Leading and Lagging Indicators Can Help You Build a Sustainable Organization

Where will your business be in 10 years? 20? Longer? Will your organization still exist? Will it be healthy—or foundering? Is it possible to make any sort of realistic prediction regarding the matter?

Maybe so. Of course, no one has a flawless crystal ball, and there are always things that can’t be anticipated, but the emerging business practice of sustainability accounting can give your organization a much more accurate idea of whether your business practices are contributing to continued growth—or an untimely demise.

Unlike financial accounting, sustainability accounting is not a straightforward matter of balance sheets and dollar figures. It doesn’t even consistently involve quantifiable measures of performance. How, then, can you account for—and track the effectiveness of—your sustainability efforts? One way is to track your sustainability metrics via two metrics:

1. Leading indicators, which are tracked on the front end of initiatives as a way to preemptively assess and manage risk, and
2. Lagging indicators, which are used to assess the outcomes of initiatives on the back end.