Why was it Developed?
In 1997, two of the Fortune 500 Board of Directors meetings I participated in sowed the seeds for The Sustainability Scorecard.
- Ashland: Patrick Noonan (then Chairman of The Conservation Fund and former Chairman of The Nature Conservancy) was Chair of Ashland’s Board of Directors Public Policy Environment Committee. Over the years, I participated in many of these committee meetings. In one meeting, Pat Noonan asked me if we could develop a scorecard that would help board members navigate the turbulent waters of sustainability.
- Honeywell (then AlliedSignal): Larry Bossidy has been regarded widely as a master of business strategy and execution – and for good reason. I first knew of him early in my career when I worked at GE. In over a dozen Board Committee meetings, I watched him in action and learned how he thought and operated.
During those 1997 Board meetings, directors discussed the fact that leading companies – particularly those based in Europe – were beginning to address sustainability in a comprehensive way. I was asked the question I have been asked in over 50 Board of Directors meetings at major (Fortune 500) corporations: How do we stack up?
I decided then to craft The Sustainability Scorecard. Pat Noonan planted the seed and said to keep corporate governance and leadership at the core. Larry Bossidy taught me to focus on strategy and execution.
We developed The Sustainability Scorecard to address the needs of the Board of Directors at corporations – particularly at large corporations. After using The Scorecard successfully in a number of C-suite and Board meetings, we have engaged with many clients over the course of 18 years to strengthen The Scorecard.
The Scorecard distills 30 years of industry knowledge, interaction with many dozens of CEOs and Board members, and sustainability expertise into an easy-to-use tool. The Scorecard – and the simple rating templates that support it – helps CEOs and their staff members understand where they stand on a range of core areas that are critical to implementing a robust sustainability strategy.
The Scorecard can be used by various individuals and groups within a company. However, it is designed primarily for use by the “chief sustainability officer” (or equivalent). That is the person who oversees internal sustainability efforts and who reports to the CEO and Board of Directors or Board Committee about sustainability posture, programs, performance, and plans.
- Built on Governance and Strategy. Not one of the over 100 sustainability rating schemes in existence today (e.g., Bloomberg, CDP, DJSI, FTSE4Good, Global 100, etc.) is strong enough on the three critical factors that matter most to Boards of Directors and C-suite executives: governance, strategy and execution. Our Scorecard is built on those elements – and embraces the changing conversation depicted here:
- C-Suite Language. The 17 Scorecard Templates comprising the Sustainability Scorecard are solidly business-focused. In other words, sustainability is woven into how businesses run – rather than bolted onto a set of additional metrics imposed by external parties.
- Best Practice Examples. When working to innovate or evolve your company’s sustainability practices, it is helpful to learn from those that have been down the path before you. Real stories and examples from other companies can be powerful ways to engage others within your company. For each of the 17 elements – and virtually all of the ~170 Key Sustainability Indicators – the Scorecard offers short summaries and links to best practice examples from global corporations.
About Hedstrom Associates
Gib Hedstrom has over 30 years of experience advising CEOs and board members about how to handle difficult environmental and business challenges. He has reported directly to boards of directors of Fortune 500 companies on over 50 occasions. Gib works with companies that want to be profitable, admired for their societal contributions, and thriving as successful enterprises.
The Sustainability Scorecard builds on Gib’s 30 years of experience working in the trenches with executives at over 250 companies of all sizes in the United States, Europe, and Asia. Over the past 18 years, the Sustainability Scorecard has been used, challenged, shaped, and refined by executive sustainability teams at dozens of diverse companies.
Gib is in constant contact with over 100 leading companies globally – through his consulting work and his involvement with The Conference Board. He runs three sustainability councils for The Conference Board, each of which meet three times a year for several days. Collectively, there are nearly 100 sustainability executives from Fortune 500 companies on these councils.
Who has Helped to Shape the Scorecard?
Since those Board of Directors meetings in 1997, Hedstrom Associates has had the pleasure of working with – and learning together with – many excellent companies. In some cases, the Sustainability Scorecard was used explicitly as the framework for a client deliverable; in other cases, the Scorecard was a tool used in conducting our work.