Yannis A. Phillis is a guest contributor. He is Professor of Engineering at UCLA and the Technology University of Crete.
The following is adopted from:
“Fuzzy Measurement of Sustainability,” by Y. A. Phillis and V. S. Kouikoglou, Nova Publishers, NY, 2009, by permission.
An organization is an entity or purposeful structure with boundaries that separate it from its environment. According to Webster’s dictionary it is an administrative and functional structure (as a business or a political party). An organization pursues certain goals such as education (this is a university) or production of goods and services if it is a corporation. Organizations interact with their environment, physical, biological and social, they affect it and become affected by it. It is quite natural then that organizations play an important role in the sustainability of a region or country.
A company might use production technologies that are environmentally friendly and continuously strive toward improving them or it might disregard such technologies to enhance short term profits. A company might resort to friendly or hostile employment practices. To be sustainable an organization should employ practices that improve the welfare of society and have a minimal environmental impact. One has then to assess societal and environmental impact of organizations quantitatively. Such assessment presupposes that organizations accept the principles of accountability and transparency. Equivalently, organizations must understand their public role and impact and voluntarily provide reliable data about their economic, social, and environmental performance.
Sustainability of organizations should not be confused with self-sufficiency. Factories ordinarily need a number of external inputs to function, such as energy, matter, and labor, for example, and they transform matter into finished products while at the same time they generate pollution which is released into the environment. Sustainability of organizations is associated with their activities, emissions, impact of products, installations, policies, etc. It is desirable to improve all activities, that is, reduce emissions, improve products, build environmentally friendly installations, contribute to the economic welfare of the society, and so on.
The boundaries of an organization are defined by its physical ones but they are not necessarily limited by them. A car company for example, generates pollution locally but its supply chain and products have global environmental impacts and national or international economic effects. Time scales also depend on the type of organization and its products or services. Each organization has its own space and time demands when sustainability is assessed.
There are several reasons why organizations assess or should assess their sustainability:
- It is good marketing to provide society with sustainability data. People often prefer products of environmentally and socially friendly companies.
- Sustainability is becoming the goal of local and national governments and organizations cannot ignore this trend.
- Improving environmental performance often improves financial and economic performance of an organization by making the various stages of production more efficient.
- A sustainability report exposes progress towards improvement and provides guidance towards new strategic decisions.
- A sustainability report shows compliance with existing environmental and labor laws and regulations.
Models that assess sustainability of organizations should be customized to the realities of each particular organization. However, general guidelines should exist to provide directions. A few corporations follow the guidelines of such organizations as the Coalition for Environmentally Responsible Economies (CERES) and the Global Reporting Initiative (GRI). In this article a different model is outlined that uses fuzzy logic to assess sustainability.
The Model
Overall sustainability (OSUS) is a function of what is called the human system (HUMS) and the ecosystem (ECOS). HUMS is a function of policies (POLIC), economics (WEALTH), health and insurance (HEALTH), and education (KNOW). ECOS in turn is a function of the corporation’s impact on AIR, LAND, WATER, and biodiversity (BIOD). The inputs to the eight secondary components are the so called basic indicators.
Basic Indicators
The choice of basic indicators depends on the type of organization under consideration. One should keep in mind when choosing basic indicators that they reflect the organization’s economic, environmental, and social performance and its contribution locally, regionally, or globally to sustainability. Norms and targets for these indicators are dictated by legal requirements and scientific or expert knowledge.
Boundaries
The boundaries of the organization extend from all possible inputs such as supply chains to all outputs such as products, clients, etc.
Assessment of Indicators
Values of indicators are provided by organizations or can be estimated using various techniques. For example, emissions due to the production, use, and disposal of goods can be evaluated using life cycle assessment (LCA).
An Example of Basic Indicators
The following is an indicative list of possible sustainability indicators.
AIR
Greenhouse gas emissions (all emissions concern production and product use/disposal)
NOx, SOx, CO emissions
VOC (volatile organic compounds) emissions
CFC (chlorofluorocarbons) emissions
Renewable energy use
Fossil fuel use
Percentage of environmentally friendly buildings, i.e., buildings with
- passive solar design
- economy fixtures
- automatic switches
- faucets that turn off when not used
LAND
Solid and liquid waste generation (all waste concerns production and product use/disposal)
Amount of solid and liquid waste treated/recycled
Nuclear waste
Reforested land
Restored land
Amount of material dumped/recycled
WATER
Water use for production
Water treatment/recycling
BOD (biological oxygen demand)
COD (chemical oxygen demand)
Hydrocarbon effluents
Wastewater effluents
BIOD
Number of species/habitats affected by production and product use/disposal
Protected habitats conserved or destroyed
POLICY
Compliance with international human rights and environmental agreements
Compliance with national environmental laws/regulations
Compliance with national labor laws/regulations
Benefits to employees
Percentage of employees covered by bargaining agreements
Nondiscrimination policies
Avoidance of child labor
Respect of rights of indigenous people expressed by numbers of violations of such rights
Financial and other contributions to communities
WEALTH
Revenue
Production/operating costs
Financial assistance received from government
New capital investments
HEALTH
Injury rates
Fatality rates
Lost days
Occupational health problems
Health insurance coverage of employees
KNOW
R&D expenditures
Percentage of employees receiving training in
- new technologies and methods
- ethics
- anti-corruption policies
Interaction with institutions of higher learning.
Starting with the basic indicators one proceeds upwards towards composite indicators using fuzzy logic until a final value of OSUS is found ranging from 0 to 1, which expresses the sustainability status of the organization. For a detailed exposition into all technical aspects of this model one could refer to the book cited below the title of this article and its references therein.
This model allows the calculation of sensitivities of sustainability with respect to basic indicators so that one could easily pinpoint those inputs that affect sustainability the most and focus on their improvement.
It should be noted that the scale (0,1) is not absolute or technically defined as for example scales of temperature in physics. It simply provides a numerical value against which one can gauge the time evolution of an organization towards sustainability and it gives a common base for comparisons among organizations.
The model is already used in practice by several researchers in the field of corporate sustainability. In an era of economic crises, hard governmental decisions and lurking social instabilities organizations ought to use such tools to assess and improve their contributions to society. First and foremost it’s for their own good.
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Prof. Phillis is in the forefront of the application of fuzzy logic to the analysis and design of production lines, queuing control, and large-scale manufacturing networks. Dr. Phillis is an Editor of the Journal of Intelligent and Robotic Systems. He was the General Chair of the International Conference on Management of Technology Change for 2003 and 2005. He received his PhD in Engineering from UCLA.