RSS

Tag Archives: ThriveAbility Foundation

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:

Bildschirmfoto 2016-03-08 um 10.40.49

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.

Bildschirmfoto 2016-03-08 um 10.41.51

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.

Bildschirmfoto 2016-03-08 um 10.41.20

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?

Bildschirmfoto 2016-03-08 um 10.42.17

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.

Bildschirmfoto 2016-03-08 um 10.42.32

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!

 
Leave a comment

Posted by on March 22, 2016 in Thriveability

 

Tags: , , , , , , , ,

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!

 

 

 
Leave a comment

Posted by on March 8, 2016 in Thriveability

 

Tags: , , , , , , , , , , , ,

‚Unsubscribe dialog – subscribe collaboration’

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Tags: , , , , , , , , , , ,