What is Sustainability Measurement? A Definition

From an environmental standpoint, sustainability measurement is a process and framework for measuring and attributing greenhouse gas (GHG), climate, and environmental impacts and outcomes to an organization’s direct actions and business operations. For example, a clothing company will measure sustainability metrics around:

(1) The material impacts of its supply chain, suppliers, and labor practices - including waste, water, and emissions

(2) How its raw materials and products travel from manufacturing to store (or e-commerce factility) to customers (and post-use destinations like recycling, upcycling, or consigment stores) to increase overall sustainabile circularity

(3) Individual and community well-being from its operations — which could include indicators like workplace safety, health, and wellness for employees and garment workers, as well as broader trends in local rates of poverty, homelessness, and economic development based on its organizational footprint.

As we can already see in this example, there’s a relationship between (a) an organization’s operations or "materiality" (working with suppliers, transporting materials, making clothes, selling them to customers, handling post-use product), (b) measurement (metric tons of CO2, liters of H2O consumed, etc.), and (c) positive or negative social externalities. Sustainability measurement tracks and understands these relationships through data.

Sustainability ESG Measurement Framework

In this sense, sustainability measurement is a process that encompasses several components:

(1) Mission statement and/or theory of change

(2) Materiality assessment

(3) Measurement framework (selected sustainability metrics + indicators)

(4) Data strategy

(5) Data capacity (collection and capabilities)

(6) Sustainability analytics, data science, and measurement

(7) Sustainability reporting, learning, and continuous improvement

Sustainability is also a space with many overlapping frameworks, which can sometimes make it feel a bit like acronym soup. There's Greenhouse Gas Protocol, IRIS, SASB, GRESB, SDGs, CDP, as well as B Lab's B-Corporation framework.

Below we compare several different sustainability measurement frameworks, as well as offer some measurement guidelines and recommendations.

For organizations that are newer to sustainability, corporate social responsibility (CSR), or environmental social governance (ESG), existing measurement frameworks can be a helpful way to establish program guidelines, measurement strategy, and focus data collection. In most cases, it's best to start with an existing framework that fits your organizations work, goals, and measurement capacity.

Greenhouse Gas Protocol

Greenhouse Gas (GHG) Protcol is the gold standard framework for emissions tracking, and a foundational framework for modern carbon accounting. Most organizations measuring their emissions (typically measured in metric tons of carbon equivalents, or tCO2e) will use Greenhouse Gas Protocol's frameworks, and our own sustainability software at Brightest is also based on GHG Protocol's methodology.

GHG Protocol also provides a framework and guidance on an important concept for sustainability measurement and carbon accounting: emissions based on scope.

Scope 1 emissions are direct emissions facilities and assets owned by the company, Scope 2 emissions indirect emissions from rentals, leased assets, and utility consumption, and Scope 3 emissions are all other indirect emissions from partners, customers, employees, suppliers, and end-of-life treatment.

Greenhouse Gas Emission Scopes

As you already know (or can likely guess), Scope 1 and 2 emissions are easier for companies to measure. Measuring scope 3 emissions can be incredibly complex, difficult, and data-intensive (that's why we made Brightest). But to have a full, holistic understanding of its GHG footprint, a company needs to measure its upstream, direct, and downstream emissions. This makes carbon (CO2) and carbon equivalents one of the most important sustainability metrics for any company.

B Corporation

The B Corp certification (and measurement framework) is designed for companies looking to make balanced business decisions and investments that weight the impact on their workers, customers, suppliers, community, and the environment. B Corp's impact framework measures five categories:

(1) Governance - corporate structure, control, shareholder rights, shareholder diversity and inclusion (D & I), and distribution of shareholder value to employees

(2) Workers - fair and just labor practices, compensation, workplace diversity, employee volunteering, and culture indicators

(3) Community - the B Corp's interactions and impact on the broader community

(4) Environment - the company's sustainability practices, measurement, and environmental impact and footprint

(5) Customers - how customer-centric the company is, how it measures customer success and satisfication, and who the company serves and works with

In the B Corp framework, environmental sustainability is one pillar or measurement area companies are responsible for within a broader whole about the overall social performance (or sustainability) of the business.

While there are some larger B Corps like Danone North America, Eileen Fisher, and Patagonia, generally the B Corp framework is a better fit for mission-driven startups and mid-sized companies who care about balancing profit and purpose, yet don't have large, complex ESG reporting infrastructure. Most B Corps typically staff one to three full-time employees in their social impact team or department, which then interfaces cross-organizational with other leaders and stakeholders to implement programs, gather reporting data, and measure impact. At present, B Corp certification and reporting is primarily survey-based.

[Disclaimer: Brightest is in the process of certifying as a B Corp, and also designs and develops software used by other B Corps for social impact operations and measurement. To learn more about the B Corporation Framework, go here.]

IRIS (Impact Reporting and Investment Standards)

IRIS describes itself as a "generally accepted system for measuring, managing, and optimizing impact," primarily based on the United Nation's (UN) Sustainable Development Goals (SDGs) impact measurement framework.

IRIS+ provides a robust, open-source list of social impact metrics mapped to the UN SDG's, making it a helpful starter resource for non-profits and social enterprises, particularly those engaged in large-scale or international impact work. If you're new to measurement frameworks or looking to adopt a more standards-based approach to measurement, we highly recommend spending some time reading through the IRIS+ resource library and metrics list.

Social Impact Measurement Framework

Source: IRIS+

However, one practical challenge with IRIS's measurement and metrics ecosystem is its size and complexity. As of 2019, IRIS suggests 594 different potential social impact metrics in its reference set, some releated to sustainability, some focused on very different areas. In most cases, only a few will apply to your organization, and - just as importantly - it's critically important to start with a manageable set of key performance indicators (KPIs) and build out measurement capacity over time. Start with three to five IRIS metrics as your core impact measurement criteria, then grow and assess from there.

SASB (Sustainability Accounting Standards Board)

SASB has similarities to IRIS and the B Corp Framework, but with more integrated design of financial accounting standards. As a result, SASB applies what some view as a higher level of "rigor" or precision to social impact and sustainability measurement.

Whereas IRIS+ is sector-specific (Climate, Diversity & Inclusion, Health, Water), SASB segments by industry vertical (Consumer Goods, Food & Beverage, Healthcare, etc.), using 77 different standards. And by comparison to B Corp, SASB is more of a large enterprise framework used for corporate governance, shareholder and ESG reporting, and socially responsible investing (SRI) analysis that includes metrics and components oriented toward sustainability.

If you work at a large corporation, find, download, and familiarize yourself with the SASB standards for your industry - then work with internal and external partners and experts to establish the right measurement and reporting system.

GRI (Global Reporting Initiative)

GRI is based in Amsterdam, and its measurement system, the GRI Standards, is a framework for international sustainability reporting. Similar to SASB, GRI Standards are designed for large global organizations. GRI Standards specifically aim to help support a global common language for non-financial sustainability reporting and disclosures, versus SASB's embrace of more finance-centric social impact reporting.

GRI segments its standards into four categories:

(1) Universal

101: Reporting Principles ["Materiality"]

102: General Disclosures

103: Management Approach)

(2) Economic

(3) Environmental [Sustainability]

(4) Social

Within GRI's three (3) Universal Standards, GRI asks organizations using its reporting framework to define (and disclose) several foundation aspect of the organization's mission and impact as part of its General Disclosures:

(1) Organizational profile - an overview of the organization’s size, geographic location, and activities

(2) Impact Strategy - an overview of the organization’s strategy with respect to sustainability and social impact

(3) Ethics and Integrity - the organization's defined alues, principles, standards, and norms of behavior

(4) Governance - the organization's structure and composition, as well as environmental risk management and policies for evaluating economic, environmental and social performance and decision-making.

(5) Stakeholder engagement - the organization’s approach to stakeholder alignment and engagement

(6) Reporting practice - the organization’s approach to sustainability reporting and measurement

GRI further segments its reporting system into three categories: (a) Mandatory requriements that an organization must comply with to meet GRI's standards, (b) Recommendations that are encouraged but not required to be GRI compliant, and (c) Guidance, which serve as market context to organizations using GRI Standards to prepare a GRI-compliant sustainability report or benchmark social impact measurement against a specific set of standards.

GRI Sustainability Reporting Stantard

An example GRI water reporting standard. Source: GRI and GSSB

GRESB

GRESB, formerly the Global Real Estate Sustainability Benchmark, is primarily a framework for real estate and buildings. For most non-profits and social impact organizations, GRESB won't be relevant, but can be a helpful sub-measurement framework within larger corporate impact and sustainability measurement in cases where the company owns, makes, and/or controls meaningful real estate and infrastructure investments.

In addition to GRESB, there are also other building-based energy standards like LEED (Leadership in Energy and Environmental Design), which focus on energy efficiency and sustainable design quality.

In almost every case, we recommend starting small (three to five core impact metrics) and identifying the most relevant, existing sustainability measurement framework to serve as reference inspiration (and benchmarking standards) for your ESG or CSR program. If you're a startup, start with B Corp. If you're a non-profit, start with IRIS+. And generally, only turn to custom impact metrics when (a) existing measurement systems clearly don't fit your work and (b) you have high confidence in your data and measurement capacity.

We wish you all the best as you continue your sustainability measurement, and if we can be helpful at all (at any step in your process), please get in touch. A central part of our mission and work here at Brightest is enabling better data-driven decision-making (and actions) for good.