How to Measure Environmental Performance

In this article we introduce ISO 14031; and provide a link between SMART objectives, effective leadership, and key performance indicators as a formula for driving environmental performance in your organization.

The method that you should apply in order to determine the environmental performance of an organization is ISO 14031. This standard provides guidance on how to conduct environmental performance evaluation in support of ISO 14001, and was first developed by the International Standards Organization in 1999. This article explores everything that you need to know in order to measure environmental performance under this standard.

According to International Standard Organization (ISO), Environmental Performance Evaluation (EPE) is a “process to facilitate management decisions regarding an organization’s environmental performance by selecting indicators, collecting and analysing data, assessing information against environmental performance criteria, reporting and communicating and periodically reviewing and improving this process”.

ISO 14031 has been describes as a “simple” environmental management system by many commentators. To some extent this is true, because this standard provides a plan-do-check-act method that enables top management to gather information on environmental performance, which is also meaningful and reliable-enough to base management decisions upon. This is illustrated by the figure below:

Environmental Key Performance Indicators (eKPIs) are the primary mechanism that can demonstrate how effectively an organization is achieving its environmental objectives. To assist you in developing meaningful KPI’s, we would suggest that you to consider these perspectives when you are planning environmental performance evaluation:

• Relevance – ISO 14001 requires organizations to identify the significant environmental aspects associated with their activities. The key to developing meaningful environmental performance indicators is to prioritise activities with the highest environmental risk.
• Comparability – The growth in environmental reporting in recent years has enabled organizations to be benchmarked against one-another. Unlike other comparison tools, ISO 14031 is focussed specifically on environmental issues and not social, economic or general organizations features (such as the CEO statement). This means that many authors can distinguish its benefits over GRI reporting when ISO 14031 is applied as a scoring mechanism:

• Verifiability – The evidence collected through Environmental Performance Evaluation is generally very robust. This is because individual performance indicators can be combined to provide greater validity and reliability. This is covered in considerably more depth in the section on indicators below. In addition, because it is based upon ISO 14001, the performance of an organization is almost universally verified by accredited certification bodies, such as NQA, which adds considerable weight to the verity of performance data.
• Clarity – Ambiguity is dramatically reduced due to the specific nature of environmental performance indicators. For example, clause 3.3.3 requires organizations to analyse and convert data into meaningful information. To illustrate this point, think about the nature of energy consumption: Whereas it is possible to measure the average energy consumption across an entire organization and to estimate this as a monthly figure, a more appropriate time-scale might be to measure changes over each week in order to determine whether energy is being drawn during the evenings or weekends when electrical devices should be switched off. Clear information is valuable information.
• Comprehensiveness – environmental performance indicators without question add to an organizations capacity to understand the very broad scope of its environmental performance. This can even allow organizations to respond in advance of environmental incidents and to gain a more holistic impression of its environmental impacts, which may be required by stakeholders.

Key Performance Indicators

ISO 14031 distinguishes three basic types of environmental performance indictor:

1. Management performance indicator (MPI) – environmental performance indicator that provides information about the management efforts to influence an organization’s environmental performance.

Common examples: Environmental costs or budget, number of audit findings, percentage of environmental targets achieved, number of complaints from public or employees, costs of environmental damage (legal non-compliance).

2. Operational performance indicator (OPI) - environmental performance indicator that provides information about the environmental performance of an organization’s operations.

Common examples: Raw material used per unit of product (Kg/unit), energy used annually per unit of product (MJ/1000 L product), emissions of specific pollutants to air (Ton CO2/yr), wastewater discharged per unit of product (1000 L/unit).

3. Environmental condition indicator (ECI) - specific expression that provides information about the local, regional, national or global condition of the environment.

Common examples: Fish deaths in a specific watercourse over time, contaminant concentration in ground- or surface water (mg/L), concentration of a contaminant in the tissue of a specific local species (µg/Kg) e.g. shellfish, pollutant contaminant concentration in ambient air (µg/m3). This approach is particularly useful when all three types of performance indicators are used together to analyse a common problem…

Worked Example

A steel manufacturer has received notification from the Environment Agency that its discharge activities could be polluting a watercourse that contains otters. What might they monitor?

OPI

• Wastewater discharged per unit of product (1000 L/unit).
• Emission of specific pollutants (e.g. suspended solids, biological oxygen demand etc.)

MPI

• Incident response time: to shut down activities in risk of generating pollution (NB, incidents can be simulated)
• Provision of drain covers, spill kits, and preventative measures (quantity of resources).
• Training to deal with abnormal operations that could lead to pollution (number of staff).

ECI

• Contaminant concentration of a specific pollutant within otter excrement (spraints) (e.g. heavy metals).
• Abundance of otters.
• Contaminant concentration within the watercourse.
• Dead fish (NB, otters are generally dependent upon fish to survive);
• Fish abundance (e.g. electrofishing survey).

It should be obvious that otters, being a protected species under the Wildlife and Countryside Act 1981, are more relevant to pollution incidents due to the protection that they afford. Concentrating on the food-supply chain means that fish and associated habitats (such as otter holts and rests) becomes increasingly important to understand.

In addition, it is important to focus and gain clarity on the nature of operations within the manufacturing site, and this means that the source, pathway and receptor of pollutants need to be controlled. Hence we can also focus on preventative measures, such as drain covers, and operational control, which is indeed focussed on the ability of the organization to respond promptly to abnormal operating conditions.

Analysing Data

It goes without saying that environmental performance indicators sometimes require calculation. Do not be afraid to adopt existing quantification methods. For example, it is quite easy to calculate the rate that an airborne pollutant is generated:

The trick to doing this successfully is to avoid double-counting these values and to focus on obtaining reliable data. Sometimes it is necessary to have independent monitoring where employee bias could affect the verity of new data.

Synthesising Solutions

The information derived from analysed data, expressed in terms of EPIs and possibly ECIs, and should be compared. The results of this comparison may be useful in understanding why the environmental performance criteria have, or have not, been met. Indeed, ISO 14031 is especially useful at pinpointing issues because it is designed around the logic of risk-based thinking: having more than one environmental performance indicator can be advantageous when you are looking to validate or corroborate evidence of environmental performance.

Looking again at the worked example, we may find out that otters are affected disproportionately from an activity that is not linked to wastewater, such as construction activities that could lead to loss of otter habitat. We would never have known this without the additional performance indicators, and namely the abundance of otters on the watercourse.

Conclusion

ISO 14031 includes guidance on both internal and external reporting and communicating to facilitate change. Another core function of this standard is how it reinforces the importance of the management review, and if you think about it, this whole process is about getting the best possible information to decision-makers within each organization. It is well worth adopting some, if not all of the principles within this standard if you have an ISO 14001 management system with NQA.