Journal of Cleaner Production 18 (2010) 1598e1607

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Journal of Cleaner Production

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The Process Analysis Method of selecting indicators to quantify the sustainability

performance of a business operation
A. Chee Tahir, R.C. Darton*
Department of Engineering Science, University of Oxford, Parks Road, Oxford OX1 3PJ, United Kingdom

a r t i c l e i n f o a b s t r a c t

Article history: This paper describes a method for assessing the degree of sustainability of a business operation, in terms
Received 14 January 2010 of indicators related to the sustainability impacts of its particular activities. The Process Analysis Method
Received in revised form considers the impact on the capital residing in the three domains: the environment, the economy and the
29 June 2010
domain of human/social capital. It is found, using the Brundtland definition of sustainability, that these
Accepted 13 July 2010
impacts can be related to two business perspectives: (1) Resource efficiency, which measures the
Available online 21 July 2010
effectiveness of conversion of natural, financial, human and social capital; (2) Fairness in benefit which
describes how fairly the benefits and disbenefits of changes in the three domains are distributed amongst
Keywords:
Sustainability
stakeholders.
Indicator The method requires a complete review of the activities of the business within an appropriately
Metric defined system boundary, in order to make an inventory of activities which affect the capital stores of
Performance monitoring value; those effects are found to relate to the business perspectives. The effects of these activities on
Business operation stakeholders are identified, and those which are deemed to be significant are characterised by issues:
Oil palm these determine the selection of indicators whose values are given by metrics. The methodology thus
enables the development of a comprehensive set of sustainability indicators and metrics for the
particular business operation. The set of indicators will be similar for businesses with similar activities, so
the methodology facilitates comparison and benchmarking. Further, the value of a particular indicator
can be traced back through the analysis to a particular business process, which is especially helpful in
guiding remedial action, since cause is linked to effect by the method.
Ó 2010 Elsevier Ltd. All rights reserved.

1. Introduction
The aim of sustainable development is to improve the quality
life of the present population in a way that will not have a negative
impact on future generations. Since this idea gained currency
following the publication of the influential “Brundtland Report”
(Brundtland, 1987), businesses have been examining ways to assess
how sustainable their operations are (GRI Reports List, 2010). One
common technique is to measure performance with an appropriate
set of indicators (Pinter et al., 2005; Bell and Morse, 2008). These
act as a guide to the direction of travel, so the choice of which
indicators to use is critical in monitoring and directing progress
towards sustainability.
In a review of the role of sustainable development indicators in
corporate decision-making, Searcy (2009) pointed out that there
were few published examples of indicators being used either in
Board-level and strategic decision-making, or in managing supply
chains or even business units. Part of the difficulty may be the
problem identified by Steinbuka and Wolff (2007) in describing the
work on indicators done by Eurostat1; they comment that
Brundtland’s phrase about meeting the needs of the present
without compromising the needs of future generations is notori-
ously difficult to turn into an operational definition. Thus each
attempt to draw up a set of indicators has to start with deriving
a working definition of what sustainable development actually is,
and what purpose the indicators must serve. In the case of Eurostat,
the approach taken was pragmatic, and directed at aligning the set
of indicators to priorities of public policy which were already
established (Steinbuka and Wolff, 2007). Indeed the same approach
is taken by many governmental and inter-governmental organisa-
tions, which, as remarked by Pinter et al., 2005 has given rise to
a proliferation of not only indicator sets but also conceptual
frameworks and methodologies.
In a critique of indicator frameworks for assessing sustainable
development strategies Dalal-Clayton and Bass (2002) suggest the

* Corresponding author. Tel.: þ44 1865 273117; fax: þ44 1865 283273.
1
E-mail address: richard.darton@eng.ox.ac.uk (R.C. Darton). Eurostat, the Statistical Office of the European Union.

0959-6526/$ e see front matter Ó 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jclepro.2010.07.012
 A. Chee Tahir, R.C. Darton / Journal of Cleaner Production 18 (2010) 1598e1607
need for such frameworks to be systemic, hierarchical, logical and
communicable. They point out that indicator sets derived from
frameworks lacking these characteristics suffer from various flaws
such as inability to produce clear pictures of socio-economic
conditions and the state of the environment, omission of essential
aspects of sustainability, overlapping components and consequent
double-counting, confusion about what is being measured and
why, unmeasurable indicators, and distortion of assessments
through an emphasis on documenting procedures rather than
achieving results (Dalal-Clayton and Bass, 2002).
Amongst the methodologies for deriving indicator sets which
do use a formalistic approach as recommended by Dalal-Clayton
and Bass, are those based on the Pressure-State-Response (PSR)
analysis developed by the OECD for environmental performance
reviews (OECD, 1993). In this method of analysis, an environ-
mental Pressure due to human activity is envisaged to cause
a change in the State of the environment, eliciting a Response from
society, and each of these is characterised by indicators. The
element of “cause and effect” in this methodology has been
developed by Eurostat into its DPSIR framework (D ¼ Driving
force, P¼Pressure, S¼State, I¼Impact, R ¼ Response), though the
idea of simple causal relationships has been criticised, for
example by Smeets and Weterings (1999) who point out that it
cannot always capture the complexity of the real world.
Responses and Impacts may not result from single Driving forces
and Pressures, so that indicators may in fact be interrelated. For
this reason, Maxim et al., 2009 argue that the DPSIR framework is
satisfactory for structuring communication between scientists
and end-users of environmental information, but is not appro-
priate as an analytical tool. These authors proposed a reframing of
the DPSIR method using the three “spheres of organisation” e
economic, social and environmental, complemented by a fourth,
the political sphere which may also produce Driving forces and
Responses (Maxim et al., 2009). In its work to identify indicators
for a Sustainable Urban Environment, the EU TISSUE project
group acknowledged that because of the complexity of the
material under review, it was not feasible to use the DPSIR
approach which would require great effort to determine the huge
number of relationships between Drivers and Impacts and
Responses. They chose instead a modified PSR methodology
(TISSUE Trends and Indicators for monitoring the EU Thematic
Strategy on Sustainable Development of Urban Environment,
2005), in which five key aspects of the urban environment2
were considered, and expert analysis used to identify a series of
trends, issues or problems relevant to the formation and execu-
tion of EU policy for each aspect; these were then characterised
by appropriate indicators. The complexity of these methodolo-
gies, and the significant amount of work needed to apply them in
a specific case, are perhaps a reason why they have had little
impact on business and commerce.
To help business respond to the challenge of sustainability, GRI,
the Global Reporting Initiative has developed a framework to
facilitate the reporting of sustainability performance of organisa-
tions, particularly companies. It is intended that reports produced
in accordance with its Guidelines (Global Reporting Initiative,
2006) will adhere to appropriate protocols and thus provide
essential information in a way that is both proper, and relatively
uniform between different organisations. This should mean that
such reports gain similar credibility to the financial reports that
have long been standard practice in the world of audited accounts.
The GRI guidelines include a set of indicators having broad
coverage, which are designed to demonstrate the results of
2
Transport, Design, Construction, Management, Environment.
1599
performance against goals for the organisation. The indicators are
generic in nature, and for an assessment that is more focussed
either on business sector related concerns or local conditions, the
GRI is developing respectively Sector-specific Supplements and
National Annexes. The Institution of Chemical Engineers (2002) has
published indicators intended for use by chemical manufacturing
industry, and which are consistent with the GRI approach but
specifically focussed on industrial (chemical manufacturing)
operations.
However, use of these conceptual frameworks or generalised
sets of indicators presents a fundamental practical problem when
applied to a specific business operation, because they are designed
for application to large organisations, geographical areas and so
on. So in specific cases care is required to ensure that issues which
are not covered in the general framework or methodology, are
taken into account. Thus, interpretation and adaptation are
needed in order to select a specific set of indicators, which is
particularly onerous when the methodology is defined in abstract
and high level terminology. Further, interpretation and adaptation
are not well-defined processes e the resulting set of indicators
may not be comprehensive in coverage of all relevant issues, or
may not relate to an acceptable definition of sustainability, or may
be inadequate in some other way. If different companies take
different approaches, the results will lack comparability.
The purpose of the research described in this paper is to develop
a method for selecting indicator sets, with the following criteria
(a) The method should start from an analysis of the specific busi-
ness operation according to a particular protocol, to ensure that
the resulting indicator set gives a comprehensive assessment of
its sustainability.
(b) The method should be as objective as possible. Although
choices may be required, these should be transparent, so that
arguments can be presented for the choices, and any bias can
be identified.
(c) The method should identify indicators in such a way that
subsequently, particular weighting factors can be imposed, or
particular subsets chosen, for particular purposes.
(d) The resulting set of indicators should represent a definition of
sustainable development, the clear statement of which is part
of the method.
We call our approach the “Process Analysis Method” (PAM),
because it is based on an analysis of the processes that comprise the
business operation that we are assessing (Chee Tahir and Darton,
2006). As will be seen, this approach exposes the “cause and
effect” relationships within the business processes in a way that is
helpful when action for improvement is planned.
2. The Process Analysis Method
The Process Analysis Method has five major steps as shown in
Fig. 1.
2.1. Step I: overview of business
The method starts with an in-depth review of the business
operation. The resulting overview includes an inventory of the
major processes, together with the associated process inputs and
outputs, and stakeholder interests or concerns. Stakeholders are
taken to be a person or group of people who can affect, or who are
affected by, the activities of the operation, as defined by Edward
Freeman and his group (Freeman, 1984; Jones et al., 2002).
1600 A. Chee Tahir, R.C. Darton / Journal of Cleaner Production 18 (2010) 1598e1607

that, whilst it is carefully crafted, it is too general for detailed

II. Definition of Sustainability
application.
I. Overview of The Brundtland definition thus needs to be translated into
Business Perspectives
Business business perspectives in order to be used in our methodology. The
business perspectives are derived by focusing on the major prior-
ities implicit in the selected definition. In this instance we identify
the priorities as economic development, environmental protection
III. System Boundary and enhancement, social development, human well-being, respect
for cultural diversity, and meeting future needs or inter-genera-
tional equity. These are further elaborated in (Brundtland, 1987).
The business perspectives derived are:
IV. Sustainability Framework

(i) Resource efficiency, and

1. The Sustainability Domains and
Capital Stores of Value (ii) Fairness in benefit.

They provide the link between the priorities arising from the
definition, and the business processes, as described in 2.4.1 below.
2. Internal Impact Generators

2.3. Step III: system boundary

3. External Impact Receivers
The next step is to define the system boundary, which is gov-
erned by two factors: the spatial and temporal scales (Bell and
4. Issues associated with impact on
Morse, 2008; Fresno and Kroonenberg, 1992). The spatial scale is
External Impact Receivers the physical size of the system. The temporal scale is the period
over which the impacts of business operations are considered. We
note that the temporal scale must be sufficiently large to cover
inter-generational effects, and in general the system boundary
5. Indicators must of course be selected to include the necessary features of the
business being assessed, but not drawn so widely that extraneous
activities are included which could confuse subsequent analysis.
The choice of system boundary is very important because it
6. Metrics limits the processes to be included in the sustainability framework.
However, it should be kept in mind that what lies outside the
defined system boundary can still be of great importance.

V. Verification / Modification
2.4. Step IV: sustainability framework

The sustainability framework is the section of the methodology

Indicators and Metrics for use
Fig. 1. The Process Analysis Method for selecting indicators and metrics to measure
sustainability performance. Based on an earlier diagram by Chee Tahir and Darton
(2006).
2.2. Step II: definition of sustainability, and derivation of business
perspectives
The method also requires the selection of an appropriate defi-
nition of the term sustainable development. This is because the
objective is to provide criteria or perspectives for assessing
performance of the operation against the chosen definition. There
are many definitions of the term sustainable development (Pearce
and Turner, 1990), some of which have been summarised by Bell
and Morse (2008).
The Brundtland (1987) definition of sustainable development,
which is “development, which meets the needs of the present without
compromising the ability of the future generations to meet their own
needs” is used in this paper since it is a familiar and widely accepted
definition. It summarises the fundamental purpose of development
as “meeting needs” and introduces the consideration that meeting
the needs of future generations may determine what is sustainable
now. However, the well-known disadvantage of this definition is
where the indicators and metrics are selected and designed. Most
of our terminology is standard (Glavic and Lukman, 2007) but some
additional terms that are used in a specific way are defined here.
2.4.1. Sustainability domains and capital stores of value
The sustainability domains, in which the business has an effect,
are identified to be the environment, economic and social, using the
approach of the “triple bottom line” introduced by Elkington
(1998).
Each of these domains is viewed as containing a store of value,
termed capital. The capital that we need to consider consists both of
resources which are available to the business and also of stores of
value external to the business which are affected by its operation.
The business can interact with each store of value in a variety of
ways, and the stores of value experience change due to these
interactions. These changes may be positive, negative or neutral in
that they enhance, diminish or preserve the capital. This judgement
is made against the business perspectives derived in Step II, where
(i) Resource efficiency measures how effectively the capital is used
or created (change can occur in both the amount of capital, and
its quality); and
(ii) Fairness in benefit means, with regard to using or changing the
capital, both (a) how fairly the benefit is distributed, and (b) how
fairly disbenefits are distributed.
 A. Chee Tahir, R.C. Darton / Journal of Cleaner Production 18 (2010) 1598e1607
The first perspective incorporates the judgement that enhancing
the quality and preserving or increasing the extent of the stores of
value (capital) is beneficial for sustainable development. Enhancing
and preserving the capital for example, will mean that more is
available for future generations to enjoy (inter-generational
equity). The second perspective incorporates a second judgement,
which is that sustainable development is advanced by a fairer
distribution of benefits which in turn promotes wider economic
and social development, as required by the Brundtland definition
that we are using. “Fairness” also applies to the distribution of
undesirable outcomes or disbenefits (e.g. pollution) requiring that
benefits should not accrue to one group of stakeholders, at the
expense of disbenefits accruing to a different group e this being an
arrangement that damages economic and social development.
These stakeholders could include future generations, whose inter-
ests will typically be important when considering issues of envi-
ronmental protection.
The stores of value identified in this paper are (1) natural capital,
(2) financial capital, (3) human and social capital as described for
example by Dyllick and Hockerts (2002). Our definitions are
influenced by those of “development capital” used by the World
Bank (World Bank Focus on Sustainability, 2005).
The natural capital, which has been broadened from the defi-
nition of the World Bank (World Bank Focus on Sustainability,
2005), is the store of value contained in the natural world that
includes all natural resources. It also includes aspects of the natural
world that are valued by mankind, for whatever reason, such as the
diversity of ecosystems, the aesthetic value of natural landscapes,
and so on.
Financial capital is defined here as funds available to purchase
physical objects such as equipment and machinery, buildings and
other physical infrastructure and the finance tied up in such
tangible assets. It also includes the cash available from products or
services which can be viewed as a livelihood asset as indicated by
Messer and Townsley (2003). Intangible assets include intellectual
property, brand and company reputation and commercial assets
such as customer databases. In short, financial capital is taken to
include tangible assets and intangible assets that could be realised
for cash.
Human capital is defined as the asset associated with human
competence such as knowledge and skills, and is enhanced by
investment in education, training and experience (Becker, 1975;
Organisation for Economic Co-operation and Development, 2001).
Social capital has been interpreted differently by various authors
(Dyllick and Hockerts, 2002; Organisation for Economic Co-
operation and Development, 2001). One such interpretation is
that social capital is an informal norm that promotes co-operation
between individuals within a group or among groups (Fukuyama,
1999). In this paper, human capital is defined as the intrinsic
value of a person, possessed by reason of his/her individual attri-
butes, knowledge and skills, resourcefulness, imagination, crea-
tivity, health and physical strength. Social capital is defined as the
extra value that people acquire by reason of their being part of
a group with interpersonal interactions and organisation, rather
than just a collection of individuals. This value is found in group
attributes such as: mutual support and trust, organisational effi-
ciency, collaboration in eliminating social ills, altruistic behaviour,
positive feedback encouraging beneficial behaviour and achieve-
ment, benefits from pooling knowledge or skills. For this paper,
human and social capital is regarded as one store of value e the
value residing in human beings, individually and collectively.
2.4.2. Internal impact generators
The second element of the sustainability framework is an
assessment of the effects of the business activities on each type of
1601
capital, when these activities are measured against the two busi-
ness perspectives. These activities form specific groups of tasks,
which are mainly the responsibility of management, termed
Internal Impact Generators (IIG). All these internal impact generators
relate to activities within control of the business e hence “internal”.
The effects on the stores of value are experienced by the owners or
guardians of the capital.
2.4.3. External impact receivers and issues
The owners or guardians of the capital whose status or states
change due to the effects of the internal impact generators on the
capital, are termed External Impact Receivers (EIR). Taking sustain-
ability in its broadest context, the owners of the capital could even
extend to include all the current and future generations of the
world. However, in the context of assessing the sustainability of
a business operation, the owners and guardians of the relevant
capital can be defined as the stakeholders of the business identified
in Step I.
The effects are now characterised in terms of one or more
“issues” which are meaningful in terms of the business processes.
An issue is a concern that a stakeholder has regarding a particular
impact. It is essential that the issues, which will be described by the
indicators, do in fact cover the extent and nature of the impact of
the internal impact generator. This will generally require both
consultation of experts, and stakeholder analysis (Dalal-Clayton
and Bass, 2002).
2.4.4. Indicators and metrics
Indicators are used to describe the issues. Help with identifying
possible indicators can be obtained from various published lists
(Bell and Morse, 2008; Global Reporting Initiative, 2006; Institution
of Chemical Engineers, 2002; United Nations, 1999; Azapagic and
Perdan, 2000; Azapagic, 2004), though of course, they can also be
developed for issues not discussed in these references. The link
between “issue” and “indicator” should be as simple and direct as
possible.
The final element in the sustainability framework is the choice
of metrics which give a value to each indicator in terms of the
specific local condition of the business. The metrics measure the
magnitude of the impact caused by the internal impact generators;
they should be backed by scientific or other quantifiable data, and
must be relevant and specific to the defined purposes. Schwarz
et al., 2002 have noted that it will often be useful if the metrics
are comprehensible to both technical and non-technical audiences.
They also point out the desirability of cheapness and ease of data-
collection, though this must be balanced with the need for proper
reliable data.
2.5. Step V: verification and modification
To ensure that the indicators and metrics developed are appli-
cable to the operations of the business it is necessary to verify and
revise the indicators and metrics through fieldwork reviews and
consultation with experts and stakeholders. This series of verifi-
cation/modification processes is repeated until a refined set of
indicators and metrics is obtained that is both necessary and
sufficient to monitor the sustainability performance of the
business.
3. Application of the Process Analysis Method: an example
In order to show how the Process Analysis Method works in
practice, and to illustrate its value, we report briefly a case study in
which it was applied to the oil palm fruit production business. This
is an agricultural business involving the production of oil palm
1602 A. Chee Tahir, R.C. Darton / Journal of Cleaner Production 18 (2010) 1598e1607

fruits from matured oil palm trees in a plantation, known as an
estate. This business is a major source of edible oil, but the oil is also
a candidate for conversion to biodiesel fuel. Annual world
production is currently somewhat in excess of 40 million tonnes
(Oil World, 2009).
3.1. Overview of the oil palm fruit production business
The major process in the oil palm fruit production business is
the cultivation of oil palm trees in estates to supply oil palm fresh
fruit bunches for delivery to the palm oil mills. The cultivation of oil
palm trees requires many types of input such as agrochemicals and
water, and also uses land. Beside these inputs, energy is needed in
the form of fuel for the machinery, equipment and transportation
used for cultivation of the trees and maintenance of the estates, and
for transporting agrochemicals and fresh fruit bunches. Trans-
portation is also needed for other logistical purposes. The produc-
tion process produces solid, liquid and gaseous wastes which cause
environmental impacts on natural resources such as land, rivers,
lakes and sea. The planting and cultivation of the estate have an
effect on biodiversity.
Significant land use, agrochemicals, water and energy use, and
impacts to the environment can affect the stakeholders who are
identified as employees including executives, non-executives and
workers; local communities including the employees’ families,
local indigenous people and others who live near the estates;
suppliers and contractors; capital providers including individuals,
business shareholders and financial organisations that have some
ownership of the operations of the estates; and government
agencies including local authorities. Customers, who in this case
are the palm oil mills which take product from the estates, and
non-government organisations, are two other major stakeholders.
Thus there are a total of seven major groups of stakeholders
identified for the oil palm fruit production business. Trade unions
in this example have been considered to be part of the employee
stakeholder.
3.2. Selected definition of sustainability
The Brundtland definition and the two business perspectives
formulated in Step II of the method were used in this case study.
3.3. System boundary of the oil palm fruit production business
In this case study, we only considered processes of the oil palm
fruit production business encountered in a matured estate. The
spatial system boundary was chosen by the gate-to-gate approach.
That is, only activities within the perimeter of the estate were
included, with one exception, as follows: certain transport, supplier
and contractor activities directly involved in production and
transport of the fruit bunches, which occur across the boundary,
were included where these were considered to be integral to the
operation of the estate. This is an important inclusion, to allow
a more comprehensive assessment of the sustainability of the
estate.
For the temporal scale, the inter-generational time period was
taken.
3.4. Internal impact generators, indicators and metrics for the oil
palm estate
3.4.1. Environmental domain
The oil palm fruit production process requires various types of
input from the environmental domain, and generates various
types of output to the environmental domain. When any of these
input and output processes, judged against the two business
perspectives, causes positive or negative impacts on the natural
capital, they are classified as internal impact generators for the
environmental domain. There are a total of nine internal impact
generators identified for the environmental domain as shown in
Table 1, and we have selected one of these to demonstrate how the
sequence:
(Internal impact generator / external impact receivers /
issues / indicators / metrics) is developed in practice.
An example: Environmental Product Management
Palm fruits are oil base in nature, and are a rich source of food.
Events associated with the handling of this product such as
uncontrolled spillages, improper disposal of rejected low grade
fruits, or harvested fruits left unattended for long periods in the
estates could lead to the occurrence of nuisance such as the
presence of pests, though precautions are taken to keep these
incidences to a minimum. All these could give rise to environ-
mental problems leading to degradation of natural capital. This
would not only (a) affect the efficient utilisation of natural
capital, raising concerns for some stakeholders, but could also
(b) reduce the ability of future generations to access the benefits
of the natural capital e which relates to the fairness perspective.
The external impact receivers (Table 2) were identified by
screening all the stakeholders to see how they were affected by
the environmental product management of the business. A
damaged environment could affect the business operations of
the capital providers, suppliers and contractors due to the loss of

Table 1
Internal impact generators for environmental, economic and social domain for the oil palm case study.

Internal impact generators

Environmental domain Economic domain Social domain

Material management Economic product management Management of human capital
Energy management Management of waste with economic worth Management of social capital
Land management Economic material management Social product management
Water management Economic human resource management
Biodiversity management Economic utility and service management
Waste management Economic environmental impact management
Environmental product management Economic distribution to capital providers
Transport management Economic distribution to suppliers and contractors
Management of supplier and contractor Economic distribution to employees
environmental practices Economic distribution to government agencies
Economic distribution to local communities
 A. Chee Tahir, R.C. Darton / Journal of Cleaner Production 18 (2010) 1598e1607
Table 2
Indicators and metrics for the three Internal Impact Generators: environmental, economic and social product management.
Internal impact External impact Issues
generators receivers
Environmental Capital Prevention of product
product providers environmental
management pollution
Suppliers and contractors
Local communities
Economic product Capital providers Sales, earnings and
management costs
Social product Customers Community well-being
management Employees
Local communities
RM ¼ Ringgit Malaysia.
natural resources; local communities would lose the ability to
enjoy the resources of an undamaged environment. These
stakeholders were concerned with the issue of prevention of
environmental pollution. An appropriate indicator for this issue
is “Environmental incidents concerning products”. Suitable
metrics are the proportion of harvested fruit left unprocessed,
spilt or disposed of to the environment, number of incidences of
nuisance and cases of non-compliance (see Table 2).
3.4.2. Economic domain
Analysing the information obtained from the overview from an
economic view point we identified two types of inputeoutput flow
representing the economic aspects of the business. One type could
be described as value flow: inputs of material, human resource,
utility and service, and outputs of product, waste and environ-
mental impacts. The other type of economic flow was money flow.
On the input side we have flows of money from capital providers,
customers and government agencies (through any subsidies
provided); on the output side we have flows of money to employees
in the form of salary, to suppliers and contractors, to capital
providers in the form of dividends or interest, and to government
agencies in the form of taxes and fees. We note that money output
to the suppliers and contractors often results in a benefit to the
local communities through paid employment provided by these
suppliers and contractors. This is an example of benefits flowing
further than the immediate recipient.
Assessing the activities associated with the two types of
economic inputeoutput flow against the two business perspec-
tives, a total of eleven internal impact generators were identified
for the economic domain (Table 1). The money input activities of
the economic contributors were not included in the set of internal
impact generators as they were considered to be not internal to the
business. Again we have selected one economic internal impact
generator to demonstrate how the approach is used to develop
indicators and metrics for this domain.
An Example: Economic Product Management
Oil palm fruit production is predominantly a product-orientated
business, where the majority of the revenue is generated from
the sales of the oil palm fruits. Hence, if not managed properly,
1603
Indicators Metrics Units
4 Environmental Proportion of harvested palm fruits left %
incidents concerning unprocessed, spilt or disposed to
products environment
Number of incidences of nuisance Number (10 y)1
Number of fines or cases for non-compliance Number (10 y)1
Economic worth of Value-added of palm fresh fruits RM t1
products
Profit and profitability Return on average capital employed (ROACE) %
Product quality in terms Number of implementations of health and Number y1
of health food safety certification, control and audit
and food safety system
Number of cases of health and food safety Number (10 y)1
violation
Traceability of products to Proportion of successful traceability cases %
allow informed choices
Credibility of branding, Number of reported cases of information Number (10 y)1
labelling and infringement
marketing information Proportion of suppliers and contractors %
subject to inspections and quality audits
along the supply chain
the activities associated with product sales will affect the
financial status of the business. Thus the capital providers are
concerned with the sales, earnings and costs of the product.
Adding value to a product can generate additional earnings for
a business. For the estate, one way to add value to its output is to
adopt the cultivation of organic oil palm. The benefit of organic
oil palm is that organic materials such as palm oil mill effluent
and palm empty fruit bunches are used as substitutes for
chemical fertilisers during the cultivation process. The oil palm
fruits produced, which are free from any form of man-made
chemicals are able to fetch a higher price as there is a growing
demand from customers for organic agricultural products.
Another way of increasing profitability is to produce oil palm
fruits with higher oil yield.
The survival of a business is highly dependent on its profits and
how well it avoids loss. One way to measure profitability is to
record the return on average capital employed (ROACE), which
measures how well a company has employed its capital to make
profit and not just how much profit has been made (Wood and
Sangster, 2008).
The two metrics (see Table 2) for this Internal Impact Generator
are thus (a) added value of palm fresh fruits, and (b) the return
on average capital employed.
3.4.3. Social domain
The presence of an oil palm fruit production business could give
rise to many social impacts especially on the communities living
within the operating areas of the business. For example, the influx
of migrant workers could affect the job prospects for the local
community. In addition, oil palm fruit production can involve
workers working in remote locations and under unpleasant
working conditions. Various types of chemicals are used in the
production process that could give rise to contamination of the
product and chemical exposure affecting workers, customers or
local communities, though naturally precautions are taken to
minimise this.
Hence, the oil palm fruit production business was viewed from
the social perspective as comprising value flows where the inputs
were social expectations defined by the customers, employees
represented by their unions, government agencies, local
1604 A. Chee Tahir, R.C. Darton / Journal of Cleaner Production 18 (2010) 1598e1607
communities and non-governmental organisations; the outputs
were social effects experienced by the employees, customers and
local communities. Judging the activities associated with this social
inputeoutput flow against the two business perspectives a total of
three internal impact generators were identified (Table 1). Activi-
ties associated with the social expectations of the stakeholders
were not considered as part of the analysis as they were not
internal to the business. Below we show one example of an internal
impact generator in this domain.
An example: Social Product Management
Palm oil becomes a consumer product when eventually incor-
porated into food products or non-edible products such as
cosmetics and pharmaceuticals. These may be sold and
consumed by customers anywhere in the world. The significance
of social product management is that a poorly managed product
could adversely affect health and well-being of people in many
countries, whereas a well-managed product brings health and
welfare benefits.
To address the concern of community well-being, the quality of
the product must be controlled with respect to food and health
safety. To ensure this quality, implementing relevant certifica-
tion systems and monitoring contamination from dirt, pesticide
residue and toxic chemicals are important.
Traceability of products to allow informed consumer choice
and to enable a business to trace a particular product back to
its origins is also important. In the case of the oil palm fruit
production business, with proper recording and transparency,
oil palm fruits can be tracked back to the producing estate and
the mother palm. Full traceability also requires detailed
records of the suppliers and contractors who provided the
necessary materials and services to be available for any
product batch.
Besides this, the need for credibility of branding, labelling and
marketing information is also important in order to have social
acceptability of the product. For this purpose, the estate should
conduct frequent random checks on its processing and research
centres to ensure that there are no inaccuracies in the claims
made for the product, and no lapses in quality control
procedures.
Conducting inspections on suppliers and contractors of the oil
palm estate along the supply chain to ensure their compliance
with the product claims made by the estate through its quality
labels and marketing information are important. These inspec-
tions are known as “supply chain inspections and quality audits”
(see Table 2).
3.5. Data collection and field work
Initial analysis of the oil palm production case was based on
the authors’ own knowledge, supplemented by information from
literature and other publications. Subsequently field work was
undertaken at several oil palm estates, to gather data and hold
discussions with experts and stakeholders, to verify and refine
the analysis and ensure that impacts and issues have been
correctly identified. Table 2 shows some typical results, in this
case for aspects of product management. The table lists the
indicators and metrics together with the internal impact gener-
ators (the three aspects of product management), the external
impact receivers and issues. Using similar approaches, indicators
and metrics are developed for the remaining internal impact
generators listed in Table 1. The whole analysis for the oil palm
estate will be reported separately e in this paper we concentrate
on the methodology.
4. Uses of the developed indicators and metrics
The set of indicators and metrics found by the Process Analysis
Method can be used to judge the overall sustainability performance
of the business. If analyses can be made for similar businesses, this
will facilitate benchmarking. Since each indicator can be traced
back to an Internal Impact Generator, the method provides clues for
management on how to act in order to improve sustainability
performance.
The selected indicators and metrics are specific to a particular
business, so that local conditions can be taken into consideration
without losing the holistic nature of the sustainability assessment.
This also facilitates the use of current operational data or company
records in assigning values to metrics, which is a useful practical
advantage.
To illustrate the uses of the metrics, we discuss the metrics
developed for the three example internal impact generators of
Table 2.
This selected sub-set of metrics (Table 2) can be used to track the
environmental, economic and social performance of the oil palm
estate with a view to improving the estate product management.
Table 3 shows the indexed numerical metric data obtained for four
matured oil palm estates for the particular example of Product
Management. The data of the three estates, B, C and D were indexed
against the data of estate A, and show the comparative perfor-
mance of each estate for each of the Product Management metrics.3
To obtain a simple view of the overall difference between estate
performance, the indexed numerical metric data of each estate was
ranked as shown in Table 3, with 1 being the best and 4 the worst.
For all the environmental product management metrics, the higher
the score of a rank, the poorer is the performance of the estate
concerned, as these metrics measure the negative impacts on the
natural capital due to the internal impact generator. However, the
two economic product management metrics measure positive
impacts. Therefore, the higher the score, the better is the perfor-
mance of that particular estate. For the case of social product
management, two of the metrics (number of cases of health and
food violations; number of reported cases of information
infringement) measure negative impacts while the remaining three
metrics record positive impacts. From this analysis, the estates can
identify areas that they need to improve.
5. Discussion
The Process Analysis Method aims to produce a set of sustain-
ability indicators which are objective, comprehensive and relevant
for the target business operation. The extent to which the indicator
set satisfies these requirements depends on the thoroughness of
the analysis. It is important that the list of internal impact gener-
ators and issues is as complete as possible. Clearly there is an
element of judgement in selecting these, since some impacts can be
justifiably considered negligible compared to others, and thus
neglected. Consultation and stakeholder involvement (Dalal-
Clayton and Bass, 2002) are ways to widen the basis on which
selections are made, but an element of judgement will always
remain.
The methodology allows the analyst to expand or reduce the
spatial and the temporal scale of the system boundary as demon-
strated by the oil palm case study. By appropriate selection of the
system boundary, we can focus on the sustainability performance
of a particular part of the business, such as a supply chain,
3
Indexing protects the propriety information belonging to the estates, which is
of course available to the analyst and management.
 A. Chee Tahir, R.C. Darton / Journal of Cleaner Production 18 (2010) 1598e1607 1605

Table 3
An example of indexed numerical metric data for four oil palm estates.

Internal impact Metrics for estate Data indexed against data of Estate A with Rank
generators data of Estate A indexed ¼ 1a

Estate A Estate B Estate C Estate D Estate A Estate B Estate C Estate D

Environmental product Proportion of harvested palm fruits 1.000 1.000 1.000 2.000 1 1 1 4
management left unprocessed, spilt or disposed
to environment
Number of incidences of nuisance 1.000 3.000 0 2.000 2 4 1 3
Number of fines or cases of non-compliance 0 0 0 0 1 1 1 1
Economic product Value-added of palm fresh fruits 1.000 1.042 1.043 1.208 4 3 2 1
management Return on average capital employed 1.000 0.908 1.063 0.961 2 4 1 3
Social product Number of implementations of health and 1.000 1.000 1.000 1.000 1 1 1 1
management food safety certification, control and audit
system
Number of cases of health and food safety 0 0 0 0 1 1 1 1
violations
Proportion of successful traceability cases 1.000 0.977 1.011 0.830 2 3 1 4
Number of reported cases of information 0 0 0 0 1 1 1 1
infringement
Proportion of suppliers and contractors 1.000 1.056 1.033 0.867 3 1 2 4
subject to inspections and quality audits
along the supply chain
a
Data in italics are non-indexed data.

a manufacturing or agricultural unit, or a product life cycle. Foran
et al., 2005 and Wiedman et al., 2009 have pointed out the
advantages of incorporating complete supply chains when assess-
ing the sustainability of a business, to ensure that off-site, upstream
and embodied impacts are included. It is well-known that inap-
propriate setting of the system boundary, which also controls the
span of information and data gathering, can result in a misleading
conclusion (Bell and Morse, 2008; Azapagic and Perdan, 2000;
Global Reporting Initiative, 2005). A similar difficulty arises in
Life-cycle Analysis. To avoid this outcome transparency and
objectivity in the selection of the system boundary are required.
It is a strength of the method that the internal impact genera-
tors, which in practice are rather generic in type, emerge from an
analysis of the business. As a consequence, these will be similar for
similar business operations, such as manufacturing, which should
facilitate the analysis. The indicators follow from the internal
impact generators, so that it is difficult to manipulate the process to
ensure omission of inconvenient indicators. For the choice of metric
however, there remains the possibility that choice may be affected
or manipulated by the desire to avoid a particular outcome.
Transparency and objectivity again are required.
A limitation of the method is that sustainability problems or
issues that arise indirectly from the activities of the business
through the action of an External Impact Generator may be left
out. That is, interactions may be neglected if their direct causation
is chiefly due to external factors. For example, government policy
on the distribution of taxation receipts may have a significant
effect on the way societal stakeholders experience the benefits or
disbenefits of the business operation. The extent to which our
analysis should, or can, include such indirect effects is a complex
issue. Partly this is a question of being clear about the definition
of the system boundary. Whilst this should normally be drawn so
as to exclude operations of others which are outside the control of
the business, there may be areas where the transition from
control / influence / affect will make the boundary hard to
determine.
The external impact receivers are selected from the list of
stakeholders of the business but there may be some guardians of
capital who could have been affected by the activities of the busi-
ness process but are not easily recognised as stakeholders. An
example would be “remote” guardians such as future generations,
whose interests include considerations of inter-generational equity.
In our method these interests are represented by proxy stake-
holders such as non-governmental organisations or government
agencies, but this may not always be satisfactory.
The sustainability concept used in this paper is that of the
Brundtland definition. The method allows other forms of sustain-
ability concept or definition but we would expect that this might
change the business perspectives. For example, the Sustainable
Packaging Coalition defines sustainability in the corporate sector as
encompassing “.strategies and practices that aim to meet the
needs of stakeholders today while seeking to protect, support and
enhance the human and natural resources that will be needed in
the future” (Sustainable Packaging Coalition, 2009). This is a choice
of wording based on that of Brundtland as later modified (Deloitte
et al., 1992) to make a definition specific and appropriate to busi-
ness operations. The subsequent interpretation used to derive
indicators for the packaging industry (Sustainable Packaging
Coalition, 2009), understandably in view of the nature of the
business, puts great emphasis on renewability, both of material
resources and energy. In such a case, we suggest that it would be
useful to identify Renewability as a useful business perspective to
help screen impacts on the stores of value.
We have deduced the business perspectives by focussing on the
priorities implicit in the selected definition of sustainability (i.e.
Brundtland) and screening the activities of the business to identify
the characteristics of those activities that affect the stores of value.
We would expect these characteristics e what we term the busi-
ness perspectives e to be fundamental elements underpinning the
Corporate Social Responsibility (CSR) policy of the business. The
need for a company’s CSR policy to specify the values that will be
used to guide the sustainability assessment of business operations
has been emphasised by Labuschagne et al., 2005 and others.
In assessing how the operation of a business is impacting the
three stores of value, we are repeating some of the tasks that
management will carry out anyway in the normal course of busi-
ness, for example, in monitoring how effectively capital is being
deployed. A variety of methods is available to assist managements
in this role, from simple cost accounting to the use of a “balanced
scorecard”. The latter is a performance measurement system
developed by Kaplan and Norton (1996) to help managements
implement their business strategy. This methodology clearly has
1606 A. Chee Tahir, R.C. Darton / Journal of Cleaner Production 18 (2010) 1598e1607
relevance to sustainability where we would also like both to
measure and improve performance. The balanced scorecard
(Kaplan and Norton, 1996) emphasises the importance of the
“cause-and-effect relationships between outcome measures and
the performance drivers of those outcomes” in a way that is similar
to the useful link we identify between Internal Impact Generators
and indicators. But the four business perspectives underlying the
balanced scorecard are, naturally, geared to business outcomes
such as profitability and market share, and not to sustainability.
Möller and Schalteggar (2005) discuss how eco-efficiency
analysis could be used to supplement Kaplan and Norton’s anal-
ysis, and provide data for a “Sustainability balanced scorecard”.
Dyllick and Hockerts (2002) have pointed out that corporate
sustainability is much broader than eco-efficiency, since it must
also satisfy socio-efficiency, eco-effectiveness, socio-effectiveness,
sufficiency and ecological equity. But it seems feasible to suggest
that the Process Analysis Method could be used to furnish infor-
mation to a comprehensive “Sustainability balanced scorecard”
designed to aid managements implement a sustainability
strategy.
Another approach to planning management intervention, which
could perhaps be adapted, is the Resource-based View (RBV) of the
Firm (Barney, 1991). This considers the resources available to
a company’s management, and how they may be used effectively to
gain competitive advantage. These advantage-creating resources
comprise (Fahy and Smithee, 1999) tangible and intangible assets
(which we include in “financial capital”), and capabilities such as
individual and group skills, organisational routines and culture
(which are part of “human and social capital” in our methodology).
In this paper we have addressed the problem of measuring
sustainability performance objectively and comprehensively,
leaving aside the issue of management response; however it seems
likely that the RBV, like the balanced scorecard, may help
managements use sustainability assessment by the PAM to guide
their actions.
The Process Analysis Method has been demonstrated for the
sustainability assessment of an agricultural business, though its
application to any manufacturing operation is straightforward. It
should also be applicable to a supply chain which can be viewed as
a succession of linked business operations, or to a service industry.
We might be able to apply the methodology to the activities of
other organisations such as local government, educational estab-
lishments or healthcare agencies, in as much as these operations
involve internal impact generators that affect stores of value, and
work through connected series of business processes. However,
further work is needed to explore the possibilities, and to verify
that the analysis yields a useful outcome. Applying the method to
a very large system may involve the difficulty pointed out by
Smeets and Weterings (1999) with respect to the DPSIR framework,
that causal relationships can become too complex for a simplified
analysis. We have found that considering impacts on the three
stores of value separately facilitate the analysis, but there is
undoubtedly a scale-up problem to be managed, when there are
very many impact generators.
The output produced by applying the method is a list of metrics,
which, depending on the business, may be rather long and not
convenient for making simple comparisons. Two methods of
proceeding are then possible: (a) to select a small number of key
metrics from the long list, and use these as representative of the
whole picture; (b) to assign weighting factors, perhaps with
stakeholder involvement, to combine metrics to form a composite
metric. Both approaches have useful features, but in this paper we
restrict ourselves solely to the selection of a basic and compre-
hensive indicator set. We leave the questions of weighting and
composites for further study.
6. Conclusions
Sustainable development is an abstract and a complex concept,
but one which has real and challenging implications for the way
that businesses function. This paper has shown how the Process
Analysis Method can interpret and apply the fundamental concept
to the practical problem of assessing the sustainability of a business
operation. The oil palm case study, described here briefly, illustrates
how the method can be applied, resulting in a set of metrics that
quantify the sustainability performance. Further, each metric can
be traced back through the analysis to a particular business process,
which is especially helpful in guiding remedial action to improve
performance.
Acknowledgements
Financial aid from the Malaysian funding agency MARA, and the
technical assistance provided by various companies, experts and
individuals who have helped with our fieldwork, are greatly
appreciated.
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