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a guide to reporting company performance - page 13 / 38

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Principles

Indicators should:

1 be relevant and meaningful with respect to protecting the environment and human health and/or improving the quality of life

2 inform decision making to improve the performance of the organization

3 recognize the inherent diversity of business

4 support benchmarking and monitoring over time

5 be clearly defined, measurable, transparent and verifiable

6 be understandable and meaningful to identified stakeholders

7 be based on an overall evaluation of a company’s operations, products

and services, especially focusing on

all those areas that are of direct management control

8 recognize relevant and meaningful issues related to upstream (e.g. suppliers) and downstream (e.g. product use) aspects of a company’s activities

The WBCSD recommends that the following eight principles be adopted for indicators in any field, including eco-

efficiency. WBCSD believes that these principles are applicable to all elements of measuring the performance of a company, and could apply to other

areas of sustainability such as social impact. Indicators should:

1 be relevant and meaningful with respect to protecting the environment and human health and/or improving the quality of life

The primary goal of the eco-efficiency concept is to improve the environmental performance of a company relative to the value of the products and services it provides to society. In order to ensure that companies and stakeholders focus their attention on high priority areas, all indicators should be clearly related to issues for which there is a clear need to improve an organization’s environmental performance, or that improve the value of the pr oduct to users and society.

2 inform decision making to improve the performance of the organization

Ultimately, the purpose of eco-efficiency indicators is to help facilitate decisions about a company’s performance. The primary value is to help management make decisions about how production processes and product designs can be most effectively modified to reduce resource use or environmental burdens; or how the performance of a product can be improved in ways that improve its eco-efficiency. Eco-efficiency

the core elements of the appr oach

indicators may also be used by external audiences. For example, stakeholders such as financial institutions may be able to use eco- efficiency indicators to inform decision making about the economic risks associated with a company’s environmental performance.

3 recognize the inherent diversity of business

One of the key challenges of developing indicators is that every business is different. For instance, the factors most relevant to the environmental performance of a chemical company ar e different to those of an automobile manufacturer. While it is tempting to presume that there could be a “universal” set of indicators that would apply to all businesses, in practice the

environmental aspects and values of a company’s activities and products depend heavily on the specific natur e of its business.

4 support benchmarking and monitoring over time

Improving the eco-efficiency of a company’s activities or products requires the use of indicators that can be consistently followed over time, and confidently related to both past and current performance. To maximize the value of benchmarking and monitoring,

indicators must be designed to

minimize the influence of extraneous factors that are not related to either environmental performance or product value. Otherwise users could observe “false” changes in eco-efficiency. Indicators must also be based on r obust and reproducible measurement systems that stand the test of time, and car e

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