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Integral Thinking & True Materiality – Part 7/7: What Others Say About The New Impetus

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 7/7.

Time to let others speak! I am grateful to Allen White, Georg Kell, KoAnn Vikoren Skrzyniarz, Bill Baue and Robin Lincoln Wood for their appraisals of ‘Integral Thinking & True Materiality’. I guess the impetus stands the test of some of the top thinkers and past and existing leaders in sustainability. Time to test it further, pilot it and share the learning experience with others, through the various angles to do so: Reporting 3.0, GISR and the ThriveAbility Foundation.

Allen White (Co-Founder of GRI and Founder of GISR) 

Progress toward a thriving future requires a new lens for viewing corporate purpose, strategy and practice.  Ralph Thurm’s Integral Thinking & True Materiality framework provides such a lens, enabling business leaders to better understand the broader socio-ecological milieu in which they operate and to which they ultimately are accountable.  This kind of holistic thinking is a prerequisite to transforming organizations at the depth and speed a troubled world demands.  Indeed, anything less imperils the prospects for building a just and resilient global future.

Georg Kell (Vice Chairman of the Board, Arabesque Partners; former Executive Director of the UN Global Compact)

Ralph Thurm has always been on the forefront of sustainability, from his time at Siemens to joining GRI and later Deloitte. He now continues as A|HEAD|ahead, working on necessary structural enhancements in sustainability through the various affiliations of his work, eager to explore the next level of finding suitable criteria for clarified purpose, better understanding of success and ways to scale up what’s needed to overcome sustainability incrementalism. This reader is condensing some of his thinking into a new impetus, and it contrasts current thinking that often still tends to be a bit cautious and risk-averse into a wonderful tour de force that opens the mind and connects what belongs together. Enabling fresh thinking, Integral Thinking & True Materiality is at the same time inspiring and without doubt a precious resource for anybody who wants to build lasting and thriving organisations. Following this lead we may rethink if we have done enough to invigorate trust, innovation and scalability, the outcomes of the new impetus Ralph describes.

Dr. Robin Lincoln Wood (Founder, ThriveAbility Foundation)

How can the SDG’s be integrated into corporate reporting so as to move beyond a set of silo’ed goals for ‘zero negative impact’, to stimulate innovation, excitement and the breakthroughs we need to create a safe, just operating space in which humanity can thrive? Some of the answers to this question will be found, like clues in a detective novel, in Ralph Thurm’s short compendium of articles on Integral Thinking & True Materiality.

The first clue is to be found in the leading Diagram 1 in the compendium – „Trust“. In a world where trust in our institutions and the ‚system’ is at an all time low, who can you trust? The power of great brands, like good leaders, is that they inspire trust in their promises, and by delivering reliably on those promises, that trust grows. Many organizations are now learning just how critical and valuable trust is, especially those who have lost the trust of their key stakeholders at considerable financial cost.

Clue no 2 is that „Resilience“ and „Innovation“ are pre-conditions for products and services to deliver in the longer term on an organization’s promises. The big question is: How can we ensure that an organization is trustworthy, resilient and innovative? For that we need to go inside the triangle in Diagram 1 to find four enablers: integral thinking, success, purpose and scalability:

  • Integral thinking requires leaders to incorporate both negative and positive externalities into their business reporting within the context of planetary boundaries and social floors, to be genuinely sustainable. This results in „True Materiality“.
  • Success in the 21st century will not be measured purely in financial terms.Through the integration of the seven capitals, we can arrive at the True Future Value of any decision or investment, thereby providing a trustworthy indicator of where an organization should focus its efforts.
  • Purpose is needed to align organizational stakeholders toward a North Star that enables the web of stakeholders and their business ecosystems to realise their True Future Value creating potential as an interconnected system of mutually satisfying promises delivered and commitments met.
  • Scalability enables the fruits of True Future Value generating innovations to „cross the chasm“ from the early adopters to the mainstream markets to go truly global, resulting in world enhancing outcomes.

Reporting standards and the sustainable development goals have the power to shape the governance frameworks which determine how value is perceived and created in our economy. Business leaders, investors and consumers need to trust that their decisions are contrubuting to True Future Value, not just doing less or no harm. By being able to measure what „Doing well by doing good“ really means for all stakeholders in an organization, the ThriveAbility Governance Framework and Index offers us the opportunity to move rapidly to a regenerative inclusive economy- a world where promises are delivered in ways that rebuild our trust in ourselves, each other and the possibility of a thriving future.

KoAnn Vikoren Skrzyniarz (Founder/CEO Sustainable Life Media, producers of Sustainable Brands)

In 2006, Sustainable Brands launched out of a belief that the pathway to a flourishing future depends on our ability to successfully shift our businesses and the global economy beyond those models that enabled success during the industrial age and toward something new, and more evolved. We recognized that while the industrial age delivered significant improvements in prosperity around the globe through the design of business systems focused on driving efficiency from mechanistic models of operating and the development of silos of expertise, it also produced a raft of unintended consequences brought about largely by the loss of our up till then natural aptitude for being conscious and sensitive to the interconnectedness of things.

Today, we find ourselves faced with a compound set of crisis resulting from the unchecked exuberance of our construction of a consumer economy. Our highly efficient, take, make, waste based economic engine has left us with dangerously depleted natural resources, concerning levels of toxic waste, rising temperatures and sea levels, and a rampant decline in biodiversity — all of which have has put our very survival at risk. Perhaps even more insidious is the way we’ve slowly redefined the role of humanity, away from that of citizens tasked with being stewards of our common well-being, and toward being simply a cog in the economic machine, tasked only with buying and consuming more in order to feed what some would define as a somewhat cancerous economy which seems now to have become dependent on over consumption beyond the needs of health and happiness.

Now is the time to turn our ship back toward healthier modes of commerce and consumption based on a ressurgence and deepening of our ability to see and think in systems.  We have complex challenges to face, partly of our own creation.  At Sustainable Brands, however, four key beliefs, supported by mounting research and evidence, encourage us and give us hope for the future:

  1. We believe and see growing evidence that humans are actually wired for good, and that we generally desire to learn, solve problems and to leave the world a better place than we found it.
  2. We believe that business as an institution is uniquely equipped to innovate and create new forms of value in the world.  Once we recognize a problem, and can connect solutions to the potential for economic return, we are well equipped to act.
  3. We believe brands — which are essentially the promises made by business to their stakeholders about what they aim to deliver, are uniquely equipped to help shift our global aspirations back toward health.  We have it in our capacity to help nurture a shift back toward our now latent, but yearning to be reengaged higher selves, offering more systems conscious models that acknowledge our growing awareness of the interconnectedness of things.  And maybe most importantly,
  4. The available knowledge and growing set of models and tools to help us get where we need to go are exploding all around us.

Ralph’s booklet Integral Thinking & True Materiality – A New Impetus Embracing Purpose, Success and Scalability, published as an e-book together with Sustainable Brands is a perfect example of the 4 bullet points mentioned above. It asks for new focus on purpose, connecting to the truly material problems to which we all can make contributions to; on success, in which the pathway to a multi-capital success measurement as a litmus test for delivering the truly material issues becomes blatantly clear; and on scalability, in which education, collaboration and advocation are so essential. Sustainable Brands embraces these ideas through the events it organizes and the services it offers. Ralph’s work helps us to level up our approach to business, and deliver against a new desire to fully account for all externalities impacted by our business activities, and ultimately to deliver net positive good to the world. The work of Reporting 3.0, GISR and the ThriveAbility Foundation, the parts of Ralph’s portfolio to deliver on the new impetus, are also presented and showcased in Sustainable Brands conferences.

Sustainable Brands is a global community of the willing — influential leaders in and around business who are committed to breaking through to new models that can enable a thrivable, flourishing future. We are happy to call this team of integral thinkers part of our community and to support bringing visibility to their ideas as together we search for the best possible solutions for transforming our world for sustainability.

Bill Baue (Editor, Co-Founder Convetit & Sustainability Context Group)

It has been my pleasure to edit this tour-de-force 6-part series by my colleague Ralph Thurm in which he lays out his vision for how integral thinking and true materiality can catalyze a regenerative and inclusive economy, leveraging the work of the ThriveAbility Foundation, the Reporting 3.0 Platform, and the Global Initiative for Sustainability Ratings (GISR).

In editing this series, I recognized the genius of Ralph’s triangulated conception centered on true materiality and integral thinking, as it resolves the primary outside-in and inside-out dilemmas in current corporate architecture.

True Materiality reconciles what GISR Founder Allen White calls “the artificial distinctions between internal and external materiality.” Internal materiality prioritizes that which impacts of the organization and its ability to generate value – primarily for providers (and extractors) of financial capital. External materiality prioritizes that which impacts the organization and its stakeholders, including their mutual ability to maintain wellbeing through ongoing access to vital capitals shared in the commons.

Ralph’s notion of true materiality bridges this divide, integrating both the issues that determine the future value of companies expressed in financial capital (with consideration of the multiple capitals), and the issues that determine the true value of companies by assessing positive and negative impacts on the common capitals that are vital to stakeholder wellbeing in terms of ongoing viability of these capitals within the thresholds of their carrying capacities. True materiality dismantles White’s “artificial distinctions” and thereby serves as the linchpin for assessing what the ThriveAbility Foundation calls True Future Value.

Integral thinking takes up where integrated thinking leaves off – in particular, addressing the inside-out dynamic. The primary object of integrated thinking, as conceived and articulated by the IIRC, is the external structures in need of integration – primarily, the multiple capitals. While Ralph’s notion of integral thinking certainly includes this need to integrate the capitals, it also transcends this limited focus on external realities by integrating internal dynamics as well.

Most importantly, integral thinking calls for mindset shifts, and equips us with the tools to map the center of gravity of our mindsets in terms of psychological and cultural stages of development. This additional depth transforms the more mechanistic approach of integrated thinking into a more holistic approach that accounts for both internal and external perspectives, both individual and collective perceptions.

In approaching this 6-part series, I find it quite remarkable that Ralph manages to address such a broad swath – both the shortcomings and the solutions – before us. This series challenges us to acknowledge the existential crises we face, as a corporate community and as a society, and to rise to the occasion by tapping into our human genius and resilience through inspiration and aspiration toward true thriving.


 
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Posted by on May 11, 2016 in Thriveability

 

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Integral Thinking & True Materiality – Part 6/7: Defining Trust, Innovation and Resilience

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 6/7.

With this final part of our series, we examine the outcomes of the newly proposed reporting impetus and assess the interconnected effects of the three parts of the triangle we discussed in Part 3, Part 4 and Part 5, synthesizing the elements of trust, innovation, and resilience into what we call integral thinking & true materiality. As we believe that reporting can be a trigger of change, following the new impetus demands additional strategic, governance, educational, measurement and process changes within the organization to be able to come into fruition.

Readers are likely familiar with the notion of integrated thinking from the work of the IIRC, which we applaud for pointing our field in new and fruitful directions. However, we posit integral thinking as a further development that transcends and includes integrated thinking in two important ways (among others):

  • Integrated thinking considers how organizations create and diminish value inside and outside the organization, but falls short of assessing the true materiality of these positive and negative impacts in the context of sustainability thresholds;
  • Integrated thinking rightly promotes a holistic approach, but it focuses almost exclusively on structural systems, essentially ignoring the internal psychological integration needed at the individual and collective level to instigate the transformations necessary to scale up a green & inclusive, regenerative economy.

We believe that both of these aspects of integral thinking are necessary to scale up the achievement of sustainability (minimally) and even ThriveAbility (maximally) by focusing on purpose (and connectedness), success (and True Future Value determination) and scalability (and the size of impacts needed).

Collaborators in the Reporting 3.0 Platform and the ThriveAbility Foundation believe that reporting can trigger this change toward the ‚North Star’ of achieving a green & inclusive – and, indeed, regenerative – economy. To do so, reporting must transcend compliance with current sustainability and integrated reporting standards that typically set norms within our existing economic regime – which can lead reporters to hesitate or even choose not to act, even as our current economic structure threatens the very survival of the human race on this planet.

To explain how the elements described in the earlier parts of this series integrate the three sides of the triangle together to achieve the overarching goals of integral thinking and true materiality at the center, we will use the final part in this series to unpack the diagram below:

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Diagram 11: Desired outcomes of the new reporting impetus are the result of the logic combinations of the aspects of the triangle: Trust, Innovation and Resilience.

 Trust

To build Trust with internal and external stakeholders, organizations must combine an organizational purpose, describing the contribution the organization can make to achieving a green & inclusive economy, with the answer to the litmus test question of Part 4: ‚have we ensured not having built financial capital on the back of any other capital’. Take, for example, The Crown Estate’s Total Contribution methodology, pioneered in their integrated reports using a multi-capital model, which the company acknowledges isn’t yet perfect but functions well as decision-useful tool for internal leaders as well as for external stakeholder scrutiny and recognition. The approach provides a much better understanding of the world view of the organization, the value it puts on all the capitals, and how it assesses its activities from a holistic perspective on collateral damages and benefits.

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Diagram 12: Aspects of Total Contribution, taking into account various capitals, as examplified by the Crown Estate, UK, to reflect a decision-useful framework about how purpose is proven and success is built upon.

Examples like Puma, The Crown Estate and a variety of other companies on the Net-Positive pathway experiment with these models and can be useful validators of a more sophisticated approach including accountants and standard setters.

Innovation

To achieve success (according to a True Future Value determination) and scalability of solutions, organizations need to map and tap into innovation pathways, that align investment decisions on products, services, and collaborations with positive impacts on the multiple capitals. Given that the Chief Sustainability Officer carries primary responsibility for managing impacts (and optimizing opportunities to regenerate) the multiple capitals, we see the CSO as the key untapped potential for unlocking breakthrough innovation. Indeed, we foresee a future where the CSO combines with the Chief Innovation Officer to become the Chief ThriveAbility Officer.

This development would remedy the current state whereby sustainability focuses on treating symptoms by digging deeper to address root causes in ways that shift from „less bad“ incremental improvements through Net Positive trade-offs and counterbalancing to enter the realm of Gross Positive impacts that continually regenerate the multiple capitals.

Integral thinking catalyzes root-cause, multi-capital, context-based, holistic decision-making. Below is a highly simplified example of an investment assessment from a multi-capitals basis.

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Diagram 13: Preparation for an investment decision for the energy supply system for a plant, looking at 3 potential solutions from a multiple capital perspective.

The ThriveAbility Foundation has laid out comprehensive Innovation Pathways for organizations (‚Alpha Partners’) interested in closing the 3 Gaps (Sustainability, Organizational, and Mindset), and aims to work with experienced third parties (‚Delta Partners’) that can execute the program under a license agreement and quality control by the ThriveAbility Foundation. Working with up to 300 Alpha Partners in various industries, supported by the Delta Partners, will lead to working groups that will assist the development of a focused ThriveAbility Index for their cluster industry. It is aimed to roll out these Indexes by 2019, to be fully implemented by 2020.

Resilience

What constitutes resilience when it comes to building a green & inclusive, regenerative economy?

  • A (financial) market mechanism that serves the economy by respecting how money and goods/services are created and distributed through a balance between true costing, true pricing and true taxation;
  • Companies that aim to create Gross Positive benefit;
  • Customers that understand the accurate pricing of resources without triggering extra burden through lower taxation of labor;
  • National budgets that respect nature and the wellbeing of their citizens and immigrants.

Looking at such a world, reporting creates ‚the glue’ for how organizations communicate their successes internally and externally on a multi-capital and True Future Value basis. As we closely look at organizations in this series, governance is potentially the other resilience factor that needs to be in place to allow for the new impetus to come into fruition. So, how would a resilient company’s governance approach look like?

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Diagram 14: Organizing governance as part of a GSE Pull instead of the existing ESG Push.

Currently, ESG activists push companies to adopt governance structures that lead to social and environmental (and economic) sustainability because it’s necessary; a more resilient governance regime pulls companies toward social and environmental (and economic) ThriveAbility because it’s more attractive than business-as-usual.

In our view, governance is defined by authority, decision-making and accountability, and they are nicely linked to the new impetus as described here:

  • Authority stems from mindsets, built from value systems. This constitutes the will of an organization to discuss purpose vis-à-vis its contribution to a green & inclusive economy in a holistic system.
  • Decisionmaking is based on metrics that better describe impact – and create success by measuring (and generating) True Future Value.
  • Accountability, based on multi-capitalism, creates value. In a green & inclusive economy this value is dependent on the scalability of that value within a 1-planet footprint through an enlarged positive handprint.

In a GSE pull approach, organizations would look at these basic ingredients when defining objectives, committees, principles and processes for a resilient governance approach.

The grande finale

‚A better world is possible’ – this is one of the sentences that all of us in the sustainability community grew up with. But a reality check reminds us that the data still show the opposite, and future trajectories suggest that a better world is slipping further and further from our grasp. 40 years of pursuing CSR to retain a license to operate has failed to deliver sustainability. Clearly, a reset is in order.

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Diagram 15: The constituting parts of the journey towards becoming a resilient company in a green & inclusive economy.

ThriveAbility sets its sights higher than sustainability – in part to inspire greater excitement and innovation, and in part to give ourselves a greater margin for error as we re-engineer a new global economic operating system on the fly. Diagram 15 shows the building blocks of such a system, set on the foundation of respecting the carrying capacities of social and environmental systems to launch innovation that optimizes synergies between and amongst the multiple capitals to realize our future potential of a green & inclusive, regenerative economy. The Reporting 3.0 Platform, the ThriveAbility Foundation as well as GISR are three non-profit organizations that corporations can join and that are driving this journey, they link synergistically for the described outcome of this new impetus. Come take a seat and join us for the ride!

 
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Posted by on March 22, 2016 in Thriveability

 

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Integral Thinking & True Materiality – Part 4/7: Success Definition For True Future Value Creation

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 4/7.

In this part of the series, we will focus on another very important aspect for the new reporting impetus that can serve the needs of a green & inclusive or regenerative economy – the question of how we define success. We are at this moment not able to truly claim when an organization is ‚sustainable’ (as laid out in stage 3 of the strategy continuum Diagram 4 in Part 3 of this series), and that just being ‚minimally good enough’ to indeed sustain the organization – and the real-world systems it operates within. Most reports aren’t giving a proper ‚world view’ or scenario context to their long-term targets.

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Diagram 5: Integral thinking and true materiality need a renewed focus on the definition of success to create True Future Value for the economy we want to live in.

Progress in defining ‚micro-macro’ links

Discussions in recent years show progress on defining ‚micro-macro’ links between companies’ impacts and the health of the broader systems they operate within. The elaborations about context-based reporting, science-based target setting, together with Kate Raworth’s Doughnut that defines environmental ceilings and social floors, has added vision and revealed depth as to the ‚devil in the details’ of measuring them in relation to the corporate context, and splitting them up into local, regional or global ‚allowances’, raising the profile of around thresholds and allocations.

Also, the link to the economic system thinking around the usefulness of GDP as the leading success factor has been called into question through the discussion around ‚Beyond GDP’, the Global Footprint Network, and the enhanced (yet mostly unconnected) indicator systems around National Sustainable Development Strategies of regions (like the EU). We see combinations of indices – e.g. country Ecological Footprints versus the Human Development Index – revealing the corridor in which countries should end up being sustainable. The problem here is that the ‚micro-macro’ link is not expressed at the corporate level, so companies take note of these data, but don’t know how to apply them in their specific case. The bigger and the more diversified a company is (crossing national borders), the more difficult it becomes.

The SDGs are an interim step to help fill that ‚micro-macro’ gap by dividing the global challenges into silo’ed aspects of problem articulation. There is merit to see the SDGs as a valuable attempt to induce companies to consider their contribution to a threshold through science-based goal-setting and context-based reporting. The problem is that, while the SDG areas are interconnected, the performance indicators aren’t. We already see companies start to think about picking and choosing some of the SDGs closest to them and define contributions they could make, without taking the step of developing a worldview (see Part 3 on purpose) that articulates responsibility for helping achieve the SDGs. We should not think that the SDGs will get us to any economic system transformation through voluntary contributions by the world’s millions and millions of companies. But without this transformation, there won’t be regeneration, let alone sustainability.

A stable solution for the next couple of hundred years?

We are in an experimentation phase, I fully admit, but I also claim that now is the time to not only set conventions for delivery indicators for the SDGs by 2030, but something that we can use for the next couple of hundred years, and that gets me to … accounting systems. Jane Gleeson-White already proclaimed the ‚third accounting revolution’ in her bestselling book Six Capitals, or can Accountants save the Planet?, cutting through double entry bookkeeping that was invented in the 15th century for the throughput economy, towards multi-capital bookkeeping. We now need an accounting system that prepares us for the green & inclusive economy.

The litmus test question of success that needs to be answered, both for each and every single SDG, and also as the basis to define what we will define below as ‘true future value’ simply is: does an organization have a license to grow by showing that it hasn’t built financial capital on the back of any other capital – or, quite the opposite, that it has built business models that regenerate all capitals? If yes, this would be sustainable, and possibly gross positive (ThriveAble) over time (stage 5 in the Strategy Continuum in Diagram 4 in Part 3).

In order to get there, though, we will need to renew our accounting system from double-entry to multi-capital-based. Why?

  • Simply because accounting is how economies and executives, boards and supervisory boards tick and answer questions: is my company successful? Where can I be more efficient? Do I deliver on my purpose? On my targets? On my benchmarks? Did my incentives work? What information does controlling need from accounting? What can I externally assure? Interesting how shy our community is to create this missing reporting link – also for the SDGs. We sorely need accountants to raise their voices on the need for multi-capital accounting!
  • A multi-capital accounting system aims to cover all sets of potential performance calculations: on SDGs, for context-based reporting, for science-based targeting, for value cycle efficiency. An outcome capital of the supplier can be an input capital for the next phase of such cycle, so it can serve as ‘docking station’ in a seamless review of value cycles – if all partners agree on the necessary convention on how to account and disclose in what the recently published UNEP Raising the Bar report calls “Collaborative Reporting”.
  • The structure of multi-capital accounting gives space to the necessary formulation of conventions (that’s what an accounting system mainly is, it’s not a 100% accurate discipline) and structuring of the discussions we need to have: what can be monetized? Is it necessary to monetize everything? How to link to local/regional/global thresholds? E.g., water has a different, more local or regional threshold basis than carbon emissions. How to implement threshold based and capital-absorbing indicators into corporate dashboards, into national statistics, into a ‘global pulse’ of how we are doing altogether.
  • Finally, the painful and often repeated mistake is that we think we can create indicators without proper data architecture in mind, where aggregation and disaggregation are possible and where slicing and dicing of information for multiple aspects is possible. A multi-capital based systematic approach can support that, like activity-based costing does in controlling for a long time.

Multi-capital accounting to create ‘True Future Value’

Multi-capital accounting shifts from measuring value to measuring ‘True Future Value’. The ThriveAbility Foundation adds a forward-looking focus on true future value, assessing not only the ongoing viability of the organization and the systems it operates in (science-based thresholds), but also its potential for breakthrough innovation to reduce (and ultimately eliminate) negative environmental footprints while maximizing and optimizing social handprint value creation. It uses 7 capitals, adding relational capital as a separate capital to the group of 6 capitals as proposed by the IIRC.

Bildschirmfoto 2016-03-11 um 09.22.40Diagram 6: High-level formula for deriving at ‘True Future Value’; a more detailed version with all variables can be sent by the author on request.

Here are some of the advantages of using a multi-capital basis to create ‘true future value’ (TFV) results:

  • CONTEXT SENSITIVITY – TFV is a context-sensitive methodology, which works on the basis of progressive approximation to arrive at a best-estimate based decision. The context of the decision/s being made is the very first factor taken into account when applying the equation;
  • TRUE BENEFIT/COST – TFV is a holistic equation that measures the ratio of the value created in any human activity through synergies between human, relational, social and knowledge capitals (or “anthrocapitals” that generate thriving and benefits), relative to the natural and manufactured capitals costs associated with that value creation activity;
  • THREE CORE VARIABLES – TFV includes three key terms – on the denominator we have Science Based Thresholds (social floors and environmental ceilings) divided by a Sustainable Innovation Factor (including, for example, circular economy/C2C, green chemistry, renewable energy, biomimicry and micro-biome based innovations); and on the numerator we have the Value Creation Capacity of the anthrocapitals that generate thriving;
  • ALL EXTERNALITIES INCLUDED – TFV includes both positive and negative externalities in terms of metrics that measure both impacts and value/thriving, in such a way that context based sustainability thresholds are honored;
  • THRIVEABLE DECISION BENCHMARKS – TFV provides a benchmark for decisions of all kinds through which a “thriveable” decision can be made, taking into account a full seven-capital, multi-stakeholder analysis of the true costs and true benefits of a particular investment, program or action.

True Future Value as the Basis for a ThriveAbility Index

Going a step further, the ThriveAbility Foundation has designed the ThriveAbility Index model in which the components of the TFV are embedded (see Diagram 7).

This model picks up on the idea of the three gap model in Part 2 of this series, and measures the gap closure in all three dimensions, and by that explaining where an organization stands in the continuum from surviving to thriving. It represents a different way to assess and report on the overall fitness of an organization. This is a completely new quality in helping to define the profile and positioning of an organization in a three-dimensional fitness space and probably represents the most holistic performance measurement. The argument that ‘sustainability’ or ‘thriveability’ can’t be summarized in one indicator, something the sustainability community has always declared impossible (and by that has kept the interest of multiple financial market players on a low simmer), can be overcome. This high level fitness indicator, to be developed for 10 cluster industries through the ThriveAbility Foundation by 2017 to 2019 (with the aim the have it ready to use in 2020), can be disaggregated into its three components, used for True Future Value Creation of any contextual area of interest (such as the SDGs) and offers high potential for a new quality of corporate, city, country or global performance dashboards. It can be used by Rating Organizations to produce a new generation of sustainability or ThriveAbility fitness ratings. It can be used by regions (e.g. counties) or national statistics offices as a meta- performance structure.

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Diagram 7: Three axis model of the ThriveAbility Index model that corresponds with the three gap model assessing progress in all the gap areas (Source: A Leader’s Guide to ThriveAbility, page 38).

Will we get there?

We may need new and different networks to build what’s needed. I fear the existing standard setters alone won’t cut it, the UN system alone won’t succeed, the governments alone won’t deliver, the accounting standard setters need support, IT companies needs an architecture meta-structure to work in consortiums and open source (liberated data), and the majority of corporations in the mainstream will anyway only respond to legal requirements or ‘cookbooks’ that give them a step-by-step delivery template.

Reporting 3.0, mentioned in Part 1, a networked community of several hundred interested individuals has recently proposed a set of blueprints to recommend the necessary ‘glue’ between those defining a green & inclusive economy and those in reporting, accounting, IT and new business models.

The ThriveAbility Foundation offers masterclasses, pilot projects and a multi-year business plan to deliver on TFV and the ThriveAbility Index and invites partners into the Index development.

GISR offers principles and an accreditation scheme to align with the principles, many of them in support to ingredients mentioned here for reporting and accounting. The Labs, one of the components of their CORE program, offer space for joint creation of the basics for thriveable ratings.

 What to do in the short term?

 So, let’s again imagine a sustainability and/or integrated report that showcases a reporting organization’s contribution through a success measurement involving a multi-capital accounting approach (e.g. as showcased by The Crown Estate, UK, in their integrated reports on Total Contribution). What would a reader expect to see answered? Here are examples of what I would find substantial in that area, taking into account that it still takes time to report back in a complete and structured manner as described above.

Measurement:

  • To what degree does the company inventory shows its impacts from the different levels of its value cycles (instead of value chain, reflecting the need for a circular economy)?
  • Is the internalization of external effects seen as part of a ‘True-Value-Screening’ an option to better understand the value-creation process?
  • Does one differentiate between various capitals and are these integrated in the success measurement? Does the company therefore know its value-creation potentials and weaknesses better? Does the company address the consequences from these outcomes?
  • Does the company identify one or more SDGs to align measurement methodology that looks at context-based or science-based thresholds, and does it aim to develop multi-capital assessments about their contributions to these SDGs?
  • Does the company also collect data about the organizational transformation capacity and leadership capacity, taking into account the 3-dimensionality of achieving ThriveAbility, responding to the 3-gap-problem?

 Target setting:

  • Are there defined target corridors for the sustainable use of different capitals?
  • Are ‘science-based-goals’ assessed and context used for connecting to ‘social floors’ und ‘environmental ceilings’ when targets are defined?
  • How are long-term targets defined and then used to backcast mid- and short-term targets?
  • How are data of organizational transformation and leadership capacity used in defining targets also for these categories?
  • How are potential scenarios linked to target-setting?

Incentives:

  • How does the company incentivize sustainable performance? How does it punish unsustainable performance? Is this based on the measurements as mentioned above?
  • How does the company trigger and incentivize better leadership and transformational capabilities?

The combination of multi-capital approaches in internal accounting and controlling as well as external reporting, combined with experimenting their interconnections through True Future Value Calculations, and adding transformational and leadership capacity factors into measurement, target-setting as well as incentive structures, could help tremendously to report on the future readiness of an organization’s business model(s).

 

 
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Posted by on March 11, 2016 in Thriveability

 

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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.

Bildschirmfoto 2016-03-08 um 10.35.48

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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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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Transition from GRI 3.1 to G4 – 10 reasons why there is no time to waste!

– By Ralph Thurm, A|HEAD|ahead, and Nick de Ruiter, Sustainalize –

The Global Reporting Initiative published their G4 Guidelines in May 2013, but at the same time announced that G3/G3.1 reports and the application level check services would be accepted until the end of 2015. In consequence, companies that want to continue reporting based on the requirements of the GRI Guidelines have time until 2016 to declare either core or comprehensive ‚in accordance’ with the G4 Guidelines. Does this indicate that companies would have ample time to transition towards G4 and more than 2 years still to go with G3/G3.1?

In our view this is a dangerous perception, both based on the different – and sharpened – requirements G4 poses and a critical reflection of the time needed to build the necessary understanding, internal buy-in and systems readiness to be able to comply. Also, an incorrect application of G4 makes that your report becomes too broad, too thick and lacks in relevancy. Here’s a variety of 10 reasons why we think there is no time to waste – working on the transition needs to start now!

  1. Understanding materiality is crucial. A company’s impact, related boundaries and focus on materiality are much more strongly emphasized in G4, some of them described in more depth below, but the consequences of that push by GRI go much deeper. While GRI G4 is out now and the requirements become slowly clearer (G4 is nicely designed, but still no easy read), companies need to ‚delearn’ G3/G3.1 first. Ignoring materiality could quite easily lead to an irrelevant and a report which is too broad. The flexibility of interpreting and reporting on certain indicators, the lax regime on the use of omissions, the 3 applications levels, and the comfortable, reductionistic and legalistic boundary setting, these days are gone.
  2. Sustainability needs to be part of your strategy. In order to better understand a company’s impact(s) – which in consequence will help to define boundary setting and material aspects for reporting– there needs to be a willingness of top management to look at sustainability in a more strategic way. For existing businesses we know that this can be a layered, multi-year process, and is demanding a personal openness of top managers and a willingness of letting go of certain mental stereotypes. Some of them are
    1. Short-termism driving hectic actionism for quick successes;
    2. Sustainability as merely risk management, thereby ignoring the fact that sustainability can be positioned as a means to distinguish yourselve from competitors;
    3. the avoidance of mid- to long-term (SMART) target setting including a clear positioning of the legacy and right to exist (today and in the future);
    4. data and performance become a goal in itself. The lack of the ability to accept that relationships will drive success and not over-ambitious targets that lead to customer dissatisfaction, stressed-out employees, and – in the worst case – neglect of aspects like human rights, environmental protection, and anti-corruption.
  3. You need to analyse and understand your impacts. While top-management commitment is necessary and needs to go further than just words, the ability to understanding a company’s impact needs to include various actions, amongst them
    1. understanding impact based on root causes, including environmental degradation, demographic effects, technological changes, world trade developments, urbanization and transparancy development and how the company is affected by this nexus as well as how the company itself affects others and these root causes. Many sustainability strategy development projects visibly have not gone through this important step, e.g. a simple ‚reduction of CO2 emissions’ target without a program of how to tackle different route causes will remain on the symptoms level and risks any effectiveness, and more dangerously could lead to wrong decisions, think of simple outsourcing of effects into the supply chain and where effects can even be worsened.
    2. the willingness to work on various scenarios that can describe a company’s reaction to the effects identified and where they occur in the value cycle (that in contrast to the value chain which is a concept based on a throughput economy). This includes an active exchange or even shared work with partners up and down the value cycle.
    3. The willingness to gather data about impacts and therefore prepare a readiness to discuss with stakeholders from an informed perspective.
  4. The number of disclosures have been expanded. While the abovementioned steps are in our view necessary actions to define a sustainability strategy, GRI G4 is urging to also make early decisions about the ‚in accordance’ level. While both levels – core and comprehensive – put a materiality focus on top, there is a huge difference in disclosures. If a reporter is aiming for comprehensive reporting, the level of information that needs to be ready is considerably higher and should be reported for multiple years. Examples are disclosures on governance and remuneration, supply chain, anti-corruption, GHG emissions as well as ethics & integrity. It is therefore necessary to prepare the necessary data spectrum early on and define necessary ‚owners’, both with regard to responsibility as well as for the disclosures.
  5. Boundary setting has been changed. The G4 Guidelines have also changed the approach to boundary setting. While G3/G3.1 still allows a rather legalistic-reductionist approach based on ownership structures, G4 now asks for the definition of boundaries based on the underlying impacts. This is the reaction to the neglection of impacts down the supply chain – most companies never got beyond a policy level in their interaction with suppliers in the quest of reduced impact – and is now a major challenge internally in terms of data availability and enforcement of targets and policies.
  6. The stakeholder dialogue becomes more important. It is to be expected that the stakeholder dialogue process will see a change in depth and quality due to the new requirements of G4. Not only does the reporter have to clarify how the involvement of stakeholders was organized, but also how the dialogue has lead to the selection of material aspects. Obviously the company needs to be well prepared for this dialogue. It is recommended to use the sustainability context insight derived from a thorough impact-based assessment as a necessary precondition to have an informed and effective dialogue about the material aspects. This means that a proper stakeholder dialogue is less of a simple ‚negotiation’ between the company and its stakeholders, but a shared and joint point of view and therefore less confrontative, but more collaborative.
  7. Understanding the sustainability context is essential. Meaningful reporting demands a clear view in how far a company contributes – positively and/or negatively – to the most urging problem areas on this planet (or aspects in the language if GRI G4). The G4 guidelines demand certain disclosures, but many of them simply describe efficiency increases (in relation to earlier reporting periods), relative changes or compliance and quality in following a certain due dilligence (audits done, shortcomings recorded, mitigation measures taken). Overall, many of the indicators do not give the reader the impression that what a company has done is at least ‚good enough’ in the light of the global urgencies. This shortcoming in G4 (which also existed in G3 already) has been called the ‚sustainability context gap’ and refers to the requirements of the sustainability context principles in G4. Every company needs to have a good view on their micro-performance against a macro dataset (e.g. the ecological footprint, data from TEEB, etc.). This enables companies in setting focused strategies, it makes communication about real impact possible and facilitates readers in reviewing and understanding the actual performance.
  8. There will be less room for omissions. Another point to start working on the transition to G4 now, is the use of omissions as common in the GRI 3/3.1 Guidelines. GRI G4 has put a halt on the use of number of omissions as well as not allowing any omission without proper reasoning. With just 4 specific ones that are allowed (indicator not applicable and why, confidentiality constraints, legal prohibitions, and unavailability of data with a reference until when the company expects to have the data available). The use of a larger number of omissions may lead to a ‚invalidation’ of the claim for core or comprehensive in accordance reporting. It is not yet clear what process the GRI will adopt in the light of the new regime, but it is to be expected that companies claiming a certain level will at least need to notify GRI about it.
  9. Sector specific information is integrated in the reporting requirements. Sector supplements will be become an integral part of the reporting requirements both for core and comprehensive in accordance with GRI G4. This means that a reporting approach needs to take that fact into account from the start of the reporting process design. The luxury to just use feasible sector supplement indicators to obtain the highest grading (A/A+ in GRI 3/G3.1) will disappear.
  10. There are more frameworks, ratings and guidelines evolving. Additional frameworks like IIRC’s Framwork for Integrated Reporting, sector specifications as proposed by SASB (the Sustainable Accounting Standards Board) and GISR (Global Initiative of Sustainability Ratings) and the consequences of their focus, logic, requirements and information enlarge the plethora of reporting requirements. IIRC’s capital model, SASB’s industry-specific indicators, and at a later stage the recommendations by GISR on how to safeguard quality in ratings are maturing and will become evident in the coming two years (well within the timeline until GRI G4 will require in accordance statement by reporters). Together with all abovementioned reasons we think there is no time to waste to start using the combined set of requirements for the design of a continuously improving reporting regime.

Authors: Ralph Thurm is the Founder & Managing Director of A|HEAD|ahead, Nick de Ruiter is partner at Sustainalize. This is their first joint blog post and is posted on both blog sites.

 
 

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Context, please! Ralph’s column in edition 3/2013 of ‘forum Nachhaltig Wirtschaften’

Here’s the pdf of the (German) article ‘Kontext bitte’ of the ‘forum Nachhaltig Wirtschaften’, edition 3/2013.

FNW_2013_03_Thurm

Why is Novo Nordisk’s newest integrated annual report tackling growth? Because they have to, it’s the context to their business model, and embracing the idea of a ‘Grenn & Inclusive Economy’ is core to them. Why is the Shell report missing enough context and get a clear ‘warning signal’ by their External Review Committee (while being famous for their scenarios)? Because they still don’t get how much is at stake in a rather short amount of time and they just neglect that a ‘Green & Inclusive Economy’ needs to be built without fossils; defenders of a certain faith just move as much as they’re absolutely forced to, unfortunately. So, will GRI G4, the IIRC and the approaches of SASB and GISR (to name a couple of new kids on the block) catalyze some of that change towards more context in reporting? Chances are they could be part of the solution as macro-micro benchmark information will become the ultimate litmus test of useful, context-based and satisfying information for all stakeholders. We need to start asking for that information. What is your right to exist today, and in the future? Did you ever have the idea that this – most important – question has been answered in a sustainability or integrated report you read recently? Novo Nordisk is close, Shell not, so my investment strategy is clear…

 

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