Selecting KPIs at Thames Water

Thursday, August 18, 2005

Selecting KPIs at Thames Water

Although Thames Water, the UK’s largest water provider, has always collected and reported on environmental targets, two years ago senior managers created more strategic key performance indicators (KPIs) for all aspects of corporate responsibility.

During a brainstorming session, senior managers from across the business ended up with several potential indicators in three areas – economic, social and environmental (and a general section if the indicator didn’t fit neatly into one of those categories, but which dealt mainly with governance).

The group then whittled the list to 50, and selected 15 of these that would be “key performance indicators.” The reason for selecting KPIs was to make the job of focusing the rest of the business on CR targets easier. “We decided to identify the key ones to focus on,” says Ed Mitchell, Thames Water’s director of corporate responsibility.

For example, regarding climate change, they selected general indicators like energy consumption, renewable energy generation, fuel for transport and business miles travelled, but decided the KPI for climate change would be one that summed the others up – “global warming potential.” Under governance, the indicators included compliance with a range of environmental certifications and the percentage completed of each year’s commitments on the environmental commitment program (an internal management system).

The KPI they picked was “regulatory violations.” “Regulatory violations are the hard performance measure, so that became the KPI,” Mitchell says.

Adapted from “Selecting key performance indicators at Thames Water” in the current issue of Corporate Responsibility Management.

Blogged on 3:28 PM by Upay

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