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Measuring Up: ROI on Sustainability Initiatives
2008-11-20 09:07  ???:1345

  You may be thinking sustainability is only for crunchy, granola types that live out in California.  It’s not!  Unlike “green”, environmental or sustainability movements of the past, this time it is being driven by the mainstream and not a fringe group.  Large retail brands, not just exclusive niche boutiques, are working to make themselves, via their business practices, sustainable.  After all, sustainability makes good business sense.  For example, reducing waste not only means that you’re squeezing all the value out of your substrates and inks, but it also implies fewer defects and lower bill from your waste hauler.  And, creating a healthy and safe workplace reduces employee absenteeism and worker compensation premiums.

  Businesses routinely measure return on investment (ROI) on capital equipment purchases and marketing campaigns.  What I’m increasingly finding, though, is that businesses aren’t measuring the ROI on their sustainability initiatives.  This hinders some businesses from seeing the tangible financial benefits of sustainabilityCnotably less waste, more efficient production, fewer defects, lower utility bills, and a safer, healthier workplace.  It also makes it difficult to learn which initiatives are effective and engage employees, not to mention the difficulties it presents in determining cost savings.  This information is important because strategies used to implement effective initiatives can be replicated for new ones.  But, if you don’t have a measure of how you were doing BEFORE the initiative started and have frequent check-ins to see how the initiative is doing, it’s impossible to know, for sure, how things are going.  And that makes it difficult to energize employees to do more.

  How do you measure the outcomes and progress of your sustainability initiatives?  Believe it or not, it’s not as complicated as it seems.  Most of the information you need is already around your office in the form of purchase orders and bills.  If you’ve already started a sustainability initiative, you may want to look at the year prior’s purchase orders and bills so that you can create a base year metric.  If you’re just about to start a sustainability initiative, gather metrics for your base year NOW!  Going forward, it’s best to record metrics monthly, but if that’s not possible, quarterly reporting is acceptable.  By having several check-ups in the year, you can better track progress, aka your ROI.

  What sorts of things should you track?  A good place to start is looking at your energy usage (including electricity, natural gas, oil, and gasoline), waste (hazardous and non-hazardous), water usage, consumables (ink and substrate purchases) and injury/illnesses.  You should also normalize for production increases and decreases by dividing the above metrics by either ink purchased or substrates purchases.  This way, you control for the fact that increases in production usually means increased consumption of energy, consumables, etc.  It will allow you to compare and contrast your metrics across time, as your business grows.

  Need a bit more help?  Contact Katy Lellelid via the ASSIST hotline at 888.385.3588.