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Gaining understanding of the use of sustainability KPIs in practice

Panel: 2. Sustainable production design and supply chain initiatives

This is a peer-reviewed paper.

Authors:
Nancy Bocken, University of Cambridge, Department of Engineering, Institute for Manufacturing, United Kingdom
Dai Morgan, University of Cambridge
Department of Engineering
Institute for Manufacturing, United Kingdom
Steve Evans, University of Cambridge
Department of Engineering
Institute for Manufacturing, United Kingdom

Abstract

It is uncertain whether the use of sustainability KPIs leads to performance improvement. Surveys followed by in-depth interviews with practitioners were used to investigate sustainability KPIs in manufacturing. It was found that:

-Surveyed companies are not sure whether sustainability KPIs are leading to performance improvement. Choosing appropriate boundaries and metrics will greatly influence improvement.

-It is difficult to make trade-offs between social, economic and environmental metrics, because all are important. In certain situations we may need to consider one metric more than others. Social metrics may be difficult to measure, but are of increasing interest to government and industry.

-Measurement and control of impacts outside of direct scope are of concern. Some companies in our initial survey consider themselves either too small (insufficient bargaining power) or too large (too many suppliers or customers, complexity) to manage this effectively.

-Leaders are looking beyond the metrics they have used in the past but require support from outside of industry. For instance, companies may want to move from the ethos “zero waste to landfill” to “resource efficiency”, but do not know how to measure and compare these different approaches. Start-ups or “sustainability followers” may want to begin by using the best measurement available.

-There are opportunities in both internal and external sustainability reporting. Companies may not always measure what is needed, or make use of their own metrics to improve external communications.

-Learning within the company between different sites is important but may be difficult because of differences in energy management systems, geographical areas, age of equipment, personnel expertise and other factors. Also, the politics of inter-site competition may be a barrier.

Future research requires a deeper understanding of the design of sustainability KPIs and the performance management systems needed to deliver improvement.

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Download this paper as pdf: 2-083-12_Bocken.pdf