Systematic Review - Network for Business Sustainability

4. Integrate sustainability metrics into financial
reporting; adopt transparent sustainability reporting
Efforts toward developing a globally accepted standard
of integrated reporting are being made across financial,
environmental and social communities. In some
countries, such as France, governments are beginning
to make integrated reporting mandatory. Transparent
sustainability reporting is being increasingly adopted by
Organizational Transformation firms.
Some of this reporting does not require radical change
to current business processes. However, much
sustainability information is non-financial and needs to
be converted into financial metrics, which are the main
standard for evaluating organizational activity. Whether
this conversion is feasible remains to be seen. In spite
of the progress made, existing metrics do not cover the
whole landscape of sustainability, omitting such areas
as ecological degradation and social impact. Firms
are experimenting with new modes of sustainability
performance measurement, such as measures that can
directly relate corporate environmental performance to
the marketplace, revenues, customer satisfaction and
upstream environmental impacts (Lent & Wells, 1992).
Multiple schemes have sought to establish common
frameworks for reporting sustainability progress. These
include the Global Reporting Initiative, 9 the International
Integrated Reporting Committee, 10 the Carbon
Disclosure Project 11 and the Dow Jones Sustainability
Index. 12 Other organizations also are developing
integrated TBL reporting guidelines (Kaval, 2011).
In Practice
In 2007, Nike created its Considered
Apparel Index to score the environmental
attributes of its apparel. In 2010, it was
upgraded it to a web interface, to enable
earlier designer and supplier involvement
and firm access to performance data. Dow
Chemical developed the Eco-Compass
to assess innovations environmentally
by plotting product functionality, material
intensity, energy intensity, toxicity and
resource conservation against two economic
indicators: economic value created and
security of the business position. Other Dow
tools include the Sustainable Chemistry
Index, which focuses on critical aspects
of sustainability through the company’s
value chain, including renewable/recycled
content, resource management, life cycle
benefit, manufacturing efficiency, social
need, manufacturing/transportation, product
application and public policy/end of life.
Adapted from Baya and Gruman (2011) and
Dow Chemical Company (2012). 13
A small but growing number of firms are publishing
such integrated reports (EYGM, 2012).
Integrating measures with other organizational
indicators helps to embed the sustainability mindset
internally and to legitimize the firm externally. The
reporting of these measures may take several forms,
including social impact reports, environmental impact
9 See www.globalreporting.org
10 See http://www.theiirc.org/
11 See https://www.cdproject.net
12 See www.sustainability-index.com
13 See http://www.dow.com/sustainability/goals/chemistry.htm
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