Functions and Characteristics of Composite Indicators of Environmental Performance

E.RI.s have been considered for the evaluation and control of the environmental performance of companies. Due to the reliability of its information, managers have a strong information base to carry out the decision-making process, allowing the identification and improvement of the critical points of the organisations (Medel- Gonzales & Garcia, 2012).

One function of environmental performance indicators is measuring the environmental performance achieved. Also, they establish corrective actions, such as process innovations, product and implementation of management strategies, prioritise actions to achieve effective benefits in less time, report environmental performance to regulatory bodies, clients and society, demonstrate the improvements in environmental performance to stakeholders and increased environmental awareness of internal customers, among others (Semarnat, 2014; Medel-Gonzales & Garcia, 2012).

An efficient E.P.I. must have the following characteristics: offer a complete panorama of environmental conditions and pressures; be simple, easy to infer and able to show trends; respond to changes in the environment; provide a basis for comparisons; be applicable at the national or regional level, as the case may be; be theoretically and scientifically well-founded; be able to relate to economic and/or development models, as well as to information systems; be available at a reasonable cost; be well- known, with recognised quality; be easily updated at regular intervals with reliable procedures (OECD, 2003).

Environmental Performance Indicators Classification

Due to the large number of environmental performance indicators, there have been several attempts to categorise them. The proposed classifications vary depending on whether the indicator comes from academia, the government sector or other organisations. The classification approach varies according to the author, but there are general trends, such as those proposed by Yale University, the Global Reporting Initiative, the O.E.C.D. and ISO 14031: 99.

Some works such as that of Herva et al. (2011) continue with similar classifications. They suggest four types of E.P.I.: energy material flow indicators, territorial dimension indicators, L.C.A. indicators and indicators based on environmental risk assessment.

Petrovic et al. (2012) has classified E.P.I.s into management condition indicators (M.C.G.) and operational condition indicators (I.C.O.). The former focus on management efforts aimed at facilitating the infrastructure for environmental management. Some of them are environmental objectives have and target programs, personal training and incentive systems to reduce environmental impact, audit on-site inspections, supervision and relations with the community. I.C.O. is related to the operation of the organisation. These include activities such as reuse, emissions reduction and recycling of critical materials, fuel consumption or the use of energy (Petrovic et al.,


On the other hand, Jasch (2000) classifies environmental performance indicators according to the form in which the values are expressed and according to their use and application. These categories are absolute indicators, relative indicators, indexed indicators, global representations and weighted evaluations. Although this standard is based on environmental management system implementation, those activities are linked to stages across the product life. Furthermore, this classification is composed of three type of indicators: operational performance indicators, management performance indicators and environmental condition indicators.

Table 5.1 provides information about how the industry behaves with all the stakeholders. Furthermore, it provides information about how each product and service impact the environment. This impact shows a reactive perspective, such as soil impact and flora decreasing, but also a pro-active perspective, such as design and


Classification of Environmental Performance Indicators

Indicator Type



Operational performance indicator

Income indicator



Services supporting organisation

Physical facilities and equipment indicator





Land use


Outcome indicator (provided by the organisation)





Management performance indicator

System indicator

Policies and programmes implementation Compliance Financial performance Employee participation

Functional areas indicator

Administration and planning Purchases and investments Health and security Relationships with the community

Environmental condition indicators

Environmental condition Indicators

Emissions Water consumption Soil impact

Critical raw material consumption

Biotic and tropospheric indicators

Flora decreasing Wildlife impact

Aesthetics, heritage and culture

transportation. Although they are indicators of extensive coverage, they can be used to focus the attention of the organisation on the new management of environmental aspects associated with Industry 4.0.

According to Bonilla et al. (2010), although there is literature related to the opportunities, challenges and barriers faced by Industry 4.0 with respect to environmental sustainability, there is no research on the measures and the viability of the decrease of that impact. Although the digitisation of industrial production is beginning, it is still not known if it will promote or hinder the transformations that will affect environmental sustainability. Given that this technology has not been explored from a sustainability perspective due to its novelty and the impossibility of measuring the degrees of implementation in each country or region, although at first sight it is promising, its long-term effects are still unclear.

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