The Role of Metrics in Sustainable Development: A Progress Report
Issue 4, 1998
Strategy, Sustainability

Companies that have embarked on sustainable development initiatives recognize that measuring progress is critical to success. Companies such as British Petroleum, IKEA, Interface, and Royal Dutch/Shell are exploring not only why and how to reach sustainable development goals, but also how to calibrate how well they are doing. The challenge is that, for many facets of sustainable development, there is no agreed–upon context or consensus for measurement. When a company sets its sights on increasing profits 28 percent in the coming year, everyone involved knows what that metric means and why it's important. But how does a company measure its progress in supporting the well–being of a local community in a developing country? What environmental, economic, and social metrics should a company draw on to develop a state–of–the–art manufacturing plant in a new region, or to change how it transports goods both internally and externally? Will old measures suffice? Can a few simple measures capture the three dimensions of sustainable development – economic success, environmental quality, and social equity – and provide management with valuable decision–making tools?