Sustainability has been a hot topic over the last three decades, although always at a very abstract and scientific level, disconnected from the concerns of the common citizen. Despite the various analyses being made by academics worldwide, most conclusions are still not considered as being part of the genesis of economic development.
The Sustainable Organization Index (SORG) is an attempt to bring this sustainability to the heart of all economic analyses and decisions. It makes it easy for anyone to understand how sustainable an organization really is, anywhere, regardless of the organizations location, size and purpose. Furthermore, it allows for an easy analysis and comparison of any organization, according to criteria that are tightly linked to sustainability.
The fact is, we still think about sustainability, development, climate change and profit as being entirely independent. Actually, most people see sustainability as a cost, or even something they will have to consider only to look good, for the sake of stakeholders. This perception needs to change: Sustainability should be at the core of any economic decision, resulting in the assurance that future costs are always included when analyzing current profits.
Sustainability should be considered at genesis of any organization - business, non-profit, NGOs, government, any type or size of organization. The SORG index is a simple and accessible way to measure it.
21. SUSTAINABLE ORGANISATION INDEX (SORG)
SORG =
SORGI x SORGII x SORGIII
THE PRODUCT OF THE THREE INDEX
INDICATES A CUMULATIVE EFFECT AND HOW
BALANCED THE ORGANISATION IS -
INTERNALLY AND EXTERNALLY
SORGI MEASURES THE BALANCE OF THE ORGANISATION WITH THE COMMUNITY;
SORGII INSIDE THE ORGANISATION BALANCE;
HARMONY THE INTERNAL COHESION.
COMMUNITY2
xTEAM MEDIAN2
OWNERS2
xTEAM AVERAGExCEO
SORG =
22. SUSTAINABLE ORGANISATION INDEX I (SORGI)
COMMUNITY(3)
=
(REVENUES-COGS(1)
-INTERESTS(1)
+TAXES(2)
+IMPACT)
OWNERS=
NET INCOME-TEQUITY(4)
TEQUITY=
NET INCOME x TEAMOWNERSHIP
TEAMOWNERSHIP=
TOTAL SHARES OWNED BY TEAM / TOTAL SHARES
COMMUNITY (5)
OWNERS
(1)
COGS AND INTEREST WILL BENEFIT OTHER ENTITIES. AS ITS EXPLAINED IN THE ECONOMIC FLOW MODEL
(2)
TAXES COME BACK TO COMMUNITY
(3)
ORGANISATIONS WITH NO REVENUES CALCULATE USING ONLY IMPACT.
(4)
FOR NET INCOME >= 1
(5)
TO DO A HISTORIC ANALYSIS DO SUMMATION OF BOTH FACTORS FOR THE YEARS OF ANALYSIS
ESSENTIALLY IT ANALYSES THE OWNERS’ INVESTMENT EFFECT ON THE COMMUNITY
SORG I=
23. HARMONY INDEX
CEO=
CEO SALARY+ALL BENEFITS
TEAM=
TEAM SALARY+ALL BENEFITS
COHESION FACTOR IMPLIES THAT
CEO <= MEDIAN TEAM x 12
TEAM MEDIAN2
TEAM AVERAGE x CEO (1)
FIRST PART ASSURES THAT THE
DISTRIBUTION IS CLOSE TO A NORMAL OR
SKEWED NEGATIVELY ( TO HIGHER
VALUES) CURVE
SECOND ENSURES COHESION IN TOP
(CEO) RETRIBUTION
(1)
FOR CEO GREATER THAN TEAM MEDIAN. OTHERWISE CEO= TEAM MEDIAN.
HARMONY =
24. COMMUNITY(3)
=
(REVENUES-COGS(1)
-INTERESTS(1)
+TAXES(2)
+IMPACT)
OWNERS=
NET INCOME-TEQUITY(4)
TEAM=
TEAM SALARY+ALL BENEFITS
TEQUITY=
NET INCOME x TEAMOWNERSHIP
TEAMOWNERSHIP=
TOTAL SHARES OWNED BY TEAM / TOTAL SHARES
IT ANALYSES BALANCE BETWEEN OWNERS AND TEAM, SHARING FLOW
TEAM x HARMONY (5)
OWNERS
(1)
COGS AND INTEREST WILL BENEFIT OTHER ENTITIES. AS ITS EXPLAINED IN THE ECONOMIC FLOW MODEL
(2)
TAXES COME BACK TO COMMUNITY
(3)
ORGANISATIONS WITH NO REVENUES CALCULATE USING ONLY IMPACT.
(4)
FOR NET INCOME >= 1
(5)
TO DO A HISTORIC ANALYSIS DO SUMMATION OF BOTH FACTORS FOR THE YEARS OF ANALYSIS
SUSTAINABLE ORGANISATION INDEX II (SORGII)
=SORG II
25. SUSTAINABLE ORGANISATION INDEX I (SORGIII)
COMMUNITY(3)
=
(REVENUES-COGS(1)
-INTERESTS(1)
+TAXES(2)
+IMPACT)
OWNERS=
NET INCOME-TEQUITY(4)
TEQUITY=
NET INCOME x TEAMOWNERSHIP
TEAMOWNERSHIP=
TOTAL SHARES OWNED BY TEAM / TOTAL SHARES
COMMUNITY (5)
TEAM
(1)
COGS AND INTEREST WILL BENEFIT OTHER ENTITIES. AS ITS EXPLAINED IN THE ECONOMIC FLOW MODEL
(2)
TAXES COME BACK TO COMMUNITY
(3)
ORGANISATIONS WITH NO REVENUES CALCULATE USING ONLY IMPACT.
(4)
FOR NET INCOME >= 1
(5)
TO DO A HISTORIC ANALYSIS DO SUMMATION OF BOTH FACTORS FOR THE YEARS OF ANALYSIS
ESSENTIALLY IT ANALYSES THE TEAM LEVERAGE EFFECT ON THE COMMUNITY
=SORG III
26. SUSTAINABLE ORGANISATION INDEX (SORG)
SORG =
SORGI x SORGII x SORGIII
THE PRODUCT OF THE THREE INDEX
INDICATES A CUMULATIVE EFFECT AND HOW
BALANCED THE ORGANISATION IS -
INTERNALLY AND EXTERNALLY
SORGI MEASURES THE BALANCE OF THE ORGANISATION WITH THE COMMUNITY;
SORGII INSIDE THE ORGANISATION BALANCE;
HARMONY THE INTERNAL COHESION.
SORG =
COMMUNITY
TEAM
COMMUNITY
OWNERS
TEAM x TEAMEDIAN2
OWNERS x TEAMAVERAGE x CEO
XX
SORG I SORG II SORG III
29. Financial data from
Wolfram Alpha (2013 filling data)
Median PayScale Dez 2014
Team was calculated by
average salary x employees
SUSTAINABLE
ORGANISATION INDEX
SORGI=
COMMUNITY/OWNERS
SORGII=
TEAM*HARMONY/OWNERS
SORG=
SORGI x SORGII x HARMONY
COMMUNITY=
REVENUES - COGS - INTEREST
+TAXES + IMPACT*
OWNERS=
NET INCOME-TEQUITY
TEAM(1)
=
AVERAGE SALARY x EMPLOYEES
*IMPACT WAS NOT CONSIDERED IN
THIS EXAMPLE
THIS PROPOSAL OF
CALCULATION SORG HAS THE
ADVANTAGE TO BE VALID TO
ANY ORGANIZATION SIZE
(1)
WITH DATA DISCLOSE TEAM =
SALARIES + ALL BENEFITS
OWNERS
33. INDUSTRY
TYPE OF IMPACT
ECOLOGICAL HEALTH SECURITY DEVELOPMENT
OIL
ITS EASY TO RELATE BARREL WITH REVENUES
- $96x Barrel
THIS IS AN OFFICIAL VALUE
-0,2x Revenues
JUNK FOOD - 2x Revenues
COMPUTERS -0,5 Revenues +2 x Revenues
LEARNING +3 x Revenues
HUMANITARIAN NGO +500xPeopleHelped +100xPeopleHelped
ARMAMENT - FxRevenues
WE SHOULD MEASURE THE IMPACT OF EACH INDUSTRY. IT SHOULD BE A FACTOR, POSITIVE OR
NEGATIVE, OF REVENUES - SO IT WILL BE EASY COMPARABLE.
IMPACT CALCULATION - IDEAS
34. IMPACT EXAMPLE, CONSIDERING US$96 COST OF CO2
Market
Cap
(bn
USD)
Revenue
(bn USD) Employees
Net
Income
(bn USD)
Cost
of
goods
sold
Taxes Interest Average
Salary
Median
salary
(USD per
year)
CEO
x
MEDIAN
ExxonMobil 421,7 436,5 75.000 5,82 283,6 22,03 0,066 $44.000 $ 96.900 936
Impact
(bn USD)
SORG I SORG II SORG
-437 - 44,98 0,00133 - 0,000141
30,05 0,00133 0,000094
35. Obs: WIKIPEDIA revenues, cogs and net income are in thousands
Financial data: Wolfram Alpha (2013 filling data)
Median Salary: PayScale.com Dez 2014
Average Salary: Carrerbliss,com
WIKIPEDIA data from WIKIPEDIA financial report 2013