Indicators and steering methods

Data collection: While financial accounting is an integral part of day-to-day business, the preparation of non-financial reports is still generally viewed as an elective exercise. Just like financial reporting, it involves the precise capture of individual datasets, which are then aggregated in a structured report. It makes sense to invest in a dedicated IT solution here. In future, companies will be facing more and more questions about the ecological footprint of their industrial products. And in this day and age, no company can afford to answer: “We don’t know. We don’t have that data.”

Knowledge: Armed with the right knowledge, you can identify potential savings by allocating specific non-financial indicators to different cost items in your company. One typical example of this would be reducing energy consumption – also known as improving ecoefficiency. And this has the welcome knock-on effect of curbing costs.

Measuring success: Non-financial datasets can tell you if your initiatives are making a tangible contribution to climate protection, for example, and whether your investments are paying off in financial terms.

Early-warning system: Indicators in a non-financial report, such as resource consumption, are typically output-oriented. In other words, they indicate end-of-process values. These kinds of metrics are also known as lagging indicators. They are easy to measure but hard to improve or influence.

The amount of heating energy consumed by a manufacturing site at the end of the year is a prime example here. Let’s imagine that a facility has set itself the goal of reducing its heating energy consumption. To do this, the company must identify an enabling “leading indicator” – something that will be almost impossible to find in standardised specifications for non-financial reporting. Most companies develop these kinds of indicators internally.

In this case, a leading indicator could be the average time the automatic industrial doors on the site remain open per hour over the course of a year. Here the aim would be to reduce this time and thus also demand for heating energy, which, in turn, would improve the corresponding lagging indicator. As you can see, leading indicators are excellent steering tools. They can help you keep your company on course to achieve its sustainability goals.

Company-wide, cross-department learning: To present a comprehensive non-financial report, data must be collected from all parts of the company and across all functions. This data collection process helps build valuable connections throughout your company.

Employee motivation tool: Your sustainability communication is the perfect way to inspire your employees – showing them a different side to your company and encouraging them to develop their own initiatives.