Improving the Credibility of Corporate Sustainability Metrics

Résumé fourni par la source

Firms face growing pressure to measure and disclose their sustainability performance, yet credible sustainability metrics remain scarce because sustainability initiatives often operate under significant uncertainty. We argue that two forms of uncertainty—(1) “effect uncertainty” (whether an initiative produces its intended outcome) and (2) “measurement uncertainty” (the accuracy and stability of quantification)—fundamentally shape the credibility of sustainability metrics. We introduce a credibility-centered roadmap that helps managers diagnose these uncertainties, select metrics that fit the informational context, reduce uncertainty where feasible, communicate remaining uncertainty transparently, and pause quantitative disclosure when precision cannot be responsibly claimed. The roadmap recognizes that credibility depends on aligning disclosure with what can be responsibly known rather than choosing the “right” metric in the abstract. Using carbon offsets as an illustrative domain where both uncertainties are exceptionally high, we demonstrate how misaligned metrics can unintentionally mislead stakeholders and why process metrics, qualified outcomes, or strategic silence may be more credible than precise quantitative claims. By adopting this structured approach, organizations can design sustainability metrics that more accurately reflect what can be known, avoid overstating confidence, and strengthen stakeholder trust.

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