frequently reflect an ignorance of the conceptual problems associated with the
aggregated indicators of environmental performance that they employ. The
sometimes cavalier use of indicators undermines the standing and usefulness of
these studies’ findings. More comprehensive and rigorously developed environmental performance indicators would greatly benefit this school of analysis.
7 Analysis of Environmental Performance in Firms: The
MEPI Study
Environmental performance indicators are used in many different ways:
E Business managers use environmental performance indicators as an internal
management tool and for external communication.
E Banks and insurers examine the environmental performance of firms to help
assess longer-term economic risks.
E Fund managers use environmental criteria to respond to the demand for
environmental and ethical concerns to be taken into account in investment
decisions.
E Policy makers may evaluate the effectiveness of different policy instruments
in improving firms’ overall environmental performance.
E Environmental groups compare the environmental profile of firms in order
to put political pressure on poor performers.
E Neighbours observe to what extent companies damage their local environment.
E Researchers analyse patterns and trends to improve understanding of the
causes of good and poor environmental performance.
In all cases, indicators can provide only partial information that may need to
be qualified with information from other sources. Indicators are deliberately
simple measures that stand as proxies for complex and often diffuse phenomena.
Indicators indicate. Awareness of their specific limitations and biases is an
important aspect of their interpretation.
In the next two sections, we report on the results of the Measuring
Environmental Performance of Industry (MEPI) study. The study aimed to
analyse patterns and dynamics in industrial environmental performance on the
basis of publicly available information. To achieve this, a balance had to be found
between doing justice to complexity on the one hand, and pragmatism about data
availability and quality on the other hand. Environmental performance indicators
should aim to compare the comparable. In most cases, this means comparing
companies and sites within the same economic sector on an annual basis. For
example, benchmarking the energy use of an insurance company with the energy
use of a chemical firm may not generate useful results to either.
The MEPI approach distinguished between variables and indicators. Through
literature reviews that characterized the environmental profiles of different
industry sectors, and following consultation with representatives from industry,
policymaking and financial organizations, indicator sets for each of the sectors
studied were generated. These presented identifiable data requirements. Data
were collected for this set of variables, providing the information necessary to
Corporate Environmental Performance
175
aggregated indicators of environmental performance that they employ. The
sometimes cavalier use of indicators undermines the standing and usefulness of
these studies’ findings. More comprehensive and rigorously developed environmental performance indicators would greatly benefit this school of analysis.
7 Analysis of Environmental Performance in Firms: The
MEPI Study
Environmental performance indicators are used in many different ways:
E Business managers use environmental performance indicators as an internal
management tool and for external communication.
E Banks and insurers examine the environmental performance of firms to help
assess longer-term economic risks.
E Fund managers use environmental criteria to respond to the demand for
environmental and ethical concerns to be taken into account in investment
decisions.
E Policy makers may evaluate the effectiveness of different policy instruments
in improving firms’ overall environmental performance.
E Environmental groups compare the environmental profile of firms in order
to put political pressure on poor performers.
E Neighbours observe to what extent companies damage their local environment.
E Researchers analyse patterns and trends to improve understanding of the
causes of good and poor environmental performance.
In all cases, indicators can provide only partial information that may need to
be qualified with information from other sources. Indicators are deliberately
simple measures that stand as proxies for complex and often diffuse phenomena.
Indicators indicate. Awareness of their specific limitations and biases is an
important aspect of their interpretation.
In the next two sections, we report on the results of the Measuring
Environmental Performance of Industry (MEPI) study. The study aimed to
analyse patterns and dynamics in industrial environmental performance on the
basis of publicly available information. To achieve this, a balance had to be found
between doing justice to complexity on the one hand, and pragmatism about data
availability and quality on the other hand. Environmental performance indicators
should aim to compare the comparable. In most cases, this means comparing
companies and sites within the same economic sector on an annual basis. For
example, benchmarking the energy use of an insurance company with the energy
use of a chemical firm may not generate useful results to either.
The MEPI approach distinguished between variables and indicators. Through
literature reviews that characterized the environmental profiles of different
industry sectors, and following consultation with representatives from industry,
policymaking and financial organizations, indicator sets for each of the sectors
studied were generated. These presented identifiable data requirements. Data
were collected for this set of variables, providing the information necessary to
Corporate Environmental Performance
175