With no shortage of urgency and passion, many sustainability efforts were undertaken quickly and are still rather loosely organized – defying standard approaches to benchmarking and measurement. This is understandable, since many corporations first focused on defining strategic intent, announcing goals and initiatives, and piloting projects in various areas.

As a result, most companies joining the green revolution lack a comprehensive framework for benchmarking sustainability investments across the enterprise. Since green is here to stay, we are seeing companies turning their attention to the process of organizing, prioritizing and measuring the impact of their numerous green investments. They are eager to:

• Benchmark how they compare with other groups within their own company.

• Benchmark how they compare with other companies in their industry.

• Benchmark their projects against effective practices across industries.

• Prioritize projects based on an approach that helps them determine how to invest and what the expected impact would be on the environment, financial performance (ROI, cost savings/expense), growth and brand equity.

To address these needs, Deloitte launched a green benchmarking initiative to provide services designed to help companies in their efforts to assess and compare their sustainability projects, and then apply management techniques to prioritize these efforts to deliver a high return on investment (ROI) and benefit to the environment.

The Evolution of Green: Managing for Performance

The good news is that across America, the green movement is in full swing. Everywhere you look, corporations have multiple initiatives underway. But as the movement continues to mature, questions of, “Why should we do this?” have been replaced with “How should we do this?”

Process & Industrial Products

Learning from LeadersWhile the study is ongoing, the initial research immediately highlighted the challenge that there are no clear terms or norms used to describe green projects. In fact, many company announcements include a confusing combination of goals, innovative ideas and a discussion of the organization’s values – but rarely provide an inventory or assessment of the projects being implemented. This is problematic, since without a common set of terms it is difficult to begin the task of measuring and benchmarking a company’s green initiatives – let alone compare the results with other organizations.

As a result, Deloitte used the analysis of these sustainability initiatives to build an enterprise framework for green project classification and provide executives with a better way to categorize, prioritize and assess green investments. The implementation of the Deloitte Green Benchmarking Project Classification™, will provide a consistent basis for companies to begin measuring and comparing the results of their green initiatives.

The Green Benchmarking Project Classification includes four core business dimensions:

• Supply Chain Classifications – Defining standard terms in the areas such as sustainable planning, sourcing, production and delivery.

• Workplace Classifications – Encompassing sustainable land use, building, workplace policies and IT.

• Workforce Classifications – Including issues of sustainable virtual workforce, commuting, training and community programs.

• Products, Sales and Services Classifications – Creating standard terms for sustainable product R&D, services, sales and marketing.

In addition, the classification includes a fifth, foundational dimension:

• Strategy and Governance Classifications – Defining consistent terms for the critical areas of sustainability strategy and vision, governance and performance management. This project area is different than the others in that it provides a strategic foundation for all green efforts within an organization.

Measuring Payback: Phase II ResearchBut for some, the most important outcome of the research will be the implementation of the powerful new analytical tools used to generate the data. After all, it is the application of these tools to their own businesses that we believe can help companies make significant strides in improving their own green strategic planning function. They include:

• Green Project Benchmarking Frequency Analysis – Provides a simple, quantitative assessment of the relative frequency of green projects across the various dimensions, project types, industries and/or organizations. For example, this can help companies gain valuable insight by comparing the dimensions of green initiatives on which most companies are focused (supply chain vs. workplace, etc.) and within each of these categories, which project areas are the primary focus (planning vs. sourcing or production) within a given industry.

• Green Project Benchmarking Impact and Payback – Provides executives with a high-level

overview of project environmental and financial impact. Together with an assessment of the complexity and risk of each project, this analysis provides a strategic vantage point from which the relative value – and therefore priority – of a given project, or a portfolio of projects, can be determined.

• Green Project Maturity Model – Provides a company with a clear assessment of how far different types of projects have been deployed, their level of sustainability and overall results. For example, in any given dimension, a company would be ranked as achieving stage one, two, three or four in terms of its stage of project maturity.

• Global Impact Footprint – Provides companies with a visual depiction of its global impact across the five dimensions of sustainability, as an aid to help them reduce their “footprint.” The Global Impact Footprint helps users identify tangible actions to reduce their footprint and create a target future state for each area.

This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication.

Copyright © 2008 Deloitte Development LLC. All rights reserved.

• Sustainable Business Value Map – The Deloitte Green Benchmarking Project Classification, impact analysis and maturity model link to the Deloitte Sustainable Business Value Map to help companies perform an assessment of green investments along key drivers of business performance – revenue growth, operating margin, asset efficiency and future expectations – to evaluate the impact on shareholder value. It also helps a company understand how sustainable business initiatives can actually help drive business performance while producing economic, environmental and social value at the same time.

Accelerated AdoptionCompanies should consider Deloitte’s new benchmarking framework as a way to measure, compare and prioritize sustainability projects, and to implement disciplined planning and management tools to help their green projects deliver on their strategic objectives – both financial and non-financial. We believe this will not only provide a sound decision-making process and project prioritization for green investments, but remove a key obstacle for making those investments – the lack of a coherent framework. And this is good news indeed, since getting green faster is exactly what this revolution is all about.

To learn more, attend Tim Hanley’s sustainability session on June 11 at Managing Automation’s Progressive Manufacturing Summit and Awards: “Orchestrating the Business.”

Visit www.managingautomation.com to register.

For further information about how we might help you with your sustainability efforts, contact:

Tim Hanley, PartnerVice Chairman, U.S. Process & Industrial Products Sector LeaderDeloitte & Touche LLP (414) 977-2520thanley@deloitte.com

Christopher Park, PrincipalSustainability & Corporate Responsibility Practice LeaderDeloitte Consulting LLP(313) 324-1258chrpark@deloitte.com

John Christensen, PrincipalGreen Project Benchmarking LeadDeloitte Consulting LLP(408) 704-4804jbchristensen@deloitte.com

Peter Koudal, DirectorDeloitte ResearchDeloitte Services LP(212) 436-2647pkoudal@deloitte.com

Deloitte Sustainable Business Value Map