Sustainability ROI: An overlooked KPI?!!?

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According to Ethical Corporation’s survey, only 30% of companies have KPIs in place to measure return on investments (ROI) as a result of sustainability practices.

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            Ethical Corporation has found that corporate sustainability grows the business and reduces costs. According to a survey of over 1,500 executives from leading companies around the world, however, lent the opinion that implementing sustainability policies and practices contributes little to the company’s revenue growth, with 56% supporting the opinion in 2018 as opposed to 49% in 2015. In addition, although 30% of businesses have a sustainability-to-ROI measurement, few are confident that it is accurate.

Credit: Shefali Kapadia / Supply Chain Dive, data from Ethical Corporation

 

            In the past, many companies found that investing with sustainability cncept doesn’t only benefit the world but it also contributes to the profit of the business as well. Thus, many leading companies have turned their attention to the development of supply chain management, procurement and transportation. At any rate, they admit that coming up with relevant ROI numbers for senior management is no easy task by any means.

Despite the caveat, calculation is not impossible. Let’s take a quick look at a couple simple ROI measures.

  1. A before-after comparison is a good starting point to compare, e.g., the costs of disposable batteries to the costs of rechargeable batteries after switching to see the difference.
  2. Customer reviews can be created to measure customer sentiments about the brand before and after implementing sustainability policies and activities. Learning customer feedback towards a particular subject matter can help the brand to develop programs that better reflect market expectations.
  3. Real-time analysis of various sources such as social media and news source websites to learn consumer commentary and social views about certain company green projects or sustainability campaigns.

 

Compiled by BLOG.SCGLogistics

References and photos supplychaindive.com, .ethicalcorp.com, exchange.cim.co.uk, environmentalleader.com

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