Scorecard
Methodology
(< Return to
Sustainability Scorecard®)
ERS Global, in collaboration with researchers
from Georgia Tech, DePaul University Department of
Finance, and the University of Michigan identified core
competencies of high performing environmental and social
responsibility companies. The identification was
initially based on research conducted on strong
financial performers among consumer product companies
and later expanded to include industrial and commercial
services. The combined research team reviewed peer
reviewed academic and journal publications, hundreds of
company sustainability reports, and conducted in-depth
interviews of executives responsible for environmental
and social responsibility functions at these companies.
Analysis revealed a positive association between five
core competencies and financial performance of the firm.
The Sustainability Scorecard evaluates the core
competencies identified in this analysis, and is in use
today across manufacturing and service industries.
The hypothesis was that companies with the following
organizational competencies in place would have stronger
financial performance:
| ●
Demonstrated management commitment to the
environment. |
| ●
Defined metrics and regular reporting of
results to stakeholders. |
| ●
Regular internal auditing of compliance and/or
EMS conformance. |
| ● Engagement of internal and external
stakeholders. |
| ● Innovation processes that took the company
“beyond compliance”. |
A performance index was developed and based on the
presence or absence of these five competencies.
Financial variables evaluated included published
Standard and Poor’s earnings per share, price: earnings
ratio, and increase in stock price over time. Results
showed that those companies strong in these five
competencies experienced the greatest increase in stock
price, as measured by the percent change in stock price
over ten years.
Reviewer Organizations and Beta-test Companies
included:
| ●
CERES |
| ●
3M |
| ●
Interface, Inc. |
| ●
Baxter |
|
|
