Corporate sustainability: indicators for measuring environmental impacts
Corporate sustainability refers to a company's tangible commitment to developing a business model that ensures long-term viability while respecting environmental and social principles.
This commitment is assessed through ESG (Environmental, Social, Governance) criteria, which evaluate responsible investments from financial, environmental, social and governance perspectives.
Environmental sustainability requires concerted efforts in several areas:
- Reducing polluting emissions
- Use of renewable energy
- Reducing environmental impact
- Reducing water consumption
- Correct waste disposal
- Circular economy
The commitment to sustainability must go beyond rhetoric; it requires ongoing measurement to gauge progress, validate the chosen path towards sustainable goals (as outlined in the UN 2030 Agenda) and identify areas for improvement where necessary.
Indicators to assess environmental impacts
Every company is different and naturally has various impacts on the environment. The sustainability goals and actions will vary depending on the type of business, the actors involved in the supply chain and the products manufactured.In general, there are three main goals of the UN 2030 Agenda to consider when pursuing environmental sustainability:
- Goal 7 - Clean and affordable energy: Businesses should aim to increase the share of renewables in their energy consumption by 2030.
- Goal 9 - Enterprise, infrastructure and innovation: Efforts should focus on improving infrastructure, promoting sustainable industrial practices, increasing resource efficiency and adopting cleaner, greener technologies.
Goal 12 - Responsible consumption and production: Achieving environmentally sound management of chemicals and waste, with significant reductions in waste generation, is imperative.
Measuring performance not only provides valuable insights for future initiatives but also brings quantifiable data to the somewhat abstract concept of sustainability.
Sustainability indicators are critical for assessing a company's commitment to long-term viability while maintaining environmental and social responsibility. These indicators include Material Flow Analysis (MFA), Life Cycle Assessment (LCA) and Environmental Key Performance Indicators (KPIs), which play a key role in assessing environmental factors such as CO2 emissions and water consumption.
MFA-Material Flow Analysis (analisi dei flussi di massa)
Material Flow Analysis is an approach used to quantify the flow and stocks of materials or substances within a defined system. It is invaluable in identifying critical points within supply chains or material recovery processes and guiding investment to improve sustainability. MFA can be applied to single or multiple industrial facilities, making it a critical tool for establishing waste management models and reducing costs, ultimately benefiting the economic sustainability of an organisation.
LCA-Life Cycle Assessment
Endorsed by the European Commission, Life Cycle Assessment (LCA) is considered the leading tool for evaluating the environmental impact of a product. This internationally standardised methodology helps quantify the environmental impacts associated with goods and services and assess environmental benefits, trade-offs and areas for improvement. LCA consists of two main elements: Life Cycle Inventory (LCI) and Life Cycle Impact Assessment (LCIA).
The LCI collects and analyses data on environmental impacts, such as air and water emissions, waste generation and resource consumption, over the entire life cycle of a product - from raw material extraction through production, use and final disposal, including recycling, reuse, and energy recovery. The LCIA is then constructed based on this analysis.
Environmental KPIsKey Performance Indicators (KPIs) are quantifiable values that calculate a company's sustainability and environmental impacts. These KPIs include tracking carbon and water footprints. A company's carbon footprint quantifies the greenhouse gas emissions associated with a product, service or business. It provides insight into the environmental impacts of a company's activities, expressed in tonnes of CO2 equivalent.
At the same time, companies can monitor the environmental and energy efficiency of their facilities, which can translate into tangible business benefits. Customers, stakeholders and partners increasingly choose to engage with companies based on their commitment to sustainability. Companies can use their strong performance in carbon footprint reduction to support their operations and underscore their social and environmental responsibility policies.
Another KPI critical to a company's environmental sustainability is its water footprint, defined as "an indicator of freshwater consumption that includes both direct and indirect water use by a company," according to the Ministry website. A company's water footprint is the total amount of freshwater used in producing goods and services, measured in terms of water consumed (through evaporation or incorporation into a product) and water polluted per unit of time.
It has three components:
- Blue water: Freshwater that does not return to its point of origin or does so at different times.
- Green water: Rainwater that does not contribute to surface runoff and is mainly associated with evapotranspiration in agriculture.
- Grey water: The volume of polluted water, quantified as the water required to dilute pollutants until water quality exceeds pre-defined standards.