Build a business plan 101: identify data

Identify the data to be collected

Identifying the correct data and its availability may be the most challenging part of developing your business case. Some drivers, such as Cost Savings, are tangible and have relatively straightforward data, while others — like Brand Reputation — are a bit more intangible. In this step, we’ll outline some of the more common tangible datasets to be collected or developed.

There are two main types of quantifiable, or tangible data to collect:

1. Financial data (revenues and expenses).
2. Environmental impact data.

1. Financial data

Financial data may be quantifiable — but that doesn’t mean it’s readily available. You may have to reach out to others to obtain it. For each piece of financial data, revisit your list of internal stakeholders to understand who owns the data, and think about how you might be able to gather it.

Financial data may include:

• Sales.
• Operational costs.
• Fines, penalties, and taxes.
• Capital expenditures.
• Research and development.

2. Environmental data

This can be less straightforward than financial data. Your company may or may not be keeping track of its greenhouse gas emissions, for example. In that case, you may need to back into the calculation.

For example, to calculate your greenhouse gas emissions in your facilities, you’d first need to know the amount of electricity used, and the energy mix you have for creating that electricity. Is it nuclear? Coal? Renewable?

Each energy source comes with its own GHG emissions footprint. If you’re able to collect those data points, you’d be able to estimate your GHG emissions.

Environmental impact data may include:

• Tons of greenhouse gases emitted.
• Gallons of water used.
• Pounds of chemicals reduced.
• Tons of waste.
• Acres of land cleared.
• Pounds of fertilizer used.

Discovering the data for your environmental impact can be a time-consuming process. You’ll need to determine how crucial some of the more challenging environmental impact data points are to your business case. You may feel that you’ll be able to make a strong case using only financial data. If you feel that this data is necessary to make your case, it may be helpful to seek out a consulting firm that specializes in environmental accounting.

External consultants are available to help  you with this step.

If you want to keep it in-house, there are many existing frameworks you may want to get acquainted with for quantifying your environmental impact:

• Natural Capital Coalition and its protocol document.
• GHG Protocol.
• EcoLab Water Risk Monitor Tool.
• Quantis Land Use Change guidance.

Assigning financial and environmental impact to drivers

Below are sample data tables for the common drivers we discussed earlier. Referring to the tables from this earlier step, the next step is to add in the financial and environmental impact components:

Calculating the return on investment

Now that you’ve performed a Cost-Benefit Analysis, you can calculate your plan’s Return on Investment (ROI). Knowing this ROI will help you determine how likely your financial stakeholders will be to greenlight your plan, based on quantitative benefits alone.

If you have a low or negative ROI, it is crucial that you discuss the non-quantitative, or intangible, benefits of your sustainability plan. Refer back to your priority drivers of change to identify these benefits.

Communicate the intangible benefits and risks

In some ways, calculating the tangible, or quantitative benefits is easy — as long as you have the numbers.

What’s often more difficult to calculate are the intangible benefits — things like customer loyalty, brand reputation, and attracting and retaining talent. These types of benefits — and risks — are always considered in other business decisions.

Marketing, advertising, social media and others often work in a world of fuzzy returns, yet they don’t always need to show tangible ROI to get projects approved. The consulting firm Ocean Tomodid an intangible asset market study in 2015, and found that a whopping 84 percent of the market value for S&P 500 companies came from intangible assets.

What this means is that the case for your sustainability plan is not fundamentally different for marketing’s case, or the case for a social media department. You may find it helpful to think about how to communicate and frame this when presenting the business case to your internal decider stakeholders.