Are Your Sustainability KPIs Outdated? Here’s How to Choose the Right Ones for 2025!

Summary

In a rapidly evolving ESG landscape, relying on outdated KPIs can not only hinder meaningful change but also pose liabilities for businesses. In her video, Tasneem Bakri argues that to truly drive sustainability, companies must choose KPIs that are aligned with their core strategies and address material issues specific to their industry. She highlights common pitfalls businesses face, such as focusing on easy-to-measure metrics, cluttering reports with excessive KPIs, and failing to evolve these metrics with changing global trends. Bakri stresses the importance of selecting KPIs that offer actionable insights and align with stakeholders' expectations, ensuring they're not just numbers, but meaningful contributors to a company's strategy and sustainability goals.

Highlights

• ESG reports are becoming longer but not necessarily better; KPIs need to be relevant 🌱.
• Many companies are still using old KPIs that don’t reflect current sustainability challenges and expectations ⏳.
• KPI alignment with business strategy is key to driving true sustainable change 📈.
• Mistake: Focusing only on easy-to-measure metrics misses the big picture 🔍.
• Select KPIs that provide actionable insights and contribute to the company’s strategy and stakeholder interests 🚀.
• Emphasize metrics that impact shareholder value and indicate growth potential 📈.

Key Takeaways

• It's crucial to update and align ESG KPIs with current business strategies and material issues of the industry 🌍.
• Avoid focusing solely on easily measurable KPIs; they might not always indicate meaningful insights 🎯.
• Less is more when it comes to KPIs; focus on a few impactful ones rather than many irrelevant metrics 📊.
• Regularly revisit and update your KPIs in response to new regulations, technologies, and market demands 🔄.
• Choose KPIs that aren’t just about ticking boxes but also drive real, sustainable business value 💡.

Overview

Tasneem Bakri delves into the evolving world of ESG (Environmental, Social, Governance) KPIs, urging businesses to reassess and update their metrics. She warns that while ESG reports may be getting more comprehensive, they aren't always improving in quality. Packed with outdated KPIs, these reports may not offer the meaningful insights stakeholders demand, potentially becoming liabilities.

Bakri highlights critical errors companies make with ESG KPIs: an over-reliance on easy-to-measure metrics, the cluttering of reports with excessive KPIs, and failure to adapt KPIs to reflect new global trends. Her advice is clear: update your KPIs regularly to maintain relevance and to make your ESG efforts truly impactful.

A good ESG KPI goes beyond mere compliance; it should be forward-thinking, align with business strategies, and address the core issues of the industry. By doing so, companies can ensure that their ESG efforts contribute positively to their overall goals, driving not just sustainability but also financial and strategic success.

Chapters

• 00:00 - 00:30: Introduction and Importance of Updating KPIs This chapter introduces the importance of updating Key Performance Indicators (KPIs) in Environmental, Social, and Governance (ESG) reports. It highlights the issue of ESG reports becoming longer but not necessarily better due to potentially outdated or irrelevant KPIs. The chapter emphasizes the need to choose the right KPIs to ensure that reports drive meaningful change rather than just serve as formalities. It suggests that if KPIs have not been updated in the last five years, it is time for a review and refresh.
• 00:30 - 01:00: Understanding ESG KPIs and Their Evolution The chapter, titled 'Understanding ESG KPIs and Their Evolution,' explores the significance of Key Performance Indicators (KPIs) in the context of Environmental, Social, and Governance (ESG) reporting. The focus is on distinguishing which KPIs are truly impactful in driving sustainability efforts versus those that merely occupy space in reports. It emphasizes the importance of using KPIs that effectively measure progress in the evolving ESG landscape, thereby providing actionable insights for business consultants and advocates.
• 01:00 - 01:30: Challenges with Outdated KPIs The chapter titled 'Challenges with Outdated KPIs' discusses how many companies have not updated their Key Performance Indicators (KPIs) despite significant changes in climate risks, regulatory requirements, and stakeholder expectations. Initially, ESG (Environmental, Social, and Governance) KPIs were considered innovative when they focused on basic metrics such as energy consumption and recycling rates. However, as stakeholders have become more informed, they now demand more comprehensive and up-to-date ESG measures.
• 01:30 - 02:00: Aligning KPIs with Business Strategy The chapter discusses the importance of aligning Key Performance Indicators (KPIs) with business strategy. It highlights the inadequacy of traditional KPIs in the modern business environment, where stakeholders demand transparency and accountability. The rise of ESG (Environmental, Social, and Governance) data analytics underscores the need for relevant and actionable insights, as opposed to mere compliance checklists. The chapter emphasizes that outdated KPIs can be detrimental rather than beneficial. To choose meaningful KPIs, alignment with overall business strategy is crucial.
• 02:00 - 03:00: Common Mistakes in Developing KPIs The chapter emphasizes the importance of aligning Key Performance Indicators (KPIs) with an organization's core business strategy and the key issues influencing their industry. It highlights that for companies in the renewable energy sector, KPIs should reflect the innovation and efficiency of their technology. This principle applies across different industries, indicating the need for metrics that closely align with what is significant in a given sector and for a specific company. The chapter intends to address common mistakes in KPI development, particularly when clients are developing their Environmental, Social, and Governance (ESG) strategies.
• 03:00 - 04:00: Qualities of Effective ESG KPIs The chapter highlights common mistakes made during ESG reporting. The first mistake is concentrating only on easily measurable metrics, such as energy usage or employee turnover, which might not necessarily reflect the most significant aspects. The second mistake involves having too many KPIs, thus overwhelming the report. The emphasis is on the quality and significance of KPIs, rather than their quantity, to ensure the report focuses on what truly matters.

Are Your Sustainability KPIs Outdated? Here’s How to Choose the Right Ones for 2025! Transcription

• 00:00 - 00:30 let's face it ESG reports are getting longer but are they actually getting better more data doesn't always mean more insight especially if your ESG kpis are well irrelevant today we're going to break down how to choose the right kpis so you're not just reporting for the sake of it but actually driving meaningful change and trust me if you've been using the same kpis for the last 5 years it's time for an update hi everyone my name is my name is tasim
• 00:30 - 01:00 Becky and I simplify sustainability for businesses consultants and Advocates with clear actionable strategies so let's get real about ESG kpis you're probably thinking aren't all kpis important well not exactly some are crucial others not so much the question is are the kpis you're using actually moving the needle or are they just filling up pages in your ESG report we all know that the ESG landscape has evolved dramatically over the past few
• 01:00 - 01:30 years climate risks regulatory changes and stakeholder expectations have all shifted but guess what hasn't changed for many companies their kpis most ESG kpis were created in a time where companies were just starting to dip their toes into sustainability back then tracking basic metrics like energy consumption or recycling rates seemed Innovative but here's the problem those days are over stakeholders are more informed formed and they expect ESG
• 01:30 - 02:00 reports to provide actionable insights not just compliance checklists and with the rise of ESG data analytics in AI relying on these old metrics won't cut it anymore the investors are demanding transparency and consumers want accountability outdated kpis aren't just irrelevant they're actually a liability so how do you choose kpis that matter when it comes to selecting kpis that truly matter the key is alignment your
• 02:00 - 02:30 kpis should be closely tied to your core business strategy and the material issues that drive your industry if your company is in renewable energy your kpis need to reflect the Innovation and efficiency of your technology and it's basically the same thing for all other Industries so you need metrics that are closely aligned with what is important in your sector and to your company so I wanted to create this video to point out some of the most common mistakes I see regarding kpis when my clients are developing their ESG strategies or
• 02:30 - 03:00 creating their ESG reports mistake number one is focusing only on what's easy to measure if you're only tracking what's easy like energy usage or employee turnover you're missing the big picture just because it's easy to measure doesn't mean it's the most important don't be afraid to measure the tough metrics mistake number two is too many kpis when it comes to kpis less is more a good ESG report should focus on on the kpis that matter not drown people
• 03:00 - 03:30 in a sea of data points I usually recommend five or six powerful kpis and that's it believe me it will say a lot more than 30 irrelevant ones mistake number three is not revisiting your kpis your kpis should evolve with your business and with global Trends are you adjusting for new regulations Technologies Market demands if not you're falling behind Okay so what separates good ESG kpi from great ones
• 03:30 - 04:00 as someone who has worked on countless ESU reports if there's one thing I've learned it's that the best kpis go beyond numbers on a page they're forward thinking they tie directly to the company's bottom line and they reflect what actually matters to the stakeholders so when you're selecting your kpis think like an investor investors want to see numbers that indicate stability and growth potential so focus on metrics that are financially relevant how are your ESG efforts
• 04:00 - 04:30 impacting shareholder value can you quantify how diversity in leadership reduces risks or how sustainable procurement strengthens your supply chain these are the kinds of kpis that matter not just to your ESG report but actually to your business remember ESG isn't just a box sticking exercise it's about creating a better more sustainable future and it starts with the right kpis I'll leave you with that thought and don't forget to subscribe to my channel till next time