Benchmark
Organisations may compare performance with their peers to collect an additional point of reference for objective-setting
Overview
Benchmarking performance relative to peers and internal targets – in addition to societal or ecological thresholds
A level or range of performance that divides sustainable from unsustainable performance. These ranges are set with reference to social norms or planetary limits that have been identified through scientific research. Learn more about Thresholds and allocations. Source: United Nations Environment Programme Finance Initiative (UNEP FI); United Nations Conference on Trade and Development (UNCTAD) (The Cocoyoc Declaration, 1974); Kate Raworth The evaluation (of something) by comparison with a point of reference. Putting performance into a common unit (using ratings or valuation) is necessary to enable comparison of performance at different units of analysis. Source: Oxford English DictionarySocietal or ecological threshold
Benchmark
- on a metric
Metrics
A standard of measurement. The words 'metric' and 'indicator' are typically used interchangeably. Metrics are used to measure the state of something at a point in time. Repeated measurement makes it possible to determine change over time.
Source: Adapted from Meriam Webster Online Dictionary
; - on a sustainability topic
Sustainability topic
A term used broadly to denote aspects of stakeholder well-being (e.g. health, wealth, safety), or business activities or practices that are evidenced drivers of well-being (e.g. employment, diversity and inclusion). This term is synonymous with ‘sustainability matters’, ‘impact areas’, ‘impact categories’ or ‘general issue categories’ which are similar terms used by different standard setters.
Source: OECD Well-being Framework; Global Reporting Initiative (GRI) Sustainability Topics; Sustainability Accounting Standards Board (SASB) General Issue Categories; IRIS+ Categories; United Nations Environment Programme Finance Initiative (UNEP FI) Impact Areas
; and - as a whole organisation.
Benchmarks of a whole topic or whole organisation rely on ratings
A classification or ranking of something based on a comparative assessment of their quality, standard, or performance. Source: Oxford English Dictionary An estimation of the worth of something. Source: Oxford English Dictionary In the context of Sustainability: a process that seeks to understand the relative value that an organisation creates, preserves or erodes for its stakeholders, which is understood by expressing sustainability performance information as a common unit of value. Estimating value to different types of stakeholders sometimes requires different methodologies. See Glossary terms Value to society and Value to the organisation. Source: Value Accounting NetworkRating
Valuation
When using a benchmark at the topic or organisation level, it is worth considering whether the weighting (or rating) methdology has been created in consideration of societal or ecological thresholds and/or the views of affected stakeholders (i.e. impact valuation
The relative importance, worth or usefulness of impacts to the people who experience them, expressed in a common unit of value. Impacts can be experienced by people directly, or through changes to the planet or the economy. Also known as impact valuation. Source: Consensus definition based on discussions with Capitals Coalition; Impact Weighted Accounts Initiative (IWAI); Social Value International (SVI); and Value Balancing AllianceValue to society
Figure 1: Performance can be benchmarked for a single metric, a whole topic, or a whole organisation
Having assessed impact
A change in an aspect of people’s well-being or the condition of the natural environment caused by an organisation. Source: Impact Management Platform; Well-being defined as in OECD Well-being FrameworkImpact
Resources
For-profit ‘ESG ratings and analytics’ providers such as MSCI, Sustainalytics, RepRisk and Thompson Reuters carry out a similar function. Their results and methodology are not a public good so they are not explored in detail here.
B Impact Assessment
Tool designed to help organisations measure and manage their impact on workers, community, environment, and customers.
Use this resource to:
- Identify sustainability topics: Fill in the online questionnaire to understand performance on sustainability topics that are likely relevant to manage, based on the organisation’s size, sector, and geography. B Lab’s questionnaire is developed through research and public consultation, and so provides an evidence-based starting point for identifying sustainability topics to measure.
- Measure sustainability performance: Use the B Impact Assessment as a set of metrics. The questionnaire enables organisations to quickly get started collecting information on performance on sustainability topics that are likely relevant to manage, based on the organisation’s size, sector, and geography.
- Assess impacts: Fill in the questionnaire to track change in performance over time. Each question is scored – some with reference to social or ecological thresholds – to help the organisation determine whether it is performing sustainably on that topic.
- Benchmark: Compare performance with peers on each sustainability topic or as a whole organisation. If an organisation scores 80 points or above on the questionnaire, it can apply to be certified as a B Corp. The tool provides guidance to help organisations improve their score every year, and all B Corps must update their responses to the self-assessment to re-certify every three years.
CDP’s Disclosure System
Tool for investors, companies, cities, states and regions to manage their environmental impacts. The CDP Disclosure System supports companies in making their environmental impact transparent to stakeholders, better understanding how they can reduce their impact, and act to become environmental leaders.
For organisations
Use this resource to:
- Identify sustainability topics: Fill in CDP’s questionnaires to understand the relevant climate change, forests and water security impacts to measure, based on the organization’s size, sector, and geography.
- Measure sustainability performance: Use CDP’s questionnaires as sets of environmental metrics.
- Assess impact: Fill in the questionnaires to track change in performance over time. Each question is scored – some with reference to social or ecological thresholds – to help the organisation determine whether it is performing sustainably on that topic.
- Disclose: Report to all stakeholders on climate change, forests and water security. The questionnaires provide a framework for companies to report environmental information to their stakeholders covering governance and policy, risks and opportunity management, environmental targets and strategy, and scenario analysis. Receive an A-D grading based on questionnaire responses.
- Benchmark: Tool allows companies to benchmark their environmental performance against their industry peers and receive feedback on their progress each year. The information disclosed is also used by financial markets for stewardship and engagement, in investment research, new financial products, and global indices and ratings.
For investors and financial institutions
Use this resource to:
- Identify: Use CDP’s questionnaires to understand the relevant climate change, forests and water security impacts to measure.
- Assess: CDP holds the most comprehensive collection of corporate environmental data globally, and the questionnaire is now aligned with the TCFD recommendations. CDP data is disseminated throughout the market, and investors access and use the data in their own investment practices.
- Monitor: Every year, investors working with CDP request environmental information by asking companies to respond to our questionnaires on climate change, deforestation and water security. These investors can then access the companies’ responses and can use the data and insights in their own investment process.
- Benchmark: CDP scores allow companies to benchmark their environmental performance against their industry peers and receive feedback on their progress each year. The information disclosed is also used by financial markets for stewardship and engagement, in investment research, new financial products, and global indices and ratings.
SDG Action Manager
Tool designed to help organisations measure and manage their impacts in relation to the Sustainable Development Goals.
For organisations
Use this resource to:
- Identify sustainability topics: Fill in the online questionnaire to understand the SDGs most relevant to manage, based on the organisation’s size, sector, and geography. The questionnaire draws from B Lab’s B Impact Assessment and the UN Global Compact’s 10 Principles. It was developed through research and public consultation and so provides an evidence-based starting point for identifying sustainability topics to measure.
- Measure sustainability performance: Use the SDG Action Manager as a set of metrics. The questionnaire enables organisations to collect performance information on the SDGs that are most relevant to manage, based on the organisation’s size, sector and geography.
- Assess impact: Fill in the questionnaire to track changes in performance over time. Each question is scored – some with reference to social or ecological thresholds – to help the organisation determine whether it is performing sustainably on that topic.
- Benchmark: The self-assessment tool helps organisations compare performance with peers on each SDG or as a whole organisation.
For investors and financial institutions
Use this resource to:
- Assess: Engage with underlying assets and support them in completing the SDG Action Manager Questionnaire. The multiple-choice, weighted question format helps underlying assets and their investors quickly judge whether performance on a topic is likely to be unsustainable or sustainable, and what they can do to improve.
WBA Benchmarks
Benchmarks that rank companies and financial institutions based on their impact. The WBA recognises that transformations are needed to achieve sustainability across seven systems (financial, decarbonisation and energy, food and agriculture, digital, social, urban, and nature). In each of these seven systems, companies that have a big role to play in hindering or advancing progress towards a sustainable future are identified as ‘keystone’ companies. WBA then develops a publicly available methodology for each system (or component of a system), drawing on existing standards to identify relevant topics and associated metrics for companies to disclose against.
For organisations
Use this resource to:
- Benchmark: Large ‘keystone’ companies can compare their rank versus peers and understand how they are contributing to the seven system transformations WBA has identified. The publicly available WBA benchmarks draw on existing standards and methodologies to identify relevant topics and associated metrics for organisations to disclose against (e.g. the Climate and Energy Benchmark, which incorporates the sectoral decarbonisation approach developed by the SBTi).
For investors and financial institutions
Use this resource to:
- Benchmark: Assess underlying asset performance whilst reviewing the methodologies to understand the approach to scoring.
Definitions
Benchmark
The evaluation (of something) by comparison with a point of reference. Putting performance into a common unit (using ratings or valuation) is necessary to enable comparison of performance at different units of analysis.
Source: Oxford English Dictionary
Impact
A change in an aspect of people’s well-being or the condition of the natural environment caused by an organisation.
Source: Impact Management Platform; Well-being defined as in OECD Well-being Framework
Metrics
A standard of measurement. The words ‘metric’ and ‘indicator’ are typically used interchangeably. Metrics are used to measure the state of something at a point in time. Repeated measurement makes it possible to determine change over time.
Source: Adapted from Meriam Webster Online Dictionary
Rating
A classification or ranking of something based on a comparative assessment of their quality, standard, or performance.
Source: Oxford English Dictionary
Societal or ecological threshold
A level or range of performance that divides sustainable from unsustainable performance. These ranges are set with reference to social norms or planetary limits that have been identified through scientific research. Learn more about Thresholds and allocations.
Source: United Nations Environment Programme Finance Initiative (UNEP FI); United Nations Conference on Trade and Development (UNCTAD) (The Cocoyoc Declaration, 1974); Kate Raworth
Sustainability topic
A term used broadly to denote aspects of stakeholder well-being (e.g. health, wealth, safety), or business activities or practices that are evidenced drivers of well-being (e.g. employment, diversity and inclusion). This term is synonymous with ‘sustainability matters’, ‘impact areas’, ‘impact categories’ or ‘general issue categories’ which are similar terms used by different standard setters.
Source: OECD Well-being Framework; Global Reporting Initiative (GRI) Sustainability Topics; Sustainability Accounting Standards Board (SASB) General Issue Categories; IRIS+ Categories; United Nations Environment Programme Finance Initiative (UNEP FI) Impact Areas
Value to society
The relative importance, worth or usefulness of impacts to the people who experience them, expressed in a common unit of value. Impacts can be experienced by people directly, or through changes to the planet or the economy. Also known as impact valuation.
Source: Consensus definition based on discussions with Capitals Coalition; Impact Weighted Accounts Initiative (IWAI); Social Value International (SVI); and Value Balancing Alliance
Valuation
An estimation of the worth of something.
Source: Oxford English Dictionary
In the context of Sustainability: a process that seeks to understand the relative value that an organisation creates, preserves or erodes for its stakeholders, which is understood by expressing sustainability performance information as a common unit of value. Estimating value to different types of stakeholders sometimes requires different methodologies. See Glossary terms Value to society and Value to the organisation.
Source: Value Accounting Network
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