Eco-efficiency, Cross Cutting

What are eco-efficiency indicators?

Eco-efficiency (also called cross-cutting) indicators measure both economic and environmental performance with one dimension as the numerator and the other as the denominator.

An eco-efficiency water indicator determines which organization can provide the most products with the least amount of water or cause the least amount of damage to the natural resource. Using fewer resources reduces the cost to produce the product and makes the organization more competitive.

To calculate water efficiency, we might use the following formula:

To compare efficiency, an indicator must be normalized, which means it should be divided by some measure of production or size for better comparison. The calculation above accomplishes this by dividing by the number of products. Obviously, larger organizations will have greater absolute impact than smaller organizations.

To compare all organization sizes, indicators that allow for better comparison are any of the following:

  • ratios;
  • percentages;
  • per capita; or
  • per product.

Another way to improve comparability is to show indicators against some benchmark, such as an industry average. In this way, the reader can get a sense for whether the organization performs above or below the average or standard.

However, critical thinkers might ask if the standard is in the right place, meaning that even the best performers need to improve their performance.