Beyond Profit: 4 Eco-Centered Metrics for Your Business

Most businesses measure their success in terms of one simple metric: profit. Businesses with healthy profit margins, a high growth percentage, and sales revenues through the roof can expand their operations, employ more people, and give healthy returns to shareholders.

Using profit as a metric for success is good for the health of your business. But profit-driven enterprises can be terrible for our ecosystem. Maintaining a strong profit margin may even require you to use cheap materials, labour, or operational methods even at the expense of the natural environment.

However, as the impending climate crisis knocks on our door, some businesses are changing their tune. These environmentally friendly businesses are looking beyond short-term profits and are using eco-centred metrics to measure business success.

ESG Frameworks

ESG (“Environmental, Social, Governance”) frameworks measure the environmental and social impact of a business as well as the overall ethics of its governance. ESG can be used to identify morally grey areas of business operations and raise the ethical standard of day-to-day operations.

As a business leader, you can use digitally integrated ESG reporting to assess and improve your ESG metrics in real time. AI-powered ESG can account for everything from your carbon emissions to your energy consumption and waste production. AI-led ESG software also makes it easier to spot trends in your operational sustainability so you can quantify the impact that your eco-friendly changes make.

Presenting your ESG is increasingly important for investors, too. Companies that cherish ESG are seen as lower-risk investment opportunities, as they’re less likely to commit ethical mistakes that damage their brand. By investing in AI-powered ESG reporting, you can ensure that your business is an attractive investment opportunity and a force for good in the world.

Sustainable Process Index

The sustainable process index (SPI) was created in the 1990s to measure the impact of industrial processes on global ecology. As a business leader, you can use SPI to improve the accuracy of your ESG by calculating the potential damage your business does to the environment to deliver your product or service to consumers.

Using the SPI to assess your business's impact on the environment can be a lengthy process. The calculations can also become complex, as you are accounting for every minutia of your operations. However, completing an audit on this scale gives you an accurate picture of your operational eco-efficiency as you measure everything from the resources you require to the area needed for staff accommodation.

You can make the process of calculating your SPI easier by using “SPIonExcel.” SPIonExcel has been developed using the metrics needed for an SPI audit and can automate some parts of the calculations you’ll need to assess the impact of your product/service.

Genuine Progress Indicator

As a business leader, you should be familiar with financial forecasts that aim to predict your future successes and challenges. You can use this same kind of predictive thinking to account for your progress as a sustainability-oriented business.

John Talbarth and Jeremy Webb presented the genuine progress indicator (GPI) as an eco-centred metric, and as part of the Green Growth Best Practice series. The GPI is usually used by governments to assess their macroeconomic strategies but can be applied to your business, too.

When assessing for GPI, ask yourself two questions: “what portion of our operations are driving growth?” and “which drivers of growth can be deemed sustainable?” Answering these questions will yield a combination of quantitative and qualitative results, as you’ll need to revamp the original calculations to yield metrics that are valuable to your business process.

Carbon Neutrality

Combating climate change and protecting the natural environment requires every business to make a serious commitment to reducing carbon emissions. Only 46% of U.K. businesses have plans in motion to become carbon neutral by 2050 and a further 31% say they have no intention of becoming carbon neutral at all.

As an eco-inspired business owner, you can take the lead on carbon emissions and commit to a carbon-negative approach to your operations. Start by completing an audit of your current carbon emissions using digital carbon calculators. Online calculators can give you a quick assessment of your total carbon use in tones which will give you a baseline to work from.

As a business owner, you should see carbon neutrality as part of every long-term project. So, when planning to expand operations or open a new location, be sure to integrate your carbon footprint calculations into your project management planning. Treat your carbon calculations with as much reverence as you would profit margins or sales volume, or you risk prioritizing short-term profit over long-term sustainability.

Conclusion

Keeping track of eco-centred metrics like ESG and SPI ensures that your business grows in a sustainable, environmentally conscious way. This is good for the world as well as your business's financial health, as investors are increasingly interested in businesses that take their commitment to climate change seriously.

by Sam Bowman