oday, businesses and companies alike rely upon financial capital as the main resource for ensuring stability and driving business growth. The primary metrics for evaluating financial performance include measuring cash flow and determining profit on a monthly and yearly basis. Digging a little deeper there are a number of other specific key business performance indicators (KPIs) that companies can select from to monitor and track financial performance. Forbes previously provided a number of financial KPIs for consideration including cash flow from operations, inventory turns, receivables growth vs. sales growth, productivity, on-time deliveries, employee retention, back log, interest rate coverage, and gross margin. The Harvard Business Review (HBR) discussed return on assets (ROA), return on equity (ROE), and debt leverage as the leading means to determine business performance. Small Business reviewed profitability, liquidity, debt, and activity as the primary measurements for business performance. So as can be seen, companies and businesses have a number of financial KPIs available to measure business performance. The key is to determine which metrics work best for your organization.
However, are there other sources of sustainability capital that can benefit and optimize business and organizational performance, and if so what types of KPIs and other metrics can be used to add more sustainability value to the bottom line?
The following sustainability capital sources covering the “triple bottom line” of environmental, economic, and social impact, can be evaluated. Examples of KPIs and metrics that can be used are also provided.
The number of triple bottom line sustainability capital sources are varied and opportunistic. The first step is identifying and classifying those sources that can provide the most worth to the company or organization. Selecting the best metric or KPI and then monitoring on a consistent basis will add additional sustainability value to the bottom line.