The Role of Metrics in Sustainable Development: A Progress Report [Archive.org URL]

Companies that have embarked on sustainable development initiatives recognize that measuring progress is critical to success. Companies are exploring not only why and how to reach sustainable development goals, but also how to calibrate how well they are doing. The challenge is that, for many facets of sustainable development, there is no agreed-upon context or consensus for measurement. When a company sets its sights on increasing profits 28 percent in the coming year, everyone involved knows what that metric means and why it’s important. But how does a company measure its progress in supporting the well-being of a local community in a developing country? What environmental, economic, and social metrics should a company draw on to develop a state-of-the-art manufacturing plant in a new region, or to change how it transports goods both internally and externally? Will old measures suffice? Can a few simple measures capture the three dimensions of sustainable development – economic success, environmental quality, and social equity – and provide management with valuable decision-making tools?

Answers to these questions don’t come readily. And measuring is further complicated by the need to address the concerns of many stakeholders with different needs and priorities. Fortunately, however, some leading companies have undertaken, on their own or in industry partnerships, to develop and test indicators and metrics for all three dimensions of sustainable development. These first steps help define how companies can tackle sustainable development measurement. The ideal metrics will be those that consolidate progress across all three dimensions of sustainable development.

Editor’s Note: this article was written in late 1998 and discusses the ongoing development of useful metrics so it is out of date but still it provides a useful exploration of core principles and issues to consider.

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