- By Eva Pohl
A company that has a sustainability policy often has sustainability metrics, but it is hard to say if it is performing well or not. However, it is possible to add these metrics up in different ways and to create tools to evaluate them. Such a tool can be called “Sustainability Index.” This can also be done for a certain sector of the enterprise, a product or a service.
Another form of index that measures only environmental performance is the Life Cycle Assessment (LCA) methodology. It was invented in the 1970’s, but became popular in the 1990’s when computers were efficient enough to handle large databases. An LCA begins with an inventory of all emissions and resource consumptions caused by a product or service both when it is produced, consumed and recycled. In the next step, these emissions and resource consumptions are added up in an index and evaluated according to environmental impact and effects.
Finally, in the accounting of enterprises there are often hidden environmental costs because they are included in the overhead and other dark pockets. This causes biases when cleaner production projects are budgeted and planned. More detailed accounting of waste costs and other costs related to the environment often show that environmentally-driven projects have better economic feasibility than first thought. Another area of misunderstanding is public procurement. Some people believe that the cheapest products have to be chosen, but as long as the Request for Proposal (RFP) says that the Life Cycle Cost is central, one can chose to buy, for instance, more expensive refrigerators which are more energy-efficient and thus cheaper in the long run.
- By Eva Pohl