Welcome to ‘My key KPI’, a new weekly content series where we ask CFOs and FDs what metrics and measures they use to drive their businesses forward.
The aim is to understand how different finance professionals, across a broad array of industries and sectors, use data to inform their decision making.
In this week’s edition, we speak to the head of finance and sustainability at Adnams, a Suffolk based brewer and hospitality chain.
Richard Carter enjoys a unique twin role. He’s head of finance, yes, but he’s also one part of Adnams’ sustainability team. “It all developed from an ad-hoc conversation with our chief exec,” he explained.
“He wanted to formalise our environmental reporting and he assumed that if I could add up money, I could add up carbon. Of course, at the time, adding up carbon is what people meant by environmental reporting.
“I explained to him, you can’t just add it up at the end of the year, you’ve got to monitor it on a frequent basis and drive the agenda if you want to reduce your emissions. And it’s not just carbon: it’s all the greenhouse gasses, it’s water, waste and biodiversity.”
So Carter went about implementing several environmental KPIs into his models and share these with the Adnams board every month. “Our carbon footprint - by that I mean our carbon emissions relative to our turnover and manufacturing volume - because that’s a measure of efficiency.
“Our water usage in absolute terms, again normalised against production volume. Less frequently we talk about waste because we’ve already got to zero to landfill.”
But word to the wise: Carter cautions against an obsession with KPIs and quantification. “I’m not sure that’s always helpful or healthy. Sustainability is a much more complex area than that and the business cases need to reflect this complexity. One has to look at things holistically, or one can make an irresponsible decision.
“For example, we looked at desalination a few years ago. We’re right next to the North Sea. Technically, it’s quite possible and we could get that water to a suitable quality. The problem is that the energy required to do that -- and therefore the carbon emissions -- were prohibitive. So you’d fix your water problem -- but you’d screw up your energy and your carbon.”