End of July 2012 Deloitte published the report ‘Toward Zero Impact Growth – Strategies of Leading Companies in 10 Industries’, summarizing outcomes of the work of Deloitte Innovation and John Elkington (Volans) around describing the need for a new breed of industrialists, called the ‘Zeronauts’, and a new measurement regime around ‘Zero Impact Growth’. It was clear that Elkington’s new book would become a megaseller, but the Deloitte report that focused more around the measurement of sustainability performance has clearly hit a nerve too – thousands of hits and report downloads on the website http://t.co/Iqo0QePl just within a couple of weeks already send a clear message. Why has the report has attracted so many readers:
The call for a green and inclusive economy has never been so loud. In the run-up to the Rio +20 conference the UN Global Compact called for a ‘quantum leap’, and the World Business Council for Sustainable Development was asking their 200+ members to ‘change the pace’ as necessary precondition on how to get there in a timeframe until 2050, with many crucial decisions to be taken way earlier, many of them in the next couple of years. However, how would we know that we are successful, quick enough and effective in this transition, ensuring a new economic model that allows growth in the future as well (demographics simply demand that), but that this growth balances with the planetary limits and human well-being (or should we be more drastic: human survival)? Honestly, not one industry, not one company on earth is able to tell us that at the moment!
Our current appetite for radical transformation surely isn’t the way forward. Looking at the time span between the first and second Rio conference, we have altogether learned how to be ‘less bad’, without knowing what is actually ‘good’ overall performance. We are flying blind on many levels while we clap shoulders for marginal efficiency improvements, and even often don’t know if our improvements are causing extra burdens for fellow human beings. The current reporting regime – the GRI G3.1 Guidelines – asks for sustainability context information in order to be able to define report content, but reporters dramatically fail to report on them due to many reasons. If it is the fact that the GRI indicators only ask for ‘less bad’ while leaving sustainability context to the foreword of the board or CEO (which normally do not deliver on that task), the fact that report boundaries are in most cases limited to the annual report boundaries and not to real impact (the Guidelines still offer a sneak-out ‘and/or’ option), or simply due to the fact that often stakeholders too do not understand the sustainability context of a reporter’s actions and therefore materiality is way too ‘negotiable’, it is becoming painfully clear that this is not enough. What we need is a North Star benchmark, a joint paradigm that allows all industries (and companies as part of them) to identify, adapt and perform towards that common vision. The Deloitte report offers ‘Zero Impact Growth’ to be that North Star, with the necessary Zeronautics as measurement regime. This is not yet fully developed and needs the involvement of all industries and stakeholder groups. Elkington’s book not only shows a set of mental mindsets on how to get there (the 5-step ‘pathway to zero’ model), it also shows ample examples of organisations and individuals that already work towards Zero Impact Growth. The paradigm embraces ideas like the circular economy, cradle-to-cradle, bottom-of-the-pyramid or shared value creation as practical concepts in the need to speed up, whilst Zero Impact Growth and the Zeronautics help to assess the effectiveness of their partial contributions towards the overall targeted North Star.
Based on the pathway to zero model Deloitte developed a maturity model and has assessed 65 leading companies on how far they are in this mental journey. All of these companies are either part of the GC Lead program, the C4C or Water mandate campaign. The outcome of the assessment in 10 industries is described in Deloitte’s report, both as a complete outcome as well as the single performances of the 65 companies. Figure 1 illustrates the outcome in the 5 categories.
Figure 1: Results of the Zero Impact Growth Monitor 2012
Furthermore the report also reveals 4 major gaps that were visible through the ZIG Monitor: a major comparability gap (that is why all rankings and ratings tell us different stories about best-in-‘their’-class performance), major gaps between the overall strategy of organizations towards Zero Impact Growth and furthermore the real capabilities of sub-strategies to deliver on the organization’s overall strategy (it simply doesn’t add up in many cases), and finally gaps in the balance of sub-strategies and major performance gaps in and between industries. And all of that while the report only assessed companies that see themselves as leading in sustainability.
The Deloitte report gives us a baseline picture of where we really are, but also assesses the brakes, the accelerators and the options for a ‘joint flight’ towards adapting Zero Impact Growth as the new basic and minimum paradigm that we all together need to agree on, recognizing that there is a whole world to win behind Zero Impact Growth, some call it regenerative or restorative growth. It’s a process that can be a door-opener for cross-industry fertilization, for social entrepreneurship, for collaborative action to develop true costing, true pricing and true taxing initiatives (so true valuation of resources, goods and services) as part of the Zeronautics we need desperately and that can be breakthroughs to real ‘integrated reporting’ (in which the sustainability context gap is finally closed).
I once sadly noted and called our current way of acting ‘Dilbertarian Sustainability’, it’s now time to have the courage and the willingness to go beyond: ‘It’s time to be steered by the stars, not by the light of each passing ship’, as mentioned by Omar Bradley many decades ago. It’s time we start doing exactly that. Be part of the ‘joint flight’ and see where you are by applying the Zero Impact Growth Monitor to your own organization.
[This blog was originally published in the ACSRN newsletter for October 2012]