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INCLUDING THE ENVIRONMENT IN KEY PERFORMANCE INDICATORS

28. November 2019

Established business practices dictate companies evaluate the success or failures of their business model on key metrics that adhere primarily to financial standards that comprise a healthy balance sheet. These financial metrics, also known as key performance indicators or KPIs, take aim at the bottom line, with little to no evaluation of other metrics outside of fiscal measurements, such as revenue and profit after tax and expenses. However, a strong consumer trend is positively influencing companies to use eKPIs, or environmental key performance indicators, as part of that business model evaluation. It is no longer enough to evaluate the future strength of a manufacturer on its financial position without adding in the environmental aspect of their responsible use of resources.

How does this impact the consumer? Brands are always seeking ways to connect with the consumer about the benefits and value their product contains, and why it is worth buying over another brand. The benefits of the bluesign® SYSTEM impact matrix data evaluation not only addresses resource scarcity, but lends transparency, traceability and value to the company and the consumer. Due to Bluesign’s knowledge and expertise in supply chain management—not just chemical expertise—brands can now accurately measure and report to consumers the steps taken to reduce resource consumption.

 

The changing face of business indicators


From the beginning, minimizing resource consumption and reducing the harmful impact of chemicals on the environment and people has been Bluesign’s guiding methodology. By employing a stout emphasis on the necessity of circular economy creation and enhancement in textiles and trims production, the bluesign® SYSTEM uses environmental indicators to reduce waste and increase the use of recyclables and bluesign® APPROVED chemicals.

One prominent early method used to evaluate impacts, known as the Life Cycle Analysis or calculation of a product’s carbon footprint, has begun to rear its flaws. The goal of a Life Cycle Analysis is to develop an impact assessment of the product’s environmental effect by measuring it against what is most important for their business model. Through the use of past partnerships, Bluesign is a forerunner seeking to co-develop eKPIs that are based on accurate data, collected on-site and verified.

In order to assess and evaluate the carbon footprint of a finished product, the scope and aim of the analysis are initially defined and pitted against the environmental requirement ISO 14044, a standardized benchmark aiming for reliability and transparency in manufacturing. Subsequently, inventories are evaluated for their inputs’ and outputs’ potential environmental harm, ultimately resulting in an interpretation phase to validate or invalidate conclusions and aide in the desired implementation of methods to lessen energy consumption, use of raw materials, and ultimately pollutant emissions. There is however a major flaw to this method; intricate input and output supply chain schemes become abridged and can ultimately distort the reality of the analysis if the scope is not clearly defined. It often isn’t, rendering the work ineffectual as a best guess only.

It’s no doubt the textile industry is resource intensive. Yet outside of the bluesign® SYSTEM there is very little information regarding the intensity of resources as inputs, let alone a method to reduce potentially harmful inputs and verify them against established data. Using established data and methods procured and provided by Bluesign eliminates the unintentional warping of dated systems like the Life Cycle Analysis and specifically addresses precious resource stewardship, which may become scarcer as we deal with climate change and the impacts it has on obtaining those resources.

 

The bluesign® SYSTEM


Fortunately, Bluesign is ahead of the curve in understanding textile manufacturing impacts and has already implemented eKPIs to monitor the continuous development of a company’s supply chain and waste impacts. As a result, a mutually agreed-upon road map has been created with system partners to implement a system approach within its bluesign® SYSTEM that evaluates the environmental impacts of manufacturing. The eKPIs used to create this roadmap use general best available techniques as a first step, followed by data sets creation generated by on-site verified data to establish benchmarks. These models deliver default values for different types of manufacturers that demonstrate the impact of the bluesign® SYSTEM on materials consumption, supply chain health, reducing hazardous substances and reducing consumption of existing natural resources.

The result of Bluesign’s use of these eKPIs has created established parameters for partner company rating systems via an impact matrix. This matrix is based on supply chain inputs and manufacturing effects on people, the environment, and ever-scarcer resources, by compiling on-site data verification to mitigate risk, reduce environmental impacts with an ever-present eye on the protection of people and the environment, and increase resource productivity.

Throughout the process of overseeing the textile manufacturing process across multiple brand partners assessments and on-site verified data collection benchmarks, impact reduction by the bluesign® SYSTEM is continually honed once new partners are evaluated, and their manufacturing data is evidenced. At this point, resource savings can be calculated as hazardous substances are removed and replaced, and any other corrective action needed as they are evaluated against pre-existing resource management data sets, which don’t exist outside of Bluesign’s process.

 

Work with Bluesign


Along with the topic of sustainability, using chemical management and chemistry as an enabler and a deterrent to creating a circular manufacturing process will be covered. Other topics will include how to use best available techniques to incorporate accurate environmental impact measures into your model in order to recognize and reduce environmental bearing through the use of relevant environmental key performance indicators. Ultimately, attendees will gain a thoughtful, knowledgeable partner in Bluesign to produce relevant and accurate measurement that drive those actions.

 

 

 
Chemicals Change Management

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