Identification and Visualization of Key Ecological Indicators

Table of Contents

List of abbreviations

Register of Illustrations

1. Introduction
2. Ecology and Sustainability – How does this relate?
2.1 What is sustainability?
2.2 Placement of ecology
2.3 Functions of nature
2.4 Health of nature

3. Key Ecological Indicators
3.1 What are KEIs?
3.2 Requirements for KEIs
3.3 Classification of KEIs
3.4 Positioning and usage of KEIs
3.4.1 Macro-view
3.4.2 Micro-view
3.5 Determination of KEIs

4. Building a KEI Framework for Business-Processes
4.1 Introducing the Case study
4.2 Defining properties of the KEI Framework
4.3 Selection of processes-based KEIs
4.4 Architecture
4.4.1 Monitoring of process-execution
4.4.2 Measurement of substances and energies
4.4.3 Granularity of data
4.4.4 Datawarehouse Design
4.4.5 Extract Transform Load Process
4.4.6 Aggregation of data and calculation of KEIs
4.4.7 Visualization of KEIs

5. Conclusion

6. Outlook

7. References

8. Explication

List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

Register of Illustrations

Figure 1 - Aims of this work

Figure 2 - Perspective on the systems

Figure 3 - Linear throughput depiction of the socio-economic process

Figure 4 - Process Interfaces

Figure 5 - Correlation of Indicators

Figure 6 - Different Environmental indicators

Figure 7 - Classification of KEIs

Figure 8 - BPM Lifecycle

Figure 9 - Components of an EMS

Figure 10 - Modules of Eco Accounting

Figure 11 - Derivation of KEIs

Figure 12 - BPMN Diagram of the underlying business-process

Figure 13 - Extract of ESORs Strategy

Figure 14 - General Architecture for KEI aware process execution

Figure 15 - Sequence Diagram - Event Capturing

Figure 16 - Class diagram of defined Events for EventManager

Figure 17 - Class Diagram EcoSimulator

Figure 18 - ConfigManager File

Figure 19 - Functioning of EventManager simulating energy data

Figure 20 - Sequence Diagram EventManager

Figure 21 - Datawarehouse ERM

Figure 22 - Relationship Schema

Figure 23 - Table Substance Type

Figure 24 - Table Substance

Figure 25 - Table Energy Mix

Figure 26 - Table Indicator Types

Figure 27 - Table Indicator Level

Figure 28 - Table Indicator Definition

Figure 29 - Table Indicator Target

Figure 30 - Class diagram CEP Event

Figure 31 - Sequence Diagram ETL Process

Figure 32 - Class diagram - ETL and DWConnection

Figure 33 - Dashboard for ESOR – Overview

Figure 34 – Dashboard for ESOR – Activities

1. Introduction

Our planet with its life friendly environment is the foundation of our lives. Without it we and all living things wouldn’t exist, so one could say it is the most important basis for our existence, and thus should be one of the most relevant subjects in our society. But if you face reality Mother Nature is exploited and destroyed by men and corporations for resources, money and profits, as could be seen in contemporary events, like the oil spill of the Deepwater Horizon in the Gulf of Mexico, or the nuclear disaster at the atomic plant in Fukushima. These events showed us, very obviously, how easy corporations could harm the vulnerable eco-system in a sustainable way. Moreover they pollute the environment with all their activities not only with serious accidents or scandals that are reported by the media, and thereby are in the awareness of a huge variety of people. Almost everything corporations do, more or less, will have an impact on our ecological system, as our own behavior will influence it as well.

In the last centuries though, more and more people began to question those reckless methods that violate our nature. They start to wonder how such an attitude would influence our future. Could it lead to an unlivable planet, so that following generations will not be able to live anymore? In deed this question targets a very pessimistic scenario, but is illustrating importance, as well as necessity of ecological health for humankind and all living creatures on planet earth. It is resulting in further questions, like which impact does our present behavior have on our environment, and how will it develop in the following years. Or in which way do we have to change our manner to ensure a healthy and livable environment in future. Additionally there are the so called “what if scenarios”, which ask for instance, what environmental pollution would be if all developing countries behaved the way we do. As one can see, there are plenty of problems our society has to think about. Some of the biggest issues scientists have recognized are the greenhouse effect associated with the global warming problem, the limited amount of non-renewable resources like carbon, oil or gas, the urbanization of our planet and the shrinking biosphere for other creatures.^[1] These issues show the need keeping track of our influence on Mother Nature and the urgency reducing it to a non-critical amount. Therefore the Environmental Protection Agency (EPA) has identified a huge potential for the economic sector reducing greenhouse gas emissions^[2].

But what could motivate enterprises spending time, effort and money for environmental concerns? As it is a public good it is implying that the government should be responsible for that. Because of this statement it seems to be very obvious that businesses are not voluntarily interested in investing into public goods, which won’t generate direct profits.^[3] Nevertheless, more and more corporations consider a way improving their environmental impact and indeed every fifth manager sees the environment as a very important subject^[4].

To explain such a divergence one can look at stakeholder theory. It assumes that not only shareholders will have an interest in a company, but also other groups like government or society. Their interests differ from the classical maximization of profits. As a consequence the environment might be of interest for stakeholders and therefore to organizations too, which will result in new objectives for corporations. In the end compromises of different interests must be made, revealing that more aspects than profit should matter.^[5]

This explanation by stakeholder-theory has an implicit assumption, namely that improving environmental impact will cost money. Further it will come with a decrease of profits and will result in a conflict of interests. However several authors^[6] argue that this must not be the case. But you could also improve your profits by becoming “greener”, which would even encourage shareholders to become more ecofriendly. In short this concept is known under the term eco-efficiency. It means that one is trying to become more efficient by using fewer resources for the same outcome or in short “do more with less” and thus improving environmental performance, as well as increasing profits. Therefore environmental protection might become a so called “win-win situation” or a strategic option that exposes to be an opportunity for enterprises to be better as their competitors and establish a good reputation by communicating their effort in reducing impact on Mother Nature.

Because of this awareness some companies claim that they actually care about the environment and advertise their eco-friendly products, processes or behavior, but cannot really prove their assertions. Parisi and Maraghini, for instance, detected that 90 percent of the biggest US-companies make promises about sustainability improvements and thereby also to the environment, but only 35 percent can actually prove that they observe their promises by measuring progress.^[7] This might be one of the causes for the term “Greenwashing” that has come up in recent years. It is an expression for a marketing strategy, where “businesses try to make their practices look greener than they actually are”^[8]. Such corporations, who takes environmental concerns, as well as corporate responsibility seriously, but not just wanting to improve their reputation in short-term, without really caring about the environment, must be able to prove their effort without having a “Greenwashing” marketing strategy.

These mentioned examples show that there are “multiple forces pushing enterprises to become better environmental stewards.”^[9] Olson tried to identify and structure those multiple forces by categorizing them into three tiers.^[10] He started with foundational drivers, which are in fact the reason why ecological concerns emerge and thus are the big environmental problems that have to be solved. In this category he identified two significant problems: the global warming problem, related with climate and weather changes and the increasing demand of humanity that is caused by population growth and industrialization. These are the major causes for him, which “the world must learn to manage, to avoid adverse impacts on the environment and Earth’s natural resources”^[11]. These foundational drivers cause further impacts, inducing several risks again. As impacts of these foundational drivers he has identified “public pressure for environmental stewardship”, “natural resources & raw material scarcity”, “water stress” and “national security & safety concerns”. Risks that are evolving from these impacts are “economic risks”, “market risks”, “regulatory risks”, “reputational risks” and “operational & supply chain risks”. So in fact all these mentioned impacts and risks are extrinsic motivations for corporations to become more eco-sensible. Of course the listed forces are not an entire enumeration of all conceivable forces and the earlier mentioned intrinsic motivation, named eco-efficiency has not been considered either, but it is still a first attempt to explain different motives and inducements for companies investing effort in improving environmental performance.

All preceding assertions exhibit that there are many extrinsic, as well as intrinsic motivations for the reasons why corporations should decrease their environmental impact. But how can corporations operationalize this objective and verifiably improve their environmental performance?

The phrase “if you measure it, you can manage it”^[12] is giving one hint to that question. This is one opportunity where IT could support corporations. It enables an effective and efficient implementation of a measurement system, which can gather environmentally relevant information in an automatic or semi-automatic manner, calculate and aggregate them to indicators and visualize the results adjusted to relevant authorities. Based on these indicators, executives can make profound decisions, direct and optimize their company in a way that is environmental friendly, and in the end can ensure competitiveness, as well as long-term survival for their organization. They are further enabled to communicate and prove their environmental performance based on quantitative numbers and establish a good reputation in long-term, without using short-term “Greenwashing” marketing strategies.

After showing some examples for motivations, and relevance of IT-based environmental performance measurement to corporations, it comes to the purpose of this work, which is to identify and visualize Key Ecological Indicators. First some preparatory work is necessary to get all the theoretical information needed. To achieve this goal it is further required identifying KEIs, establishing a measurement system to monitor environmental impact of a corporation, persisting the measured data and processing it to calculate the identified KEIs. The next step is developing a management dashboard to visualize selected KEIs in an appropriate way. The theoretical part of this work is actually considering environmental impact and KEIs from an overall corporation perspective, as it is needed to understand the context the practical work (Building a KEI framework for business-processes). So chapter 4 is limited to the business-process perspective being a subarea of the overall corporation perspective. Therefore the abovementioned steps will be executed for identifying and visualizing KEIs, highlighted green in Figure 1. Steps four “optimize processes” and five “control performance” are actually not part of this work, but are the logical consequences taking place next. Additionally there is an iterative component in this figure. A continuous improvement process should always be considered to become better and keep the system to the state of the art.

Thus the contributions of this work are developing theoretical foundations of KEIs and the implementation of a KEI framework for business-processes, exemplarily be done for a case study. By this case study, possibilities to calculate and visualize KEIs will be discussed.

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Figure 1 - Aims of this work^[13]

2. Ecology and Sustainability – How does this relate?

Starting with the basis for understanding environmental concerns by showing the relation of ecology to sustainability and vice versa, as it is indispensable for KEIs to be discussed. A general understanding of the term “sustainability” is needed, as well as an understanding of the perspective upon and the placement of ecology to determine priority of ecological aspects. Afterwards the fundamental functions and goods provided by nature will be discussed. It illustrates interfaces between economy and ecology, indicating where corporations and their business-processes affect nature. Finally conditions of environmental health will be discussed. It will show the relationship between ecology and sustainability, and will point out opportunities for corporations to contribute solving environmental problems.

2.1 What is sustainability?

Before the main chapter about Key Ecological Indicators commences it is necessary to talk about a very popular concept named sustainability, mentioned incidentally in the introduction of this work, and being absolutely fundamental for understanding ecological concerns and objectives. So the first preparatory work is answering the question: what does sustainability mean and really stand for?

Historically it possibly started in the 18th century where one of the main resources was wood. As the need for wood had increased people began to cut more wood. Soon they reached a state, as trees couldn’t grow as fast as they were cut. It was probably the reason for the emergence of the first known sustainability thoughts. People recognized that it would be more effective cutting only such an amount of trees that can grow back in the same period of time, implying not to live on the substances itself, but on the revenues generated by it.^[14]

This was a fundamental recognition that was very important for the future development of our ecological system, and shaped our understanding of the term sustainability. It implies a restriction for the use of the natural resource wood and thereby also restricts the economic activity for humankind that relies on this resource in short-term, but in long-term it guarantees relative constant revenues for all future generations. So one could say it is enabling all generations to cut the nearly same amount of wood.

After this historical excursion the next step to mention playing a major part in our understanding of sustainability was the famous Brundtland Report with its definition of sustainable development:

“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”^[15]

In principal it abstracted the sustainable wood cutting notion into a more universal statement usable in almost every topic. Based on this understanding the previous constraint for woodcutting ensured that all generations will be able to satisfy their need for wood, as well as current generations not running out of it. The ability to use the term “sustainable development” very generally is caused by diplomatic language, and is the reason why this concept is criticized as to be too unspecific.^[16] Thus the real question that this definition evolves is what “needs” do present and future generations have to specify what has to be done to ensure sustainable development. This philosophic question is indeed not easy to answer, and this work does not claim answering it, but some of the needs concerning nature will become clearer in section 2.3. Thereby the mentioned statements illustrate importance to concretize the definition of sustainability for different domains, because they will have a varying influence on the ability of current and future generations satisfying their needs. Additionally this specification will be needed to set realistic and practical objectives for corporations wanting to contribute to sustainable development. As this work is mostly concentrating on a business-specific view it is requisite considering what sustainability means in this context, which topics it includes, and how it can be operationalized. A very popular concept to differentiate various subjects of corporate sustainability is called the sustainability triangle. It contains three different dimensions named economy, ecology and society. These three points are the main areas and together build the business understanding of sustainability. It follows a short explanation for what those keywords stand for giving a better imagination what they mean.

The economic dimension ensures long-term survival, as well as competitiveness of a corporation. Thereby it considers the ecological and social dimension.^[17]

The ecological dimension is about reducing environmental impact, which is induced by economic activities of corporations.^[18]

Finally the social dimension considers impacts of economical acting to total society and especially includes a respectful handling of employees, good relationship to stakeholders, and responsibility towards society.^[19]

So in fact corporations have to consider three different dimensions of needs that together will ensure sustainable existence of their organization, as well as supporting sustainable development for society. Corporations will need the social dimension, for example, for getting employees, customers, or social legitimacy for their economic activities. The ecological dimension will be needed to get resources and other services provided by nature, being discussed in section 2.3. Finally business will be there to make and earn money for an (ideally) infinite period of time, which are needs of the economic dimension. If one were missing the corporation would probably not exist and thus not be sustainable.

These different dimensions of course don’t complement each other in each case. If, for instance, the ecological dimension was to be improved it could possibly come along with a decrease of the economic dimension by a more expensive, but environmental friendlier business-process. This example illustrates the big challenge that corporations are confronted with by sustainability. They have to integrate^[20] these different dimensions with their different objectives to a coherent concept so that all interests of their stakeholders and shareholders are considered and the final result of all dimensions will be maximized. The problem with this maximization is that especially progress to the social and ecological dimension are hardly appraisable with monetary numbers, so evaluating how much effort should actually be performed to those areas is hard. Besides the mentioned forces and motivations in the introduction there is another relevant subject named corporate responsibility that could give a hint determining the scope of effort. Corporations posses an important role in our society and influence our lives in many ways significantly. For example the prosperity of our society depends on the economy, as it creates jobs and income for their employees, or by paying taxes corporations can also support the whole society. But they have negative effects too by causing pollution, noise, or material scarcity. Because of these diverse effects they should consider expectations and values of society, as they need the social legitimacy for their existence.^[21] Corporations that realized this mutual dependency feel responsible for their negative effects on society and ecology and therefore try keeping them as low as possible. This on the other hand could lead to an improved reputation, which today progressively determines the value of an enterprise.^[22]

Integrating these three needs is a challenge that is tried to solve in corporations by sustainability management, and standards like ISO 26000^[23] have evolved to support corporations with that challenge. In this work there will be a strong focus on the ecological dimension and its relation with the other systems and not on the integration and maximization of all three dimensions.

Moreover it raises a certain question: how could priority of the ecological dimension within corporations be derived? It is particular interesting for showing relevance of reducing environmental impact. The effort that is going to be performed to ecology might depend on the perspective upon and the priority of ecology that stakeholders, shareholders, management, and society possess, which will be considered in the following section.

2.2 Placement of ecology

It became clear that ecology does definitely relate to sustainability in some way, because it will be essential for life and will be one primary need of present and future generations. The introduced sustainability triangle assumes that all three dimensions should be, in some degree, equally important for corporations and have the same priority. But if reflecting about the common practices this will probably be not really the case.

To demonstrate how importance of each dimension could be derived and how ecology could be placed a model of Senge will be presented. He has tried to show two perspectives from which businesses or humanity could see the correlation of the three dimensions.

The left part of Figure 2 demonstrates the classical notion of how businesses see, and understand the hierarchy of these systems. It assumes that within economy, or also as a special case within one enterprise there are two smaller systems called ecology and society. In this way it implicitly has the assumption that profits are the most relevant aspect for economy respectively corporations and the remaining two systems are merely from secondary relevance. Thus they have not an equal importance as economic aspects when objectives for enterprises will be set. This perspective is stated as the exclusive eco-efficiency thought where these mentioned “secondary” systems are only considered, if not negatively affecting or even increasing the main goal realizing as much profits as possible. Such companies see the environment strictly as a public good that is entirely the responsibility of the government and not of themselves. Therefore they only observe regulations that law does make to environmental protection. But if this perspective should illustrate reality with the logical correlation of these systems and not from a very business-centric kind of view it would rather look like the right part of Figure 2 where ecology is the foundation of the other systems.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2 - Perspective on the systems^[24]

It is a complete different perspective implying that in particular environmental objectives should have the highest priority to humanity and corporations. Of course this assumption conflicts with the purpose of economy to make money and profits. It is a very idealistic respectively theoretical point of view for the economic-sector, but it demonstrates that as the sustainability triangle assumes social and ecological objectives should have at least the same, or an approximately equal priority as economical ones. Corporations possessing this perspective realized and are aware of the responsibility they bear for ecology and society, thereby following the concept of corporate responsibility.

At last there is a certain aspect unmentioned illustrated in Figure 2. As has been shown in the introduction and section 2.1 there are multiple motivations inducing corporations to think about their environmental impact, which is represented as the arrow from the left to the right perspective, and clarifies the slowly changing perspective caused by these mentioned forces that corporations as well as humanity do have regarding environmental concerns, and yet provides another motivation for corporations reducing their environmental impact.

2.3 Functions of nature

After showing priority of ecology it is necessary to take a closer look on nature itself. Especially before one can measure environmental impact of corporations to identify and calculate Key Ecological Indicators it is essential to recognize interfaces from environment to economy and vice versa. Which functions does Mother Nature provide for us in general and classify being observed to reduce impact of our economical acting and ensure environmental health.

In the preceding section Figure 2 illustrated the environment being the basis for all following systems and thus is the “initial source of all human endeavor”^[25]. Wackernagel and Rees even intensify this statement by saying:

“We are not just connected to nature – we are nature. As we eat, drink and breathe, we constantly exchange energy and matter with our environment.”^[26]

These two sentences additionally show why nature is absolutely worth being protected, and really has to be preserved for future generations. In this statement there is also a note to a very general, but fundamental function that Mother Nature provides for us namely the exchange of energy and matter. We use and consume resources provided by our ecological system and cause emissions and wastes, which have to be absorbed by the ecosphere.^[27] These goods and services that earths’ ecological system performs to society are categorized into the areas “provisioning”, “regulating”, “supporting services” and “cultural & amenity”^[28]. They will be concretized and illustrated by some examples giving a little perception for what those short keywords stand for.

With “provisioning” things like water & food, raw materials, fuel & energy, genetic resources, medical resources, and ornamental resources are meant.^[29] It consequently contains all types of resources, renewable as well as non-renewable ones provided by nature, which are consumed by living creatures, plants and organizations. The category “regulating” means services like climate regulation, disturbance prevention, water regulation, soil retention, waste treatment and biological control^[30], thus it has something to do with our ecological system absorbing wastes, emissions, and recycling these into new usable resources. “Supporting services” are for example habitat & refugium, biogeochemical cycles, soil formation, and nutrient regulation.^[31] These services could be stated as location and soil services, which are not ultimately consumed, but used by humanity, living creatures, and plants. Moreover nature provides functions, summarized under the category “cultural & amenity”, including aesthetic information, recreation and tourism, inspiration for art, folklore, spiritual information, historic information, science and education.^[32] These are additional benefits that nature supplies for humanity.

Those examples illustrate how diverse and important the functions are that our ecological system does provide for us containing needs that humanity does and will have concerning nature, so that the question “what needs do current and future generations have?” raised by the definition of sustainable development is partially answered concerning needs to nature.

Following this, the identified goods and services will be refined for a more business-specific kind of view, and its relation to the other systems illustrated in Figure 3.

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Figure 3 - Linear throughput depiction of the socio-economic process^[33]

In this figure one can see the three foundational systems economy (orange), sociosphere (blue) and ecosphere (grey), which already came up in the preceding chapters and its detailed correlation with each other. Figure 3 contains the realistic hierarchy of systems introduced on the right part of Figure 2. Additionally it adds another relevant part being absolutely essential for the evolution of our earth, the sun. It provides solar energy for renewable resources like plants, for instance, which transfer carbon dioxide to oxygen by photosynthesis. The opposite of renewable resources are non-renewable resources. They are not naturally rebuilt and exist in a constraint amount implying they are not sustainable. These two kinds of resources together are provided by the provisioning function of ecosphere and used by society, as well as economy. Within our economical system corporations consume these provided natural resources for producing goods or other services to create value for itself and society. As a consequence a throughput of resources through the company and its business-processes originates. By this process, and the consumption of goods and services natural resources are decimated and emissions, as well as wastes, are caused, ultimately absorbed by nature with its function as a sink. This absorption occurs by regulating functions provided by our ecological system, illustrated by the arrow from the “sink” to the “renewable source”. The previously mentioned photosynthesis example is one instance of a regulating function absorbing emissions and produces new useful renewable resources out of it. In this concrete case it transfers carbon dioxide to oxygen. Further the figure contains a possible method used by economy to reduce environmental impact known as recycling. Finally corporations enable net psychic income being “something apart from money that you get from your job, and which gives you emotional satisfaction such as a feeling of being powerful or important.”^[34]

Figure 3 is pointing out that the business-view is especially interacting with nature by using its “provisioning” and “regulating” functions and in some way to the “supporting services” for getting site for their buildings or arable land for agrarian economy, which is not illustrated directly. But the “cultural and amenity” category is not compulsory connected to corporations in a direct way.

It follows that especially enterprises have, beside the usage of land, two noticeable interfaces to the ecosphere^[35]:

- Input of resources and energy (using provisioning functions)
- Output of emissions, waste and products (using regulation functions)

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Figure 4 - Process Interfaces^[36]

In Figure 4 input and output interfaces of corporations are separated into two different kinds of flows through the business-process of a corporation, as business-processes will be the focus for implementing a KEI framework. The first one is the primary material flow with its input of resources and output of products illustrated by the green arrows. The second one is the supporting flow with its input of energy and output of wastes and emissions illustrated by the red arrows. This separation into two different flows is necessary to divide the productive flow from the supporting flow and illustrates different kinds of interfaces from economy to nature.

2.4 Health of nature

Based on these interfaces between economy and ecosphere it is possible to discuss the conditions of ecological health being necessary to set objectives for environmental protection.

Mentioning in advance that knowledge about ecosystem health and a general procedure of assessing diagnoses about it is still at the beginning and not as much developed as our knowledge about human health, for instance.^[37] But as assessing ecological health is not primary to the practical part of this work it will be considered in a very superficial way. Nevertheless this information is helpful for corporations wanting to gather data about environmental health getting feedback about the effectiveness of their actions executed to reduce environmental impact, like optimizing a business-process based on its environmental impact. So when an ecological system is called and stated as healthy?

One assertion calls an ecological system healthy if it provides its inputs and functional services over indefinite time periods. This will only be the case if we are able to maintain it appropriately.^[38] Another one states it as healthy whether it is able to provision goods and services to our society in a stable and sustainable way. Therefore it must have the ability to maintain its structure, as well as function, under external stress over time.^[39] At last one is going to be introduced trying to explain environmental health from a sustainability point of view. If we want our world to be sustainable, it will be necessary to ensure that essential products and processes provided by our ecological system will be not used more quickly than they can be regenerated. Additionally only such an amount of waste should be discharged, that can be absorbed by nature.^[40]

Hereby a certain similarity to the sustainable wood cutting notion is recognizable, as nature’s products and processes should not be used more quickly than they can be regenerated. So in fact it is also saying not to live on the substances of nature, but on the revenues generated from it. It further enhances this statement by limited absorption processes that should not be exceeded.

These assertions have in common that goods and services provided by nature must be preserved for future generations, as they are basic needs of people, actually being the sustainable development thought of chapter 2.1. Thus health of environment is given if sustainable development is ensured. As a result health of environment is expressed by the ability of our ecological system to undo usage of its resources and impacts of its pollution caused by humanity. The relationship between ecology and sustainability could be identified as the sustainable availability of natures’ provisioning and regulating functions. Strictly speaking, this understanding of natures’ health is restricted. But there are other additional conditions necessary for assessing health of environment, like vital environment. Ecological health includes the availability of natures’ supporting services, for instance, as a healthy environment needs space for development, so that a high diversity of animals and plants could exist.^[41]

A further research specified health of our ecosystem in a more detailed way and identified the following aspects that are an expression of ecological health^[42]:

- Homeostasis
- Absence of disease
- Diversity or complexity
- Stability or resilience
- Vigor or scope for growth
- Balance between system components

It contains the provisioning and regulating function within the aspects “homeostasis” or “stability or resilience” and expands the previously mentioned condition of ecological health.

As a matter of fact, it is neither exactly known when limitations of ecological functions are reached or even exceeded, nor the exact coherence of human- and economic activity to environmental damages making it really hard to set realistic and helpful usage and emission constraints, as well as objectives, for reducing environmental impact to corporations. Additionally, as mentioned in the introduction, developing countries also want economic prosperity, and cause more and more emissions and environmental damages. It follows that humanity must try to reduce their affects to our ecological system wherever possible and see the nature as an asset^[43], or a capital^[44] that is going to be invested in. However, there are some approaches to determine limitations to natures’ functions by retaining the current amount of emissions and wastes connected with economic growth, which would imply to know the current impact to nature and increase eco-efficiency, so that more products or services can be produced with constant environmental impact.^[45]

But how could corporations strategically reduce their environmental impact to contribute ensuring environmental health? To do so a method is needed to gather data about the actual impact of a single corporation on nature, as well as an approach to manage and direct it in a manner that is environmentally friendly and oriented to business strategy. Finally, it should provide information how to optimize or improve operational and organizational structure of businesses by ecological aspects. For that purpose the concept of Key Ecological Indicators will be introduced in the following chapter.

3. Key Ecological Indicators

In this chapter the concept of Key Ecological Indicators will be introduced. A common understanding of the term “Key Ecological Indicator” is necessary. Next some basic requirements to KEIs will be defined, as well as a classification of different kinds of KEIs. Then KEIs are considered from a macro-perspective for a better overview, and afterwards positioned within the micro-view. Finally, procedures to determine KEIs will be introduced and some indicators that might be KEIs, caused by its definition, will be presented.

3.1 What are KEIs?

To introduce the concept of KEIs a common understanding of the term Key Ecological Indicator is mandatory to avoid misunderstandings.

In current literature there is no definition for the term “Key Ecological Indicator”. Thus it is not a common used expression, but there is a huge variety of different terminology in the context of ecology, like ecological indicator, ecological performance indicator, environmental accounting, environmental management system or eco-health assessment, which are partially synonyms.

First of all, one should ask what an indicator is in general. There is also a pretty obvious relation to Key Performance Indicators so it would be advisable to take a look at the definition of Key Performance Indicators as well. Finally, there are definitions for environmental indicators, which should also be considered.

At first it is necessary to know what the word indicator means. In chemistry, for instance, it is a tool to get information about the presence or absence of another chemical species usually induced by color.^[46] In politics there are quantitative indicators, like gross domestic product to induce the economic situation and by comparison to the last years it displays the economic growth of a country.^[47]

As a result of these two short examples it is a very universal term, and can be used for a very wide range of subjects. Moreover its purpose can be summarized as getting information about certain facts of interest.

Considering the business-context, indicators are also called performance measures or performance indicators, as they want to know how well the corporation performs. They are understood, similar to the politics example, as some kind of quantitative information about a company’s internal or external situation.^[48] These two terms evolve a certain issue concerning the distinction between indicators and measures. Frequently measures are stated as something that can be estimated directly, like water usage in liters for instance and indicators are quantitative assessments of variables that are estimated in an indirect way, for example job satisfaction.^[49] Thus indicators can be built by one or several measures to reveal something that could not be measured directly. Therefore by speaking about indicators also measures could be meant. On the other hand, measures are a special subset of indicators. This understanding is illustrated in Figure 5.

Indicators should accomplish transparency by informing about operational facts in a very compact, relatively easy and concentrated manner.^[50] This specification is necessary because businesses have the ability to gather a lot of data. There is so much data available that one is constantly overloaded with data and indicators are a possible way to limit complexity, as well as amount of information, to relevant and essential aspects.^[51] This is usually done by aggregation and compression of much data into an indicator, but comes of course with loss of information and often leads to criticism about indicators in general.^[52] Nevertheless they are indispensable to summarize data and take founded decisions within corporations, but this criticism should illustrate importance to take serious cogitations if defining and implementing indicators, as they are only a reflection of reality and could lead to wrong decisions if not appropriately defined and calculated. Moreover there are several kinds of indicators available. First there are present and past oriented measures of current internal business situations. Second there are normative indicators to set targets by specifying a quantitative number that should be reached and would be future oriented. Orientation indicators are used for comparison with external business situations, for instance the industry average and are also present oriented, but could give hints for setting new target indicators.^[53]

From these shown understandings and kinds of indicators there could be derived two essential functions, namely a representation function and a management function.^[54] Gladen mentioned another very relevant purpose of indicators, as they also possess a certain communication function by easing the communication process in an organization in terms of reports or discussions based on indicators.^[55]

Thus functions of indicators are very wide spread, but the following three fundamental functions of indicators are identified:

- Representation function
- Information function
- Concentration function
- Communication function
- Management function

As a result, indicators have the purpose to represent the internal or external situation of organizations by quantitative information, concentrated by compression and ease the communication of its situation. If appropriately developed and calculated, they can help to take profound decisions and are a method to manage and lead organizations in a target-oriented manner by communicating target values in terms of indicators.

After the term “indicator” is adequately specified and different purposes were shown it comes to the differentiation of indicators and Key Performance Indicators. It is necessary to define KEIs. The word “key” commences an indicator that is very relevant and essential to the performance of an organization. It is stated as a “measure ‘that matters’ and ideally can be acted on.”^[56] The word “measure” should be renamed to the more general word “indicator”, as KPIs could describe a relevant fact that couldn’t be measured directly and would not follow the previous definition of “measure”.

Like indicators in general, Key Performance Indicators also have a representation, communication and management function. The determination if an indicator is actually a KPI that is contained in this definition are the two words “that matters”. To highlight and specify this aspect a definition from Parmenter will be introduced:

“KPIs represent a set of measures focusing on those aspects of organizational performance that are the most critical for the current and future success of an organization.“^[57]

In this definition the word “measure” is used instead of “indicator”, but it says “a set of measures”, which could actually measure something that couldn’t be measured directly, for example the KPI “customer satisfaction”. As it can’t be meted directly it usually contains a set of measures that together hopefully indicate this fact of interest. Nonetheless it should also say a “set of indicators” instead of “measures” in terms of more flexibility, as KPIs could include several indirect facts of interest that are again induced by direct measures.

It follows that KPIs are identified as a special subset of indicators being strategically important for a corporation’s performance and are current or future oriented, which implies that past measures cannot be and never were KPIs.^[58] So their purpose is to “help an organization define and measure progress toward organizational goals.”^[59]

This temporal assumption causes another problem because the assertion that KPIs are current and future oriented is not specific enough. “Current oriented” can be understood differently for each individual organization, for example it could mean all information of one day, month, quarter, year, or even since the foundation of the organization. It includes measures from the past, which does not agree with the statement saying KPIs are not past measures. Therefore the word “current” will be specified in the following. “Current” actually stands for a certain period of time of the past defined individually for each corporation depending on the understanding how the current business situation is represented. A corporation, for instance, that changed their business-process last year could understand “current” as an aggregation of information by one year, as it represents the actual state of the current business-process version. This statement contains the assumption that the word “current” means the time period since the last change of organizational or operational structure.

In the end KPIs are tied to strategic targets and could indicate the difference from present situation to predefined target situation.^[60]

So they indicate a current situation in a particular manner and show how strong it differs from the targeted situation. To summarize the definition of KPIs, they

- indicate the performance of a particular, actual business situation,
- that is tied strategy
- by setting concrete target values, indicating difference between the strategically desired and the actual business situation.

After defining indicators and Key Performance Indicators it comes to the environmental reference. In literature there are attempts available to define the term “environmental indicator”. One attempt is going to be introduced in the following. It describes an environmental indicator as “a mediate or immediate environmentally relevant quantity, formed as an absolute or relative number, which describes purposefully an operational situation with increased insight value.”^[61]

Thus environmental indicators have to express some kind of environmentally relevant information that show how much the environmental functions and services are used by corporations or illustrate the actual health status of our environment. For example an absolute environmental indicator is the total amount of water used, or a relative one is the amount of water used per product, which are both part of the provisioning function of Mother Nature and fulfill the “environmentally relevant information” requirement. This specification further justifies the determination of health and function of nature, as they contained interfaces between ecology and economy, and thus contain references about what environmentally relevant information is.

Additionally the following statement concretizes this definition:

“Environmental indicators should reflect the objectives of environmental protection, which are set under consideration of sustainable economic activities“.^[62]

It results that environmental indicators should be derived from objectives of environmental protection and show the environmentally relevant information that is needed to optimize the corporation in a way that contributes to environmental protection.

With this understanding of indicators, Key Performance Indicators and environmental indicators, the question: “What are KEIs?” will be answered in the following. They are also understood as a certain subset of indicators the previous determined functions, like representation or management function of indicators apply in this case, too.

As stated out it is similar to the term “Key Performance Indicators”, but the word “Performance” is substituted by “Ecological”. So the performance of a corporation is not ultimately the primary aspect, but the ecological impact is the relevant information that is going to be quantified, implying KEIs being a subset of environmental indicators. Therefore a certain concretization is needed that enables to determine if an environmental indicator is actually a KEI. As an environmental indicator is derived from objectives from environmental protection this statement cannot be taken for identifying environmental indicators to be KEIs.

For this purpose the following statement considers the relation from KPIs to KEIs: “Key Ecological Indicators (…) are in fact special Key Performance Indicators”^[63]. This is the reason why aspects and issues discussed for KPIs do also apply to KEIs, like the definition of the current business situation, which has to be considered if implementing KEIs. Moreover this statement enables to determine if an environmental indicator is actually a KEI based on the definition making an indicator a KPI.

As KPIs and KEIs are a special subset of indicators and additionally KEIs is a special subset of environmental indicators caused by their environmental reference. KPIs are understood as a strategic indicator that matters and is essential to the performance and success of a corporation. An indicator shows an internal or external business situation, which can be strategically relevant. It follows that KPIs are a certain subset of indicators. Because of identifying KEIs as special KPIs they are a subset of them.

As a result, linkage to strategy was the primary aspect that determined if an indicator is a KPI. This knowledge is used to specify whether an environmental indicator is a KEI. KEIs do not solely indicate a certain environmental fact but rather they should show environmental information, which are strategically relevant. As a result Key Ecological Indicators are understood as an

- indication of environmental impact concerning a particular, actual business situation,
- that is tied to strategy
- by setting concrete target values, inducing difference between the strategically desired and the actual business situation

To use this definition for visualizing KEIs in the practical part of this work it will be further specified in a more mathematical way:

KEIs are defined “as a tuple consisting of an Ecological Characteristics (EC) metric and a target value function based on the ecological goals one wants to achieve (defined by business strategy).”^[64]

In conclusion an actual business situation is represented by ecological characteristics that express the usage of nature’s goods and services by corporations identified in 2.3. Reference to strategy is ensured by a target value function that is derived from business strategy and can include the objective to ensure health of nature, discussed in 2.4. An example illustrates this definition: ‘water consumption of a corporation per year <= 100.000 liters’. It implicitly has the assumption that reducing water consumption is connected to a corporations’ strategy.

Abbildung in dieser Leseprobe nicht enthalten

Figure 5 - Correlation of Indicators

Finally the assumed correlation of these different terms is illustrated in Figure 5. Depending on the responsibility toward ensuring sustainable development taken by a corporation, the set of KEIs would become larger if more responsibility is taken, as it would include more environmental indicators that are connected to strategy.

3.2 Requirements for KEIs

The previous definition set properties KEIs must fulfill. But there are further aspects needed for evaluating the quality of KEIs. In literature there are already plenty of requirements for classical indicators or indicator systems and some explicitly for environmental indicators available. Consequently requirements to indicators are also applicable to KEIs, as they are in fact a special subset of indicators. There are so many different requirements named in literature that a limitation to the most essential and relevant ones is necessary.

The first requirement that is going to be introduced is summarized under the term “economical requirement”. It consists of the aspects time, quality, flexibility and profitability of information and consequently means that it should be worthwhile to take effort in gathering information and processing them to indicators. This is determined by setting the requirement that the gathering and processing procedure should cost less than, or at least be proportional to the benefits generated by it. Further this process should be executed within a certain period of time, so that these indicators are available at a point in time when they are usable and needed. Flexibility is mentioned in terms of a set of indicators and means that they should be adaptable. At last quality signifies an appropriate preparation of information for decision-making. These consisting aspects should be entirely optimized, as they are also related and have negative effects to each other.^[65]

For example if the time attribute is optimized to a real-time collection of data and calculation of indicators, it will decrease profitability, as the needed infrastructure enabling real-time indicators is more expensive. Thus one has to consider whether real-time is really necessary to improve time and decrease profitability. Setting this general requirement actually covered a lot of different requirements that are named and listed by other authors, for example requirements like currency^[66], availability^[67] or acceptable costs^[68]. Because of this generalization almost every set of requirements that have been found did include some kind of economical requirement. It illustrates that it is very relevant.

Measurability or quantification^[69] is yet another frequently mentioned requirement. It means representing the fact of interest by a number. Achieving it is not easily feasible in each case, like measuring the mentioned customer satisfaction KPI. Nevertheless it is achieved by identifying a set of measures that might indicate it.

And there are further requirements like simplicity^[70], verifiability^[71], comparability^[72] and reliability^[73], which will not be explained as they mostly speak for themselves or are not that relevant to the requirements for KEIs.

However, there are some requirements particularly set for environmental indicators in literature. KEIs are a subset of environmental indicators and therefore requirements for environmental indicators can apply to them as well. Environmental indicators should:^[74]

- address key issues
- be quantifiable
- be derived from process (modeling) data
- relate to other metrics commonly used in research and business decision-making processes

With key issues the big environmental problems could be meant, or issues within the corporation that exist concerning ecology, so environmental indicators should be connected to them. Quantification and measurability is also a requirement for ecological indicators. Derivation from process data offers the first evidence for a possible procedure to determine KEIs, discussed in section 3.5. The relation to other metrics is helpful for using these metrics for decision-making and is even necessary if aspects like eco-efficiency are going to be measured. This relation is not essential to KEIs so that it is not made a requirement for them.

With these several requirements for indicators and environmental indicators requirements for KEIs will be set for this work:

- Economical Requirement
- Relevancy (tied to strategy by target value)
- Measurability / Quantification
- Environmental reference
- Transparency

The economical requirement does apply to KEIs with its contained aspects time, quality, flexibility and profitability. It is always a fundamental requirement in practice. Further it should fulfill the requirements “relevant” by connection to strategy and “environmental reference” by containing some kind of environmental impact. They result from the definition of KEIs. Moreover KEIs should also be measurable or quantifiable for decision-making and transparent to discuss how they are calculated or how well they express certain information.

3.3 Classification of KEIs

After setting requirements a classification is needed for a better structure and distinction of different kinds of KEIs. In advance there are many possibilities to classify them by the most varying aspects. Because of the fact that they are tied to strategy a wide range of different KEIs could possibly be identified.

A certain class was already mentioned, by thinking about health of environment. Depending on strategy, it results in KEIs for ecological quality, health or current ecological state. Another kind of KEIs expresses environmental stress caused by corporations and other entities using provisioning and regulating functions of nature. Moreover there are indicators for environmental management that enable to take decisions based on quantitative numbers. This classification is illustrated in Figure 6. It should be considered that environmental management indicators could contain both, environmental stress and environmental health indicators for managing environmental impact. As a result this separation is not distinct. Additionally indicators for environmental health are primary politically relevant and only huge corporations with a high environmental impact upon its region will gather such information to monitor and document the regional environmental status.^[75] It can be used to indicate progress in protecting the regional environment and could show if taken environmental actions are effective.

[...]

^[1] Cf. Kottmann, H., et al. (1999), p.21., Olson, E.G. (2009), p.8., Braun, B. (2002), p.1. and Hilgenkamp, K. (2006), p.12ff.

^[2] Cf. Olson, E.G. (2009), p.9.

^[3] Cf. Lesourd, J.B., Schilizzi, S.G.M. (2001), p.16.

^[4] Cf. Buß, E. (2007), p.213.

^[5] Cf. Lesourd, J.B., Schilizzi, S.G.M. (2001), p.5f.

^[6] Cf. Braun, B. (2002), p.3. or DeSimone, L. D., et al. (1997), p.2.

^[7] Cf. Parisi, C., Maraghini, M.P. (2010), p.131.

^[8] Conner, N. (2009), p.286.

^[9] Olson, E.G. (2009), p.7.

^[10] Cf. ebenda (2009), p.7.

^[11] Olson, E.G. (2009), p.8.

^[12] Zee, H. (2002), p.5.

^[13] Refers to: Olson, E.G. (2009), p.89.

^[14] Cf. Grunwald, A., Kopfmüller, J. (2006), p.14.

^[15] Young, T., Burton, M.P. (1992), p.2.

^[16] Cf. Sheldon, C., Yoxon, M. (2002), p.7.

^[17] Cf. Hüttner (2001), p.47. and Küker (2003), p.31.

^[18] Cf. Schaltegger, S., Dylilick, T. (2002), p.33.

^[19] Cf. Wilkens, S. (2007), p.12ff.

^[20] Cf. Schaltegger, S., et al. (2007), p.14ff.

^[21] Cf. Gruber, K.A. (2009), p.71f.

^[22] Cf. Buß, E. (2009), p.218.

^[23] ISO 26000 (2011), URL see references

^[24] Senge, P., et al. (2008), p.102.

^[25] Lawn, P. (2006), p.17.

^[26] Wackernagel, M., Rees, W. (1996), p.7.

^[27] Cf. Wackernagel, M., Rees, W. (1996), p.8.

^[28] Cf. Groot, R., et al. (2006), p.227.

^[29] Cf. ebenda, p.227.

^[30] Cf. ebenda, p.227.

^[31] Cf. ebenda, p.227.

^[32] Cf. ebenda, p.227.

^[33] Lawn, P. (2006), p.17.

^[34] Financial Times Lexicon (2011), URL see references

^[35] Cf. Seurig, S.A., Pick, E. (2001), p.157.

^[36] Seurig, S.A., Pick, E. (2001), p.157.

^[37] Cf. Jorgensen, S.E. (2010), p.5.

^[38] Cf. Milon, J.W., Shogren, J.F. (1995), p.28.

^[39] Cf. Niccolucci, V., et al. (2010), p.425f.

^[40] Cf. Wackernagel, M., Rees, W. (1996), p.7.

^[41] Cf. Schaltegger, S., Sturm, A. (1995), p.115f.

^[42] Jorgensen, S.E., et al. (2010), p.11.

^[43] Milon, J.W., Shogren, J.F. (1995), p.28. and Wackernagel, M., et al. (2006), p.246.

^[44] Lawn, P. (2006), p.17.

^[45] Cf. Faßenbender-Wynands, E., Seuring, S.A. (2001), p.151.

^[46] Cf. Shakhaschiri, B.Z. (1989), p.39.

^[47] Cf. Kesselmann, M., Krieger, J., (2009), p.13.

^[48] Cf. Burkert, M. (2008), p.9.

^[49] Cf. Bryman, A., Cramer, D. (2009), p.19.

^[50] Cf. Hopfenbeck, et al. (1996), p.196.

^[51] Cf. Gladen, W. (2008), p.11.

^[52] Cf. Pape, J., et al. (2001), p.179.

^[53] Cf. Eichhorn, P. (1976), p.159f.

^[54] Cf. Seidel, E., et al. (1998), p.10.

^[55] Cf. Gladen, W. (2008), p.15.

^[56] Rasmussen, et al. (2009), p.23.

^[57] Parmenter, D. (2010), p.4.

^[58] Cf. Parmenter, D. (2010), p.7.

^[59] Reh, F.J. (2011), URL see references

^[60] Cf. Rasmussen, N., et al. (2009), p.23f.

^[61] Kottmann, H., et al. (1999), p.7. (translated)

^[62] ebenda, p.4. (translated)

^[63] Nowak, A., et al. (2010), p.3.

^[64] Nowak, A., et al. (2011), p.6.

^[65] Cf. Ösze, D. (2000), p.80.

^[66] Cf. Kottmann, H., et al. (1999), p.19.

^[67] Cf. Dietrich, E., et al. (2007), p.14.

^[68] Cf. Jorgensen, S.E., et al. (2010), p.11.

^[69] Cf. Pape, J., et al. (2001), p.184.

^[70] Cf. Jorgensen, S.E., et al. (2010), p.11.

^[71] Cf. Clausen, J. (1998), p.53.

^[72] Cf. Kottmann, H., et al. (1999), p.19.

^[73] Cf. Ösze, D. (2000), p.80.

^[74] Harmsen, J., Powell, J.B. (2010), p.162.

^[75] Cf. Kottmann, H., et al. (1999), p.9.