THE CONSTRUCTION OF ENVIRONMENTAL INDICATORS FOR DETERMINATION
OF PERFORMANCE OF ESG INDICATORS TO SUPPORT
DECISION-MAKING OF INVESTORS
Alena Kocmanová1, Zdeněk Karpíšek2, Markéta Klímková3
Faculty of Business and Management, Brno University of Technology, Kolejní 4, 612 00 Brno, Czech Republic
E-mails: firstname.lastname@example.org (corresponding author); email@example.com; firstname.lastname@example.org
Received 29 June 2012; accepted 19 September 2012
Abstract. is contribution deals with the construction of environmental indicators, serving investors for the assessment of com-
plex performance of companies in accordance with social and corporate governance indicators, the so-called ESG performance
indicators. e research project “Construction of Methods for Multifactor Assessment of Company Complex Performance in
Selected Sectors”, solved by the team of authors has been introduced. In recent years, investment managers have preferred the
importance of ESG indicators showing long-term sustainable performance of those companies in which they have invested their
nancial resources. e objective of presented contribution is the proposal of environmental indicators, i.e. key ESG performance
indicators. Environmental indicators are used not only for decision-making, but also for determination of sustainable value.
A number of successive steps have been taken to construct environmental indicators and a combination of various statistical
methods has been employed. An empirical analysis of environmental performance indicators for the companies operating in
the processing industry according to CZ-NACE has been carried out on the basis of the analysis of sources, suggested by inter-
national organisations and voluntary environmental instruments. Environmental performance indicators, facilitating investors
to decide on their investment activities and forming the part of key ESG-performance indicators, represent expected results of
the empirical research.
Keywords: environmental indicators, performance, manufacturing industry according to Classication of Economic Activities
Czech Republic, empirical research, T-test, regression function, key performance indicators, decision-making, measurement.
JEL Classication: Q50, Q56.
APLINKOSAUGOS RODIKLIŲ NUSTATYMAS VEIKLAI VERTINTI PAGAL ASV
VEIKLOS KRITERIJUS IR INVESTUOTOJŲ SPRENDIMAMSPAREMTI
Alena Kocmanová1, Zdeněk Karpíšek2, Markéta Klímková3
Brno technologijos universitetas, Kolejní 4, 612 00 Brno, Čekijos Respublika
El. paštas: email@example.com; firstname.lastname@example.org; email@example.com
Įteikta 2012-06-29; priimta 2012-09-19
Santrauka. Straipsnyje nagrinėjami aplinkosaugos rodikliai, kuriuos taikydami investuotojai gali įvertinti kompleksinę
organizacijų veiklą, atsižvelgdami į socialinius ir bendrovės valdymo rodiklius, angliškai vadinamus ESG veiklos kriterijais.
Šiuo tyrimu pradėtas tiriamasis projektas „Tam tikro sektoriaus bendrovės kompleksinės veiklos daugiakriterinio vertinimo
VERSLAS: TEORIJA IR PRAKTIKA
BUSINESS: THEORY AND PRACTICE
ISSN 1648-0627 print / ISSN 1822-4202 online
2012 13(4): 333–342
334 A. Kocmanová et al. e construction of environmental indicators for determination of performance...
metodų kūrimas“. Pastaraisiais metais investicijų valdytojai teikia pirmenybęESG veiklos rodikliams, kuriuos taikant galima
įvertinti darnią bendrovių, į kurias investuota, veiklą. Tyrimo tikslas – pasiūlyti aplinkosaugos rodiklius, t.y. vienus pagrindinių
ESG veiklos kriterijų. Šie rodikliai naudojami ne tik priimant sprendimus, bet ir nustatant darnią vertę. Nuosekliai parinkti ap-
linkosaugos rodikliai ir pritaikytas įvairių statistinių metodų rinkinys rodiklių reikšmėms nustatyti. Atliktas įmonių, veikiančių
apdirbamojoje pramonėje pagal CZ-NACE, aplinkosaugos veiklos rodiklių empirinis tyrimas. Aplinkosaugos veiklos rodikliai,
leidžiantys investuotojams spręsti apie investicinę veiklą ir sudarantys ESG veiklos rodiklių dalį, išreiškia tikėtinus empirinio
Reikšminiai žodžiai: aplinkosaugos rodikliai, veikla, apdirbamoji pramonė pagal CZ-NACE, aplinkosaugos aspektai, empirinis
tyrimas, regresijos funkcija, pagrindiniai veiklos rodikliai, sprendimų priėmimas, matavimas.
In recent years, investment managers have preferred the
importance of ESG indicators showing long-term perfor-
mance of those companies in which they have invested
their nancial resources. Surveys indicate that investors
are more and more convinced that ESG integration into
their investment decisions maximizes their long-term inte-
rest and that good corporate governance and sustainability
contribute to creation of long-term value for shareholders.
e project holder – Faculty of Business and
Management, Brno University of Technology (FBM BUT)
- is involved in ESG indicators in the processing sector in
the Czech Republic within the framework of the Project No.
P403/11/2085 “Construction of Methods for Multifactor
Assessment of Company C omplex Performance in Selected
Sectors” funded by the Grant Agency of the Czech Republic
e objective of presented contribution is to propose a
method of selection of environmental performance indi-
cators at the corporate level, supporting decision-making
of investors and being the part of ESG indicators and
Integrated Reporting. Application of proposed methodo-
logy is clearly illustrated with an example of environmental
indicators for performance. Reaching the objective is divi-
ded into successive steps. Individual stages of selection of
indicators, including description of applied methods, have
been dened in the methodology.
Development of research in the area of corporate per-
formance evaluation and corporate sustainability repor-
ting in the Czech Republic has been described by authors
(Hřebíček, Soukupová 2009; Kocmanová, Dočekalová 2011;
Ritschelova et al. 2010
e most commonly known environmental, econo-
mic and social corporate data and information are being
monitored, codied, registered and aggregated into Key
Performance Indicators (KPIs) (Bassen, Kovacs 2009;
DVFA 2009; IFAC 2012).
e sustainability performance is, however, oen unders-
tood as performance in environmental, social and economic/
nancial terms, thus excluding governance performance
(Schaltegger, Wagner 2006). However, we shall also consider
corporate governance (Bhojraj, Sengupta 2003).
erefore, a conclusion can be drawn that ESG integra-
tion is currently becoming the investment strategy, where-
by ESG indicators focus on the economic consequences of
long-term risks and opportunities, associated with strate-
gies of companies in which investments are being made.
ESG performance indicators are becoming a tool for future
cash ows. Primarily, investors want to achieve excellent
nancial returns under predetermined risk levels (Bartes
2010; Kocmanová, Němeček 2009.
Even with the growth of socially responsible investment
(SRI) such ESG indicators are being incorporated into the
investment assessment. Current nancial crisis has shied
a stronger focus of the investors on the social and environ-
mental conditions existing in the companies to be covered
in their investment analyses. Many companies have also
begun to ask themselves how to improve their commu-
nication skills on environmental, social and governance
factors aiming at these mainstream investors (BSR 2011)
Corporate sustainability, that is the capacity of a compa-
ny to continue operating over a long period of time, depends
on the sustainability of its stakeholder relationships (Perrini,
2. Environmental Performance
An environmental performance indicator of a particular
company (indicator of impact of company activity on its
environment) is understood as a specic statement, fa-
cilitating the measurement of company’s environmental
performance. Development of environmental indicators
has passed through a long evolution. Consumers more and
more demand green products and services; on the other
hand, businesses and industries are now much more res-
ponsive to green issues (Yildiz, Yercan 2011).
ČSN EN ISO 14000, mainly represented by generic
standard ČSN EN ISO 14001, is applied in the ecologically
oriented management system in the Czech Republic. e
standards accompanying the establishment of systems of
environmental management and their auditing shall be
governed by the series of standards ČSN EN ISO 14000.
e underlying philosophy of these international standards
is to assist companies with all areas towards active and inde-
pendent behaviour in environmental matters.
Environmental performance indicators in the context of
the Environmental Management Systems (EMS and EMAS)
of the company should address primarily those company
environmental impacts that are most signicant and those
which the company can inuence by its operations, mana-
gement, activities, products and services on environment
and sustainable growth. ey should full dual purpose of
assisting the management of the company and providing
information to stakeholders (Hřebíček, Soukupová 2009).
Key Performance Indicators (KPIs) provide companies
with a tool for measurement. KPIs help companies to imple-
ment strategies by linking various levels of such companies
(organization units, departments as well as individuals) with
clearly dened targets and benchmarks.
Corporate environmental (sustainable) reporting forms
the part of company environmental communication that
is directed from such a company to various target groups.
Nowadays corporate environmental reporting has evolved
to sustainability reporting, which covers a wider area of the
company performance, also including economic and social
aspects (Hřebíček, Soukupová, Kutová 2009; Schaltegger,
3. Empirical research
A number of successive steps have been taken to construct
environmental indicators within the framework of the re-
search. ese relate to objective and subjective methods of
selection of indicators/performance indicators and use of
combination of various statistical methods.
Objective methods, e.g. on the basis of statistical analy-
ses, represent the most appropriate method of the selection
of indicators. ey provide results based on clear algorithms,
coming out only from actual values of such indicators
Subjective indicators are based mainly on statements made
by the respondents and their reection of the investigated
issue. Nevertheless, rational-logical point of view on monito-
red indicators is eliminated during the selection procedure.
us, they are clearly subject to the person and investigated
personality (Kuprová, Kamenický 2004). e instrument
of eciency’s measurement is metrics i.e. strict nancial or
non-nancial indicators or evaluative criteria which use e-
ciency’s levels in specic area of enterprise. To analyse and
control complex processes and phenomena, the knowledge
of their inherent structure is needed (Ginevičius 2010).
e measurement of the contribution of an economic
entity (company, etc.) to the sustainability poses a problem
today and is subject to several debates. Based on the infor-
mation provided by the organizational entities themselves
and the information made public, the approach of sustaina-
ble value constitutes today the approach most accomplished
to assess the sustainable performance (Rhouma 2010).
e impact of environmental matters on business per-
formance is increasing and will continue to do so. For exam-
ple, poor management of energy, natural resources or waste
can aect current performance; failure to plan for a future in
which environmental factors are likely to be signicant may
risk the long-term value and future of a business. erefore,
it is expected that company shall need to use environmental
KPIs to adequately capture the link between more and more
environmental, social and economic performance.
As it is clear from the analyses of international organi-
zations (GRI, UNCTAD, IFAC, UN PRI, UNEP FI, OECD,
IFRS, EFFAS-DVFA, CFA, etc.), which are dealing with the
development of environmental, social and also corpora-
te governance and economic indicators, there are coming
to the front the ESG performance indicators, which they
recommend to the investors to incorporate into their inves-
tment analyses and decision-making processes (CA 2012;
CFA 2012; DVFA 2008; IFAC 2012; Nardo et al. 2005.
On the basis of such processed resources the ques-
tionnaire “PERFORMANCE OF THE COMPANY:
ENVIRONMENTAL, SOCIAL, ECONOMIC ASPECTS
AND GOVERNANCE” has been designed. Such proposed
questionnaire has been compiled on the basis of achieved
theoretical knowledge, dened areas of solved problem and
specic objectives, so that the obtained results may contri-
bute to the setup of key performance indicators (KPI) for
the companies in the manufacturing industry according to
CZ-NACE in the year 2012. Partial objective of the empiri-
cal research has been represented by the identication of key
environmental performance indicators. Companies classi-
ed according to the legal forms of their businesses have
been selected from the compiled database of companies and
personally visited: 42 joint stock companies, 35 limited lia-
bility companies, 1 association and 1 state-owned enterprise
classied in CZ-NACE in the processing industry, i.e. 79
companies with the number of employees over 250 accor-
ding to the EU-criterion. From the ownership perspective,
out of participating 79 companies 44 companies (55.7%)
are in the exclusively domestic ownership, 35 companies
(44.3%) are both subsidiaries of multinational corporations
and companies with foreign investor.
Empirical research has focused primarily on the manu-
facturing companies: i.e. manufacture of electrical engi-
neering, engineering, medical products- 31 companies
(38.5%), electricity, gas, water and waste processing – 12
companies (15.4%), foundry production – 11 companies
(14.1%), manufacture of textiles and leather – 9 companies
(11.5%), manufacture of chemicals – 8 companies (10.3%),
and manufacture of food products – 8 companies (10.3%).
Manufacturing companies have been deliberately selected
for the reason of comparability of data; moreover, these are
companies with strong eld of action not only in the social
and economic dimension, but also in the environmental
eld as regards the relationship to voluntary management
instruments (see Table 1).
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336 A. Kocmanová et al. e construction of environmental indicators for determination of performance...
Method of selection of the investigated objects, i.e. com-
panies, we can characterize as for a specic purpose and,
moreover, based on a voluntary basis. But, as Reichel states,
this is not considered insucient in the qualitative research,
because the ambition here “is not the representativeness,
so ... the implementers consider such selection procedure
reasonably as appropriate” (Reichel 2009).
From the voluntary management instruments in the
companies of processing industry, the standard ISO 9000 is
used with 89.9% of the companies, followed by the standard
ISO 14000 with 55.7%, although from the total number of
companies it has been introduced only in half, the same
also applies to the OHSAS 18000 48.1% and MRP 48.1%.
e companies consider the other voluntary instruments
for management less signicant.
4. Research methodology
Methodology of determination of the environmental indi-
cators took place in several stages.
e initial determination of the environmental indica-
tors was based on the resources from the Global Reporting
Initiative, EMAS III, and the International Federation of
Accountants (GRI 3.1 2011; CZO 2012). Furthermore, the
research dealt with environmental indicators which were
published in the Statistical Environmental Yearbook of the
Czech Republic (CZO 2012).
e selection of environmental indicators and related
analyses was preceded by calculation of descriptors for each
To identify relevant indicators, selected sample of com-
panies in the processing sector was asked: “Which environ-
mental aspects, associated with the protection of environment,
are signicant and insignicant for the performance?” and
“Which environmental aspects, associated with the use of
natural resources and raw materials (including energy), signi-
cantly aect performance?”. Respondents could express the
fact of monitoring of the indicator in a range from “Yes”
(4) to “No” (1). e questionnaires showed that for the
companies the monitoring of the generation of waste was
signicant in 91.1%, including hazardous waste in 70.9%,
emissions to air in 64.6%, discharging of waste water in
59.5%, smell, noise and vibration in 53.2%. Insignicant
were the inuence on landscape in 58.2% and eects on soil
in 60.8%; however, some companies claimed monitoring
of these aspects. Following the question, related to the use
of resources and raw materials, the response indicated that
the companies monitored the consumption of raw materials
and consumables in 78.5%, power consumption in 69.6%.
e response to the indicator relating to water consumption
(36.7%) and gas consumption (35.4%) and consumption of
heat (24.1%) was most varied.
To the question “Which environmental indicators are
monitored?” the respondents stated indicators used as
environmental performance standards. e answers to
this question conrmed the relevance of these indicators:
– energy eciency: energy consumption (primary sour-
– eectiveness of the material consumption: consump-
tion of raw materials and consumables 91.1%,
– waste management: total quantity of waste 82.1%,
hazardous waste 76.3%,
– water management: water (total water consumption)
75.9%, total quantity of discharged water 52.7%.
A surprising result was the indicator of emissions to
air, the respondents monitored emissions only in 37.5%
for NOx, SOx and other signicant emissions, 39.7% made
the total emissions of greenhouse gases; that did not mat-
ch with the previous question on environmental aspects.
e companies did not care about biodiversity indicator
in 69.1%. Other relevant indicators of the impact of the
company activities on environment were the compliance
with laws and regulations, the companies considered that as
the most important indicator in 93.7%, nes and penalties
78.2% and trac 68.8%.
e empirical research further tested the statistical
signicance (T-test) of the legal forms of companies or
industry in relation to the environmental aspects of the
performance; nevertheless, the testing did not provide any
statistically signicant results, in fact, there was no factual
relationship between these factors (Field 2009; Meloun,
Militky 2002). Identically, whether an owner of compa-
ny was a foreign or domestic body did not indicate any
inuence on the relationship of the companies with their
environment (see Table 2).
Table 1. Voluntary management tools in the companies of the processing industry according to CZ-NACE
9000 MRP ISO
No 10.1 51.9 44.3 84.8 51.9 91.1 74.7 88.6 69.6 78.5 69.6
Yes 89.9 48.1 55.7 15.2 48.1 8.9 25.3 11.4 30.4 21.5 30.4
Testing the signicance of the relationship between
the owner of the company and position on the environ-
ment indicated an indirect transmission through voluntary
management tools. Companies with foreign owners more
often established standard ISO 14000 than companies with
domestic owners (statistically signicant, t(75) = –2.1,
P < 0.05, the strength of the effect, r = 0.24). Still more
often, companies with foreign owners introduced a mana-
gement system for production planning and inventory (sta-
tistically signicant, t(77) = –2.9, P< 0.05, the strength of
the effect, r = 0.31). With other management instruments
there were no dierences between companies with domestic
and foreign owners.
e perception of the signicance of the environmental
aspects (reduction of environmental impact, sum of the
environmental indicators) in reference to the performance
of the company was not aected by whether the company
introduced ISO 14000 or not (see Table 3).
Application of ISO 14000, however, has a consequence
for a particular conduct in the company concerning the
relation to environment, i.e. that the company with ISO
14000 (compared with company without this standard) is
trying more hard to reduce its impact on environment and,
consequently, also to monitor more indicators relating to
environmental performance. Using regression analysis, we
are interested in how many more indicators the company
will track if it has ISO 14000. For the formulation of depen-
dencies we choose the simplest linear regression function
=β +β for Model 1 and Model 2.
Signicance of the correlation coecient R from Table
4, the estimates of regression coecients (β) with P-values
from Table 5, and the standard error (Std. error) from Table
4 indicate by how much -according to the regression model-
the monitoring of the environmental indicators would be
increased in the company with implemented ISO 14000.
Signicance of the correlation coecient R from Table 6,
estimates of the regression coecients (β) with P-values from
Table 7, and the standard error (Std. error) from Table 6 indi-
cate by how much -according to the regression model- the
monitoring of the environmental indicators would be incre-
ased in case of the ISO 14000 introduction to the company.
e results of regression analysis indicate that in case
of the standard ISO 14000 introduction the company will
seek to reduce the impact on environment in one more
additional area and will also monitor, moreover, about two
more environmental indicators.
Results of testing the signicance (T-test) of the
relationship between by ISO 14000 and whether the envi-
ronmental aspects increased or improved performance are
presented (see Table 8).
Table 2. Relationship between the owner of company and the environmental aspect
∑ of environmental
aspects related to
∑ of environmental
aspects associated with the
use of natural resources
∑ of monitored
∑ reducing the impact
on the environment
Domestic Foreign Domestic Foreign Domestic Foreign Domestic Foreign
N44 35 44 35 44 35 44 35
Mean 4.1818 4.2286 3.4091 3.6 7.14 7.69 11.16 11.16
Std. dev. 2.3355 2.0013 1.4030 1.4184 2.237 2.04 3.18 2.62
Vari able s
T-test for Equality of Means
95% condence interval
of the dierence
∑ of environmental
aspects related to
EQVA* –0.094 77 0.925 –0.046 0.496 –1.036 0.942
EQVNA** –0.096 76.5 0.924 –0.046 0.488 –1.019 0.925
∑ of environmental
with the use of
EQVA* –0.598 77 0.552 –0.190 0.319 –0.826 0.444
EQVNA** –0.597 72.6 0.552 –0.190 0.319 –0.828 0.446
∑ of monitored
EQVA* –1.132 77 0.261 –0.755 0.667 –2 .084 0.574
EQVNA** –1.157 76.9 0.251 –0.755 0.653 –2.055 0.544
∑ Reducing the
impact on the
EQVA* –1.127 77 0.263 –0.549 0.487 –1.520 0.421
EQVNA** –1.139 75.5 0.258 –0.549 0.482 –1.510 0.411
Verslas: teorija ir praktika, 2012, 13(4): 333–342 337
338 A. Kocmanová et al. e construction of environmental indicators for determination of performance...
Table 3. Relationship between ISO 14000 and the environmental aspects
Vari able s
T-test for equality of means
Std. Error of
95% condence interval of
∑ of monitored
EQVA* 2.297 77 0.024 1.092 0.475 0.145 2.039
EQVNA** 2.218 60.5 0.030 1.092 0.492 0.108 2.077
∑ Reducing the
impact on the
EQVA* 2.825 77 0.006 1.810 0.641 0.534 3.085
EQVNA** 2.807 71.2 0.006 1.810 0.645 0.524 3.095
∑ of monitored environmental
∑ reducing the impact
N44 35 44 35
Mean 7. 8 6 6.77 12.30 10.49
Std. dev. 1.786 2.438 2.758 2 .914
Table 4. Testing of Model 1
Model 1 R R square Adjusted R
Std. error of the
0.253 0.064 0.052 2.099
Table 5. ∑ Reducing the impact on the environment by the introduction of ISO 14000
Model 1 Coecients t P-value
Constant 6.771 0.355 19.082 0.000
ISO 14 000 1.092 0.475 2.297 0.024
Table 6. Testing of Model 2
Model 2 R R Square Adjusted R
Std. error of
0.306 0.094 0.082 2.828
Table 8. Relationship between ISO 14000 and the environmental performance
ey saved nancial means ey have improved
ey improved company image
N42 35 40 34 41 35
Mean 3.36 3.29 2.65 2.12 3.07 2.71
Std. dev. 0.906 0.893 1.122 0.977 0.787 0.987
Table 7. ∑ of monitored environmental indicators by the introduction of ISO 14000
Model 2 Coecients t P-value
Constant 10.486 0.478 21.934 0.000
ISO 14000 1.810 0.641 2.825 0.006
Vari able s
T-test for equality of means
Std. error of
95% condence interval of
Saved nancial means EQVA* 0.347 75 0.730 0.071 0.206 –0.339 0.482
EQVNA** 0.347 72.9 0.730 0.071 0.206 –0.339 0.482
EQVA* 2.157 72 0.034 0.532 0.247 0.040 1.024
EQVNA** 2.181 71.9 0.032 0.532 0.244 0.046 1.019
EQVA* 1.763 74 0.082 0.359 0.204 –0.047 0.765
EQVNA** 1.731 64.7 0.088 0.359 0.207 –0.055 0.773
8 lentelės tęsinys
Table 9. Key indicators of environmental performance
Indicator KPI Measurement
Total annual energy consumption
(indicator EN3 in GRI)
Total direct (produced internally) and indirect (delivered)
energy consumption in megawatt divided by net sales.
(Total direct energy consumption = Electricity/heat
produced by the company)
Renewable energy use
Total consumption of renewable energy
Total of renewable energy sources in MWh x 100 divided by
total energy sources.
Annual mass ow of dierent used
materials (in addition to the carriers of
energy and water)
[t/CZK] (indicator EN1)
Total consumption of materials in tons divided by total
Recycled materials use
Proportion of the recycled input
materials [%] (indicator EN2)
Percentage content of used recycled materials out of total
EN3 - Waste
Production of waste
Total annual production of waste
[t/CZK] (indicator EN22)
Total waste use in tons divided by net sales.
Production of hazardous waste
Total annual production of hazardous
Total hazardous waste use in tons divided by net sales
Total annual consumption of water
Total water use in cubic meters divided by net sales.
EN5-Emissions Total annual emissions
Total emissions (solid particulate matter, SO2, NOx, NH3,
PM without CO) in tonnes divided by net sales.
EN6-Investment Environmental protection investment
[t/CZK] (indicator EN30)
Total investments in environmental protection in CZK
divided by net sales.
with the rules on
the protection of
Environmental laws and regulations
[number] (indicator EN28) Number of voluntary agreements.
Fines and penalties
[CZK] (indicator EN28)
Monetary value of signicant nes and total number
of non-monetary sanctions for non-compliance with
environmental legislation and regulations. e total
monetary value of signicant nes; number of non-
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340 A. Kocmanová et al. e construction of environmental indicators for determination of performance...
Companies with established ISO 14000 stated that envi-
ronmental aspects established in their companies increased
competitiveness, e.g. possibility to participate in selective
proceedings of government contracts, in the remaining
questions the inuence of ISO 14000 was not identied
5. Results and discussion
Key Performance Indicators (KPIs) are the essential as-
sumptions of measuring environmental performance. e
environmental performance indicators provide quantitative
forms of a feedback reecting the results in the framework
of the corporate strategy. Environmental indicators, which
particular company develops and informs about them in
internal or external reports, always depend on the company
strategic priorities, mirroring the unique character of every
company. Key environmental indicators for the companies
in the processing industry to measure performance are
proposed (see Table 9).
Key performance indicators can help companies to plan
and manage their environmental priorities, in particular,
when the indicators are focused on the core business stra-
tegy, by means of operational plans, which include perfor-
mance targets. e most important is to recognize what is
measured, what is controlled, and important fact is that the
measures create value for the company and its stakeholders.
Environmental indicators should be chosen by the
company itself on the basis of their relevance and in terms
of its strategy, these performance indicators should help
companies to demonstrate progress towards the objectives
of sustainability and ensure that they cover their environ-
mental, social and economic impacts. Use of key perfor-
mance indicators can be challenging in a particular orga-
nisational context. Prior to company decision as regards
the establishment of scales of key performance indicators,
it is necessary to understand how they can be best used and
integrated into internal management and how they can help
and support sustainable reporting. Managers must consi-
der how to present the key performance indicators in their
internal and external reporting. Identication and selection
of key performance indicators depend on the context within
the company and industry.
In the event that the company is of the opinion that
some of selected environmental indicators are not relevant
for evaluation of the performance, then it does not have
to include such indicator in the overall evaluation of the
Key performance indicators (KPIs) may help the companies
to plan and control their priorities. e proposed environ-
mental indicators should serve for the evaluation of ESG
performance and they should meet some basic requirements:
clarity, simplicity, real verication of data for their deter-
mination, taking into account the comprehensive problem
and representativeness. e indicators should include the
essential and characteristic features of ESG performance.
Environmental indicators have been selected from a
wide range of performance indicators on the basis of the
above available international sources. e proposal of envi-
ronmental indicators and analysis were preceded by the
calculation of descriptive characteristics of the individual
variables. Descriptive statistics of all initial input indicators
have been carried out, because certain specic variables
have impact on the outcome of the methods in the follow-up
phase and they can be revealed already in the descriptive
statistics of the indicators.
ese modications have been preceded by one-dimen-
sional analysis of all the variables with use of statistical
methods and two-dimensional analysis; furthermore, the
interrelations with T-test have been tested and correlation
analysis has been employed.
e objective of the contribution is the construction of
key environmental performance indicators. Empirical rese-
arch deals with the selection of environmental performance
indicators for CZ-NACE sector-manufacturing industry.
ESG indicators quoted in an integrated reporting can pro-
vide relevant information, and even over time.
Indicator KPI Measurement
(Indicator EN29 in GRI)
Greenhouse gas emissions
Total direct (produced internally) emissions of CO2
equivalents in tonnes divided by number of covered
kilometres in company.
Land use [%]
of built-up surface
(partial indicator EN11)
Total amount of land owned, leased, or managed for
production activities or extractive use in square meters x
100 divided by the area of SCIs in hectare (according to
Natura 2000 Sites).
Continued Table 9
e result of empirical research is the formulation of
environmental indicators, which shall form the part of ESG
performance indicators. Key Performance Indicators are
formulated for companies involved in the manufacturing
industry, according to CZ-NACE, with the use of statis-
tical methods. Measurement of environmental indicators
involves quantitative indicators requiring the information
linked with company performance. Environmental per-
formance indicators include: EN1-Energy, EN2-Materials,
EN3-Waste, EN4-Water, EN5-Emissions, EN6-Investment.
Additional indicators: EN-Compliance, EN8- Signicant
environmental impacts, EN9- Biodiversity.
e primary and crucial basis of the conception is the
reporting of real-life conditions, their good knowledge,
gathering of empirical data, when mainly the values of the
mentioned ESG factors come to the fore, for the individual
phases of the economic, environmental, social and corpo-
rate governance performances, while not only their values,
but also their roles and priorities, content and functions
and mutual interaction are monitored, and based on them
formulation of proposals and methodical procedures as
benets to help boost company performance. Identication
of measurable and relevant objectives for sustainability and
appropriate metrics are a matter of the utmost importance.
is paper is supported by the project No. P403/11/2085
“Construction of Methods for Multifactor Assessment
of Company Complex Performance in Selected Sectors”
of the Czech Science Foundation and the research pro-
ject “Management Support of Firms Using Quantitative
Methods” of the Academy Sting, Business College in Brno
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A le n a K OC M A NO VÁ . Associate Professor at Depa rtment of Economics, the Faculty of Busi ness and Ma nagement, Brno University
of Technology. Research interests: corporate economic s and environmental ma nagement. She takes par t in resolving gr ant projects,
research plans at the state and faculty level, Grant project of Czech Science Foundation and international projects. At the present
time she is the co-researcher of the international projects in Latvia, Riga Technica l University, Institute of Engineering Economics.
Zdeněk KARPÍŠEK. Associate Professor at Department of Economics, the Faculty of Business and Management and Faculty of
Mechanical Engineering, Brno University of Technology. Research interests: fuzzy sets, stochastic modeling and applications in
dealing with technical, scientic, medical and economic problems in the basic and applied research.
Markéta KLÍMKOVÁ. PhD Student, Faculty of Business and Management, Brno University of Technology, Research interests:
lean production, environment management, dierent methods of operational and environmental management in manufacturing