Review: How to monitor success
In order to maintain support for sustainability improvements it is necessary to demonstrate how your company has benefited from any changes made. This requires a level of monitoring and reporting back to your stakeholders on progress against the sustainability priorities identified in your company’s business strategy.
The information you need to collect should link directly to your own sustainability priorities, identified within your company’s business strategy. Further details on developing a sustainable strategy can be found in the Strategic Approach module.
Consider using measures that have been tested and agreed for reporting purposes by a wide range of companies – including those from the finance sector. This provides the benefit of enabling your stakeholders, including investors and customers, to compare your performance against other financial institutions and will help to provide transparency and comparability – two essential components for good reporting.
The Global Reporting Initiative (GRI) has the most definitive set of measures currently available, agreed through a multi-stakeholder approach. Available as a Financial services sector supplement (pilot).
A proposed reporting framework that will enable more consistent, comparable reporting is discussed in the Report & evaluate module.
2. What measures are currently in use?
Measures used by financial organisations include the following.
- Number of clients engaged on social and environmental issues.
- Number of clients who comply with internal guidelines/policy and improvements made over time (this can be integrated into mainstream risk management processes).
- Negative publicity received from perceived or actual association with controversial deals.
- Number of staff who have received training.
- Level of ongoing awareness-raising for staff involved in decision-making process.
- Revenue generated by sustainable products (e.g. carbon trading, green products).
- New business gained through improved sustainability credentials (although it can sometimes be hard to attribute new business to sustainability improvements alone).
- Cost savings from operational efficiencies (e.g. energy savings).
- Positive feedback from stakeholders on bank’s activities, for example from NGOs, Socially Responsible Investment (SRI) analysts.
- Ability to report on improvements in sustainability performance (i.e. demonstrate the result of their actions).
Are there key considerations we haven't included? If so, please let us know.
The tools, techniques and practice to deliver sustainability within the financial sector are still being developed
Methods and measures for monitoring success are still being developed within the Finance sector, for example environmental measures being developed for this sector by The Global Reporting Initiative are still draft measures and the application of such measures is still being trialled.
Lack of responsibility for data
Having good information on areas that your organisation may not be 100% responsible for can also be difficult. For example, quantities of carbon within a loan portfolio may depend on information provided by other parties (for example customers and their suppliers). This is a similar issue currently being addressed by other sectors, such as food retail. Effective and credible reporting in this area relies in large part on openness about the degree of influence a financial institution has with its clients.
Lack of consistency in reporting styles
Consistency is always a challenge for transparent reporting – many banks, insurers and asset managers are already reporting on social and environmental performance using a range of different methods of collection or units of reporting. Using standard measures – such as the Global Reporting Initiative or using a standard reporting framework such as the Connected Reporting Framework can help resolve this.
Are there challenges in this area we haven't discussed? If so, please tell us about them.
Do you have another example of how these challenges can be overcome? If so, please submit a case study.