On use of Balanced Scorecard in ecology: KPIs and their explanations
The issues of environmental protection have become very acute in the late 20th and early 22nd centuries. The dangers of global warming, pollution of air, water and soil have made officials and representatives of major industrial businesses reconsider approaches to production process and environmental protection. Emission of harmful substances into the oceans, deforestation of the planet lungs and air pollution have already resulted in serious problems for the entire mankind. But if to start solving problems now it may be possible to avoid disaster for the whole planet.
Of course, some production facilities cannot be 100% ecologically clean, and at the same time the humanity got used to the products and services offered by such enterprises. In such a case we cannot talk about elimination of harmful substances. However, it is possible to decrease negative impact of industry on the nature.
In recent years hundreds and thousands of enterprises started campaigns aimed at reducing negative impact on the environment and transition to ecologically clean production methods, whenever possible. It is very important for an enterprise or an ecological organization to measure efficiency of environmental campaigns. Enterprises evaluate actions aimed at reduction of harmful substances emission, while environmental and ecologic organizations measure campaigns and initiatives targeted at saving the planet (pompously as it may sound).
If it is possible to measure business performance why not measure performance of recycling process or anti global warming actions? Balanced scorecard system, as a popular business evaluation measurement tool, can perfectly work in the field of ecology.
Traditionally balanced scorecard measures KPIs known as key performance indicators. Every business has own set of KPIs, including ecology sphere. Let’s review major ecology KPIs which all together evaluate ecologic and environmental efforts of enterprises, plants, factories, environmental protection organizations etc. Before we start, it should be noted that these KPIs may concern production enterprises (sources of pollution) and organizations that promote ecologically cleaner production but do not produce anything.
Global warming scorecard
Efficiency and collaboration perspective
- Surveys efficiency level. This KPI is relevant for organizations promoting environmental protection in the industrial process. It is very important to know which sectors of economy are the key polluters, and what response actions need to be taken to improve situation. Surveys and studying are the best methods that work here.
- Number of collaborations. This indicator represents the number of organizations, enterprises and governing bodies that consented to be partners in environmental campaigns. The more collaborations – the better. For instance, a factory can work with a number of environmental organizations, production enterprises or governing bodies on environmental issues.
- Reduction in projects completion time. It is very easy to analyze this KPI. The sooner enterprise completes project, the sooner it is possible to see positive results.
Operations and experience perspective
- Number of areas worked for
- Number of organization assisted. The above two KPIs directly represent effectiveness of environmental campaigns. It is possible to collaborate on environmental issues in the numerous areas like steel, auto, rubber and tires, chemistry, pharmacy etc.
- Decrease in greenhouse emissions level. This is one of the most important KPIs on global warming scorecard. Decreasing greenhouse gas emissions is the ultimate goal of any production enterprise which attempts to transfer to environmentally safe production methods.
Awareness and learning perspective
- Number of people educated
- Number of seminars and campaigns
- Increasing the dissipation level
- Number of techniques in use
These KPIs speak for themselves. The more people the company educates on environmental issues, the more effective seminars and training session it holds, the more people participated in environmental campaigns, the better the results.
Funding perspective
- Number of donations sources. These days, if an enterprise chooses to transfer to ecologically safe production methods it can qualify for donations from environmental and ecologic organizations. The more donations sources a company has the more it can invest in brand new and safe production facilities.
Major KPIs on Global Warming Scorecard
Recycling scorecard
Waste disposal and safety perspective
- Diversion of waste from landfill. Any company that set a goal of becoming ecologically cleaner should aim at maximizing diversion rate.
- Recycling rate. This KPI represents the rate at which materials are recovered through recycling.
- Quality standards and their number. When implementing environmental goals it is imperative to follow certain standards. The higher the standards, the better.
Customer and policy compliance perspective
- Increase in usage of recycled products. If the company manages to use more and more recycled products it does not only contribute to environmental protection but can also save costs as recycling process may be cheaper than the production itself.
- Reduction in customer complaints regarding recycled products. The more satisfied customers who like quality of recycled products – the better. Reduction of this KPI value means efficiency of recycling process.
- Compliance with legislative and other requirements. Every business is operating within a certain jurisdiction. If a company is 100% compliant with legislative requirements it means it has no fines and sanctions imposed.
Environmental and social responsibility perspective
- Reduction in greenhouse gases emission. It is obvious that any company should strive to reduce emission of greenhouse gases to the atmosphere. This KPI vividly demonstrates efficiency of company’s environmental efforts.
- Number of programs and campaigns related to social responsibility of business. This indicator shows company activity in the sphere of social responsibility of business. An enterprise promoting, for example, lower consumption of gas, will surely have an attractive business and social image.
Operational and R&D perspective
- Number of products recycled. Of course, it is obviously impossible to recycle all products, but an enterprise should aim at recycling as many of them as possible.
- % of operational waste recycled and utilized. This is a very important KPI since many industrial businesses emit waste directly into the nature (soil, air, water etc).
- Number of new cost efficient recycling methods developed. Recycling of products and waste can be an expensive procedure. If a company manages to develop new low-cost recycling methods, the environmental campaign will not hurt company’s budget.
Recycling KPIs
Finally, it needs saying that adherence to environmental campaigns and ecologically safe production methods is a must for any modern industrial business which should be socially responsible and non harming to the planet.
