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Integral Thinking and True Materiality – Part 1/7: Introduction

This 7-part series has been first published on Sustainable Brands between late January and early March 2016 as a 6-part series and a follow-up by Bill Baue, co-founder of Convetit and the Sustainability Context Group. It captures the essence of my thinking I was able to gather through the extraordinary work of the Reporting 3.0 Platform, GISR and the ThriveAbility Foundation in 2015. What came out is a structure that I called a ‘new impetus embracing purpose, success and scalability for thriving organizations’. I am reposting the original 6 parts here and add a part #7 with reflections of others. This is part 1/7.

If 2015 was the year that inspired new hope in sustainability with the publication of the Sustainable Development Goals (SDGs) and the success of COP21 in Paris, 2016 is year the rubber needs to hit the road when it comes to implementation and impact. So rather than add to the end-of-year ‚10 best of this and that’ listing stampede, instead I have worked on this 6-piece series summarizing essential learnings from 2015 to focus priorities and actions for 2016.

Reflecting on 2015, my own work focused on front-end developments needed in three interlinked areas:

  • Reporting: I am curating & facilitating the Reporting 3.0 Platform, a community of several hundred concerned global individuals from various constituencies that instigates ‚Reporting for a Green & Inclusive Economy’, and looks into the greater whole of reporting, accounting, data architecture, and new business models. Helping aligned constituencies to build the necessary glue between these four interconnected areas the platform has organized 3 annual conferences, various Transition Labs and just presented their ‚Call for Participation for 2016’, offering participation in four ‚blueprint projects’ to help bridge gaps between the different areas mentioned. See: reporting3.org
  • Ratings: As Director for Engagement at the Global Initiative for Sustainability Ratings (GISR) I am helping with the implementation of CORE, the Center of Ratings Excellence, grounded around the GISR ‚Framework’ (Principles & Accreditation), the GISR ‚Hub’ (a database with more than 100 data points on more than 440 rating products from 125 or so companies globally), the ‚Labs’ in which companies, investors and rating agencies can work on use cases for that increased transparency and work on continuous improvement of ratings; and finally on training and ‚convenings’ for the community, building a greater knowledge base around CORE. See: ratesustainability.org
  • ThriveAbility: for several years I have been involved in the ThriveAbility Foundation as a co-founder. The Foundation published ‚A Leader’s Guide for ThriveAbility’ last summer and has started the process to scale up the ThriveAbility equation, innovation roadmap and index development through masterclasses and pilot projects, with plans for a multi-year development to deliver on the index by 2019. For an introduction about ThriveAbility, please see: http://www.sustainablebrands.com/news_and_views/new_metrics/bill_baue/intro_thriveability_next_stage_development_sustainability

Circling back to the SDGs and COP 21, instead of following the hype around them, I continue to take a longer-term perspective towards what I call ‚integral thinking and true materiality’. The below diagram structures these areas in which activity is most needed, and of course Reporting 3.0, GISR and the ThriveAbility Foundation are great hosts for ongoing work in these areas. It is not without reason that they form the basis of my work portfolio.

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Diagram 1: the new reporting impetus – integral thinking and true materiality in reporting for a green & inclusive economy.

This series will focus on the different parts of the diagram. It is a distillation that might have the potential to a) define a structure for what I call ‚integral thinking and true materiality’, and b) instigate various pockets of needed change and areas of activity. The additional parts will unfold as follows:

Part 2: The need for integral thinking and true materiality

Part 3: Purpose clarification defines connectedness

Part 4: Success definition defines true future value creation

Part 5: Scalability opportunities define size of impact

Part 6: Integral thinking and true materiality define trust, innovation and resilience

Part 7: Reflections

Each part will build on earlier parts, and together they will explain the above diagram. Each part will also look at the necessary change needs and focus areas within an organization. Fully developed integral thinking and true materiality can become a real game changer!

 

 

 
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Posted by on March 8, 2016 in Thriveability

 

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Homo homini lupus – the failing answers to the refugee crisis

A month ago I published ‘The long sustainability shadow of the refugee crisis’. Today, with hundreds of readers and about 200 reactions richer, I am writing a sequel to this blog. It sums up what I heard, both negative and positive, both disgusting and heartening. My inbox was a showcase of how torn our society worldwide seems to be.

First, what struck me most was the fact that there seem to be just two camps on the issue: those that see refugees as the source of all evil, and those that see refugees as the opportunity to learn and thrive in a future to come. There’s no difference between that in Germany, UK, US, Netherlands (reflecting the countries most of the reactions came from). And there’s nothing in between.

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Secondly, it was strikingly clear that those in the haters camp are simply not able to envisage a positive future mindset. All of their argumentation stems from whatever source from the past they could find and sucks up all negative provocation of current refugee misbehavior without reflecting the why. Furthermore they are amendable to all the hoax and purposefully faked stories. A German website (see http://hoaxmap.org/index.html) collects these fake stories and uncovers the bullshit.

What doesn’t come to mind to them at all is the fact that the way that we in the Western world exploited the refugee’s countries of origin in the past might have been unfitting, that we were for a couple of hundred years protagonists for creating the situation we now face, from stuffing dictators to exploiting resources just for our own benefit, from climate change up to being asleep at the wheel and cynic when the first signs of the refugee crisis showed up (see Lampedusa). Their mindsets stop at their very own boarders, it doesn’t even need fences for that. I refuse to see them as Europeans; their national pride, their distorted sense of belonging and belongings (my home is my castle) evaporates a potential to develop a higher level of consciousness. The fear that refugees will take away what belongs to them is the primary source of the hate.

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They are ice-cold when looking at the situation, there is simply no appreciation about what the refugees have gone through. In spiral dynamics terms they are stuck in blue and orange mindsets in which self-interest prevails and dominates all thinking. The fact that Europe has a huge solidarity problem is something that they of course refuse to accept, they totally ignore it. The below map shows the whole dilemma frighteningly well:

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But there is light at the end of the tunnel. The Bertelsmann Foundations recently published a study in which they state that the majority of the EU citizens wants a European response to the refugee crisis and is in favor of fairly distributing the burden amongst all member states. They strongly reject the idea of individual countries acting unilaterally. 79 percent of all Europeans are in favor of a common European asylum and migration policy. Also 79 percent want a fair distribution of asylum seekers across all countries of the EU. A majority of around 70 percent also supports the demand that those states, which refuse to accept their share of the responsibility, should receive less money from EU coffers. While this is positivity news, the study also shows how decided Europe is between East and West. While a majority of 85 percent in the old EU member states think that the burden of asylum seekers should be fairly distributed, only 54 percent in the new member states support that view. Also, whereas in the old member states 77 percent demand that those states, which refuse to accept their fair share of asylum seekers, should be subject to financial penalties, only 41 percent of the citizens in the new member states are in favor of such a measure (see study here).

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Thirdly, and funny enough, I was accused for not being able to exactly prove why I think that the refugee crisis will in the end be a blessing in disguise for Europe. As if one is not allowed to have an opinion without having a glass bowl at home that accurately proves future predictions scientifically. Or for not having a time machine ;-). Of course, nobody can predict the future, and what will come out over the next years and decades will mainly be dependent on how much Europe will now unite (its called a ‘union’) and be able to manage. The European question will stand or fall around this issue. To me, this is all connected to how we will develop the innovation potential of the refugee inflow. For many years we crow about ‘Diversity’ – and here it is. Fresh blood, cultural views and interpretation of whats needed for the world that is a village, knowing that scalability of solutions will be essential globally. The crowd wisdom of refugees can be a game changer.

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Fourthly, let me thank all those that shared positive comments on the blog. Looking at the percentages – which are of course not representative – there was a 85% positive halo effect on this first blog. The haters camp always repeated their one-dimensional backward-looking argument: immigration didn’t succeed in the past, so it can’t succeed in the future as well. It costs us money that our own people should get. It takes jobs away that belong to us. They get our apartments that we subscribed for. There is no understanding that Europe will fall apart – damaging all economies multiple times more (see alone the Schengen discussion) – if we continue segregation, division and mercilessness.

Summing it all up, what we can state so far:

  • The majority of Europeans have a different mindsets than the refugee-haters; it doesn’t make sense to try to convince them, their experienced life conditions won’t let them change easily. The only way to dry up their dangerous mental matchboxes is to educate the next generation of Europeans that will make them run into opposition every time they light up one of the matches. Constant dripping wears away the stone.
  • Europe so far has a devastating track record in explaining to their citizens what give and take as well as solidarity and values really mean in the European context. It has both to do with awareness about Europe’s history in leading to some of the current developments (a connection often not made as it seen as ‘normative’) as well as to help citizens understand the need for immigration, the management of integration and designing circumstances in which the value added by immigration can come into full fruition. I appreciate the outcome of last week’s German Summit of Industry Federations that wholeheartedly supported Angela Merkel’s resolution towards the ability to gain strength through a proactive immigration policy, despite all opposition inside the country and from the European countries that are backsliders in taking their fair share of the solidarity value effort (see here).
  • Eastern European countries are in a cocooning mode while asking Brussels to pay for the cocoon and support if the cocooning doesn’t work and will have negative economic impact. This is the opposite of how Europe works and what to expect. If you take, you have to give. The developments in Eastern European countries, now having affected Austria (that historically always saw itself as the gateway to Eastern Europe) as well, is stubborn, demagogic and dividing. It also shows that becoming a member of the European Union was mainly built on economic benefits than on values like solidarity. Nation egos are still the main ‘elephant in the European glasshouse’.
  • We have yet to understand that a 500 million people strong European Union has not only an obligation, but also a benefit from one million refugees per year and that we need an ongoing capacity to deal with these numbers every year, spread over the whole EU. We haven’t understood the impact of climate change and have yet to define the term ‘climate refugee’. It doesn’t make sense to define ‘secure countries of origin’ when the life conditions don’t allow a life in dignity in these countries just because the political system wouldn’t imprison or kill someone that got deported back. It is in my view therefore already problematic to distinguish between ‘political’ refugee and ‘economic’ refugee. There are more than enough economic reasons to flee, based on the underlying sustainability context. Of course checking the circumstances is still an appropriate means of differentiation, I don’t believe in ‘one process fits all’.
  • The current discussions about ‘healing the problem at the source’ needs to take the broader and holistic/systemic developments into account. Otherwise we continue to throw money at countries with little to no effect.I do believe that we will continue to have 1-2 million refugees in Europe every year, no matter how many fences we build at the boarders. Refugees will find other routes. Defending our borders at that massive rate of refugees will be a bloody undertaking and will ruin Europe’s reputation. Already now there are hundreds of thousands of new refugees waiting in Libya. If we find a way to agree on a fair share in Europe and find the resources to reduce the worst conditions in the country of origin, further escalation can potentially be prevented. The systemic aspects around climate change, poverty and demographic effects won’t go away for at least another 30 years. Let’s also please keep things in relation: 1 million refugees per year mean 0,5 % of the total European population and will just protect us from social systems drying out and declare bankruptcy. It will be some of the refugees that will pay part of our pensions in the future. Yes, it does cost money in the beginning, but the payback will be rich.

In finishing this blog post I was reminded of David Suzuki’s words below. What was written to describe environmental degradation in my view also applies to Europe’s future if we’re not finding minimum agreements on how to manage the refugee issue in the long-term, making it a major success story of the EU and support its reason to be. And by that it is also a true sustainability issue. Let’s prove ‘homo homini lupus’ wrong!

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Posted by on February 28, 2016 in Thriveability

 

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The long sustainability shadow of the refugee crisis

For those of us working in the sustainability field for many years, sometimes decades, following the current discussion about the ‘refugee crisis’ hurts. We are used to think longer-term, at least those of us who are not just on the compliance path of following a reduced understanding of sustainability. Remember, wasn’t it people, planet and prosperity, wasn’t it intra- and intergenerational equity, and wasn’t it about human’s behavior to remain safe on this planet, offering limited resources for up to 10 billion people, recognizing that there will minimally be 3 billion more people by 2050-2100. Sustainability was asking us to get ready. The current refugee crisis painfully shows how far we are away from that. What surprises me most is the fact that none of this comes right out of the blue! Politicians saying to be amazed of what has happened in the last 12 months should look into the mirror and ask themselves why they couldn’t have seen the big lines of development and have allowed themselves to be eaten up by the daily nitty-gritty. What went so awfully wrong?

Let’s go back in time. Weren’t you amazed in school when you looked at a continent map like Africa and saw the straight lines that showed the borders of all these African and Middle East countries? This is one of the most visual leftovers of colonization, lines that got drawn 100-150 years ago. Why bother, a desert is a desert, so these lines were drawn in the interest of those colonizing, not those that lived there hundreds of years, tribal heritage, cultural sights, trade routes, etc.. While colonizing is over the scars sit deep in the minds of generations and generations of Africans and Arabs, remembering very well who abused their habitat for resources, threw money at dictator regimes in a broad variety of these countries, only to keep the revolt down and continue to ‘dig, baby, dig’ for the growing need of Western consumerism. Development aid for decades ran into the wrong canals, often only a little portion reached those in need, while Westerners remained rather easy on these fatal flaws, it simply continued to keep people quiet and secured easy access to resources. Most of the oil producing countries were or are based on a brutal regime of a dictatorship of a single or a couple of families that managed to keep the poor majority somehow in a ‘too much to die, too little to live’ state, while building a life of affluence for themselves. Sure, there was growing awareness that our country’s systems and ideas about ODA failed, we needed more help for people to help themselves, avoiding what went wrong in the past. But can we say we succeeded? In my view we can’t, we never solved this problem. Did we really do the best we can? Just look at how wimpy we created development aid programs, how unimportant a development minister always was and still is, and look at the history of cuts in their budgets to close other holes in the overall budget. Look at how many countries really succeeded to spend at least 0,72% of GDP for development aid, the minimum agreed upon, hardly ever delivered upon. And why? Because it was known it was mostly useless, the real problems were never tackled since it meant stop funding dictatorships.

And then climate change, demographic developments, poverty and transparency through social media created the brew that lead to the Arab spring. Dictatorships fell because of the inability to react to massive poverty created by more and more climate-related droughts. Look at Libya and Egypt as examples. The tragedy of that situation simply was that those revolted and took dictators down had no education and hardly any help how to build strong democracies, they never learnt it. This gave space to regained religious and tribal power, awakening from their decades of suppression. While the economy was down and no improvement in sight fights between myriads of little new parties, partially religiously motivated, went on and on. Instability, just droughts and poverty, no jobs, no trade, no life. People started moving.

In other parts of the Middle East existing regimes fight against religiously motivated groups, with IS the most radical one, trying to re-establish an Islamic caliphate. It created new alliances in which the West changed fronts all too easy, the Assad regime in Syria is the best example. While he was called a tyrant some years ago, throwing poison gas against his own people and the West condemned him for that, he is now a ‘partner in crime’ against the IS. The country facing climate-related effects and related poverty is now totally demolished. There’s no hope for anyone trying to raise a family in dignity, people fled to Turkey, Lebanon and Jordan in the first instance.

Two decades earlier Russia and the US failed in Afghanistan, and whoever is still there from the Western alliance faces the Taliban when they attack the semi-democratic leaders  through suicide bomb and other terrorist attacks. Together with Irak it remains unstable terrain, one can easily see the hesitation of Western countries to totally withdraw the remaining armed forces from there. Droughts and uncontrollable floods continue to pester these countries every year, including also Pakistan. No wonder more and more refugees also started to move from there. The ongoing struggle between Saudi Arabia and Iran is on the surface one of tribal rivalry, but in the end it’s about power in the region, with the Wahabites being the most aggressive force.

Let’s be totally clear. While all of that turmoil is multi-facetted and overshadowed by tyranny, religious infatuation, tribal power plays, missing segregation of religion and state (one can say that Islam never had a renaissance like christianity) and lack of education of how to handle democracy, the root cause of this has been climate-related poverty and a disillusionment of being able to have a proper life for families. And here is where I don’t understand the Western governments: while the Arab spring was probably surprising, climate-related movements of people are not. Let’s not forget that many of the refugees now reaching Europe also come from countries like Eritrea or Sudan. So, besides historical effects, the West is now also paying back for their ignorance of climate change and climate-related poverty in these parts of the World, forecasted since decades.

Europe is at a make-or-break point of being able to solve this crisis. And while we have ignored the environmental source code of this crisis for long we utterly only have this one chance to at least show the social salvation potential of the crisis we helped to create in the first place. Europe doesn’t have a refugee problem, Europe has solidarity and humanity problem. While we always say we need immigration for demographic and economic reasons (just look at the demographic trees of our societies growing older and older) we don’t accept this opportunity now as a blessing in disguise. We have 380 million people in the European Union, one million refugees per year means 0,026% increase of population if we would be able to equally share the ‘burden’ of this immigration wave. It is in my view a devastating behavior of the majority of the EU member states, totally ignoring the mess created in the past, and a total blindness of responsibility today. As a European citizen I am ashamed of the year-long inactivity of the European Union in the light of repeating tragedies in front of the island of Lampedusa. More than once European Commissioners and ministers of various countries promised to help, the writing was on the wall for a long time, and nothing happened as soon as they were back at home. They helped to create the mess Europe is now in, and as politicians are, they are very easy to forget or blame an earlier Commission or Cabinet for purely disgusting political game plays. Let me not even start to talk about the rape of the refugee theme in US-American pre-election Muppet Shows.

While we could easily cope with this situation in Europe – and we have to as a whole – the ignorance of the past now creates the short-term problems that lead to new short-term devastation. Building fences, securing borders, the potential closure of the Schengen area, costing billions of tax-payer’s money and having enormous economic implications, are totally wrong moves and will play into the continued re-establishment of right-wing parties, partially extreme. Poland and Hungary are early warnings. Refugees are blamed for a situation we created in the first place, and honestly: it is not for the first time that I have a déjà-vu with the early days of the Nazi movement, where all of us always wondered: how on earth could this have happened? We are now seeing extremist right wing movements gaining power again, the police is met with no respect, in certain areas of our cities private groups organize ‘security services’, and all fueled by our authority’s inability to cope with the massive stream of immigrants, empowering criminal energy to recruit new herds. I am shocked that there is no streamlined immigration procedure in Europe, not even in my home country Germany, allowing system abuse. I am shocked by the fact that deportation isn’t equally enforced, and that people that now want to move back to their home countries because their immigration procedure could take up to a year and are unable to bring their families in for even longer can’t get their passports back and/or their home countries actually refuse to have them back. It is not the refugees to blame, it is a blatant failure of the European Union and its member states not being able to have organized at least a rudimentary streamlined procedure and enforcement.

So what does a sustainability expert recommend in such a situation?

First of all, those involved need to understand the broader context of the situation. We need to accept the long curves of history and establish an understanding of ‘climate refugees’. Separated from the ‘white noise’ of all of the religious, cultural and tribal aspects, we are moving into a future in which between 60 and 250 million climate refugees will be the new normal. Whatever the COP21 treaty will lead to the situation will still get worse for the next 30 years before their is a chance that it can get better. We are now seeing the effects of CO2 emitted 30 years ago. Also, understand the demographic implications of 10 billion people on Earth is essential. Immigration of 1-2 million climate refugees per year will continue. Any politician that thinks this can be solved through fences is naive!

Secondly, learn to understand the social implications of immigration. Immigrants want to work, want to learn our languages, want to put their kids into schools, and look for nothing else than a bit of dignity, and being able to make friends. Let all young people in our countries do a ‘social year’ devoted to help especially immigrants to adjust. We ourselves made friends with a Syrian family, now living close by, and offer our service as helpers when new refugees arrive. We made extremely positive experiences. The most important fact is quicker processes to get refugees into a position to be able to work and produce value-added. What has to be avoided vis-a-vis our own population is a feeling of greed in which refugees are prioritized when it comes to social housing, allowances, social services, etc.. Many of the refugees would love to help to create work to help themselves. We have architects, engineers, translators, nurses, doctors, social workers amongst them. Give them the opportunity to do something. If we created systems that don’t allow refugees to work as long as they are not fully accepted as immigrants, change that very system. Again, these people can and would love to work!

Thirdly, dry out criminal energy in our towns from the outset. We don’t get more criminals just because refugees come into the country. What needs to be avoided is that criminals can recruit disillusioned refugees into their groups, given our slow procedures. If 1 percent of the people in each country shows criminal energy the increase of the population through refugees is more likely to lower that percentage, but only if refugees get a positive vision of a potential life in our countries. It is simply not true that the refugees increase the crime rate. Simple statistics 1:1. Some culture shocks like we saw them at New Year’s Eve need to remain ‘anomalies’ in these early days of learning how to cope with such massive immigration.

Lastly, refugees are a blessing in disguise for our economies. Not only that the majority of the billions of extra budgets for handling immigration right now are already spent in our countries (and increase GDP), it’s the long-term economic effect of letting refugees work. There are many thousands of open vacancies in many industries, and our social services can themselves benefit from educated refugees. We need diversity to learn from. Infusion of new and different thinking will give extra impulses for growing strong together. We know that, the high priests of the global economy just told us in Davos this week.

It is essential to keep our inner borders open while existing law is enforced (and that includes securing the outer borders). It is a fatal flaw to close borders and blame the refugees for that. It is a flaw to think it will hold climate refugees back from coming into our countries. It is a flaw to allow right-wing extremists to fuel the fire. It is a flaw to think we need to defend our culture while all of us more or less come from immigrant families (just look back 2-4 generations in your own family history). It is a flaw to believe that Islam takes away anything from us, it adds a new colour to our society.

At this moment this is not the Europe I was born into, it is not the Europe I want to live in. I feel ashamed of what is going on. It was all foreseeable, so let’s be quick in remembering what we learned about sustainability and apply it as should have for the last 20 years.

PART 2 will come out in a couple of days.

 

 

 
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Posted by on January 24, 2016 in Thriveability, Uncategorized

 

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Heaven or Hell in Garden Eden? – A|HEAD|ahead’s year in review

Another year went by too quickly, at least this is how it feels. Let’s put the question aside if this is because of getting older or simply because this year was filled with (too?) much work. Maybe this is a good sign, too! Leaning back in my chair at the last ‘official’ working day in 2014 and thinking about how this year has been special, insightful, positive or negative, progress or setback, I can’t define a clear ‘yes or no’, more sort of an ‘and’.

Clearly, 2014 has been a year in which many of the problems on this planet have become even more strikingly clear, due to the many different events that reached the news. Amongst them, and in no particular order, are the brutal violence against women in India, the blazing racial incidents in the U.S., the wrecked havoc in the Middle East due to the never stopping war between Israel and Palestine, the brutality in Syria and its neighbor countries through IS and still existing governments in place, up to the sorrow for millions of climate and political refugees that need to leave home, and many of them not surviving on their trail of tears, e.g. when crossing the Mediterranean Sea. I can’t even imagine the pain that these millions go through and doubt I would personally be able to survive under these circumstances. Humans can be monsters, but humans can also be wonders, and many of the latter now stand up to make the world a better place, so I bow to humans like e.g. Malala, Bill McKibben (350.org), and the many nameless individuals that risk career’s, reputation, legal punishment, and sometimes their life, just for their mission.

The roughness of the pictures add to the notion of urgency to find solutions to these problems, and my impatience is growing with all those that always have a ‘yes, but…’, stay inactive because there is a little risk in a sea full of opportunities, look at others to make the first step, ask ‘what’s in it for me’ as the first reaction to a proposal, or simply put their egos first. Many reactions are simply put under the smokescreen of political negotiations, tactics to ensure personal positioning (in order not to lose one’s reputation) or simply hiding behind the unavailability of budgets, or hierarchy not allowing to move forward. Sticking one’s neck out is often a no-go in an ongoing financial, climate, poverty, equality, … crisis, it often feels like talking to people in straight jackets in an inherent atmosphere of fear. I wonder what positions people are sometimes able to defend or take although they have families or kids at home, kids that will be very critical with their parents in the not-so-far future, and what excuses will these parents have when the kids start to ask these questions? How much guilt do they load upon their shoulders through inactiveness and by putting themselves or other bad reasons first. I also often ask that question to myself, too: what more and how much more could I have personally done? And yes, there are also bullet points on my secret list to do better, no question.

But 2014 was also the year in which I have personally witnessed and been engaged in areas that do give a lot of hope. Without mentioning all of them individually, I’d like to offer some of the insights of the conglomerate of my work in 2014, leading to positions that I take, and given the experience of the work I have done this year. I am thankful that my work has allowed me to derive to those insights, so a big thank you goes out to all my affiliations and business partners, you know where and who you are ;-). Some of these insights may be helpful for you, and I am much open to comments an reactions!

  1. Those dealing with sustainability have often forgotten the true meaning of sustainability, especially using ‘intergenerational equity’ as one of the most important guidelines of how to come to a net positive strategy. Overall, the majority of those corporations that have a certain focus on sustainability (in the still unbelievable absence of the majority of corporations to deal with sustainability at all) are happy with a ‘show less bad’ attitude, simply because they think becoming net positive is impossible to reach. There is only a handful of leaders that understood that net positive is not just one strategy to stay alive, but in the end the only strategy to keep a license to grow. It is impossible until it gets done, Mandela said.
  2. Many sustainability strategies fail to address a challenging ambition level because they are built on symptoms, not on root causes. This partially due to the standards and management systems that are built on the idea to reduce negative impact, not to increase positive impact. If climate change is an aspect to deal with, the symptoms-based strategy is to reduce emissions. A root-caused strategy will look at the causes of climate change (e.g. environmental degradation, demographic effects, urbanization, technical developments, world trade shifts, etc.) and look at ways how an organization’s business model can make positive contributions. Such a strategy will not just scratch the surface, it will go to the real questions about the purpose of the organization, the long-term vision of how the company can make a contribution, and how to excite employees, customers and investors anew.
  3. The question about the business case of sustainability is unfair to ask as long as the economic system boundaries always force people to the wrong direction due to existing pricing information. The discussion about the internalization of external effects into cost accounting, the translation into product and service prices and the counterbalancing of potentially raise in prices through lowering tax on work (and increase of taxes on resource use) needs to be seen in combination. Solutions of course need a level playing field, but again there is little fantasy to get these negotiations started. Too many ‘yes, buts …’. The effect is that a pure discussion around internalization of external effects leads to little (although we know much) as there is too much fear about unfair market conditions and increase of prices.
  4. The green and inclusive economy is undervalued and there is little going on in the corporate world to get it defined better or operationalized. I have come across people in corporations that even laugh about it since they see this as a revival of the various UN Green and Clean Tech programs, more of the old in new sheets. This is sad and possibly disastrous. Some of my work in 2014 focused on how to give shape to the idea of the green & inclusive economy and how a company’s reporting would react to that. What would be the methodologies, the tools, and what is already available. Find more through http://www.reporting3.org and read the posted report of the second Reporting 3.0 Annual conference. There are also great books that give more insights, I recommend John Elkington’s ‘Breakthrough Challenge’, Said Dawlabani’s ‘Memenomics’, Jeremy Rifkin’s ‘Zero Marginal Cost Society’, Frank Biermann’s ‘Earth System Governance’, Nick Gogerty’s ‘The Nature of Value’, Giles Hutchin’s ‘The Illusion of Separation’, Robin Wood’s ‘The Trouble with Paradise’, Tomas Sedlacek’s ‘Economics of Good and Evil’, and for those with more time, Thomas Piketty’s ‘Capitalism in the 21st Century’ makes sense if you acknowledge that there are more capitals than just financial capital. Take the essence of these books and tell me what else is missing to start making a green & inclusive economy a reality! Since we recently learned from the OECD that the idea of a ‘trickle-down economy’ is a complete failure, not one good reason is left not to work on the new economic model together.
  5. We forgot to take humans on board in order to shift from sustainability to ‘ThriveAbility’, the way to inhale new excitement to the idea of organizing the green & inclusive economy. I am deeply appreciative of the steps the ThriveAbility Foundation has taken in 2014 and is planning to take in the years from 2015-2018 and I deeply hope that the methodologies, factors, index algorithms will sink in quickly with many of the potential collaborators, and I am excited to be a co-founder of the ThriveAbility Foundation. The meetings this year have created so much positive energy, and hearing some of the partners we now have in our ecosystem, some of them experts in sustainability for decades, saying that this initiative has the potential of a ‘grand design’ truly makes me happy. I am sure the team now at the starting line will do its utmost to create the necessary breakthrough for the idea of ThriveAbility. Feel free to go to http://www.thriveability.zone or drop me a response or email (ralph.thurm@kpnmail.nl) if you are curious or excited or simply want to learn more about it.
  6. UN Secretary general Ban Ki Moon has just published a report and some blogs about the great potential the year 2015 has with regard to climate change negotiations and the agreement on the Sustainable Development Goals (SDGs). In my view these are great and necessary steps to be taken to come closer to the idea of a green & inclusive economy, but they can only be intermediate steps. Take what I said in #2 about less bad strategies and #3 about the necessary pricing information to create new boundaries for an economic system and you understand why. I also realize that any successes in 2015 will need to be translated in national legislation and then operationalized in organizations, including controlling, mitigation and sanctions. This will take at least until 2017/2018 to become effective, and results not to be expected before 2019/2020. In the meanwhile I fear tactics like ‘creating shared value’ are not enough, in one of my blogs this year I even described them as ‘a spicy sauce to make a rotten meal taste good’, and I admit there is a cynic touch in that expression. I therefore put even more hope in the work the TriveAbility Foundation can potentially achieve in the meanwhile, so please take that journey with us.
  7. Let me finish with one more advice, and that one is a result of many years in this terrain: we need to avoid the idea that whatever we design for the green & inclusive economy would have to be 100% exact from the start. Whatever methodology we use, whatever algorithms we try out, and whatever reporting format we apply, they don’t have to be 100% correct from the beginning. Although academics don’t like that, although a lot of what to try out is based on normative assumptions and not always fully covered by science, there is no other way than to try it out, so me plea is for ‘progressive approximation’ and the result will lead to conventions that are good enough to make necessary decisions. Take the LCA movement and how that has come to conventions, take the examples of environmental profit&loss accounts and how they have helped corporate decision making. The design of the green & inclusive economy needs several iterations, and we can simulate trial & error until we are all good to go. We just need to do it, nothing holds us back! The immense progress IT has made in the last years is a great help, and I am happy to be involved in some of these, too.

I continue to like Omar Bradley’s quote ‘It’s time to be steered by the stars, not by the light of each passing ship’. We have seen many ships passing by that didn’t get us anywhere, so it’s long time to go back to the stars. For Martin Luther King it was enough to have a dream, the plans came later. So what is holding us back?

I hope to hear or see many of you somewhere in 2015. Thank you to all old & new subscribers to this blog and the thousands of readers of any of my blogs on Sustainable Brands, CSR Wire, Guardian Sustainable Business, to have taken out precious time to do so. Wishing all of you and your families all the best in 2015!

 

 

 

 

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Reporting for the ‘future we create’ – shaping next-generation transparency

Recently the report of the October 6/7 Reporting 3.0 Platform Conference ‘Reporting at the crossroads – ensuring purpose, practicability, performance’ was posted at http://www.reporting3.org, together with a great video summary, a repository of presentations as well as an event gallery that wonderfully highlights the spirit and buzzing enthusiasm of the 170 participants from 4 continents and 13 countries. Please find the report attached here as well: R3_Conference_Report

I had the honor to curate the design and facilitate the conference on both days, together with a great team of BSD staff and voluntaries, and also wrote most parts of the conference report. During the whole process in the many months of preparing the conference (that included working on two Transition Labs and two Regional Roundtables), post-conference writing and thinking about how to shape Reporting 3.0 for 2015, I often wondered how much more would already be possible in reporting through a combination of existing vision, methodologies and tooling. Reporting 3.0 brought the majority of influencers together, so a glimpse of the possible was clearly visible already during the two days of the conference.

The report therefore also focuses on three main messages and gives a whole plethora of insights and examples:

1. The ingredients of the ‘green & inclusive economy’ are becoming much clearer and more tangible for corporate decision makers, investors and leading thinkers from academia and the civil society; 

2. New approaches, standards and benchmarks are under development or will be developed to close the ‘sustainability context gap’ in reporting; 

3. Information technology and respective providers offer new solutions for big data management and algorithms as well as applications that enable a new level of sustainability driven decision-making by corporate managers, investors and consumers.

As a teaser to read the full conference report I am also posting parts of my pre-conference speech that I held at the speakers dinner the day before the conference officially started here, shedding light on intentions, focus and ambitions.

“Let me start off by quoting Otto Scharmer, the author of Theory U, who once said, ‘We cannot transform the behaviour of systems (and the people in them) unless we transform the quality of attention that people apply to their actions within those systems, both individually and collectively’. I think this already comes quite close to what we want to achieve with Reporting 3.0, both the conference, but also the platform. We started off from three basic ideas: 1) that we will take serious the plea to achieve a green & inclusive economy and the design for a capitalism achieving that, made at Rio +20 in 2012; 2) that we believe that reporting has a trigger function to create necessary change (many from us come from the early days of sustainability reporting when that was indeed the case); 3) that reporting with that trigger function to achieve a green & inclusive economy will need to be different from what it is today, and most likely it is needed within just one decade.

Reporting 3.0 can change the ‚quality of attention that people apply to their actions towards an envisaged system’ through various pathways: 1) By taking note of the various developments that surround reporting, especially around new business models (circular, sharing, regenerative, restorative), and the enhanced role of (big) data, data architecture, and IT capabilities; 2) By assessing the necessary consequences of the idea of a green and inclusive economy to accounting, given the fact that these new business models need different accounting rules, and that accounting will need to embrace a grand design as well: true costing, true pricing, and even more necessary, true taxation, to balance the burdens to consumers and communities, and to allow to set new economic system boundaries in which market mechanisms can work towards the right direction, on a better and global level playing field; 3) By embracing the idea that measurement needs to much stronger close the sustainability context gap, meaning that macro-data and micro-data allow for assessing performance from a future-readiness perspective and give stakeholders confidence that what an organization says and does is good enough or in the right direction to achieve a green & inclusive economy.

Looking at the vast variety of players with different backgrounds, all knowingly or unknowingly part of the ‚grand design’, and many not from the reporting terrain, reporting more or less logically rather comes at the end of the thinking, if it comes up at all. And those in the reporting space often don’t have the time, capacity, capability to convene formats that deliver insights with these forward-looking players. They normally convene with other experts in the reporting field. The early infusion of knowledge to build the ecosystem for forward-looking reporting is rather uncovered terrain, reporting at this moment adapts to the unavoidable, and doesn’t deliver on a ‚grand design’.

To be clear, we already do benefit from what has been produced so far. There are indeed strong shoulders of that little child Reporting 3.0 to sit on! And still, not enough has been thought of, produced or tried out to sketch the new reporting landscape and to build a ‚grand design’, stemming from the North Star, the green & inclusive economy.”

 

 
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Posted by on December 18, 2014 in Sustainability Reporting

 

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‚Unsubscribe dialog – subscribe collaboration’

To survive stakeholder dialog needs to transform to stakeholder collaboration and make use of new forms of IT

This is the fourth and last installment of a blog series covering crucial sustainability reporting issues on materiality, sustainability context, comparability and stakeholder inclusiveness.

Stakeholder Inclusiveness is one of the four core principles in the GRI G4 Guidelines that help to define report content that is material to the reporting organization and its stakeholders. Since GRI introduced the logic flow of how and when to use these four principles in the reporting process (first done in a Technical Protocol in 2011 and then only slightly amended for G4) it became clear that stakeholder inclusiveness means an ongoing and unstoppable process – in parallel and supporting the use of the other three report content principles. Clearly, stakeholder dialog would not be useful for only creating an organization’s sustainability report.

And here lies the problem: exactly THAT is done in many reporting organizations. This is due to various reasons, some of them are:

  • There are other existing feedback instruments like customer or employee satisfaction surveys. Sustainability seldomly gets included there; these survey services are often offered by external third parties and the sample of topics can’t be changed. Getting varying sustainability issue feedback through those surveys is difficult and the internal owners of these instruments are hard to convince that they should be changing or adding to what is ‚theirs’ and already ‚cast in stone’.
  • New product or service testing is mainly done when prototypes are out for market trials. Before that R&D is still mainly working behind closed doors, sustainability aspects are – if existing – mainly built in through regulation, internal design standards or specifications; potential customer reactions are only due when testing starts. Crowdsourcing is still in its infancy for many of those organizations that have built R&D fortresses and it’s hard to conquer the walls of overestimation of one’s capabilities, the billions of dollars invested in know-how, brains and internal think tanks weren’t in vein, weren’t they?
  • Investor relations still doesn’t take sustainability into their analyst briefings and bulletins, and why should they? Nobody’s asking! These colleagues have to entertain a very specific stakeholder group, engrained in their own mental stereotypes of how markets function and reward. Dozens of sustainability indicators? Well, spare me the white noise, give me one or two!
  • Top management wants information rather quick: if somebody is asking difficult questions in an interview (the questions are mostly precooked) or if top management needs input for a speech, turnover time to serve with answers is often less than 48 hours, so better have handy all necessary data and sound bites in or through the sustainability team.
  • Finally we hear so often that sustainability team members need to be careful, need to create step-by-step approaches, need to draw a fine line, have to be politically correct, need to know ‚the game’ or ‚how it works’ inside the company. Risk-averse approaches are the consequence. Being one of the most important internal strategy or board advisors – a role we would wish for the sustainability department to have – is much different. Go ask some companies how often the head of sustainability meets the board or the head of strategy! Prepare yourself for some disturbing answers.

These descriptions may sound a bit over-exagerating for some, but feedback from dozens of organizations we spoke to internationally in the last year or so paint a rather difficult picture of how especially internal stakeholders react to demands by sustainability departments to include sustainability into their daily working instruments, surveys and dashboard. Of course, there are organizations in which ‚integrated thinking’ as proclaimed by the IIRC for integrated reporting works better in the meanwhile, but for the majority of companies we still doubt it.

One consequence of these rather unsatisfying conditions is that a stakeholder dialog process is often done just through the sustainability department and – even more disturbing – just for the report that comes out. That again is input for some of the known rankings and ratings. Many sustainability department staff know the routine as they are both inviting and invitees (in other company’s dialog processes): once per year data is collected through existing niche software (or through some ERP system modules) or certain identified colleagues (issue owners) get an excel sheet into which they have to add data they are responsible for. Thank you, and until next year! Parallel to that a questionnaire is sent out to identified external stakeholders (often also from other companies), and of course the other usual suspects, including some internal stakeholders. After a max. 30 % feedback rate some statistics are pulled together. Usually, these are presented in one or several roundtables, sometimes in various countries (in the case of multinationals). Together with additional weighing factors a materiality matrix is then drawn up. Programs are set in motion to decrease the most negative impacts, and there goes your report and the shoulder clapping.

We expect that this sort of stakeholder dialog process will be dead in about 2-3 years. There are many indications for that:

  • Can this process convince to support and carry out reliable stakeholder input to really find out what the material issues are? In our view, it can show tendencies or possibly trends, but would you truly tell your top management that this is a proper assessment of the reality out there? As the availability of software and data is less and less of a threshold, one can demand a different quality and amount of data involved.
  • Hardly any sustainability department has organized stakeholder inclusiveness in a way that it is an ongoing process. There is anecdotal evidence at certain moments during the year and some have tried out standing stakeholder expert committees or panels to bridge that gap, but will that be seen as enough? Members of these committees are changing over time, so how stable is that interim solution?
  • Most corporate representatives are frustrated: having received many invitations to such rounds of questionnaires and roundtables from other companies, there is little excitement to go there more than once. Seen it, done it, had it, too little benefit to be involved. It also dawns on them that their own process will most likely face the same problem.
  • NGO representatives already face an ‚overflow error’ syndrom. Think about potentially up to 6.000 calls that Greenpeace will receive in 1-2 years based on the EU’s new Corporate Reporting Directive. No way! Same with most other NGOs, apart from the fact that they also already face the same frustration as mentioned above. Too little do they know what happened to their input and how far it lead to any transformation.

What will be the alternatives? Sure, there’s one big vision already on the horizon: the possibilities of Big Data for stakeholder involvement. In the coming years new data and information-based technologies will contribute to the development of new ways to collect, analyze and visualize bigger and so far unconnected sustainability data. Smart cities, infrastructure, sensors, the Internet-of-Things, portable and cognitive technologies, as well as new business models around Big Data will contribute to this development. Additionally, new interfaces between earth system science, satellite-based data and personalized technologies will emerge. IBM’s Watson and Smarter Planet are first examples of how enterprises prepare themselves for these changes. A bridge too far for the moment for most of us, we would say.

But there are also intermediate solutions to start already now. It all begins with a change of mindset. Like already mentioned we can be sure that stakeholders will more and more unsubscribe from the current approaches, simply because that sort of stakeholder ‘dialog’ is not fulfilling. In combination with a) the growing data availability and b) a further integration into corporate strategy development, stakeholder dialog needs to be replaced with ‘stakeholder collaboration’. That in our view is only possible if the different parts of the organization, those that are not yet connected (or willing to connect, see above), will tune in. Here’s how:

  • Employee and customer satisfaction insight need more than questionnaires with some extra questions on sustainability. We need offers to contribute instant feedback, ideas, openings to focused discussion forums. It is clear that stakeholders want quick feedback, want to know what happened to their input, and how it was used to support change. That data can very well be used to indicate material sustainability issues.
  • Crowdsourcing and crowdfunding are important, yet underestimated feedback instruments, not just to develop products & services, they are also indicators for the reputation of the organization on many fronts, the willingness to co-create and re-think by stakeholders, and the buy-in for potential new products and/or services developed and used by stakeholders. Best new recruits could stem from those sources.
  • Investors need new and aggregated data that can quickly show the ‚ThriveAbility’ of a company, both for investment decisions and for their own reputational buffer. The ThriveAbility Foundation (thriveability.zone, going live soon) has started the development of an aggregate ThriveAbility Index as well as a ThriveAbility Assessment (designed to check organzational capabilities to being thrival) and ThriveAbility Pathways (a tool to assess leadership capabilities for becoming thrival). Thrival in short means the ability to instigate a net positive value creation process, the future precondition to have a right to grow and to get fresh capital.
  • Top management can get infomation instantly if new software tools like e.g. VERSO Workbook (verso.info) are used, to our knowledge the first holistic plan-do-check-act support tool that covers data aggregation, workflow management, facilitated discussion on issue-specific communities, communication and publication of sustainability information as well as coverage and use of all mainstream social media tools for stakeholder involvement. Think about your top management having access and all relevant information just 2-3 clicks away?
  • Sustainability departments can strengthen their role and need to be embedded in corporate strategy. The development of new qualities of materiality matrixes will be a growing field, but needs to be done differently. Virtual dialogue and online engagement platforms will increasingly fill this need, given the cost and carbon-intensity of in-person engagement, the scheduling nightmare of multi-party conference calls and webinars, and the inefficiency and isolation of individualized outreach to stakeholders. Convetit (convetit.com), the online stakeholder engagement platform co-founded by Bill Baue and Tom O’Malley, helps solve these problems by hosting asynchronous online dialogues. Most recently, Convetit introduced an interactive Materiality Matrix tool that enables stakeholders to plot the importance of material issues on a matrix that the platform then aggregates and averages to paint a collective picture of stakeholder sentiment.

Other new tools using Big Data approaches will be arriving on the market soon and will have promising propositions: Take e.g. the startup eRevalue (www.erevalue.com) that analyzes external sources from the internet and provides business intelligence to companies. Through objective output analysis – screening sources that were published by third parties – companies can make an informed decision as to what issues to focus on. This depends per sector, per region, per operational structure, supplier locations etc.. Their software will help determine which sustainability issues are most relevant to a particular business. It uses a set of key topics (“semantic ontology”) related to environmental issues, social issues and corporate governance. This set of key topics creates a common language for companies to use for strategic decision-making.

It is time to get real on the new realities stakeholder collaboration demands. The earlier the new possibilities are used, the quicker we will see results. The technology is there, it will be polished, fine-tuned and upgraded by the growing amount of users. Together with the Big Data developments that we will be seeing within just a couple of years, old-fashioned stakeholder dialog for sustainability reports as we knew it will be history. If you are interested to get to know all these and even more players, don’t miss the 2nd International Annual Reporting Conference in Berlin, October 6/7, see www.reporting3.org.

Authors: Ralph Thurm is the Founder & Managing Director of A|HEAD|ahead, Nick de Ruiter is partner at Sustainalize. Transparency disclaimer: Ralph is involved in VERSO and in that role has contact to a whole array of new tools for stakeholder collaboration. He is also curating the Reporting 3.0 Platform and is a Co-Founder and Technical Director of the ThriveAbility Foundation.

 

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Comparability of sustainability information – slaughtered on the altar of materiality?

This is the third of four installments of a blog series covering crucial sustainability reporting issues on materiality, sustainability context, comparability and stakeholder inclusiveness.

The GRI content principles – sustainability context, materiality, stakeholder inclusiveness and completeness – are forming a balanced set to give guidance on how to define what a ‚good’ sustainability report should cover. The focus of work pulling G4 together was on making that balance and the process of how to get to such reporting even more clear and crisp. While our last blogs were digging deeper into the need of putting real teeth into step 1 – defining sustainability context better – another principle from the report quality section, namely comparability, has started to be discussed. The reason for that is that most communication of GRI under the banner ‚what matters, where it matters’ zooms heavily into materiality, and questions start to arise on what that means for the other important reasoning for standardized reporting – producing information that can actually be compared. This discussion has a strong connection with our earlier plea on getting more clarity around sustainability context and working on micro-macro-linked indicators. The discussion around a potential lack of comparability is making painfully clear that not having worked on these potential indicators in the G4 development process will most likely break open a whole plethora of uncomparable information. We have enough experience how certain information was presented in sustainability reports so far: take SOMO’s 2013 study on energy companies disclosure, Transparency International’s 2012 study on reporting on anti-corruption indicators, or Deloitte’s 2012 study on zero impact growth strategies that examplified dozens of ways in which companies described their CO2 target-setting. Either information was presented in many different absolute or relative ways, or different information than asked for was published (should we call this pretending?), or no information was published at all, or no context was given on what was published (how would we call that then?). Our view here is: without micro-macro-linked indicators comparability will heavily suffer. The loop to our sustainability context plea and the need for ‚different’ indicators as we have them right now becomes clear when we consider the text in the Guidelines around comparability, the core sentences here are: „Comparisons between organizations require sensitivity to factors such as differences in organizational size, geographic influences, and other considerations that may affect the relative performance of an organization. When necessary, report preparers should consider providing context that helps report users understand the factors that may contribute to differences in performance between organizations.“ Together with the wording of the sustainability context principle we really doubt that consistency in reporting can be delivered in a way that comparability will at all become realistic with the current indicator set. In total, we think that the dilemma between focusing on materiality on the one hand, and delivering comparable information on the other hand, can’t be solved without micro-macro-based indicators. The existing indicators will not cut it, we have seen this all before! Work on micro-macro-based indicators will be necessary, the denominators of these indicators will need to help defining comparability, not the voluntary, company-by-company target setting (whose long-term basis is normally not disclosed – most likely because it doesn’t exist at all?). This status quo has several consequences and effects, and it is interesting to look at least at some of them:

  1. The work of rating & ranking organizations will continue to produce more confusion. As we continue to have information about how organizations became ‚less bad’, the more than 120+ different rankings & ratings will continue to produce ‚best-in-class’ champions, for none of them we know what that really means, since we don’t know what is feasibly ‚good enough’. We have seen first attempts of rating organizations to get out of this dead-end-street, e.g. Climate Counts or Inrate who themselves start to make the link to macro-based goals by simply setting them. As GISR also puts sustainability context clearly into the focus of ‚good’ ratings, the need to also consider macro-based information on global, regional and/or local level will also continue here. More comparability will most likely be the outcome.
  2. The lack of focus on micro-macro-based indicators will produce competition for GRI. A whole set of organizations already work on such indicators, first and foremost the Natural Step-based approach on the ‚Future-Fit-Benchmark’, an approach that includes Bob Willard and a set of sustainability reporting veterans. The Sustainability Context Group, around 120 members strong, has several members that actively work on other alternatives of context-based indicators, their plea to work on them together with GRI has been noted down there, but with no outcome so far. WBCSD has started to team up with the Stockholm Resilience Centre (and the various other players connected to them) to see how Vision 2050 can be supported by an Action 2020 and how ‚values-based reporting’ can be set up. Worthwhile to mention here is that this approach also includes tooling and accounting methods, so gets to a deeper level than to just think about reporting indicators, but also how to create the processes. WRI, CDP and WWF now work on ‚science-based target setting’ and has invited to several workshops. Also here, an increase in comparable information will be a foreseeable outcome.
  3. At this moment we also observe the development of the Sustainable Development Goals, to be presented in 2015. It will be interesting to see how they will develop further; as it stands right now they seem to be more sort of ‚corridors’ of change in 16 different issue areas, and it is not yet sure how interdependencies (nexus effects) will play out on this variety of areas. In our view it would be much more effective to take a step back and first develop a set of principles (based on the probably most important ‚North Star’ question: what will really make up a succesful green & inclusive economy?) and then define action areas with a special view on interconnectedness of effects to define clear and actionable roadmaps or adaptation plans on how to get there. Targets could be defined per region, taking into account the various cultural and mindset calibrations as well as timelines necessary to measure progress. These could be built into a comparability approach for defining indicators of change with actionable items where each company can define a positive impact (instead of concentrating on the reduction of negative impact). See it a bit like the approach Unilever took when they connected their mid-term target setting with main sustainability issue areas. It is no wonder to us that Unilever’s approach scores extremely well in certain ratings, e.g. the latest GlobeScan and SustainAbility Leaders Survey, published just a couple of days ago.
  4. As a side effect the lack of comparability also creates a revival of the discussion around what was supposed to be called ‚Beyond GDP’. First of all there is the question if GDP should be used as a denominator in order to increase comparability in micro-macro-based monetary and relative comparisons, but much more important there is also again increasing discussion about the usefulness to use GDP at all as a means to measure a valueable contribution of a single company. In our view this is a must-have discussion that will sparkle ideas on what ‚success’ really means for a society at large, it seemed to get stuck around the idea of happiness in the last couple of years, which in our view is a very individual mindset and difficult to standardize. Hence, there is a glimpse of hope, and it is good to see that GRI is also one of the partners in one of these projects, called ‚Measure what matters’, with amongst others the Green Economy Coalition, Accounting for Sustainability (who are the initiators of many good developments, e.g. IIRC as well), the Stockholm Environment Institute (SEI) and IIED.
  5. We are still amazed to see how little companies are interested in defining what a ‚green & inclusive economy’ or ‚resilient economy’ actually means for themselves. That is mainly due to the lack of real comparison opportunities to give this vision real meaning. And it will remain like that as long as we don’t define the expected minimal and/or positive contribution per company and stakeholder. We refer to our last blog on the ‚mindset gap’ for further depth there. Comparison and target setting will be the most interesting pathways for competition in the future, so again ask yourself what all that focus on materiality will help if comparability possibilities will suffer from that in this heavily interconnected world in which nexus effects will be part of the comparability agenda, to be analyzed when thinking about sustainability context.

Overall, we expect that the discussion about comparability will become as vital as the one on materiality today, simply because more materiality will not automatically lead to more comparability of information (we fear even less), and more comparability focus will not simply lead to more materiality. There needs to be a balance as both are of critical importance to understand, define and act on these urgently needed adaptation plans towards the economic blueprint of the future, the ‚green & inclusive economy’. Authors: Ralph Thurm is the Founder & Managing Director of A|HEAD|ahead, Nick de Ruiter is partner at Sustainalize.

 
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Posted by on May 27, 2014 in Sustainability Reporting

 

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