ve achieved with the resource (i.e. the opportunity cost). The spread between both figures is called value contribution. The value contribution thus shows how much more or less return the company has generated with the resource in comparison to the benchmark. In the last step of the evaluation the sum of all value contributions is divided by the number of resources considered in the assessment. The result of that division is called the Sustainable Value.
Sustainable Value Henkel 2004
Taking a set of resources into account (click to enlarge).
In our example, Henkel generated a Sustainable Value of about € 1.1 billion in 2004. In other words, Henkel managed to generate € 1.1 billion more gross value added with its set of six resources than the average company in the German economy. The Sustainable Value as an absolute figure thus shows, how much more (positive Sustainable Value) or less (negative Sustainable Value) return a company generates with a given set of resources in comparison to a benchmark.
As an absolute monetary figure Sustainable Value depends on company size. We tackle this problem by relating the return of a company to another indicator representing the size of the company: its opportunity costs. The resulting indicator is called the Return to Cost Ratio (RCR). The Return to Cost Ratio puts the return of a company in relation to the return the benchmark would have created with the same set of resources (opportunity cost).
Return to Cost Ratio
The Example of Henkel 2004.
In 2004, the gross value added of Henkel was 1.6 times higher than its opportunity costs. In other words, Henkel used its six resources 60% more efficiently than the German national economy on average.
The RCR shows by which factor a company uses its resources more or less efficiently than a benchmark. A RCR > 1 thus shows that a company is using its resources more efficiently than the benchmark. A RCR < 1 stipulates that a company is using its resources less efficiently than the benchmark. A RCR of 1 : 2 hence shows that a company is using its resources only half as efficiently than the benchmark. Generally speaking the RCR represents a relative measure of corporate sustainability performance in relation to a benchmark.