Performance management

Carbon Disclosure Project 2011

How are the world's largest companies
responding to climate change?

 

Maximising the efficiency of operations is significantly more complex once a company commits itself to sustainability goals.

Optimising quality and costs is hard enough in an ever-changing business environment. So how can a company possibly accommodate newer sustainability targets, such as minimising water and energy use, CO2 emissions and waste, as well as attaining the highest levels of conduct on labor practices and ethics?

The challenge is difficult but certainly achievable with tools and processes that PwC has developed or implemented. PwC has advised companies on performance management related to sustainability throughout their operations, from human resources and production to R&D, procurement, marketing and distribution. In advising companies on setting sustainability key performance indicators (KPIs), we’ve developed trend lines against which to measure progress and ensure that KPIs can be measured consistently across an organisation.

Another key tool for optimising performance with respect to sustainability is to conduct quantitative analyses of competing processes and products, a service PwC provides in virtually every sector. With our TEAM® Bâtiment process, for example, we analyse the environmental impact of competing building designs.

Life-cycle analyses are also indispensable tools for assessing a range of environmental impacts of products, processes or modifications of either. For example, a life-cycle analysis can determine the savings in cost, CO2 emissions, water use or other factors, related to a change in packaging throughout the life of a specific product. The comprehensive assessment would include the impacts on shipping and logistics, storage space, and consumer waste. With such assessments, companies can determine whether their packaging reduction initiatives are meaningful, whether improvements are required or alternatives should be explored.

And understanding the level and breadth of buy-in regarding sustainability is also crucial. We have developed tools to measure how employees make decisions that balance priorities, including sustainability, for example, to use as a guide for employee incentives and a measure of corporate culture.

The performance management services we provide related to sustainability include:

  • Identification of the most meaningful measures for financial, operational and regulatory performance
  • Creation of corporate performance management tools
  • Life-cycle assessments of product or service impact on sustainability goals
  • Analyses of sustainability impacts and attributes of competing products and services
  • Evaluations of employee buy-in to the sustainability agenda
  • Mechanisms for fostering employee buy-in

Triggers

  • Which plan will be more beneficial to the environment: reducing the amount of packaging on our products or making the packaging recyclable? What are the relative costs?
  • How can we find the suppliers in the new markets into which we plan to expand that will most closely adhere to our business code of ethics and labor standards?
  • How can we find the breakdown between the sustainability agenda set in the C-suite and our poor performance against our sustainability targets?
  • How do we align our senior management’s compensation with our sustainability goals?
  • If we want to reduce our water use by half in 10 years, what interim targets should we establish?

Case studies

PwC conducted a life-cycle analysis to help a worldwide leader in thin opaque papers assess the impact of the company's activities on the environment.

The client’s challenge

As part of its environmental stewardship commitment, the paper company needed expert counsel to analyse and accurately communicate the environmental impacts of lightweight paper.

Our approach

PwC professionals:

  • Conducted a life cycle analysis of thin paper products
  • Identified strengths and weaknesses and provided recommendations for improving the environmental footprint of current and future products
  • Assisted the client in developing a clear environmental communications strategy

Benefits to the client

As a result of the engagement, the paper company was positioned to communicate its existing environmental story with confidence while making ongoing operational improvements to further enhance performance.

For an international oil and gas company based in Italy, qualifying for key sustainability benchmarks such as the Dow Jones Sustainability Index, FTSE4GOOD, and the Climate Disclosure Leadership Index was essential to corporate business objectives. PwC was retained for its rigorous approach to ensure that the company was capturing and presenting accurate and credible data to Index decision-makers and other key audiences.

The client's challenge

An international oil and gas company based in Italy was seeking guidance on minimising reporting errors, streamlining processes, and increasing confidence in its sustainability activities among financial, regulatory, and internal stakeholders.

Our approach

PwC professionals:

  • • Reviewed and assessed the systems and data reliability at every point of contact:
    • corporate level

      - examined management's data consolidation and Group Report preparation process
    • business unit/ division level

      - evaluated departmental approaches to managing sustainability issues and compiling data
    • production site level

      (on an emphasis rotation basis)- assessed the data collection and monitoring protocol for each reporting area

Benefits to the client

PwC's thorough engagement approach led to procedural enhancements and a stronger profile across key sustainability indices.

PwC's extensive life-cycle analysis and Environmental Product Declarations (EPD) research helped a division of a Belgium-based multinational company enhance regulatory compliance and increase competitive advantage during tender offers.

The client's challenge

In response to mounting competitive challenges as well as escalating environmental scrutiny in the marketplace, the client, a manufacturer of high performance fire protection and insulation materials, decided to proactively identify and communicate the environmental impacts of its products throughout Europe.

Our approach

PwC professionals:

  • Conducted a life-cycle analysis of the company's key products
  • Prepared EPD's in French, Dutch and German
  • Prepared an interpretation of report methodology to ensure transparency and facilitate external review

Benefits to the client

The EPDs and other findings were instrumental in enabling the client to quickly and easily respond to tenders requiring environmental data information in several European countries and to remain compliant with the Integrated Product Policy.

The client, a leading private transport and communications infrastructure management corporation, aimed to strengthen its strategic positioning with stakeholders and influencers by bolstering its CSR program. PwC completed a holistic assessment of the client's activities to identify weaknesses and opportunities. We delivered comprehensive recommendations for upgrading reporting and monitoring systems, elevating employee and stakeholder engagement, and enhancing the client's performance on sustainability indexes and rankings.