COMMENTARY

Peter Burgess

About Gaia Metrics

Gaia Metrics was founded on the belief that sustainability should be natural to every business, and that understanding and valuing it is key to financial performance and shareholder value.

We help companies engage stakeholders, perform due diligence and extract and synthesize meaning from large quantities of documents in order to fuel reporting. And we help them use this information to gain insight into the financial risks and opportunities associated with environmental and social issues.

Sustainability issues are strategic

Environmental and social issues are increasingly relevant to companies’ bottom lines, affecting brand equity, sales, costs and profits. This is shifting the discussion from the community affairs office to also include the C-suite and the Boardroom.

A rising tide

More and more companies are hearing from – and reacting to pressure from – social impact investors, consumers, employee and labor groups, community organizations and other stakeholders. They’re responding to the threats to brand and reputation, and opportunities for new value propositions in stakeholder engagement.

And there are dollar implications.

Companies that make sustainable practices a part of their DNA minimize costs. And they may also find new profit centers and intangibles they don’t own or control, but that support new ways of partnering and competing.

Those that fail to embrace sustainable practices may pay higher taxes, fines, licenses to operate and explicit charges. They may also confront new responsibilities within their supply chain, diminished demand from consumers, market pricing pressure and loss of goodwill or other asset values.

Pricing changes behavior

Many companies struggle to understand – and manage – environmental and social issues because they don’t have a way to recognize, let alone measure, the financial risk attached to them. Nor do they have a way to weigh downside risk against upside opportunities. Conventional frameworks simply aren’t designed to assess the full portfolio of assets and liabilities.

These companies may miss the true impact of greenhouse gas and climate change regulations, or of a dependency on depleting water and other natural resources. They may fail to recognize opportunities in new markets and to extract increased efficiencies in old markets. They may mislead because they lack transparency into suppliers and supply chains. And they may fall short of showing the value added by social investments in communities where a business operates.

Failure to recognize the materiality of these issues effectively means they are priced at zero – now and forever. Gaia Metrics resolves this dilemma with a framework for assessing forward-looking risk, and a way to factor the materiality of uncertain but potentially significant price changes in the future.

The Gaia Metrics framework includes both verbal and numeric data sources, leading to richer and more accurate portfolio assessment.

Being diligent

Gaia Metrics helps you prove due diligence – should the need arise.

Employee exposure to toxic materials, health and safety problems, product liability and suppliers’ child labor practices are among the environmental and social issues that can quickly become reputation killers and destroyers of brand equity. Ethical business leaders work hard to understand and resolve these issues before they become big problems.

Gaia Metrics tools for digesting large and diverse sources of documentation help companies expand the reach of their corporate 'radar' and increase the precision of locating and assessing relevant content.

CSR as starting point

For many companies a formal CSR document has been the end goal of their sustainability initiative. Gaia Metrics turns this convention upside down by making CSR the starting point – with a report as one likely outcome of stakeholder engagement. Gaia Metrics expands the impact of CSR by making sustainability integral to financial and operational decision making, using CSR data to fuel analysis of environmental and social factors risk.

Taking the pulse of stakeholders

Gaia Metrics helps CSR professionals monitor and enrich the public online conversations taking place on any number of community and other stakeholder sites, and to gain additional insight into the issues that matter to key constituencies. And it helps CSR professionals confidently engage with stakeholders, knowing they’ve gone above and beyond with their diligence.

CSR as process, not event

The documents, relationships, and events that fuel a CSR program occur throughout the year. The reporting about such activities should too. Gaia Metrics helps CSR managers surface the information they need to bring stories to life – as they occur -- and make CSR timely, vibrant and meaningful.

Gaia Metrics streamlines the process of identifying, collecting and organizing the building blocks of reporting so it is more efficient and less costly. It gives companies the option of reporting more frequently, with greater transparency, and in more flexible ways.

Apples to apples

Knowing your company’s CO2 output per employee is interesting. On the other hand knowing how you compare -- on CO2 and some 100 other indicators -- to other companies in your industry is actionable business knowledge.

Comparing qualitative indicators, like industry norms for CSR content, is just as important. Gaia Metrics provides the insight business leaders need to make informed decisions, with qualitative as well as quantitative benchmarks.

How Gaia Metrics can help

Gaia Metrics helps companies and investors in three key ways

• Gaia Metrics for CSR. We help CSR professionals with the stakeholder engagement, due diligence and information extraction and synthesis that powers reporting.
• Gaia Metrics Benchmarking. Our benchmarking service provides data from hundreds of indicators across some 100 industries. Customers use this data to spot vulnerabilities and understand how they rank within their industry.
• Gaia Metrics for Finance. We help finance executives understand which environmental and social factors are material to their business, why, and in what time frame. And we provide a pricing mechanism so they can gauge materiality to forward looking financial assessments.