SANYO North America, please visit www.us.sanyo.com.

Sam Murata
Mr. Sam Murata serves as a President of SANYO North America Corporation as well as Vice President of SANYO Electric Co., Ltd. His clearly defined objectives include expanding the finished goods business and promoting SANYO’s brand image as “A Leading Company for Energy and Environment.” To learn more about SANYO North America, please visit www.us.sanyo.com.
 
Planning for a Sustainable Future
Sponsored By: Dakota Software

  
Just the Facts: 8 Popular Misconceptions about LEDs & Controls
Sponsored By: Digital Lumens

  
The Corporate Sustainability Professional's Guide to Better Data Management
Sponsored By: Urjanet

  
Four Key Questions to Ask Before Your Next Energy Purchase
Sponsored By: EnerNOC, Inc.

  

4 thoughts on “How to Measure the ROI of Your Sustainability, CSR Efforts

  1. 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/

  2. 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!

  3. 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.

  4. 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.

Leave a Comment