Possible solutions

While most of the possible solutions that aim to overcome the sustainable innovation measurement challenges are interconnected, this section provides them with each challenge.

Determination of the dimension of sustainability performance to be measured and measurement of the sustainability performance under different dimensions

As explained in the previous section, due to the multidimensional nature of sustainable innovations, there are many dimensions to consider under measurement (Adams et ah, 2016; Gunarathne, 2019; Ranter et ah, 2019). The consideration of too many dimensions can result in too much data (Birchall et ah, 2011). This drowning in data can, therefore, lead to a ‘measurement crisis’ where the information users such as decision-makers and policymakers can often be confused (Birchall et ah, 2011). As the importance of sustainable performance information mostly depends on the users of such information, it is necessary to decide which dimensions are essential for measurement. For instance, in implementing the SSTB method, top management will be interested in the financial returns for the company. In contrast, policymakers will be keen to know the impact on the broad environment (e.g., beneficial effects on flood control in the downstream areas) or society (e.g., the social benefits of reduced flood risk).

The solution would be to decide on the ‘material’ aspects (or dimensions) for measurement, depending on the users of sustainable innovation performance information. Even if these material dimensions are determined, the next challenge is connected with measurement. In areas where monetary valuations are difficult to make, economic valuation methods4 should be used, such as the “market-price method” or “cost-based method” (Hoevenagel, 1994). For instance, the beneficial impact of SSTB on flood control could be measured as saving of the cost of flooding.

Establishment of accurate measurement methods which are easy to communicate

In determining the tools for measuring performance, it is essential to understand and anticipate the demands of the users of sustainable innovation performance. As ‘use acceptance’ is critical in sustainable innovations (Carrillo-FIermosilla et al., 2010), it is necessary to find the ‘right’ measurement tool depending on the user group. For instance, in communicating the performance of sustainable innovations to the top management of a company, it is essential to highlight the financial returns to the firm over a long period. However, when promoting a sustainable innovation to policymakers, it is crucial to highlight the monetized societal benefits. Hence, the promoters of sustainable innovation should use reliable and acceptable tools and techniques that are capable of measuring the economic, environmental, and social benefits in monetary terms.

Determination of the system boundary for the measurement of sustainability performance

As explained earlier, the selection of the boundary depends on the requirements of the targeted stakeholder group or information users. A broad scope or narrow scope could be selected. There will be many different aspects to cover if a broad scope is selected, and the evaluation process can be too complicated. On the other hand, working on a narrow scope boundary could hide much valuable information needed to convince the stakeholders. This could underrate the value of sustainable innovations. Due to the “double externality” problem, where sustainable innovations produce positive externalities for a company during the innovation phase and for society during the diffusion stage, the private returns for a firm can be less than the social gains of an innovation (Rennings, 2000). This calls for policy-level interventions such as “regulatory-push” effects to incentivize the investments at the firm level.

Determination of the time horizon for the measurement of sustainability performance

Since sustainable innovations have long-term implications, it will be necessary to set apart an adequate period for measuring innovation performance. Consideration of a very long period can also distort the measurement process as there can be many variables that can affect innovation performance in the long run. A possible solution would be to conduct several parallel trials simultaneously under different conditions representing a wide range of (environmental) conditions. Following an approach of that kind to measure sustainability performance along the appropriate dimensions will facilitate the propagators of sustainable innovations to reach more practical and applicable solutions within the shortest possible time while gaining social acceptance.

Variability in the sustainability performance based on the nature of the biological assets

A solution to this challenge would be to use an average value that broadly represents the nature of the biological assets (see Table 15.4 for more details).

Variability of the sustainability performance on the innovation process

This challenge could be overcome through the standardization of the process (see Table 15.4 for more details).

Variability of the sustainability performance on the uncontrollable factors

A possible solution would be to develop a range of region-specific innovations with customized steps and remedial actions (see Table 15.4 for more details). The implemented of innovation can then select the most relevant innovation solution to suit their conditions. This approach would level the degree of performance to a great extent while facilitating the performance measurement process and subsequent data analysis.

254 AD Nuwati Gunarathne and Mahendra Penis

Table 15.4 Sustainable innovation performance measurement challenges and possible solutions

Measurement challenge

Sources of the challenge in the tea industry

Possible general solution/s

Determination of the dimension of sustainability performance to be measured E.g., Groundwater storage and water quality has many sub-dimensions

• Increase in

groundwater storage affects many subdimensions such as water availability, water quality, and prevention of soil erosion

• Identification of the material subdimensions depending on the interests of the information users

Measurement of the

sustainability performance under different dimensions E.g., Measurement of

extended water availability, improvement in water quality, and prevention of soil erosion

• Measurement of extended water availability during water stress periods for crop production

• Use of innovative and logical measurement approaches consistently Eg., Extended water availability can be measured as the cost of irrigation during water stress periods

Variability of the

sustainability performance on the nature of the biological assets Eg., Different properties of the tea crop species can affect the crop quality and quantity

• Different cultivars of crop with a variety of growth habits and other characteristics such as pest and disease resistance

Evaluation of the innovative application under different performance categories determined by the nature of the assets

Variability of the sustainability performance based on the environmental factors Eg., Variations of the bush coverage and crop

• Variation of

performance level due to climatic conditions and soil conditions

• Assessment of response to the innovative application by different conditions.

Variability of the

sustainability performance based on the innovation process

Eg., Pruning and post-pruning practices can affect the crop yield

• Different pruning heights adapted and post-pruning practices can affect the subsequent crop yield

• Standardization of the innovation process

Table 15.4 provides a summary of the possible solutions in addressing several critical sustainable performance measurement challenges.

 
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