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Benchmarks and Indicators
According to the Merriam-Webster online dictionary, a benchmark is, "a point of reference from which measurements may be made" or "something that serves as a standard by which others may be measured or judged". Ideally, retailers will measure their environmental impacts and monitor their performance against accepted standards.
Benchmarks and Indicators are closely tied to the Corporate Social Responsibility (CSR) Reporting section of the Greening Retail Best Practice Database because a good CSR report will include the results of the indicator measures. It is important to choose indicators that are relevant and measurable.
Breadth of Practice
Key Performance Indicators (KPIs) reveal the crucial success factors of an organization. Effective indicators are directly related to retailers' goals and objectives. Sometimes aggregated indicators, such as an ecological footprint or a carbon footprint, can simplify decision-making.
Baseline measurements are gathered before a program is started. They are used later to provide a comparison for gauging the success of an environmental initiative. One way to assess how well a retailer is doing is to compare indicators with similar retailers.
Setting ambitious environmental targets is laudable; however, they should be achievable. It is also helpful to have interim goals that can be achieved along the way to long-term targets. In order to know how quickly retailers are moving towards their targets, the more often they can take a reading on their indicators, the better; therefore, regular monitoring of environmental indicators is important.
The following table summarizes the types of practices found in the Greening Retail best practice database that pertain to benchmarks and indicators and includes the number of companies for which this practice is described in the database.
Use a Set of Key Performance Indicators
Key Performance Indicators show the important success factors of an organization. Effective indicators are tied to retailers' goals and objectives. For example, each year Tesco reviews their KPIs to ensure that they are meeting the needs of their stakeholders and are still the most appropriate and robust measures of their impact.
For the past two years, Timberland has published a set of KPIs at the beginning of each CSR report. While this list has included important metrics, Timberland believes they were an inadequate gauge for overall CSR success. Timberland is developing a robust "dashboard" of metrics that will give a better demonstration of overall progress on global human rights, environmental stewardship and community involvement.
Finally, at Pick n' Pay, a priority sub-set of KPIs has been agreed upon, which includes specific indicators on their environmental performance.
Use an Aggregated Indicator
Sometimes aggregated, or combined, indicators can simplify decision-making. One popular example of an aggregated indicator is the ecological footprint, which estimates the area of land and ocean required to support the consumption of resources and energy and assimilate wastes.
Carbon footprints measure one part of an ecological footprint; namely, the combined carbon dioxide emissions of some or all of the activities of a retailer. Morrisons' Carbon Footprint covers their stores, depots, all transport (Group-owned and third party haulage) and also their in-house supply chain of manufacturing, processing and packing facilities. It is being used as a measure of their carbon emissions for the Group, and taking 2005 as the baseline, they aim to reduce their Carbon Footprint cumulatively by 36 per cent by 2010. In the past 12 months they have achieved a 6.6 per cent reduction in their total Carbon Footprint of 90,874 tonnes.
Marks & Spencer measured the approximate 'footprint' of all the food they sell at 3.3 million tonnes of carbon dioxide. This work demonstrated that the emissions caused by packaging and transportation are relatively small in comparison with raw material production and manufacturing.
Another example of an aggregated indicator is Ito-Yokado's "Integrated Indicator". They calculated the "IY Environmental Impact Indicator" with the "Integrated Indicator" as the numerator and the product of the total floor area of all stores times operating hours as the denominator, and thereby analyzed the relationship between the environmental impacts and their business activities.
Establish a Baseline
Baseline measurements are gathered before a program is started. They are used later to provide a comparison for gauging the success of an environmental initiative. Zellers developed a complete energy baseline of all its facilities in 1999. Since then, energy consumption for each facility has been tracked monthly. Each quarter, energy consumption is analysed to determine the Top 10 energy users in terms of consumption and cost per metre squared.
Comparisons with Similar Companies
Another way to assess how well a retailer is doing is to compare indicators with similar retailers. For example, H-E-B assesses their results in relation to other grocery retailers from time to time. They note the importance of also comparing to retailers in close proximity to their stores or with similar weather conditions. Measures they compare include $/kWh, kWh per sq. ft. and cost per sq.ft. of electricity and natural gas
Setting ambitious environmental targets is laudable; however, they should be achievable. It is helpful to have interim targets so that goals can be achieved along the way to long-term targets.
The John Lewis Partnership has pledged to reduce its CO2 emissions by 10 per cent by 2010, relative to their trading pattern in the year 2001. In summer 2005, KarstadtQuelle's neckdermann.de became the first German mailorder company to send its main fall/winter catalogues on a climate-neutral basis.
Morrison's target for carbon reductions are bolder: they aim to reduce their Carbon Footprint cumulatively by 36 per cent by 2010 (based on 2005 emissions). Other targets include:
In order to know how quickly they are moving towards their targets, the more often retailers can take a reading on their indicators, the better. B&Q has achieved the Carbon Trust Standard by reducing its carbon footprint year on year. It aims to maintain this reduction and the retailer is also in the process of rolling out stores with a targeted 50 per cent reduction in carbon emissions. The Halifax store opened in April 2008 and the New Malden store is due to open soon.
This synopsis was compiled from case studies in the Greening Retail Best Practice Database. Sources for the information in the case studies are available in the database.
This database contains links to case studies of environmental best practice from retailers around the world. You can search this database by the name of the company only, or you can find case studies that match one or several specific criteria, such as the type of retailer, the type of best practice, the company's country of origin, and/or project return on investment.
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Please note that we cannot include all the practices of every retailer; therefore, the non-inclusion of a company, or of a certain area of practice for a company, does not mean that they do not presently have progressive environmental initiatives in these areas.
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