Improved Metrics for Minimizing Business Risk Impacts

We have seen evolution of sustainability goals from targeting operational areas in environment and energy to focusing on all-encompassing goals around the community and employees. Thanks to the initiatives at leading brands, the metrics catering to supply chains and products are also poised to be mainstream. This is important because over 50 to 70% of environmental impacts come from the upstream value chain for consumer product companies. In addition, uncertainty in value chains can morph into unexpected issues in quality, safety, emissions, or labor and lead to consumer and investor dissatisfaction.

In Feb 17, I posted a related blog on Wharton IGEL on analyzing goal-setting at consumer product companies using pivot goals data. With Vertaeon’s focus in data analytics and measurement of business impacts, our objective was to identify past core areas and undertake some level of sector and company benchmarking and gap identification that could yield higher visibility into goal-setting.

This preliminary assessment indicated a primary focus on operational goals at leading CPG companies. While product and supply chain goals are increasingly becoming part of sustainability initiatives, we concluded there was room for further adoption. In addition, heterogeneity in consumer expectations has not yet fully translated to goal-setting or reporting. Recent studies indicate consumer expectations are expanding along other dimensions such as risk & compliance and social justice. These broader expectations suggested disconnects between corporate sustainability reporting and stakeholder interests.

There is continuous progress in metrics measurement via new tools and methods — an area of focus in the SB New Metrics 17 Conference. How can we utilize the extensive data that comes out of measurement to quantify impacts to each value chain block and, by extension, your organization? In 2017, Vertaeon launched a web-based, integrated, supply chain analytics platform that seamlessly connects and aggregates data from disparate sources of information on goals set by thousands of companies. Our goal is to deliver a clear, cohesive view of the entire value chain (supplier and market), on multiple attributes ranging from environmental impacts and carbon footprints to compliance, social and governance risk factors. This, combined with operational aspects such as spend analysis, can deliver a comprehensive picture on performance, potential risks, and KPI prioritization.

Where can this improved transparency and impact quantification help? We think in cost reduction via operational efficiency improvement opportunities, revenue generation via new product designs and brand value via mitigating potential red flags in supply chain. As a sponsor of SB New Metrics 17, we are looking forward to seeing you in Philadelphia during November 13-15 and discussing this further!

Rekha Menon-Varma
Co-Founder and Managing Partner
Vertaeon LLC
November 15, 2017