Development and Implementation of Environmental Key Performance Indicators (KPIs) in Swedish Manufacturing Industry

Abstract: Traditional manufacturing industry have developed a linear production path that involves resource extraction, energy usage, emissions released to air and water, and waste produced at volumes and rates that places increasing burden on the natural environment. These traditional manufacturing organizations have mostly viewed environmental activities separately from their core business operations. Today, organizations are shifting their manufacturing approach. There is a significant potential to reduce the energy use, emissions released, resource consumption and wastes produced through sustainable initiatives. Using environmental key performance indicators (KPIs) is one emerging sustainability initiative. Environmental KPIs depict the vast quantity of environmental data of a firm in a comprehensive and concise manner, applying mostly to set absolute material and energy data in relation to other variables in order to increase the informational value of quantitative data. In this thesis work, literature review and empirical study was carried out to find out the significant factors and the major challenges during the development and implementation of environmental key performance indicators (KPIs). A case study in four Swedish manufacturing companies was carried out to collect primary data which was later compared with literature review. The thesis work also highlights the management system used to implement environmental KPIs.