{"id":6332,"date":"2023-06-23T11:58:00","date_gmt":"2023-06-23T16:58:00","guid":{"rendered":"https:\/\/www.mhisolutionsmag.com\/?p=6332"},"modified":"2023-06-23T10:13:53","modified_gmt":"2023-06-23T15:13:53","slug":"esg-metrics-begin-making-inroads-in-the-warehouse","status":"publish","type":"post","link":"https:\/\/www.mhisolutionsmag.com\/index.php\/2023\/06\/23\/esg-metrics-begin-making-inroads-in-the-warehouse\/","title":{"rendered":"ESG Metrics Begin Making Inroads in the Warehouse"},"content":{"rendered":"\n<p class=\"has-text-align-left\" style=\"font-size:16px\"><strong>For the first time, WERC\u2019s annual DC Measures Study and Report surveyed the current application of Environmental, Social and Governance frameworks in warehousing.<\/strong><\/p>\n\n\n\n<p>BY&nbsp;MICHAEL MIKITKA, EXECUTIVE VICE PRESIDENT OF MHI\u2019S KNOWLEDGE VALUE CENTER AND WERC<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.mhisolutions-digital.com\/mhiq\/0323_volume_11__issue_3\/MobilePagedArticle.action?articleId=1888901#\"><img decoding=\"async\" src=\"https:\/\/images-cdn.dashdigital.com\/mhiq\/0323_volume_11__issue_3\/data\/articles\/img\/079.jpg\" alt=\"aside from making time\"\/><\/a><\/figure>\n\n\n\n<p>For 20 years, the Warehousing Education and Research Council (WERC) has conducted an annual benchmarking study of the key warehousing and distribution metrics operations professionals use day-to-day. Our purpose for producing the annual&nbsp;<em>DC Measures Study and Report?<\/em>&nbsp;To help improve warehousing practices by giving operators a tool to benchmark their own performance against others in the field\u2014and to chart their own course of improvement.<\/p>\n\n\n\n<p>Over those two decades, the report\u2019s research team periodically focused on other topics likely to be of increasing interest to distribution center (DC) managers. The newest edition of&nbsp;<em>DC Measures<\/em>&nbsp;is no exception. This year, the team explored the application of Environmental, Social and Governance frameworks in warehousing. Conducting and reporting on the study are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Joe Tillman, WERC researcher and manager of education programs at SMC<sup>3<\/sup><\/li>\n\n\n\n<li>Karl Manrodt, PhD, professor of logistics at Georgia College &amp; State University<\/li>\n\n\n\n<li>Donnie Williams, PhD, associate professor and executive director of the Supply Chain Management Research Center at the University of Arkansas<\/li>\n<\/ul>\n\n\n\n<p>&#8220;As companies evolve away from a focus on shareholders to stakeholders, there\u2019s an increasing need to measure performance on more than just investor returns,&#8221; Manrodt explained. &#8220;Even the World Economic Forum noted that today\u2019s companies need to be more than an economic unit that generates wealth. Rather, they must also measure how well they achieve their ESG objectives.&#8221;<\/p>\n\n\n\n<p>I recently chatted with Manrodt, who spearheaded the analysis of the ESG data. Here, he shares the highlights of this emerging metric.<a href=\"https:\/\/www.mhisolutions-digital.com\/mhiq\/0323_volume_11__issue_3\/MobilePagedArticle.action?articleId=1888901#\"><\/a><\/p>\n\n\n\n<h4 class=\"wp-block-heading\">ESG metrics new to warehousing<\/h4>\n\n\n\n<p>While ESG is gaining ground at the corporate levels of many organizations, it has only made very small inroads into the warehouse. So small, in fact, that only 10% of the survey\u2019s participants answered the ESG-focused questions, making the data directional but not definitive, said Manrodt.<\/p>\n\n\n\n<p>&#8220;Aside from making time away from the day-to-day challenges associated with operating a warehouse, operations managers must choose among a plethora of ESG standards against which to measure their progress,&#8221; he noted. &#8220;Simply wading through the dozen or so different options can be overwhelming.&#8221;<\/p>\n\n\n\n<p>These include frameworks created by organizations such as the Sustainability Accounting Standards Board (SASB), the United Nations, the CDP and the Social Progress Imperative. Corporate finance and management consulting firms McKinsey &amp; Company, Ernst &amp; Young and Bain &amp; Company\u2014as well as investment indices Dow Jones and Bloomberg\u2014also publish ESG frameworks.<\/p>\n\n\n\n<p>&#8220;One study found that not only are there a lot of different ESG frameworks and platforms, but there\u2019s only about 30% correlation between the ratings. This is a bit odd if the ESG ratings are measuring the same construct,&#8221; added Manrodt. &#8220;In comparison, the S&amp;P 500 and Moody\u2019s stock ratings have 95% of correlation.&#8221;<\/p>\n\n\n\n<p>That lack of standardization may explain why 49.3% of respondents have not begun the process of implementing ESG frameworks or measurements within their warehouses, while 28.4% are developing their own internal ESG metrics. Another 22.5% are either working with their suppliers or with outside consultants to develop or select an ESG platform.<\/p>\n\n\n\n<p>Then there\u2019s the question of what to measure, added Manrodt. &#8220;Of those who have implemented an ESG framework, environmentally focused metrics are the most used.&#8221;<\/p>\n\n\n\n<p>Manrodt suspects that\u2019s because measuring carbon emissions, the carbon footprint of individual products, packaging materials, renewable energy usage and deployment of clean technologies are low hanging fruit. &#8220;These are not only easy to measure, they\u2019re also easier to confirm a quantitative impact through cost savings compared to social and governance metrics,&#8221; he explained.<\/p>\n\n\n\n<p>That said, many operations already have social metrics in place, such as labor management, health and safety, human capital development and labor standards, he added. Likewise, there are many warehousing metrics associated with governance, including compensation, labor standards, accounting and risk management.<\/p>\n\n\n\n<p>&#8220;These metrics haven\u2019t yet been applied as part of ESG reporting,&#8221; Manrodt said.<\/p>\n\n\n\n<p><strong><em><a href=\"https:\/\/www.mhisolutions-digital.com\/mhiq\/0323_volume_11__issue_3\/MobilePagedArticle.action?articleId=1888901#articleId1888901\">Click here to read the full article.<\/a><\/em><\/strong><\/p>\n\n\n\n<p>ISTOCK.COM\/SAKORN SUKKASEMSAKORN<\/p>\n","protected":false},"excerpt":{"rendered":"<p>For the first time, WERC\u2019s annual DC Measures Study and Report surveyed the current application of Environmental, Social and Governance frameworks in warehousing. BY&nbsp;MICHAEL MIKITKA, EXECUTIVE VICE PRESIDENT OF MHI\u2019S KNOWLEDGE VALUE CENTER AND WERC For 20 years, the Warehousing Education and Research Council (WERC) has conducted an annual benchmarking study of the key warehousing &#8230;<\/p>\n","protected":false},"author":40,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,14],"tags":[3145,2887,442,1902,1907,3151,466,528,95,576],"class_list":["post-6332","post","type-post","status-publish","format-standard","hentry","category-departments","category-sustainability","tag-environmental","tag-esg","tag-mhi-solutions","tag-mhi-solutions-magazine","tag-mhisolutionsmag","tag-social-and-governance","tag-supply-chain","tag-supply-chain-sustainability","tag-sustainability","tag-sustainable-supply-chain"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ESG Metrics Begin Making Inroads in the Warehouse - MHI Solutions<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.mhisolutionsmag.com\/index.php\/2023\/06\/23\/esg-metrics-begin-making-inroads-in-the-warehouse\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ESG Metrics Begin Making Inroads in the Warehouse - MHI Solutions\" \/>\n<meta property=\"og:description\" content=\"For the first time, WERC\u2019s annual DC Measures Study and Report surveyed the current application of Environmental, Social and Governance frameworks in warehousing. BY&nbsp;MICHAEL MIKITKA, EXECUTIVE VICE PRESIDENT OF MHI\u2019S KNOWLEDGE VALUE CENTER AND WERC For 20 years, the Warehousing Education and Research Council (WERC) has conducted an annual benchmarking study of the key warehousing ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.mhisolutionsmag.com\/index.php\/2023\/06\/23\/esg-metrics-begin-making-inroads-in-the-warehouse\/\" \/>\n<meta property=\"og:site_name\" content=\"MHI Solutions\" \/>\n<meta property=\"article:published_time\" content=\"2023-06-23T16:58:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/images-cdn.dashdigital.com\/mhiq\/0323_volume_11__issue_3\/data\/articles\/img\/079.jpg\" \/>\n<meta name=\"author\" content=\"Robin Lamerson\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Robin Lamerson\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.mhisolutionsmag.com\/index.php\/2023\/06\/23\/esg-metrics-begin-making-inroads-in-the-warehouse\/\",\"url\":\"https:\/\/www.mhisolutionsmag.com\/index.php\/2023\/06\/23\/esg-metrics-begin-making-inroads-in-the-warehouse\/\",\"name\":\"ESG Metrics Begin Making Inroads in the Warehouse - 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