Measure It, Manage It

Peter Drucker, considered by many as the inventor of modern business management, is credited with two of the most important quotes in business management.  The first is: “If you can’t measure it, you can’t improve it.” This concept is very applicable to climate change.  We measure and monitor levels of carbon in the atmosphere to understand and predict how changes will affect the earth’s temperature, i.e., global warming.  It’s a very scientific and complex process and critical to our understanding of the future of our planet.

In an earlier post (i.e., Does It Matter?) I noted that 70% of CO₂ emissions can be traced back to the 100 largest oil, gas, and coal companies.  However, their production of energy accounts for only 10% of those emissions; the other 90% is a result of the products that use that energy such as transportation and generating electricity – the things that “we the people” use and are responsible for every day.   

My post Environmentally Friendly Hotels provided information on what individual hotels or chains were doing to reduce their CO₂ emissions (among other planet friendly projects). The purpose was to provide information that “we the people” could use to better choose which hotel we wanted to do business with.  It made me wonder if there was readily accessible data to evaluate not just hotels, but companies in all industries.

Turns out there is a lot of data that is being gathered and analyzed for companies in all industries to better understand and provided a basis for improvement regarding their carbon emissions.  It began known as the Carbon Disclosure Project but is now referred to as CDP.  CDP is a not-for-profit organization that runs a global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. Over the past 15 years CDP has created a system that has resulted in unparalleled engagement on environmental issues worldwide.

Borrowing from the earlier Peter Drucker quote, CDP operates under premise: “You can’t manage what you don’t measure.” Each year CDP supports thousands of companies, cities, states and regions to measure and manage their risks and opportunities on climate change, water security and deforestation.  Companies and cities disclose their data to CDP because they want to understand how they are doing relative to other companies and cities, and because investors and other stakeholders want to know too.  Over 525 investors with $96 trillion in assets and 125 major buyers with combined purchasing power of $3.6 trillion, have requested companies disclose through CDP, information on climate change, water security and forests.  As a result, over 7,000 companies, 620 cities, and 120 states and regions have reported through CDP data on climate change, water security and forests. 

Using this data, CDP can assess and score how companies and cities are doing relative to climate change, as well as water security and forests.  In 2018, CDP determined there were 139 “A List Companies” regarding climate change; 31 “A List Companies” associated with water security; and 7 “A List Companies” regarding forestry.  With a few clicks, you can see the “A List” Companies and Cities and if you bore into CDP on-line data, you see how all the individual companies that submitted data scored. 

With this type data, and the scoring, companies have the incentive to continually improve their activities relative to the planet, because it’s important to their investors, and their customers.  The actions they take, of course, vary among the industries, but much is known about how to reduce, for example, CO₂ emissions.  As discussed in What Matters Most, and referencing the book Drawdown, there is a wealth of information on actions that can be taken to reduce greenhouse gasses and the resultant impacts.  We know what to do.

Which leads me to Peter Drucker’s second famous quote: “Management is doing things right; leadership is doing the right things.”  With the data, we can now look to see who is doing the right things.

From a personal perspective, I plan to further investigate which companies I should do business with.  I also plan to start monitoring and tabulating my personal activities – e.g., for example the amount of gasoline I use every year in my car.  With the data, I hope to see how I’m doing relative to last year and hopefully, at some point, can get to zero gallons of gasoline.