Measuring Eco-efficiency: A Guide to Reporting Company Performance

By Hendrik A. Verfaillie, Monsanto Company, and Robin Bidwell, Environmental Resources Management plc

A report produced for the World Business Council for Sustainable Development

New corporate WBCSD guide offers common framework for measuring and reporting eco-efficiency.

Eco-efficiency is widely adopted in today’s business world but approaches to measuring and reporting its performance have lacked consistency. For the first time, a report by the World Business Council for Sustainable Development (WBCSD) proposes a common measurement framework that can be adopted by all companies, from multinationals to small family-run businesses, regardless of their sector or location.

Eco-efficiency: A guide to reporting company performance provides a common set of definitions, principles and indicators flexible enough to be widely used and interpreted across all industries. The report, prepared under the leadership of Hendrik A. Verfaillie of Monsanto Company, and Robin Bidwell of Environmental Resources Management plc, defines two indicator categories. ‘Generally applicable indicators’ are valid for virtually all businesses whereas ‘business specific indicators’ fit the particular context of individual companies. These indicators provide a strategic tool for business managers, enabling them to assess, measure and increase eco-efficiency performance and improve decision-making.

The report is a result of a two-year process, including a year-long pilot program in which the concept was tried and the indicators were thoroughly tested. Involving 22 companies from 10 industry sectors, the pilot program demonstrated the validity of the framework and that a variety of companies could implement it.

Further, the report provides guidance on how to communicate eco-efficiency performance to external audiences. "It is intended to give external stakeholders such as bankers, insurers, and consumers a way to evaluate the eco-efficiency performance of a company " say the project leaders. " Also, these indicators go beyond measuring a company’s environmental performance and bridge the gap between environmental and financial data."

The WBCSD is a coalition of 140 companies committed to sustainable development. Its members are drawn from 30 countries and more than 20 major industrial sectors. The organization also benefits from a thriving global network of national and regional business councils and partner organizations, representing more than 600 business leaders.