Wednesday, 10 September 2014

Maturity Model Blog 2: The Need for a More Objective Sustainability Maturity Rating

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Re-Cap of the Maturity Model

In the first blog of this series, we introduced an array of different sustainability maturity models, all of which served the same purpose: providing a vision for integrating sustainability within a business. Using the models, internal stakeholders can loosely determine their company’s maturity level and get a clear idea of what else they can do to improve their sustainability practice.

The models we looked at are great at providing vision, but they are generally based on subjective, internal information. They offer no means by which to make an external assessment of other companies, so it is not possible to accurately benchmark one company’s performance against the industry average. The models can really only be used for internal benchmarking, and for very rough estimations of other companies’ maturity levels.

The Need for a New Maturity Model

In our work, especially with small and medium-sized companies with nascent sustainability practices, we realized that in addition to an internally-oriented maturity assessment, there is a compelling reason for these companies to access an easy-to-understand comparative maturity rating of other companies within their business environment. To accomplish this, they need a maturity model that can be used to make unbiased assessments of other companies.

Being able to compare with competitors and establish benchmarks is fundamental in motivating managers to adopt more sustainable business practices, and helps define their vision of sustainability success. We have found that small and medium-sized companies often do not have a good sense of the state of sustainability practice in their sector – either what their competitors are doing, or what the sustainability agenda of their current and potential clients are. This lack of perspective impedes their ability to take appropriate decision related to sustainability initiatives. 

The Challenge of Creating the New Model

We have been working on the development of a Sustainability Maturity Model that learns from the existing models and overcomes some of their limitations. The goal is to create a more objective, unbiased way to assess a company’s maturity level that is easy for a non-specialist to.

One difficulty in creating such a model is balancing access to the necessary and accurate information with the ability to scale up the model so we can assess more companies and sectors.

There is no debating the fact that the most accurate information about a company’s environmental sustainability efforts – its intent, successes and failures – are recorded with the company’s internal functionaries, and can be accessed only through direct contact with them. A detailed study, even for one company, would probably take considerable time and effort. Even so, it is possible that some of this information might be confidential and cannot be disclosed to an external agency. While a model that is based on such detailed, well-researched information is ideal, it is unlikely that in the near future a concerted effort can be launched to map the sustainability efforts of a significant number of companies on a pre-decided set of parameters. As such, we needed a model based on data that is available in the public domain. Such data is reported by the companies through their websites or sustainability reports. The drawback of this approach is that we cannot be absolutely sure that the data is not exaggerated or under-reported.

Our other challenge in developing the model was balancing thoroughness with ease of use. There are many caveats of sustainability practice which are indicators of a company’s sustainability maturity level, but including them all would make maturity assessment a painstakingly laborious process. Additionally, not all of the indicators would be consistently reported in the public domain.

Introducing the Climate Miles Maturity Framework

After much deliberation, we settled on a solution which met our needs without sacrificing accuracy or ease of use. We have used a simple, objective framework that draws from the most indicative parameters derived from the most popular sustainability reporting standards. Our next blog in this series will give you a sneak peak of how our model works, and the advantages it provides in guiding a company’s sustainability journey.

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