University of Vaasa - Vaasan yliopisto

pressed to compete with an industrial company on sustainability; only in the social
sector can the two be compared with any kind of accuracy. However, if we break
down the issue to the individual indicators, there are some that are more suitable, and
others that are not. Still others would only need to be reset to the level of an NGO to
be relevant.
In the environmental analysis, the “Energy used” indicator is partially usable as is.
Even though the energy usage of a NGO is hardly in the same class as that of an
industry, the effort is sound. Similarly, the “Recycling” indicator could just be
replaced by something more suitable for “intangible” NGO. For instance, a measure
of the organisation’s “carbon footprint” – that is the amount of carbon dioxide
released in the course of their activities – could be well motivated. The choice of
materials and type of energy source used would have an effect on this number. And
also in this case, the NGO’s scale from good to bad would need to be benchmarked
against other NGO:s, not against industrial firms.
On “Emissions” however, the NGO indicator should be closer linked to the impact of
their activities. This is of course a hard thing to achieve, since such impacts are
inherently qualitative and almost impossible to review objectively. As such, the only
really good way forward would probably involve benchmarking the NGO against
similar organisations. An “Environmental impact” stat based on a peer review could
produce good results. The only problem with this line of reasoning is that
performance indicators are at their best when they do not depend on subjective
assessment, but on objective, numerical data. But some sort of combination indicator
would anyway seem necessary, to fully capture the repercussions of the
organisation’s actions.
Finally, “Environmental incidents” and “Investments in biodiversity” could remain
as they are, since both are viable even in the case of NGO activity. However, the
“Investments in biodiversity” stages could be modified to reflect the different
situation, focusing on percentage of available funds instead of percentage of net sales,
or even on a ratio of invested funds to the NGO’s administrative costs. And certainly,
the range could be raised somewhat, so that the fifth level would be higher than 3%,
to more accurately reflect the NGO:s’ humanitarian and environmental aims.
In the social aspect, there is less that needs to be modified – really only the category
“Product incidents” would need serious modification. Changing it to “Formal
complaints against NGO activities over the last ten years” would already be a good
step forward – more militant NGO’s would certainly rack up a few such. In addition,
the limits for “Donations for socio-cultural purposes” and “Education” could be
raised by a few percent, again to be tallied as a portion of available funds, or similar.
Finally, the economic aspects of sustainability, which are definitely where the
NGO’s differ the most from their industrial counterparts. An NGO is, for instance
(mostly) prohibited by law from making profit, and can as such not produce any
stakeholder rewards. The projects they implement often have no - or at least difficult
to estimate – financial value and abysmal ROI figures. Finally, other financial terms
such as liquidity, equity-to-assets ratio, budget variance, turnover, etc, have little or
no relevance to the successfulness of an NGO. Only the “Breaches against the law,
fines” stat has direct usefulness in such an evaluation.
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