Business environmental performance measurement

Peter James

Business Strategy and the Environment, 1994, vol. 3, issue 2, 59-67

Abstract: Organisations face increasing demands to measure their environmental performance. This is necessary in order to achieve sustainable development to reassure financial stakeholders that their investments are not at risk, to satisfy the demands of regulators and other non‐financial stakeholders and to provide information for customers and employees. Measures can be grouped into ten generic categories ‐ impact, risk, emissions /waste, input, resource, efficiency, customer, financial, normalised and aggregate. At least six different approaches to using measures can be identified ‐ production, auditing, ecological, accounting, economic and quality. Although there has been some limited cross‐fertilisation, in most cases they have developed in isolation from each other and have had different drivers, measurement focii and metrics. In order to achieve the comparison, integration and business relevance which is routine in financial performance measurement, a seventh approach ‐ that of strategic environment‐related performance measurement ‐ is both needed and beginning to develop. The long term challenge is to stretch measurement systems to include the sustainability of business activities (through impact measures) and the competitive advantage they are creating (through customer and financial measures). A ‘balanced scorecard’ of measures is essential too, as is clear identification of the customers of the measures. The comparison which is facilitated by standardised measurement is also a powerful spur to continuous improvement of environmental performance.

Date: 1994
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