Like I explained in our last article, in business the urgency for objective environmental impact measurements and transparency has been growing fast for the past months. New EU guidelines, the Corporate Sustainable Reporting Directive, compel more and more companies to accelerate their green efforts and report on it.
With this, non-financial accountancy grows in importance. Partner at Deloitte Accountants, Ralph ter Hoeven, said in Het Financieel Dagblad that he expects that decreasing emissions will become paramount in business policy and strategy. This means we have to come clean about our impact. Or – literally translated from a Dutch saying – we have to show our naked butts. But how, for heaven’s and Salacia’s sake, do we show our naked butts? And how do you navigate in this messy jungle of standards, methods, indicators and tools that promise to help you come clean?
I’ve had some years of experience in conducting impact measurements for a large variety of companies. I’ll explain the most frequent difficulties for companies tracking their impact and how Salacia solves these. Because showing your naked butt is already uncomfortable. But doing this while being lost in the jungle is just not fun.
I’ve seen a uncontrolled growth of reporting standards, measurements methods, environmental indicators and impact tools in the market. Meant to help companies navigate their way towards transparency and reduced impact. But because the forest has become so messy, the result is the contrary. Companies get lost. Should you use GRI, IIRC and IRF, SASB or the GHG-protocol? Do you choose to focus on the SDGs or to join the SBTi? Do you measure and reduce CO2-eq emissions, or also water use and pollution, biodiversity loss and energy use?
Salacia is not another such initiative. Rather, it uses existing and internationally recognized standards, protocols, methods and indicators. These are all integrated into our software. Based on a concise overview, you can choose which standards, methods and indicators to use. With one click, the dashboard shows your results according to these. With another click, these results flow into your own sustainability report.
The two methods for impact measurement I’ve seen most often are the life cycle analysis (LCA) and – let’s call it – the Excel-method.
LCA’s are extremely detailed studies of the total impact of a product or service, throughout the value chain. Performing an LCA mostly requires hiring a specialist. This is expensive. And in order to measure the entire impact of a company, numerable separate LCA’s are needed. This is often not desirable, nor doable. Also, when you’re interested in knowing the impact of all employee car travel, it’s a bit much to perform an LCA at Tesla. Rather, you just want to use existing knowledge of the impact of a car kilometre in a Tesla.
The Excel-method is also time consuming. It often requires manual data search and entry, after which the calculator behind the tool shows the results. If you’re lucky, they automatically end up in a dashboard, ready for interpretation. If you’re unlucky, you will also have to manually convert these into a results overview. The more extensive the Excel analysis becomes, the more likely it becomes that the model will “explode”: too large, too many inimitable links to cells in calculations and sometimes even – this is scarier to me than watching a horror movie – hard coded values in calculations. The Excel-method is more accessible than the LCA, but offers little flexibility and often little transparency and traceability.
Salacia offers a more efficient and flexible alternative. With little effort at our client’s side, Salacia is able to conduct extensive analyses. Since our software seamlessly connects with existing operational and financial databases at companies, there will be no more manual entry. Also, we can use a mix of existing general LCA’s and company specific LCA’s. For example, you purchase coffee. We use results of existing LCA’s to measure the impact of this purchase. However, after a while you conduct an LCA on the exact impact of the coffee you purchase. We then replace the general with the company specific LCA numbers. Quite easy.
The language of the environmental impact (analysis) is not widely understood yet. Companies are often dependent on consultants to conduct these analyses, or on internal specialists. When analyses result in scientific reports, they’re often difficult to understand and interpret by non-specialists, I have seen. This makes such reports an ineffective internal or external communication method. On the other hand, when reports are too simplistic, they provide little ground to base sustainability policy and strategy on.
Salacia’s dashboards use clear language, ensuring that the results can be understood throughout your organisation. Also, we can make a variety of different visualisations: for person A, quick and simple insights in the efforts of the past months will be enough, while person B would like to see more detail and wants to be able to perform more complex analyses on the results. It’s all possible. Moreover, since our software is rolled out company wide, anyone within your organisation can get access. Not only the green guys at the end of the hallway. This helps generating internal support for sustainability policies and gives everyone the knowledge base needed to get going.
Impact analyses are often performed as a one-off or yearly study. Whereas – if you’re not only interested in producing your legally required yearly sustainability report, but actually want to focus on reducing your impact – real-time tracking is needed.
Since Salacia’s software link with existing databases, we measure your environmental impact at the speed these databases are updated. Anomalies can now be recognized much earlier, which makes it easier to re-strategize.
Let me conclude. Performing impact studies is not as widespread yet as Mother Nature requires. This is a result of the following: companies are lost in the jungle of standards, methods and tools and often have no clue where to start; impact studies are time consuming and expensive; analysis and interpretation often requires specialist knowledge; and there is a mismatch between the low frequency with which studies are performed and the high frequencies at which they can truly inform policy.
Would you like to know more about the solution Salacia provides? Give me a call! Then we’ll show you the way through this jungle. So you can show you’re naked butt with confidence.