Scorecards, Standards and Protocols: Where the #NewMetrics Rubber Hits the Road

 

Day 2 of New Metrics ‘16 kicked off with a main stage presentation from Reputation Dividend director Sandra Macleod, who provided us with a broad overview of how social impact and other factors can influence brand reputation; reputation, she contends, is a core factor that drives investor behavior.

The business case for sustainability is now even stronger and the results are clear – reputations underpin investor confidence in companies’ ability to deliver solid economic returns. Brands with “good” reputational value (Disney, Google parent company Alphabet and several others) – are creating a combined total of $894 billion worth of shareholder value. Reputation can also destroy market cap.

The investment community increasingly favors companies they see as pursuing effective CR and sustainability programs. Not just in specialist funds but across the S&P 500, companies that have a reputation for prioritizing ESG outperform low ones. Socially responsible investing is the fastest-growing investment category, and Macleod confirmed the role of reputation as a major corporate asset.

This affirmation that reputation is increasing investment prospects set up the morning for a number of supporting case studies.

Adam Elman of Marks & Spencer said that strong metrics and the strong business case for sustainability have driven M&S to be a leader in social impact. Elman and his team recently unveiled Plan A 2020, which consists of 100 new, revised and existing commitments, with the ultimate goal of becoming the world’s most sustainable major retailer. Elman’s “smart targets” for Plan A 2020 include making sure to have at least one “Plan A quality” in all M&S clothing, home and food products, to get all employees involved and engage absolutely everyone to ensure Plan A becomes part of business as usual. When standards weren’t available, the company created its own. Elman explained that Plan A was a huge investment; it was launched because it was the right thing to do, but along the journey it has brought significant benefits to the business – for example, it is now 38 percent more energy-efficient and has saved £4 million a year in printing costs, among other important improvements.

Intel’s Supply Chain Sustainability Sr. Manager Jocelyn Cascio then shared the computer giant’s reasons for taking the lead in supply chain transparency and sustainability. First, since Intel owns its own factories, it decided to take charge and align its supply chain management with its core values (awareness, compliance, value, instinctual). Secondly, Intel has seen a four-fold increase in customer requests – to roughly half of its customer base – around supply chain sustainability since 2012. Cascio walked us through three main ways Intel is evolving its efforts:

  • Intentionally integrating sustainability into its supply chain management system, driving accountability – ex: there is now a sustainability section in the scorecard, so it is measured alongside cost, tech and availability.
  • Looking at all possible sources of data to understand risks.
  • Collaboration, both internally and externally.

Next, the Natural Capital Coalition’s Michelle Lapinski shared a groundbreaking valuation approach: The Natural Capital Protocol – a comprehensive way to measure and put a dollar sign on your company’s overall impact. The Protocol is a standardized framework for businesses to identify, measure and value their direct and indirect impacts and dependencies on nature and ecosystem services. Already over 50 companies – including including Coca-Cola, Hugo Boss, Jaguar Land Rover, Kering, Natura, Olam, JetBlue, Tata and Nestlé have tested the framework and are valuing their impacts differently.

Finally, Chelsea Reinhardt of GRI unveiled its new set of global reporting standards. GRI has moved from “guidelines” to standards because they are more flexible and have a future-proof structure, ensuring the GRI standards remain up-to-date and relevant. There is also greater suitability for referencing in policy initiatives, to help drive further uptake of credible, standardized sustainability reporting. New features include:

  • A set of 36 modules, 33 topic-specific standards.
  • A new format with clearer requirements
  • Content clarifications
  • Greater flexibility and transparency
  • Continued alignment with other reporting frameworks (i.e. CDP) and the Sustainable Development Goals.