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With apologies for cross-listing.

Please consider attending the following PDW at the 2009 AOM Conference:

What You Measure Is What Gets Done: The Importance of Developing Appropriate Sustainability Metrics

Program Session #: 405 | Submission: 12144 | Sponsor(s): (AAT)
Scheduled: Sunday, Aug 9 2009 11:30AM - 1:00PM at Hyatt Regency Chicago in Columbus KL

Moderator: Irene Henriques; York U.

Presenter: Sanjay Sharma; John Molson School of Business
Presenter: Michael Toffel; Harvard U.
Presenter: John Peloza; Simon Fraser U.
Presenter: Peter Kinder; KLD Research & Analytics Inc.

Organizer: Sujit Sur; Dalhousie U.
Organizer: Carol-Ann Tetrault Sirsly; Concordia U.

While sustainability metrics are essential to academics, consultants and managers, there seems to be no consensus on which ones are meaningful. To answer this question we need an understanding of sustainability to "who" for "what" and "why" before we embark on the "how" and "when" we measure this broad construct. The role of industry and context cannot be ignored, nor can the practical difficulties of information sources and associated validity/reliability issues. Sustainability metrics are the foundation for monitoring progress, defining objectives and moving forward (or not!) on sustainability agendas. This All Academy Symposium initiates a dialogue with experienced researchers and the co-founder of KLD on whether we measure what we truly value or whether we only value what we can readily measure. The GAS (generalizability, accuracy, simplicity) problem facing sustainability metrics underlines the compromises that must be made. Endorsing "Green Management Matters" we propose that appropriate sustainability metrics are the foundation to measuring what truly matters!

Format:

Dr. Irene Henriques will moderate this panel and will lead the panelists through the following agenda:

1.   Overview of the state of existing metrics research, commonly accepted measures of the financial impacts from sustainability - John Peloza

2.  Available metrics and KLD's rationale for using them – Peter Kinder

3.  Narrower, highly quantitative perspective on sustainability metrics and available data sources -  Mike Toffel

4.  Broader, qualitative perspective to measure holistically via triangulation of different sources of data.  Finding the balance to validity and reliability – Sanjay Sharma

The four panelists will each have 15 minutes to elaborate on their chosen theme, with 10 minutes earmarked for the moderator, and allowing 20 minutes Q&A for the audience, for a total of 90 minutes for the panel.

Proposal Overview: 

            Inspired by the Green Management Matters theme and responding to the paucity of sustainability metrics, we propose a dialogue on how researchers may capture appropriate measures of firm and industry sustainability and their effects on performance.  As befits an All Academy Symposium, this topic appeals to academics, consultants and managers coming to grips with measuring what matters.    While ESG (environmental, social and governance) reporting is positioned to transform traditional financial disclosure, it is still unclear as to which set of metrics provide insight into sustainability performance.  A discussion around measuring what is truly important to assess or monitor sustainability, as opposed to what is readily measurable, is fundamental to developing meaningful metrics. 

            As the focus on sustainability has evolved from purely resource usage to a broader ecological footprint, we need to assess our measurement tools to ensure our research captures the broader indicators of sustainability.  To do so, this panel will critically review the current usage of metrics, examine the existing assessment criteria, identify the shortcomings, and propose the way forward in the development of appropriate metrics.  John Peloza will share his review of extant literature and highlight commonalities and gaps in commonly used financial metrics. Thereafter, Peter Kinder, the co-founder of KLD rating – the most widely used criteria presently, will provide insights into the rationale used for selecting indicators, as well as the challenges faced in practically assessing sustainability.  Mike Toffel will then explore the very definition of the construct, and share his research on what quantitative measures exist and what needs further examination.  In conclusion, Sanjay Sharma will elaborate on the broader and holistic approaches, including qualitative measures to fully examine the phenomenon, before the floor opens for audience question and answer session with the panelists. 

            Thus this panel will discuss the data sources, existing understanding and missing links in our present knowledge, and instigate a dialogue on the appropriateness of sustainability metrics to respond to multiple stakeholder perspectives, various industry/ cultural contexts and dynamic change over time.  We will thus capture quantitative and qualitative approaches towards developing and using sustainability measures.  Issues to be discussed will include how to move beyond self-reports to ensure credibility and reliability; what levels of analysis and data aggregation are meaningful; how should off-sets be interpreted (i.e. carbon emission trading); and how to assess validity or determine predictive validity.

We expect to have a highly interactive panel discussion and hope that you can join us for the session.