Tools for Measuring Corporate Sustainability

To start talking about business sustainability or corporate sustainability, it is necessary to understand that it is not just another concept within an organization, but a business approach that is gaining more and more strength and importance.

Why is corporate sustainability a business approach? Because, unlike corporate social responsibility, which leans towards aspects that are more distant from the business and focuses mainly on the impacts that may occur in society, corporate sustainability is oriented towards business results and the impact generated in 3 spheres: economic, environmental and social.

In recent years, more and more organizations have become aware of the responsibility that companies have in the world and the context in which they operate. In this context, it is vital to have both a corporate strategy for sustainability in an organization and its development as well as to be able to measure the level of sustainability as it represents an important level of development for companies. Read on and find out in detail what corporate sustainability is, as well as how it is applied and measured in an organization.


What is corporate sustainability?

The sustainability of a company aims to ensure that an organization not only achieves financial profitability, but also generates environmental, social and economic value in the short, medium and long term. This contributes positively not only to the environment but, above all, to the society and communities where it operates (and both present and future generations).

Therefore, in order to achieve corporate sustainability, strategies and concrete actions must be applied, i.e. corporate tools to eliminate those adverse environmental and social impacts caused by the business operations faced by that same organization.


The three cornerstones of corporate sustainability

The three cornerstones or sustainability factors of a company are three: economic, environmental and social.

This should not be confused with greenwashing, that is, the practice used by certain organizations to appear more sustainable than they really are in terms of their practices and the benefits they provide (which confuses the final recipients), and which responds more to marketing strategies than to a concept of business or corporate sustainability.

But what does it mean to conceive economic, environmental and social aspects? 

  • Economic: It refers to the fact that a company must be able to produce goods and services without using resources that could be depleted or damage the environment, and thus not compromise future generations.
  • It is the balance between the conservation of natural resources and an organization’s demand for them. This implies that a company can conserve and restore the environment, minimizing the negative impact it may have on it. How can this be achieved? By weighing production, consumption, waste treatment, energy use and other factors.
  • The human factor of an organization and its relationship with society are key when it comes to talking about the social vertex. This means that a company must be able to pay attention to the needs of its members, both those of today and those of tomorrow. It implies equity and equality in access to resources, as well as the reduction of social inequalities. Furthermore, decisions must consider the impact it will have on all aspects of society.


How can a company’s sustainability be measured?

The sustainability and corporate social responsibility of a company cannot be just a speech, the strategies applied to achieve it must be measurable in a concrete way and, incidentally, also see how this affects those who make up and give life to this same organization.


There are different models that can be applied to help in this measurement process, such as the Triple Bottom Line (TBL) model, the Pressure-State-Response (PSR) model, the Four Pillars model, the Lowell Center’s model for sustainable production, the Sustainability Balanced Scorecard (SBSC) model, the environment-social-governance model or the El Cubrix model, among others.

Regardless of the model used, it will be necessary to have indicators to determine sustainability in organizations on an accurate basis.


What are corporate sustainability indicators?

A concrete form of measurement is to be able to apply indicators to be able to achieve it. Below we will detail some of them:

Environmental indicators.

Environmental indicators, or environmental indicators, measure the success of the measures that have been taken to minimize negative externalities on the environment and that are a consequence of the activities of the company itself.

Some environmental sustainability indicators include:

  • Amount of water consumed
  • Product life cycle
  • Raw materials used
  • Carbon footprint
  • Carbon dioxide emissions during transportation.


Indicators used to measure social sustainability.

Social indicators measure how the company relates to society or its local community, and this also includes its employees.

This implies that companies must develop an ethical activity in the society in which they operate and in the community they impact, as well as being aware of their human resources (which involves issues such as adequate wages, not discriminating, generating jobs with a good working environment, etc).

Some of the key indicators to measure social sustainability are:

  • Diversity management
  • Compliance with equality policies
  • Transparency in human resources management
  • Support for work-life balance
  • Worker health and safety

Institutional sustainability indicators

This refers to the economic and financial, because an organization that is not profitable is destined to disappear. And in this equation the organization has to watch over this and keep its functions in balance.

It is important to consider that for proper management, the management (i.e., those who manage the company) must have a counterweight, and play a fundamental role in “good governance” to achieve a corporate culture based on sustainability and transparency; for this purpose, various technologies can and should be used to support this objective.

Some of the indicators to measure institutional sustainability are:

  • Working capital
  • Debt
  • Business volume
  • Overall profitability

We can conclude that corporate sustainability is far from being a passing trend, but rather a business approach that seeks to generate a positive impact on the economic, environmental and social spheres of an organization. And it is already part of many organizations, which are currently betting on a corporate sustainability plan as part of their comprehensive strategy.

But is corporate sustainability well implemented? To find out, we can use indicators to measure an organization’s sustainability capabilities. Doing so can increase a company’s competitiveness, improve the perception of it and generate interest from investors. Thus seen, to talk about business or corporate sustainability is to talk about the center of the business, its heart, its core business.

Find out more about it and get advice from one of our consultants to implement this business approach that makes a real difference in organizations.