Social sustainability performance indicators – experiences from process industry

Abstract

Sustainable industrial development can be advanced through the development and application of sustainability metrics. This study addressed the application of social sustainability metrics to the measurement of sustainability performance within process industry and to metal production at the plant level in particular. The applied social sustainability indicators are one part of the overall sustainability index which aims at presenting a balanced and holistic view of plant-level sustainability performance. Application of plant-level indicators can support informed decision-making and fill in potential gaps in corporate-level assessments and reporting initiatives with respect to plant-level social sustainability performance. The social part of the overall index provides information on both in-plant sustainability performance and on the direct and in-direct impacts of plant operations on the surrounding society with special emphasis on the supply chain and emerging social due diligence aspects. The results of pilot implementation of social indicators in Ruukki Lappohja plant indicated a very high level of social sustainability performance with minor areas of improvement such as social risk management auditing covering the whole supply chain, suppliers communication on social responsibility requirements to workers and sub-suppliers, signing of the code of conduct by employees and reporting on policies on local community relations, safety in supply chain covering suppliers and contractors and factory health and safety performance in relation to average field of industry performance in this field.

Keywords::

• sustainability index
• social indicators
• process industry

1. Introduction

1.1 Development work for a balanced sustainability index

The development work for sustainability metrics for the measurement of sustainability performance in process industry at the plant level was based on the idea that sustainable industrial development requires comprehensive approach towards sustainability, encompassing all its intertwined dimensions and elements. In addition, by integrating the concept of the sustainability to the companies' decision-making process enables the industry to overcome present and emerging sustainability challenges within operational environment. This means that the process industry can address its sustainability challenges at the plant level through the application of a balanced sustainability index (Figure 1), encompassing environmental, economic and social indicators with legal aspects as a part of each indicator set.

Figure 1 Sustainability index for process industry.

We consider that sustainability of all operations is the key element of long-term success in any branch of modern process industry. Sustainability management requires focus on all dimensions of sustainability covering the linkages between sustainable industrial development and broader goals associated with sustainable societies and economy. The current indicators of industrial sustainability often satisfy primarily the needs of corporate management and global investors. The provided information is often broad and non-specific and might occasionally even give a false impression of sustainability performance. In general, global indicators tend to highlight one sustainability dimension over another and ignore local level sustainability performance. Thus, more balanced sustainability index is needed covering environmental, economic and social performance and impacts supported by legal aspects for each dimension of sustainability.

1.2 Sustainable industrial development – the need to measure social aspects

Sustainable industrial development and sustainable use of all resources are globally recognised priorities (WCED 1987; UN 2002; EC 2005; EC 2011; UNDP 2010). This includes the establishment of industry–society–environment interactions to ensure responsible approaches to industrial activities (Graedel and Allenby 2010) and paying significantly more attention to long-term oriented systems that recognise limits of resources, the closure of material cycles and economic recycling of materials (Reuter et al. 2005; Jackson 2009). In addition, social indicators, life cycle methodologies and redefinition of system boundaries are becoming more important (Dewolf and Van Langenhove 2006). For example, the Living Planet Index developed by the World Wildlife Fund (WWF 2012) shows a declining trend and together with the rising ecological footprint. These clearly highlight the need for more informed decision-making and more sustainable policies and practices including sustainable use and good governance of natural resources, resource efficiency, socially inclusive development and more environmentally friendly production (WWF 2012).

Sustainability indicators are increasingly important tools providing information on corporate performance (Singh et al. 2012). In addition, globally competing companies are increasingly committed to reporting sustainability performance (Labuschagne, Brent, and van Erck 2005). For example, European aluminium has been involved in the development of sustainable development indicators since 2001 (Nordheim and Barrasso 2007). Baumgartner (2008) noted that companies need to assess their sustainability performance because they are important societal actors that play a major role in the implementation of sustainable development. Dreyer, Hauschild, and Schierbeck (2010) noted that social aspects and impact have also become a major focus area in the context of life cycle assessment with an aim to support management-level decision-making, e.g. concerning socially responsible business practices. Roome (1998) recognised that modernisation of industrial management requires focus on social and environmental consequences of industrial activities and on sustainable resource use including contribution to overall sustainable development and a more sustainable society. Sustainable industrial organisation is based on the idea that industry is part of an open system linked with other systems such as social systems and economic relationships (Roome 1998).

According to Laszlo (2003), companies need to take into account the limits of resources and address long-term sustainability challenges including the potential and limits of technological aspects. He stated that forward-looking companies should focus on long-term sustainable performance with special emphasis on sustainable resource use and proactive management of social impacts to reduce risks and costs. Creation of sustainable value is based on economic, social and environmental performance (Laszlo 2003). Rendtorff (2009) presented corporate social responsibility (CSR) as an integrated part of value-driven management and business ethics and noted that this concept relates to the responsibility of corporations towards their internal and external stakeholders and constituencies. In addition, Den Hond, De Bakker, and Neergaard (2007) noted that CSR is implemented in specific context in place and time and, therefore, there are multiple definitions of this concept at the practical level.

1.3 Sustainability index

The social sustainability indicator partly uses the Worldwide Governance Indicators (WGI) project information (2013), which includes detailed social sustainability information separately for each country. The index is calculated with a specific Excel file created for this purpose. The social sustainability index consists of eight sub-indicators, which are location, supply chain, social innovations, labour practices, training and education, reporting, health and safety, and legal–social aspects. Sub-indices of the social sustainability index consist of a list of questions about the given area. Answers to the questions are mostly ‘yes’, ‘no’ or ‘not known’. There are also multiple-choice questions with a, b and c alternative answers. Choosing an answer gives the question a numerical value (often  − 1, 0 or 1). Zero value leaves the matter out of the inspection. The sub-indices are measured on a scale from 5 to  − 5, where  − 5 is the best value and 5 is the bottom value. Answering the index questions gives weighed sustainability points and the final index result is calculated based on these points. Sub-indicators and their components are equally weighed and the weighing can be modified if necessary.

Chosen indicators:

• Location indicator consists of voice and accountability, political stability and absence of violence, government effectiveness and regulatory quality, rule of law and control of corruption.

• Supply chain indicator consists of a set of questions about the suppliers. The questions are amongst other things related to company's social responsibility, employee's human rights, contract issues, health, safety, education and training. These supply chain indicator questions are listed in the social indicators Excel file in more detail.

• Social innovation indicator measures for instance whether the social issues are taken into account in the company risk analysis, whether there are social investments (e.g. coffee machine, sports and activities) made in the company and whether there are new innovations (e.g. principles, practices) on social matters. It measures whether the employees are aware of their rights and benefits and whether they are able to participate by making initiatives and suggestions. Partnerships and social development are also taken into account. This means, e.g. UN Millennium Development Goals, stakeholder engagement and different kinds of social investments.

• Labour practices indicator measures standards, salary, monitoring, working time and overtime. Standards part focuses on whether there is a code of conduct and whether the international working condition standards (e.g. ILO Labour Standard, ISO 26000:2010, the Global Reporting Initiative (GRI 2013a, 2013b) and UN (2013) Global Compact) are obeyed. Salary focuses on salary levels (national salary averages, all salaries being at least above minimum wages) and that the same salary is paid for the same job. It includes all employees having employment contracts and accident insurances, right to have periodic vacations with pay, sick leaves with pay and parental leaves, freedom of association and collective bargaining.

• Monitoring indicator consists of career development (job rotation, career length), representation of genders and age groups in different duties, same employee benefits for all and the amount of strikes. Working time and overtime measure the weekly working time and weekly overtime, whether overtime work is compulsory and whether there are fines or warnings for not working overtime and whether the overtime salaries of free compensations are paid correctly.

• Training and education indicator focuses on training and education matters as well as skills management and competence development matters. Yearly training and education activities and monitoring of training and education hours per employee are taken into account.

• The skills management and competence development indicator consist of code of conduct signed by all employees and their awareness of code of conduct and company values and principles, the ability to give feedback and show ideas, monitoring the sharing of bonuses and fees, monitoring the transfer of explicit and implicit knowledge, monitoring of investments to training and education, training and education of risk management, precautionary measures and workers' rights.

• Reporting indicator consists of CSR and local communities' matters. The chosen CSR elements cover policy, standards and reporting (qualitative and quantitative aspects) and how extensive they are, GRI activities, commitment to social responsibility (reporting and continuous improvement), risks communication plan and proactive change communication policy.

• Local communities indicator measures the contribution of a company on well-being of the local community by offering direct and indirect employment, paying taxes, community involvement (charity donations and events), community consultation and support reporting policies. Occupational health and safety indicator focus on safety principles, practices, training, audits and monitoring, preventive safety actions such as education and training in first aid and serious diseases, injury rates and monitoring, employee insurances, occupational diseases, fatality rates and monitoring, absenteeism and safety in supply chain.

• The legal–social indicator consists of six categories, which are employment contract and labour unions, employment and salary, working hours and leaves, employees, young employees and employee liability. Employment contract and labour unions part concentrates on whether employees have a right to organise, build a labour union and strike, whether there is a collective agreement of work matters between labour unions and the employer and whether it defines minimum contract terms.

• Employment and salary indicator is about complying minimum wage and minimum period of notice, severance payment and probationary period. In working hours and leaves part there are matters such as maximum working hours and overtime payment, right to paid annual leave, the length of the working week and weekly rest, and the possibility of a study leave.

• Employees indicator measures occupational health service, working safety monitoring, discrimination, protection of personal data and possibility for co-determination. Young employees part focuses on underage employees. Liability part consists of liability responsibilities of a company and its sub-contractors.

Plant-level sustainability index could support and feed comprehensive and multidimensional information into corporate-level sustainability performance management and monitoring tools. This would provide a more realistic picture of actual operations and performance at the plant level to the management-level decision-making processes through the application of sustainability performance indicators. We also believe that the application of a more balanced approach to sustainability performance at the plant level could contribute to better competitive advantage in the long run and to improved sustainability management including CSR and due diligence aspects. The application of the sustainability index requires detailed qualitative and quantitative data on some specific plant and this means that this approach requires close cooperation with the industry and joint work on performance measurement at the plant level. The sustainability index comprises an environmental, economic and social element with legal aspects as an integrated part of each element (Figure 2).

Figure 2 Measuring sustainability performance at the plant level.

2. Material and methodology

The aim of this study was to pilot implementation of social sustainability performance indicators in process industry at the plant level. In addition, this article reviews the implications of social indicators as a sustainability performance measurement tool for overall sustainability performance measurement. The applied set of social indicators is one part of a balanced sustainability index which aims at presenting a balanced and holistic view of plant-level sustainability performance encompassing information on all the different dimensions. The specific objectives of this study were the following.

• To pilot implementation of social sustainability performance indicators at the plant level.

• To review the implications of social indicators as a sustainability performance measurement tool for linking corporate and plant-level sustainability performance management and measurement.

• To benchmark the obtained results with previous studies and relevant literature.

The research material covers the plant-level results of the social sustainability performance assessment using a set of social indicators. The development of the set of indicators is described in detail in our previous article (cf. Päällysaho et al. 2012; Husgafvel et al. 2013), encompassing presentation of applied core indicators; supply chain (19 sub-indicators), social innovations (5 sub-indicators), labour practices (34 sub-indicators), training, education and competence management (13 sub-indicators), reporting (13 sub-indicators), occupational health and safety (15 sub-indicators) and legal aspects (29 sub-indicators). The present research methodology was based on sustainability assessment (Hak, Moldan, and Dahl 2007; Bell and Morse 2008; Sheate 2010; Dalal-Clayton and Sadler 2011) in accordance with the theoretical framework of sustainability science (Kates et al. 2001; Komiyama and Takeuchi 2006). The pilot implementation of the developed indicator set was carried out in the Ruukki Lappohja plant which manufactures welded tubular steel products. The plant-level assessment was carried out in close collaboration with the industry partner covering both qualitative and quantitative aspects of social sustainability performance. The data from the pilot implementation were gathered in the social sustainability indicators section of the overall sustainability index and the received answers in each indicator and associated sub-indicator group were assessed. Then the total index value for social indicators was calculated.

The evaluation method was based on the questionnaire that was sent to the participating company. Each category consisted of a number of questions that represented the key aspects of the category in question. There were typically three answer options: ‘yes’, ‘no’ and ‘not known’. In addition, some questions contained more alternatives that were scored accordingly. By this manner, each category had maximum and minimum points that can be achieved. Therefore, the min–max normalisation method was employed (OECD 2008) and the scale was formed between  − 5 and 5 where  − 5 actually represents the best possible score of the category and +5 represents the worst. There was no separate weighting method employed, indicating that all of the categories were equivalent. However, some unintentional weighting occurred since the categories encompassed different number of questions. Therefore, some questions affected more to the total score than the others. The visual presentation of indicators results was outlined in a way that gives  − 5 as the best result and +5 as the worst case scenario. The logic behind this was that social performance below the zero level (green columns) indicates good performance and above the zero level (red columns) indicates poor performance.

Before the pilot implementation phase, several workshops and meetings were arranged and our previous research narrowed down the set of social indicators to a set of seven core indicators: location, supply chain, social innovations, labour practices, training, education and competence management, reporting and occupational health and safety. In addition, the indicator set includes legal aspects in a form of a legislation checklist encompassing the following issue areas: organisation rights, labour unions, employment contract and salary, working hours and leaves, employees and health, young employees and liabilities.

3. Measuring social sustainability performance at the plant level

The total index value (Figure 3) for the pilot implementation of the social indicators and associated sets of sub-indicators was  − 4.5 (scale of  − 5 to +5). This indicates a very high level of social sustainability performance at the plant level in the case of Ruukki Lappohja plant. Comments on those scores are presented in Table 1.

Figure 3 Social sustainability total score.

Table 1 Comments on the social indicator scores.

Social indicator	Score	Comment
Location	− 4.8	Score is based on the WGI (2013) framework
Supply chain	− 4.4	Lack of social risk management auditing covering the whole supply chainNo information on whether suppliers communicate social responsibility requirements to workers and sub-suppliers
Social innovations	− 5.0	The studied plant was engaged in proactive initiatives
Labour practices	− 4.4	Probationary period and period of notice could be longer, even though both are at very high level already
Training, education and competence management	− 4.1	All employees have not signed the code of conduct
Reporting	− 5.0	Not known whether reporting covers policies concerning local community relations in addition to actual activities in this field
Occupational health and safety	− 3.5	No monitoring and reporting on (1) safety in supply chain covering suppliers and contractors on site and (2) factory performance in relation to average field of industry performance in this field
Legal aspect	− 4.9	The most essential parts of national labour laws are obligatory to obey, so results should not vary inside country. Labour law sector is mainly national and concepts are determined nationally, e.g. ‘young worker’ which makes comparing national system to others more challenging

The location indicator was based on the WGI (2013) framework encompassing aggregate indicators covering six dimensions of governance (Figure 4). These indicators are cross-country governance indicators covering over 200 countries (between 1996 and 2010). The WGI framework is based on multiple data sources based on global reporting by survey respondents, non-governmental organisations, commercial business information providers and public sector organisations (WGI 2013).

Figure 4 Location indicator score.

The WGI indicators are under the broad categories of (1) the process by which governments are selected, monitored and replaced (voice and accountability and political stability and absence of violance), (2) the capacity of the government to effectively formulate and implement sound policies (government effectiveness and regulatory quality) and (3) the respect of citizens and the state for the institutions that govern economic and social interactions amongst them (rule of law and control of corruption). The location indicator based on the WGI framework was chosen because it reflects the societal, political and regulatory conditions of specific countries and thus it can support cross-country comparisons and evaluation of country-level trends over time.

The WGI aggregate indicators are based on 30 individual data sources covering enterprise, citizen and expert survey respondents in both industrial and developing countries. Four different types of source data are used: surveys of households and firms, commercial business information providers, non-governmental organisations and public sector organisations. The WGI approach rescales and combines the 30 data sources and produces the six aggregate indicators using a statistical methodology. The indicators are reported in standard normal units ( − 2.5 to 2.5) and in percentile rank terms from 0 to 100 (WGI 2013).

The legal aspect (Figure 5) covered six key elements of social legislation in the context of labour law: collective rights, termination of employment and salary, working hours and leaves, the rights of the employees (e.g. anti-discrimination and employee data protection), the position of young employees and liability questions. In essence, the tool measures the extent to which these elements are covered in a country's legislation. The measurement is based on individual legislative elements, such as the length of the working week or minimum period of notice. Also reflecting some apects of the high location indicator score, the Lappohja plant performed well in the legal aspects evaluation. Since the measurement tool is based on the standard set by European and Finnish legislation, the result was expected. The social legal index provides more useful information when making comparisons between plants situated in different countries.

Figure 5 Legal aspect score.

In general, labour law is highlightedly national. On a national level, collective labour agreements made in certain areas of business. The role of the agreements varies a lot from country to country. Therefore, it is challenging to make comparisons at the European or global level. For example, concepts used in legislations vary dramatically: e.g. determination of ‘young employee’ can practically be of any age depending on country and culture. In Finland, labour legislation consists, on one hand, of the norms that regulate the legal relationship, in other words the employment relationship, between the employer and the employee (individual labour legislation) and, on the other hand, the collective labour legislation.

In the social sustainability index tool, majority of questions are answered ‘yes’, ‘no’ or ‘not known’, which works quite well in most cases. However, deterioration in, e.g. working conditions or possible cost cuts in social investments are such matters that cannot easily be seen in the index results, because the whole activity does not stop but reduces or deteriorates. Hence, in the index tool there should be a possibility to add quality factor when this is needed. A quality factor could also be helpful in finding more variation in the index results.

4. Linking corporate and plant-level performance

Measuring social sustainability performance at the plant level can directly contribute to corporate responsibility reporting and overall corporate-level sustainability management. Better understanding and concrete information and data on plant-level sustainability performance can support corporate-level reporting through, e.g. Dow Jones Sustainability Indexes (DJSI) World and DJSI Europe frameworks (DJSI 2012a, 2012b) in collaboration with SAM (2013a, 2013b) or the AccountAbility's AA1000 series (AccountAbility 2013). Potential linkages between corporate and plant-level social sustainability performance management and reporting (case Ruukki) are presented in Table 2.

Table 2 Potential linkages between corporate and plant level.

Existing corporate-level framework (Ruukki)	Potential plant-level feedback
GRI (2013a, 2013b)	Plant-level social sustainability performance reporting with special emphasis on the associated reporting indicators (social category) covering the following sub-categories: labour practices and decent work, human rights, society and product responsibility
Ruukki Code of Conduct (Ruukki 2013b)	Plant-level information on social sustainability elements: compliance with laws and regulations in force, good practices, human rights, values (e.g. safe and responsible work and continuous learning) and high ethical standards (good business partner and a responsible corporate citizen in the community)Information on the compliance of suppliers and sub-contractors with the code of conduct and with national laws and regulations of the country in which they operate
UN Global Compact (UN 2013)	Plant-level information on social sustainability performance encompassing human rights (for example rule of law, value chain management covering potential both upstream and downstream human rights issues, human rights due diligence, worker productivity and good community relationships), labour and anti-corruption
The AA1000 Standards (AccountAbility 2013)	Plant-level information on elements of sustainability assurance and stakeholder engagement to support integrated reporting and assurance (for example stakeholder inclusion and engagement, material issues and responsiveness)
ISO 26000:2010	Plant-level information on (1) the principles of social responsibility: accountability, transparency, ethical behaviour, respect for stakeholder interests, respect for the rule of law, respect for international norms of behaviour and respect for human rights and (2) social sustainability core subjects: organisational governance, human rights, labour practices, the environment, fair operating practices, consumer issues, and community involvement and development
SAM corporate sustainability assessment (SAM 2013a, 2013b)	Plant-level information on the components of the social dimension: social reporting, labour practice indicators and human rights, human capital development, talent attraction and retention, corporate citizenship and philanthropy and stakeholder engagement
DJSI (DJSI 2012a, 2012b)	Plant-level information on sustainable best practices to support the integration of sustainability considerations into investment decision-making

A corporate sustainability has been assumed to increase company's long-term value for shareholders (Herman and Nair 2013). From the business perspective, investors and owners, who consider that sustainability is not only a cost (Heart and Milstein 2003) but also an important subject, may also profit from this (Hildebrandt 2011). However, it is important to assimilate, these investments are performing benefit and possible competitive edge mostly in a longer term, not in quarters.

The target of using sustainability indices is to provide information for different interest groups, showing interest of the company in sustainability issues and create a credible benchmark for corporations.

By using sustainability index, with chosen indicators with respect to sustainability principles, it should also be possible to estimate the sustainability of investments, alternative technologies, the type of project or procurement, etc., and it should provide an assessment also of the economic aspects, because sustainability is not free of costs (Cantlon and Koenig 1999). This is important information to the decision-making stage. The company could also inform an interest group, such as authorities, politicians, investors, customers and sub-contractors, about the benefits of environmental protection and the price of that (Renning and Wiggering 1997).

Corporate sustainability has become a valuable tool for exploring ways to reduce costs, manage risks, create new products and drive fundamental internal changes in business culture. Sustainability thinking and practice from strategic level to operations is not a trivial task and it requires a vision, commitment and leadership and it requires systematic approach with a management framework (Azapagic 2003). Sustainability has to be an integral part of the business and like all other business activities, it must be managed in an appropriate way (Azapagic 2003).

Environmental strategy has to go hand in hand with business strategy since environmentally strategic decisions are expressing adaptation to opportunities, threats and constraints of the environment (Papadakis, Lioukas, and Chambers 1998). Moreover, as Wagner and Schaltegger (2004) have showed, one key factor for positive relationship between environmental and financial performance is the strategy choice of the company. Companies should therefore seek to integrate the financial goals with the environmental goals to optimise the profitable relationship between those.

Supply chain is one key area in the context of social sustainability performance measurement, and application of plant-level indicators can contribute to better understanding and control of these aspects also at the corporate level. In general, supply chain management in Ruukki (2013a, 2013b) covers compliance of business partners, suppliers and sub-contractors with code of conduct as well as suppliers management system including regular suppliers evaluations (e.g. management responsibility and risk management) and taking into account ethical values in the general terms and conditions of sourcing contracts. Plant-level indicators can also assist in better management of local stakeholder relations through continuous feed of accurate information to support decision-making and planning of, e.g. communication strategy.

In addition, the application of the social sustainability indicators can produce plant-level information to support management-level reporting for many other social performance assessment instruments such as RepRisk (2013) (e.g. social aspects in the supply chain, in accordance with international standards and community and employee relations), or responsible investment frameworks such as the FTSE4Good Index Series (2013) (e.g. links of ethical aspects with social responsibility), the Ethibel EXCELLENCE Investment Register (2013) (can support eligibility for sustainable or ethical investments through better than average performance in a sector in terms of CSR) and the OMX GES Sustainability Finland Index (2013) and the Vigep Aspi Eurozone Index (2013) (e.g. reporting of proactive social sustainability performance measurement results).

5. Discussion

The successful previous development work for and pilot implementation of social indicators in Ruukki Lappohja plant indicates that plant-level social sustainability performance can be measured and linked to overall corporate-level social sustainability management. The pilot implementation indicated both many strong points and areas that require further focus and development efforts such as sustainability management in the whole supply chain.

It is important to notice that no index can give the whole picture. At best, it is only a tool, which provides appointed information for decision-making. In addition, the nature of sustainability requires users to make trade-offs between or amongst different aspects of sustainability. For example, actors might have to select between using recycled material that must be trucked over a long distance or using locally provided virgin material (INVEST 2013). There are also big differences between areas and countries, such as public health care in India or Finland and so, the importance of social aspect might rise there.

Singh et al. (2012) noted that sustainability indicators address the complex and complicated information on corporate performance, e.g. in the field of social improvement. There are many indicator sets and it can be complicated to select specific indicators for different aspects of sustainability such as social well-being (Joung et al. 2013). Assessment of social impacts is difficult using only traditional quantitative indicators (Dreyer, Hauschild, and Schierbeck 2010). According to Labuschagne et al. (2005), social criteria do not receive due consideration in the context of measuring sustainability performance. Labuschagne and Brent (2008) stated that checklists and guidelines covering the social dimension of sustainability performance should be applied to technology and project management. They also noted that quantitative social indicators are not currently practical in the process industry and noticed the need to take into account stakeholder perspectives using the bottom-up approach.

In addition to corporate social performance measurements, companies have impacts on surrounding societies. For example, Barrera-Roldán et al. (2003) developed an Industrial Sustainability Index that covers In-Walls and Out-Walls evaluation. By this approach, the environmental, social and economic sustainability is evaluated inside the company as well as its contribution to surrounding societies. Similarly, Azapagic (2004) stated that industries have a great impact to surroundings by means of employment and wealth creation. Therefore, the companies' social responsibility should cover not only their own operations and supply chain management, but also their contribution to the surrounding societies. However, as stated earlier, the measurement might be difficult by using only quantitative indicators.

Furthermore, even though social sustainability is highly important, it seems that environmental and economic aspects are dominant in developed sustainability evaluation metrics. This is the case with LInX-index (Khan et al. 2004), sustainability assessment tool for energy systems (Begic and Afgan 2007) as well as indicator sets developed for industry sectors, such as sustainability indicators for steel industry (World Steel Association 2011). This might be due the fact that social sustainability is a difficult aspect to measure numerically, and therefore it can be easily neglected when developing sustainability metrics that are based on numerical evaluation methods.

Application of plant-level social sustainability performance measurement tools such as social indicators can contribute to overall sustainability management and assessments. Previous writings and studies have identified the growing importance of broader scope and balanced approach to sustainability covering social sustainability (Azapagic 2004; Krajnc and Glavic 2005; Singh et al. 2007, 2009; Graedel and Allenby 2010), and noted the lack of focus on and performance measurement tools for social aspects of sustainability (Brent and Labuschagne 2006). There is a need for an integrated approach (Wiedmann, Lenzen, and Barrett 2009) and appropriate sustainability performance assessment tools such as indicators of progress towards sustainability (Dahl 2012; Baumgartner 2008; Azapagic and Perdan 2000; Narodoslawsky and Krotscheck 1995). For example, CSR is increasingly considered to be an essential element of business sustainable development in the construction industry (Zhao et al. 2012).

6. Conclusions and recommendations

Our previous research produced a set of indicators covering a broad range of social sustainability aspects, and the application of these indicators makes it possible to carry out a comprehensive plant-level sustainability performance measurement to support strategic management and corporate-level decision-making. In this study, we applied this set to the measurement of plant-level social sustainability performance, and the results of the pilot implementation of social indicators in Ruukki Lappohja plant indicated a very high level of social sustainability performance and that the studied plant was engaged in proactive initiatives in the field of social innovations. The following are minor areas of improvement.

• Social risk management auditing covering the whole supply chain.

• Suppliers communication on social responsibility requirements to workers and sub-suppliers.

• Signing of the code of conduct by employees.

• Reporting on policies on local community relations, safety in supply chain covering suppliers and contractors, and factory health and safety performance in relation to average field of industry performance in this field.

Considering supply chain and cross-effect issues including both upstream and downstream actors and activities, it is evident that further research and development efforts are needed. Addressing sustainability challenges in process industry requires a comprehensive approach to sustainability, encompassing all its intertwined dimensions and elements. The focus of this article is social sustainability which has often been absent from sustainability performance measurement frameworks and reporting initiatives. Social sustainability is a major focus area in the context of many current initiatives in the field of sustainability and responsibility including, e.g. supply chain management, CSR, reporting frameworks, innovation and social due diligence of production activities and products. Integrated approaches such as the application of a set of composite indicators, looking beyond traditional system boundaries and focus on dynamic linkages with local emphasis can be beneficial in the further development of social sustainability performance management and measurement. In practice, this could mean, for example stakeholder identification, inclusion and engagement, and comprehensive supply chain management covering both upstream and downstream activities and various cross-effects.

Notes

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