Sustainability Indicators and Metrics of Industrial Performance

Abstract

Abstract There is a lack of accepted metrics and credible indicators to assess the current state of a company, an industry or the manufacturing sector of the economy with respect to its performance in promoting sustainable development. Metrics and indicators must be established before progress can be measured and goals for improvement can be set. These indicators of progress need to take into consideration material intensity, energy intensity, resource consumption and pollution dispersion, however, these measures alone are not sufficient indicators. They need to be assessed in the context of the total costs they represent to the company as well as in the context of an overall value-added the business generates. The design and preliminary testing of indicators by companies under the auspices of the National Roundtable on the Environment and the Economy and the Center for Waste Reduction Technologies (CWRT) have yielded a good basis for establishing workable indicators of industrial performance along the themes of energy and material use, resource consumption and pollutant dispersion; however, these indicators have required refinement to ensure that they are simple, easily understood, reproducible, and cost-effective in terms of data collection and suitable for managerial decision making. In addition, work has been needed to adapt them from large to medium and smaller-sized companies. Through a grant from US Department of Energy and under the auspices of CWRT, sustainability indicators and metrics in the areas of investigation described above have been further refined and adapted to become more robust for use in management decision making. As a part of this effort, a Total Cost Assessment tool has been developed, and particular focus has been placed on understanding social costs associated with environmental impacts as an indicator of future costs companies may bear. Introduction The often-cited principle of business "what's measured gets managed"highlights the need to understand in numerical terms where an operation is currently and what change occurs over time. While difficult to do, this is crucial to Sustainable Development. An example can be found in the efforts to produce visions for the future of industry. The material and energy intensive industries, including agriculture, aluminum, chemicals, glass, metal casting, mining, petroleum, and steel are part of the "Industries of the Future" program of the United States Department of Energy. Each of those industries has a vision for what it will become in the year 2020, including the challenges, the barriers, and the research needs related to achieving that vision. And, those industries are developing "roadmaps" which define the steps and milestones along the way. However, there is a lack of accepted metrics and credible indicators to assess the current state of a company, an industry or the manufacturing sector of the economy. Metrics and indicators must be established before progress can be measured and goals for improvement can be set. That need prompted four companies and the United States Department of Energy to fund two projects on metrics and indicators. Those projects where conducted by BRIDGES to Sustainability in Houston, Texas.