SureGround Solutions’ CEO Thera Kalmijn and HIP Investor CEO R. Paul Herman have co-authored multiple features on sustainability leadership – and its implication for profit and shareholder value – in Sustainable Life Media.

Read how to improve your company’s initiatives for higher human impact and profit – or gain plus good – here:

* Protecting Profits in a Water Scarce World – part 1 and part 2

* Innovators Creating Cash from Carbon Challenges: saving energy, pollution and money at the same time.

* New Profits from Non Profits? Partnerships among charities, companies and investors create value.

* Trust But Verify - A New Mantra for Company Growth

Meet the co-authors at SustainableBrands 2010 conference in Monterey, June 7-10, 2010.

CNBC.com’s Trevor Curwin interviews HIP about managing the pollution associated with carbon and greenhouse gasses, upcoming carbon legislation and competitive positioning across industries – and how it will affect investor portfolios.

“With carbon cap-and-trade legislation before Congress and increasing pressure from shareholders, US companies know they’ll have to deal with their greenhouse gas emissions, or carbon footprint, and many are jumping the gun to change their carbon liability into an asset.

“The best-managed companies are evaluating their carbon footprint,” says R. Paul Herman, founder and CEO of HIP Investor Inc., a Californian investment advisory firm that has created two sustainability indexes tracking the S&P 100 and S&P 500 constituent companies. “And they’re managing it lower to save energy and costs, reduce their future volatility of materials costs, mitigate potential environmental liabilities, and create new competitive advantages.”

Getting a handle on these emissions, however, takes work. …

CLICK HERE TO READ THE FULL FEATURE

Published in Sustainable Life Media and Sustainble Brands Weekly:

WHERE IS THE PROFIT IN CARBON-EFFICIENT SUPPLY CHAINS?

By Thera Kalmijn of Sure Ground Consulting & R. Paul Herman  of HIP Investor Inc.

Would your CEO or CFO want to know if up to 117% of profits were at risk? In other words, a profitable company would erase all profits? If yes, you may want to make sure you are paying attention to Copenhagen’s meetings on climate change.

The potential regulation and cap and trade systems are important issues, particularly in carbon-intensive industries where TruCost estimates carbon cost earnings (EBITDA) impacts of 2% to 117% for utilities, and 1% to 10% for less carbon-intensive industries1. However, those who are focusing only on strategies that will just meet regulatory requirements are missing the boat. Forward-thinking companies are seizing the opportunity created by the environmental crisis to shake costs not only out of their operations, but also out of supply chains. …  

 READ THE FULL ARTICLE HERE

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Measuring impact ““ whether human, social or environmental ““ can feel like an impossible task, but really just requires a step-by-step path. There are many frameworks that you can draw upon; the key is to start simple, pilot an approach, and then evolve.

At the Opportunity Collaboration in mid-October 2009 in Mexico, organized by MicroCredit Enterprises, the topic of measuring impact was a top discussion topic and desire in many conversations. (UPDATE: The Investors’ Circle conference in DC also had an intense workshop on Metrics faciliated by Suzanne Biegel and Shaula Massena.   Additional conferences – Social Capital Markets and Net Impact - have filled the room with interest in human-impact metrics.)

Several attendees requested that HIP Investor synthesize the core insights, tools and methodologies that we have seen so far ““ and how they might be of use:

1. First, understand the distinctions among Inputs, Process and Results. An input counts how many applications for a micro-loan there are. The process would count how long that process took, and the rate of acceptance. The result of a successful micro-loan would range from re-payment to the benefits of that investment, like educated children or funds for purchasing health or water. Organizations that measure results tend to be the most successful ““ as they align their select highly targeted strategies and align their resources against them. They might also measure processes and inputs, but only if contributing to maximizing the result.

2. Next, determine what and how aggressively you want to measure. You can go as shallow or deep as you like. Determine how meaningful it is to do so. If you make decisions by intuition, the metrics might be less helpful. Not everything that is measurable is meaningful ““ at most choose five metrics (the number of fingers on your hand). But if you are deciding among multiple choices with scarce resources, metrics help to identify aspects that best connect with your goals ““ whether as an organization or an investor (or donor).

3. A range of measurement frameworks exist to learn from, and provide a starting place to build a template:

• Ashoka asks three core questions: How many Ashoka Fellows changed government policy in five years? 50% typically. How many Fellows were replicated by another program in five years? 90% on average. How many people were impacted? This varies by field, and ranges from thousands to millions depending on the topic.
• The Human Development Index by the United Nations covers social, environmental and economic indicators, and rates most of the 200 countries worldwide. These metrics, covering infant mortality, literacy and gender equality, also track year over year performance.
• The Gross National Happiness approach of Bhutan looks at 72 indicators, including how people used the last 24 hours in terms of time. These compile the core “pillars” and go beyond traditional GDP as a measure of success. France is now evaluating how they can do the same with Nobel laureates Joseph Stiglitz and Amartya Sen.
• The Balanced Scorecard is used in business and tracks four categories: customers, operations (including employees), learning and financial metrics. It is used by many large companies as a more comprehensive view.
• The Global Social Venture Competition (GSVC) includes a Social Return on Investment analysis as part of its evaluation for business plans. World of Good won both the GSVC grand prize and SROI prize in 2004. Businesses select the 3 metrics that best drive their venture.
• SVT Group has cataloged more than 30 approaches in a PDF guide, and describes what they are, how they work, how many resources and time commitments are required, and where they have been used.
• Grameen Bank has a set of questions that frame how microfinance families improve their lives.
• The HIP Scorecard. has a comprehensive look at five categories ““ Health, Wealth, Earth, Equality and Trust ““ based on Maslow’s hierarchy of needs and the UN Human Development Index. HIP has adapted it to publicly listed companies. The HIP 100 Index (and the HIP 500 Index) tend to beat the S&P by integrating these quantifiable human impact factors ““ and how they drive profit for corporations.

4. Seek out benchmarks to compare against. The U.N. Human Development Index tracks many categories of metrics at the country level over multiple years. Consider how your organization’s metrics might fit those ““ and demonstrate how it’s more comprehensive, more efficient or faster momentum of improvement.

5. Start a pilot of metrics that seem right for your mission and goals. Don’t overcomplicate it. Go with one, two, or even five metrics (no more than one hand!) ““ and track the impact you are creating. Compare it to the investment currency ““ and calculate a ratio. See how that ratio changes by day, month, quarter or year. Then, evolve your approach to use it as a great management and evaluation tool.

For more information, feel free to contact us (Paul @ HIPinvestor.com) – HIP has helped Walmart develop its Sustainability Index and scorecard, advised NIKE on the development of its Green Exchange (GX) and has applied the HIP Scorecard to the entire S&P 500, resulting in HIP Portfolios for investors.   HIP can help your portfolio, your company and your world.

What’s your experience? What other models or frameworks would you suggest?   Post your ideas and links below:

HIP Commentary: “The New Fundamentals of Investing” What are 10 indicators to evaluate for your portfolio when seeking Human Impact + Profit? Read HIP CEO R. Paul Herman’s commentary in Sustainable Industries’ Money Issue. CLICK HERE TO READ THE FEATURE