Integral Thinking & True Materiality – Part 3/7: Purpose Defines Connectedness

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 3/7.

In Part One of this series, Diagram 1 showed an overview of the three main areas of the proposed change need for integral thinking and true materiality; Part Two explained why we need this new impetus. Part Three now tackles the upper section of the triangle – the need for chrystalizing purpose to better show connectness to the problems that need to be solved in interrelated ways.

Diagram 3: Integral thinking and true materiality need a renewed focus on the purpose of the organization and connectedness to the economy we want to live in.

It has been interesting to see how the discussion about ‚the purpose’ of an organization or an economy has moved into the forefront in the last 1-2 years. The 2015 numbers of the Global Footprint Network (GFN) or from UNDESA on population, consumerism and the environment [insert link] are just telling one striking story: as a species, we humans are on a slow death path.

The fact that the ‚human’ role in sustainability now gets back into the focus simply shows that it dawns on us that we forgot to take people on board of the sustainability journey, in companies as well as in private circumstances. Sustainability is not exciting for the majority of human beings. We see constant shoulderclapping about reports in which we are told how much less bad a reporting entity became, without any ‚North Star’ that could tell us what is ‚minimally good enough’, or what would lead to an envisioned future beyond just having a ‚zero negative impact’; this was sucked up by our frugality of installing sustainability departments that took care of policies, management systems, reporting and assurance. The ‚three gap problem’ as discussed in Part Two of this series led to a reduced understanding of sustainability in which essential aspects of sustainability like ‚people, planet and prosperity’ became ‚people, planet and profit’ and intergenerational equity fell by the wayside.

In consequence, Sustainability Context still remains the most neglected Content Principle of any GRI-based sustainability report. Seldom does a reader understand the ‚world view’ of a company, its leadership advocation to change the economic system towards serving a green & inclusive economy, and how the product & service spectrum offered makes a positive contribution (instead of less negative impact), alone or in collaboration / co-creation with others.

It is amazing to see how disconnected sustainability or integrated reports are with ‚the whole’ which we are contributing to (or not). Reporters typically claim it’s too complex to envision a different economic model, exploring a new level playing field in which market mechanisms can automatically work towards an aimed-at state of being regenerative and inclusive. Isn’t that what scenario analysis was invented for?

We developed our current economic model as one set of conventions, and it is up to us to change that for the better. Haven’t we already decided to aim for a green & inclusive economy at Rio+20 in 2012? So where are we with that? There are indeed some positive prompters here:

• There is a whole set of macro datasets that show the ‚global pulse’ of our continued negative pathway, which means a better understanding of the interconnectedness of our doing and its effects on the planet is more and more possible. Various IT networks, data providers and technology firms work on making ‚the whole’ visible, up to artificial intelligence (AI) approaches (see a variety of these in the Reporting 3.0 2015 conference report, http://www.reporting3.org). The main issue here is to translate that into data clusters that corporations can use for their ‚micro-macro’ impact interpretation.
• A variety of companies and development organizations work with the idea of Creating Shared Value (CSV) as proposed and vividly defended by Porter and Kramer for years. While definitely a good learning approach, CSV doesn’t yet prove to be able to either move the concept beyond the ‚feelgood’ areas of collaboration and co-creation; the nasty issues aren’t really solvable since they need new ‚rules of the game’, a normative approach to global change. And secondly, CSV aims at optimizing within an existent frame of economic system boundaries. We won’t get to a sustainable or regenerative economy without also tackling those economic system boundaries to create new level playing fields in which industries can transform. Porter and Kramer, it seems, remain in the 1990s thinking of enlarging competitive advantage with creating (extra) shared value.
• The Sustainable Development Goals are an interim step towards learning to understand thresholds in a context-based sense, leading to less-bad impact, probably a planet of ‚Zeronauts’ (to stress John Elkington’s brilliant book from 2012). The translation to apply and measure contributions in the corporate world, in local and regional circumstances as well as globally, is still to be developed. A plethora of initiatives are underway to find out, and hopefully it will be a training area to explore the possibility of thriveable, gross positive impact as the greatest innovation boost ever. Each company needs to define where they stay in the continuum that the ThriveAbility Foundation has offered, see the following diagram:

Diagram 4: The strategy continuum to assess a company’s position in a world that needs to leapfrog from surviving to thriving (Source: A Leader’s Guide to ThriveAbility, page 18).

• Kate Raworth’s ‚Doughnut’ model, showing environmental ceilings and social floors, has given us a 2-dimensional picture of interconnectedness, but only good enough to get us from suffering to struggling – it misses the ‚operating system’ to create real thriving. This model needs adaptation to become 3-dimensional, adding the component of human transformation to accelerate positive change. This is what the ThriveAbility Foundation recommends to get us from stage 1-3 of the above diagram to stages 4 and 5, and in consequence appeals to a change from an ‚ESG Push’ towards a ‚GSE Pull’, addressing authority, decision-making and accountability in one stringent approach. This needs leadership in ways that until now only a Ray Anderson (Interface), Paul Polman (Unilever), Sir Ian Cheshire (ex-Kingfisher) and some other corporate leaders have shown. Only through this advocacy will we get to economic system boundaries change addressing the ‚macro-micro change area’, mainly though the combined integration of external effects into cost accounting, translation into pricing mechanisms, and counterbalancing those effects by a drastically changed tax and subsidies regime on a global scale. The work of Trucost, the True Price Foundation, Ex’tax and others in this area are therefore essential to get this masterplan done over time, together.

So, imagine a sustainability and/or integrated report that showcases a reporting organization’s contribution through a chapter on purpose and connectedness. What would a reader expect to see answered? The below are examples of what I personally would find substantial in that area.

On Contextualization:

• Does the company have a ‘World View’ and a long(er)-term idea of positioning in the continuum from ‘Compliance’ to ‘Thriving’ when it comes to impacts and outcomes across the multiple capitals? Where does it want to be in the future?
• Is there one strategy, or does the company have a separate sustainability strategy (which should be avoided, as it signals sustainability as a side issue)?
• Is the corporate strategy based on affecting the root causes of global non-sustainability, or is the strategy just based on curing symptoms of non-sustainability (like the majority of companies do at this moment)?
• Are there various scenarios in which the company is testing its possibilities to impact and gets addional insight into its long-term positioning?

On Leadership:

• Is the socio-cultural leadership gap addressed (part of the three-gap problem)?
• Are company leaders assessing the transformation blockages in the sustainability gap (also part of the three-gap problem)?
• How is sustainability visible in the organizational hierarchy? Is sustainability integrated in strategy and governance so that the sustainability team could veto non-sustainable corporate decisions?
• To what extent is the leadership group aware about a responsibility for sustainability above and beyond the legal construct of the organization?
• What does the company contribute to asks or campaigns to change the unsustainable boundaries of our current economic system, e.g. trade barriers, unsustainable subsidies, political lobbying, testing new ‘level playing fields’ through the combination of true costing, true pricing, true taxation?

On Ambition Level:

• What’s the company’s view on growth? How does it differentiate sustainable from non-sustainable growth?
• How does the company define its ambition level and how are short-term targets derived from succeeding its long-term ambition level (e.g. through back-casting)?
• How are all employees included in defining the purpose and connectedness of the corporate strategy to sustainability?
• How does the company differentiate efficiency gains, productivity gains and their respective rebound effects vis-à-vis the need for sustainable innovation?

It is these questions that build the ‚glue’ and segway into the vision of performance beyond just doing the minimum needed. It would add to the idea that current approaches don’t add up altogether and that technology alone won’t cut anything without the humans on board. This is tough work in hierarchical structures and even tougher in multinational companies. But it honestly the only way we can deliver. It is time for new conventions.

 

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!

 

 

 

 

John Elkington’s Zeronauts ‘Roll of Honor’ – Interview with Ralph Thurm

In May John Elkington’s book ‘The Zeronauts – Breaking the sustainability barrier’ got published and since then gets a lot of attention in the sustainability community and beyond. In his book about the new breed of inventors, innovators, entrepreneurs, intrapreneurs, investors, managers, or educators who promote wealth creation while driving adverse environmental, social, and economic impacts toward zero, John Elkington has come up with an inaugural ‘Roll of Honor’, 50 Zeronauts that are examples for this new breed, coming from different constituencies. John admits that some of them didn’t even know that they were infected with the ‘zero-gen’ and simply did what the did because it made complete sense. I am very humbled and happy to be amongst the chosen few, however I am thinking that my journey to zero has also just begun. Please find below a short interview that explains my rationale, intentions and beliefs for the ‘zero agenda’. You can find many more examples on www.zeronauts.com and in John’s blog with 2degreesnetwork, to be found at http://bit.ly/NkeXH3.

Ralph, you have become a leading proponent of Zeronautics. Why?

“My journey towards Zeronautics began in 2005/2006 when I was working with the Global Reporting Initiative (GRI) and saw a growing gap in the area of Sustainability Reporting.  My question: How could you assess the positioning of a given company’s sustainability performance against a real benchmark?”  (This issue was addressed by the Sustainability Context Principle in GRI G3.)

“The indicator section of G3 wasn’t able to capture this need due to the lack of globally accepted and applicable ‘denominators’. To date, we can only measure efficiencies and relative levels of performance, and can only get a sense of whether organizations have become ‘less bad’ in their material focus areas.  What is missing is a core definition of what is actually ‘good’.”

But why is zero-based thinking needed?

“We are all somehow flying blind. I was immediately excited when I heard about the Zeronauts book project, at a GRI event in Rome in late 2010. Since then Deloitte Innovation and Volans have worked together to work out how to implement the book’s agenda into the day-to-day world of companies.”

“Much is going on that seems to be headed towards the idea of what the book dubs a 1-Earth Economy, with buzzwords and phrases like ‘sustainable capitalism’, ‘beyond GDP’, the ‘circular economy’, to mention just a few. I came up with the term ‘Zero Impact Growth’ as the minimum ‘North Star’ for our work, a door opener and conversation starter as we work towards measurable and commonly accepted denominators.”

“I especially like the embracing character of the emerging discipline of Zeronautics, which I see as a complementary development to the many existing initiatives in the ‘Sustainability Quilt’. I value the opportunity to use Zeronautics as a reality check in terms of individual and organizational effectiveness. The goal has to be a jointly agreed upon Zero Impact Growth Framework.”

“We need many more Zeronauts, in all areas of society and in the corporate world. As Yogi Berra once said: ‘You’ve got to be very careful if you don’t know where you’re going, because you might not get there.’ A first step will be our Zeronauts Symposium in Rotterdam on 5 June 2012, Earth Day.  Encouragingly, the event is more than sold out.”

—end of the interview

In the meanwhile the mentioned Zeronauts Symposium at Deloitte’s Dutch headquarter took place on June 5, 2012. I will come back with a longer blog on that fantastic event in due course. So stay tuned.

 

Ralph’s articles from forum Nachhaltig Wirtschaften 4/2011 and 1/2012 now available online (in German language)

Here are the last two article that were published in forum Nachhaltig Wirtschaften, editions 4/2011 and 1/2012, now available online:

Zero Impact Growth – Auf der Suche nach einer klaren Orientierungshilfe

describes the search towards a new minumum benchmark that industries will need to develop together and accepted by other stakeholders in order to be able to assess what GOOD or BAD performance in sustainability actually really means. Unfortunately, not many companies really want to know and the article mentions some of the reasons why. Too big the vision, too much effort needed? Or just the normal dilemma between short- and long-term. Decide yourself!

Die langfristigen Konsequenzen der Kurzfristigkeit

covers aspects of intragenerational and intergenerational equality, and describes that the second will not be possible if we don’t seriously work on the first. The interdepending conflicts of food, energy, climate and water security illustrate how aspects of intragenerational maldoing already screw up intergenerational equality opportunities today. Not acting now has uncurable effects.

 

Where’s the compass for 2012 – what about Zero Impact Growth?

It’s been more than half a year since I last posted a blog on A|HEAD|ahead. I simply wanted to take a break because I wanted to observe for a while and not add to the wave of guessing about what all the incidents and movements that happened in the world (and in parallel) really meant. I had the idea that we seemed to have reached a crucial turning point for some of the most urging questions in our economic, environmental and social agenda. But have we?

So, what has happened in the last 6-12 months if you take a look at it from a sustainability perspective? Undoubtedly, too much went into the wrong direction:

• In North America, the ‘buck bug’ continued to infect the political leadership: a month-long soap opera about the national debt cap question was orchestated, with a result that was clear from day one onwards: a continuation of increasing the burden on future generations, and no questioning of the systemic flaws. It also made the rest of the world think how nuts the American political leadership went, using this debate already as a platform to start their election campaigns for 2012. As we’ve seen just recently, the ‘Super Commission’ that was tasked to find 1.200 billion USD savings potential – at least a soft try to also stop the ever growing national deficit – was just the continuation of that earlier super disaster. So this political soap (‘Take a sip with the Tea and the Coffee Party’) goes on to compete with ‘Jersey Shore’ and ‘the Kardashians’. Immensly unsustainable, full of systemic flaws!
• Europe didn’t do better with the discussions on how to save Greece, part of the Siesta-belt, by some called PIGS countries, expecting that Portugal, Italy and Spain would follow suite. The muddling-through, throwing more good money at already poisoned assets of banks and unrealistic country budgets has in the meanwhile at least led to the sudden epiphany that without a proper haircut the European currency union would now most likely officially be dead already, and that good governance and a financial and economic union are needed as well to support a currency union to work. But still a lot of questions remain and there is uncertainty if the capital markets will decrease pressure on the other PIGS countries, and let’s also not forget Ireland as well. The newly created superfund (a name that nobody can pronounce) has not yet given us any relief.It also became clear that relying on ratings by three (anything but independent) North American rating agencies (with the hidden agenda to see money transfers to North America) isn’t helping at all. Immensly unsustainable, full of systemic flaws!
• In Japan, it became just brutal reality that we are still vulnerable towards the elements and that whatever promises were made by corporations or the authorities around nuclear energy, Fukushima told us all the truth: Bluntly believing any of these promises can be deadly. The knock-on effects on corporations and the government from the Fukushima desaster are immense and have created a general feeling of distrust, not only in Japan. Many officials there already needed to step down. The swing towards renewable energies remains a difficult undertaking, and it needs governments to reassess and reverse their strategies towards renewables. I am particularly proud of my home country Germany that did reverse a big mistake that was made in the last political coalition-building and that now continues to shut down nuclear power plants by 2022. The cost to move on with nuclear and oil are in my view not overseeable, the risk too high, a total cost picture including all externalities does favor a shift renewables! For now, again, the current situation is immensly unsustainable, full of systemic flaws!
• The outcomes of the Durban COP 17 remind us that it will be business, and business alone, to proactively guide us into a sustainable environmental 1-planet balance, and simply because of one reason: survival of the companies will only be possible in a sustainable context. Whatever global governance can help us with on that transition is fine and welcome, but it’s simply always too late. The reality is that we now have another ’empty shell’, at least an empty shell that is carried by all (am I sounding cynic?). Well, the WBCSD in their latest update said that the Durban platform content: a) does not have any ambition levels other than what came out of Cancun (i.e. + 2°C by 2050). Given the timeframe for the Durban Platform and what science and the IEA are saying, this makes the 2° target unrealistic; b) confirms the GCF (Green Climate Fund), but we do not know how it is going to be funded nor how the funds will be used; c) also confirms the Technology Mechanism, but its modus operandi is to be developed; d) is extending the Kyoto Protocol for a second commitment period, but with the EU, Norway, Switzerland, New Zealand, Ukraine and Kazakhstan as the only countries with targets, representing about 15% of global emissions (and let’s not forget the shameful step of the Canadian government two days after the closing of COP 17); e) The process of voluntary national pledges for emission reductions that were initiated at COP15 in Copenhagen will continue and follow up will be reported to UNFCCC and verified on a biannual basis. One more time: immensly unsustainable, full of systemic flaws!

Enough doom. Fortunately, at the same time as we see systems continue to derail, some positive developments happened as well, and partially as a response to the truly unsustainable situation described above:

• In the shadow of the financial crisis in Europe and North America, China earlier this year published its new 5 year plan, announcing drastic investments in leapfrogging technology and moves towards renewable energy. Is it just me, or does it also dawn on you, that (apart from many areas where we want to still see change in China), there is new sense of leadership that indeed does have a plan and will rigorously follow this plan? China is of course in a position to use currency reserves to invest heavily and now sees it’s one-in-a-lifetime opportunity to use the weakness of all the other blocks for development. If it continues like that it is just a matter of one decade until China will dominate the renewable energy market.
• In Germany, the government made a 180 degrees turn in nuclear politics, correcting a mistake that was made only months earlier as one of the compromises in the coalition-building with the Liberal Party and to please the energy lobby. It took Fukushima to make clear that the German population didn’t appreciate the earlier turn towards nuclear, so back to start. And the discussion in France, where 90 % of all energy comes from nuclear sources, has only just begun.
• The Arab Spring spread over many countries in Northern Africa and parts of the Middle East – and still ongoing in Syria and Jemen, now with first signals that Kuwait and Saudi Arabia will possibly be next? What will happen with Iran still remains to be seen, but one thing is for sure: the nuclear issue will be the trigger for change, in one way or the other. Still open are the developments in Iraq where the American armed forces just left the country and the coalition between the sunits and shiits is extremely shacky; the terrorism just returned to the streets of Baghdad (and elsewhere in the country). The Arab spring now seems to have a hot summer, where the basic democratic processes and parties still need to prove how much they are willing to be part and not dominate in the democratic setup. It will also be a crucial test in how far conflicts between tribes, religious groups and past economic opportunists of old regimes will embrace the developments.
• Although becoming a bit quiet again (due to financial dry-out), we saw the revelations of Wikileaks and the huge amount of effort of corporations and governments to stop the outflow of information. Whatever we all think about legal issues around Wikileaks, it’s clearly that there is an appetite of the global public that illegal, unethical and corrupt behavior of anybody anywhere is unacceptable and nobody can be sure that this sort of behavior won’t be discovered and publicized, so better not do it from the very beginning. Sunlight is the best desinfectant, it’s as simple as that.
• We saw the first moves of what emerged to be the ‘Occupy’ movement, starting at Wall Street, and spreading all over the world in the last couple of months. Seen as a leaderless movement (‘We are the 99%’), it is not yet really seen as a serious and lasting endevour by the remaining 1%, but as soon as a clearer frame for areas of change will emerge from Occupy and the collaboration between the different decentralized Occupy communities leads to spokesmanship, this can really become a serious counter-initiative to the crusted existing political community. It is great to see that ‘fairness’ as the underlying theme is starting to be addressed by economists and even some of the super-rich.
• 2011 also saw the birth of ‘Shared Value Creation’, a new direction for capitalisms, coined by Michael Porter and Mark Kramer in HBR 1/2011 (but didn’t I see this vocabulary at Nestlé before?). First presented as ‘CSR and sustainability are dead, long live shared value creation’, Porter has recently been more embracing and describes shared value creation as the logic next development step. I would have personally wished his shared value concept to be promoted as part of sustainable capitalism, and not describing shared value creation as something opposed to sustainability. A lot of discussion has started around this article and it’s time to thank the most heard strategy guru to have now embraced our global issues and giving hope that a new form of capitalism will help solve them. I am particularly thankful that the question of ‘scope and purpose’ of business is now finally (back) on the table. The downside of this discussion for me still is that there is a certain notion that our current unsustainable growth paradigm isn’t addressed enough and that Porter’s new capitalism could be successful without working in parallel towards a jointly developed and globally accepted Zero Impact Growth paradigm. Part of this doubt led John Elkington and Deloitte Innovation to start the ZERO HUB (see below).
• The European Commission came up with their new communication on CSR in October in which they defined the the term CSR more broadly than in 2006, now it’s ‘the impact of an organization on society an the environment’. This definition now finally turns away from the earlier notion that CSR is what companies do beyond the legislative needs, which sounded too philanthropic and hasn’t achieved a lot more than endless discussions over many years. There are also signs that the EC would finally come up with ‘processes’ to demand sustainability reporting, following early examples of France, Denmark and Sweden. If that means regulation remains to be seen, but observing the developments towards integrated reporting and the overall transparency agenda the EC should be proactive instead of reactive now to allow for a smoother transition in the years to come.

As you may expect from me, many of the incidents and movements we saw and still see in 2011 are in my view just additions to the ever mounting evidence of the start into the ‘sustainability era’. Finally, you may say! However, our biggest problem is that sustainability is still an often misused and bulky expression of a general ‘sort of’ way forward, to live in harmony with planet earth as human race. I have to admit that interpreting all of the above without a more proper definition of what they really mean and if we were are to be successful on that path towards sustainability, is some sort of guessing as well. So, do we need a better and more reliable compass? I think we do!

Are we living in a world without compass? Well, at least a world that still doesn’t really understand sustainability as the only paradigm for the successful implementation of globalization and a possible route to bring into context and cluster the issues, the dilemmas, and the opportunities, allowing us to finally and fully analyze e.g.

• the scope and purpose of the financial markets in a real-world economy that strives towards a 1-planet economy;
• the role of governments in framing and supporting the markets towards a 1-planet world, in which the illusion of externalisation of effects of wrong-doing would be stopped;
• how corporations in all their industry sectors would understand and play their role and responsibilities according to a vision of what their sectors are really good for in a 1-planet world (while also understanding their issues and remaining life-span if they don’t change);
• the role of the totally underestimated, but in reality more and more forceful civil society movements that started to globally ‘vote with their feet’, while consolidating and building communities to effectively collaborate and co-create with corporations towards a 1-planet world. A world in which social entrepreneurship becomes the maxime and where making money while exploiting other capitals would be a complete no-go.
• what is success and how have we achieved it altogether, on micro level and on macro-level!

Seeing my kids grow up in more and more uncertainty and a dimension of externalities that is less and less manageable by them, 2011 has at least for me been a turning point: I am becoming more and more impatient about the slow level of speed towards needed systemic change, more radical in the focus of what I like to help develop (means making more choices towards a specific focus), and less willing to support ‘less bad’ muddling-through.

In that regard two new movements have gotten a lot of my attention this year: The Deloitte/Volans ZERO HUB and the KATERVA awards. We need ‘epic wins’, and both initiatives have the potential to instigate change, so 2012 will be an even more important year to see how far we can get – with all your crucial support!

The ZERO HUB

This is an open innovation platform by Deloitte Innovation and John Elkington’s sustainable innovation incubator Volans, to work with companies in six different industry clusters to develop a clear vision on zero impact growth. The Zero Hub is based on the methodological and sustainability know-how of Deloitte Innovation and the thought-provoking guidance that John Elkington publishes in his new book ‘The Zeronauts – Breaking the sustainability barrier’ in spring next year, also the starting point of season 1 of the ZERO HUB.

Based on a facilitated process, simulating a space flight, we will co-create a zero impact growth vision, the related zeronautics (how to measure success on micro- and macro level), a joint adaptation plan (how to get there altogether), company-specific adaptation plans (clarifying roles and responsibilities of the various cluster industries) as well as necessary tooling (measurement, communication, change, social media, advocation, etc.). By that the ZERO HUB builds on work that the WBCSD has started with their Vision 2050, and the work of existing Zeronauts like (the recently passed away) Ray Anderson or Gunter Pauli (ZERI). It is complementary to existing company-specific programs and will increase the evaluation of the effectiveness of these programs.

The time must come where all industries and companies have a North Star to follow and in which we finally have a good view on what a company does is actually ‘good’, or ‘bad’, or ‘good enough’, or ‘not good enough’. This is not to name or shame, this is to co-create and cross-fertilize between industries, with a clear focus on how certain sustainability issue areas are helped by their joint activities. I recently spoke with Thomas Rau, a leader in sustainable architecture, and he gave me the ultimate reason for the ZERO HUB: ‘If we don’t know altogether what to achieve, every step we might individually take could be wrong’.

Current GRI sustainability reporting doesn’t cut through this, and that is because there is a big gap between sustainability context as a principle, and the reported information through indicators. Too me this is also the biggest challenge for G4, a new version of the GRI Guidelines, to be published in 2013, and in place until at least 2020 (the time when we will have reached ‘peak everything’ if we don’t act very quickly). As a former GRI staff member I hope that my ex-colleagues and the working groups tasked with the new development will be able to close this gap, and that GRI’s governance bodies and its stakeholders will not accept a new version of the GRI Guidelines that don’t deliver here. My hope is that the ZERO HUB can create inspiration for this agenda point.

John Elkington has decribed his rationale for the ZERO HUB  this week in his latest Guardian blog, see bit.ly/vdl82L. Is your company willing to take this next necessary step, then mail me at rthurm@deloitte.nl. You will be part of a group of 8-12 companies, and while we see great takeup in the financial sector and the manufacturing sector, we still seek companies in energy, transportation/logistics, consumer business, waste management and IT.

To me, the ZERO HUB rollout process has so far been a litmus test in how far companies are either stuck with their leadership, culture, programs, short-termism, and excuses to keep on doing ‘less bad’, or their willingness to co-create, think out-of-the-box, and get senior management/board committment for intended cross-fertilization. There has been a lot of shadow and some light so far, the coming double-dip scenario again leads to corporate ‘cocooning’, and all companies that so far committed to take part needed – amazingly enough – board resolutions for freeing the capacity.

The KATERVA Awards

Deloitte Netherlands has been a contributor and sponsor of Katerva, and my personal experience leading our team involved in the Awards – called already the ‘Nobel for Sustainability’ by Reuters – has been very enriching. The Katerva Awards (www.Katerva.org) are the pinnacle of global sustainability recognition. Through them, the best ideas on the planet are identified, refined and accelerated toward impact at a global level. Katerva Award nominees must undergo a rigorous evaluation process to be eligible for the grand prize. The practical, strategic, scientific, social and commercial aspects of each project are thoroughly analyzed through a meticulous eleven month review process. More than 600 individuals participate in the nominee identification and adjudication process including six filtering phases and twelve stages of focused review.

As the review process indicates, Katerva isn’t looking for ideas that will improve the world in small increments. They are looking for paradigm-busting ideas. Award winners don’t simply move the needle when it comes to efficiency, lifestyle or consumption, but rather they change the game entirely. This is a celebration of radical innovation and an acceleration of much needed change.

The winner of this (inaugural) year’s award – Sanergy – will receive over $500,000 in in-kind services from a variety of top-tier global service providers, along with global media exposure and access to the global network of thought and business leaders, academics and institutes, political and celebrity figures, and activists the world over. The Prize Jury in 2011 was composed of a distinguished group of global leaders, including Jean-Michel Cousteau, Mary Robinson, Dr. J. Craig Venter, Marina Silva, Gunther Pauli, Jeremy Rifkin, Lord St. John of Bletso and John Elkington.

For the 2012 Awards cycle Katerva now looks for interested experts in the 10 Award categories to joining the so-called Global Spotter Network which plays the important role of helping to identify and nominate the best sustainability programs on the planet for recognition and award. All that is asked of the spotters is that they make Katerva aware of any ‘paradigm-busting’ sustainability ideas they come across. That’s it. No phone calls. No meetings. No real effort required. Just one or two emails a year informing of something that has caught their attention. Of all the sustainability-related ideas that you may be exposed to every year, you filter out all those that you may find interesting but not truly revolutionary, and then feed into Katerva the one or two that you feel has the potential to become a true ‘game-changer.’ Terry Waghorn, Founder and CEO of Katerva, would be happy to see your willingness to help, contact him [+1.619.618.0464 (direct), Skype: terry.waghorn, mail: terry@katerva.org].

2012 – a very important year

2012 will be a very important year. Not only do we see a series of key anniversaries, but Rio +20 as one of them will give us another summary of the state of the world and our ability to jointly solve them. ‘As the years teach me what the days never knew’ (to quote Ralph Waldo Emerson) I am hoping that 20 years after I decided that sustainability would be the focus of my business life, the recognition is finally there that we reached the point of no return. The slow death path that we are on is no solution any longer and we have only another decade (or two) to finally fix the damage.

I’d like to finish my 2011 review with Vaclav Havel, who showed us that change is possible, even in the worst of all possible system conditions: “Vision is not enough. It must be combined with venture. It is not enough to stare up the steps, we must step up the stairs!”.

How many steps of the staircase will you take in 2012?

 

The law of Jante

Here’s the first blog ‘towards sustainomics’. In this series I’d like to share some thoughts that  build on ‘back to basics’ and tend to take a look into the future. Some of these thoughts may sound rather conventional, but often I find the simple logic more appealing when  getting to the core of certain matters. Any thoughts are welcome!

In one of his last books* Paulo Coelho explains to the reader the meaning of the “Law of Jante”, first introduced by the Scandinavian writer Aksel Sandemose in his 1933 novel A Fugitive Crossing His Tracks. In short the Law of Jante means something along the lines of “You are worthless; no one is interested in what you think, therefore you had better opt for mediocrity and anonymity. Do this and you will never face any major problems in life.” Coelho continues by saying “that it is thanks to the Law of Jante that the world has been manipulated in all kinds of ways by people who often end up achieving their own evil ends; we see the great gap between rich and poor, see social injustice, violence and people who are forced to give up their dreams.”*

What will happen a couple of generations from now when people will look back at the beginning of the new millennium? Will they realize that civil society, business and politics, although knowing all the facts that have been presented by e.g. the IPCC (let’s not talk about the current trust problem due to the lack of a consistent quality control system), many other think tanks  and clearly communicated by leaders like Al Gore, Jeremy Rifkin, Amartya Sen, Sir Nicolas Stern, Thomas L. Friedman, Paul Hawken, John Elkington, Jonathan Porritt and Jeffrey Sachs, haven’t really succeeded to prevent further environmental degradation, climate change, poverty and single-focused old style capitalism, so that everything got worse and made life impossible in many areas of the planet, causing migration waves and decimation of humankind by unknown diseases? Will they simply say “well, blame it on the Law of Jante?”

I prefer Paulo Coelho’s proposal to create an “Anti-Law of Jante” to prevent things from getting worse: “You are worth much more than you think. Your work and your presence on this earth are important. Of course, such ideas could land you in a lot of trouble breaking the Law of Jante, but don’t be intimidated. Continue to live without fear, and you will triumph in the end.”*

Paul Hawken’s book ‘The blessed unrest’ has created the sort of “Anti-Law of Jante” feeling with me. There is way more happening regarding activism of civil society than we ever imagined. Paul Hawken counted more than 140.000 networks actively involved in making this world a better place (and counting further). Much of that information he collected through the internet, so necessary information is available and transparent, so possibilities to connect with those networks is no problem. Everybody counts, so why not starting your own sustainability network or connect to others or simply become part of one? My takeaway is that there is no excuse anymore to NOT be active. So, let’s prove that we can all fight the Law of Jante now!

* Paulo Coelho: Like a flowing river, HarperCollins Publisher, 2006