Key Performance Indicators

Last updated: 17 July 2023 at 20:32

Key Performance Indicators (KPIs) are measurable values that companies use to track progress towards their strategic objectives. They help to evaluate the success of an organisation or a particular activity in which it engages. Note that in some international standards you may see the word “indicator” or “metric” as an alternative to KPI.

A good KPI is SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. It should be directly linked to the overall business purpose and mission and strategic goals, providing a clear and quantifiable measure of success. Importantly, a good KPI should be actionable, offering insights that can help to improve performance.

Sustainability KPIs specifically track progress towards sustainability goals, such as reducing carbon emissions, increasing energy efficiency, or improving social impact. They're an important tool for businesses aiming to operate more sustainably and can be crucial for communicating progress to stakeholders.

For more information about KPIs in general, resources such the Balanced Scorecard Institute can be helpful.

For more specific information about sustainability KPIs and how to calculate them, organisations like the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the United Nations Global Compact offer guidelines and resources. The Corporate Finance Institute also provides a detailed guide on how to select and use sustainability KPIs, as well as training courses and certification in Environmental, Social and Governance (ESG) specialisations.

For most Createchs, here are the top five most relevant quantitative environmental KPIs (but remember that KPIs should be tailored to the specific context and goals of your business):

Total operational greenhouse gas (GHG) emissions: Total Scope 1, 2, and 3 emissions in metric tonnes of CO2 equivalent (CO2e).
Total energy consumption: Total energy consumption in kilowatt-hours (kWh) or megawatt-hours (MWh).
Proportion of renewable electricity: As a percentage of total electricity procured from energy suppliers.
Operational GHG emissions reduction: As a percentage of a chosen base year (e.g., founding year of business). Typically, this KPI is associated with a strategic goal (e.g., 65% by 2025) or by a net zero target (e.g., net zero by 2030).
Resource efficiency and waste reduction: Total amount of waste generated in metric tonnes, broken down by type (e.g., hazardous, non-hazardous, e-waste) and disposal method (e.g., recycling, landfill, incineration). This KPI is often associated with metrics such as the recycling rate (percentage of waste materials that are recycled or repurposed).

When it comes to social impact, this is a more complex area for KPIs and there are many potential choices from those related to diversity and inclusion, to community investment and outreach. Also, there is often a mix of qualitative and quantitative KPIs to choose between. A good source for researching social impact KPIs appropriate to your business is the searchable IRIS Catalogue of Metrics which aligns with over 50 third-party standards for impact reporting (and also links them to the UN SDGs – click here to download the report). Also, corporations with sustainability leadership positions such as Unilever publish comprehensive reports covering environmental and social KPIs (click here).

This information is brought to you by the Centre for Sustainable Design (CfSD) at the University for the Creative Arts in the UK. CfSD was established in 1995 in Farnham, Surrey, UK and is based within the Business School for the Creative Industries (BSCI). The Centre has led and participated in a range of high-quality research projects and has organised hundreds of conferences, workshops and training courses in Europe. CfSD works with partners in Europe, Asia, and North America to deliver high quality results.

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