Counting What Counts: The Evolution of New Metrics

We’ve come a long way since the first New Metrics conference seven years ago. Back then, much of our focus was stuff — resource efficiency and the physical “metabolism” of our organizations; now, we focus more and more on value. Back then, we were very concerned with reporting; now, we’re increasingly concerned with how reporting contributes to strategic insight. Back then, we focused on the metrics of the tangible — the stocks and flows or both physical resources

The Sustainability Practitioner’s (Basic) Guide to Investors

As a reformed banker, I tend to be alert whenever I hear folks talking about investment and investors. Over the past few Sustainable Brands events, I’ve noticed, however, that the language can sometimes be a bit muddled around this topic. Investors are often lumped into one homogenous bunch, whose needs and duties are not really understood. The differences between the types of investment product and the accompanying financial risk-reward can be confused. And at its most extreme is the proclamation that investor group X “should” do something — which is usually code for “invest in companies like ours”! When I stopped to think about it,

How to Try Context-Based Sustainability in 3 Easy Steps

At the closing of the New Metrics ‘17 conference in Philadelphia last month, attendees were asked: “What ‘New Metric’ will you go back and implement in 2017/2018?” The overriding response tabulated in real time and displayed on the big screen in a word cloud (above) was “context based,” meaning Context-Based Sustainability (CBS) and its corresponding context-based metrics. For anyone seriously interested in experimenting

Natural Capital Accounting and the SDGs: Critical Components of Each Other’s Success

A report launched at the World Forum on Natural Capital (WFNC) in Edinburgh, Scotland last week examines the vanishing wealth of the world’s nature, and the growing systemic risk that represents to global economies and societies. The study, published by a team of economists at the University of Oxford, highlights that extreme weather, mass extinctions, falling agricultural yields, and toxic air and water are already damaging the global economy, with pollution alone costing $4.6 trillion every year. It points out that natural capital is not being accurately measured or valued in the context of these ecological tipping points — and that current economic models are

Is It Possible That GRI Has Never Really Been About Sustainability Reporting at All?

September marked the fifth anniversary of a public comment that I and 65 other members of the Sustainability Context Group submitted to the Global Reporting Initiative (GRI) in the run-up to G4. G4, of course, was the next generation of GRI’s Sustainability Reporting Guidelines at the time, which since then has been replaced by a new set of standards (no longer called Guidelines), known simply as the GRI Standards. Mark McElroywill discussContext-BasedSustainabilityatNew Metrics ’17. What my colleagues and I pleaded with GRI to do at the time was to include additional guidance that would make

By Not Accounting for Nature, Business Is Reporting Fake Profits

We need to make better decisions to avoid the potentially severe consequences for businesses operating in a deteriorated environment. The social and environmental megatrends will, over time, act as a drag on prosperity as the costs of basic inputs such as water, energy and land escalate in response to scarcity. To make better decisions, we need to measure what matters and stop considering nature as free and unlimited. It is the duty of the Board of Directors to lead this decision-making and put sustainability at the centre of the company’s strategy, effectively achieving

CPAs and Sustainability Thought Leadership: An Interview with RISCPA CEO Bob Mancini

Ahead of this week’s New Metrics ’17 conference in Philadelphia, we caught up with Bob Mancini, CEO of the Rhode Island Society of CPAs (RISCPA), to learn more about why the concept of sustainability is finally being recognized in the finance world, and what this means for the future of the industry. First tell us about the Rhode Island Society of CPAs — how is it structured, and are all the state societies structured in the same way? What is the main objective and mission of the society? Bob Mancini: RISCPA began operations in 1905. Today, the Society enjoys

State, Regional Governments Outshine National Counterparts on Climate Action

Corresponding with the kick off of the 23rd UN Climate Change Conference (COP23), CDP has released a new report finding that over 100 of the world’s state and regional governments are taking action to address climate change, particularly in the short-term. Key findings from the updated Global States and Regions Annual Disclosure show that sub-national governments are leading the way on climate action — which is up 80 percent in 2017 — across 10 sectors, including buildings, energy, transport and land use. On average, there was an 8.5 percent reduction in greenhouse gas emissions compared

QuadReal Property Group Navigates the ‘Road to Context’

Our corporate partners were increasingly being asked to contextualize their sustainability goals and performance. They wanted to understand what tools were available and how to approach the issue of context. The Embedding Project’s Road to Context guide was written to help support this process. Stephanie Bertels and Jamie Gray-Donaldwill speak atNew Metrics Boot Camp:Strategy & Operationsat New Metrics ’17. As we described in a previous blog

Commons or Uncommons? A Dialogue on Allocating Responsibility for Meeting Thresholds

Sustainability requires contextualization within thresholds. That’s what sustainability is all about. Allen White, co-founder, Global Reporting Initiative The part can never be well unless the whole is well. Plato, Charmides, 380 BCE How to Slice a Pie Thresholds define the dividing line between sustainability and unsustainability (as GRI co-founder Allen White reminds us above). Implementing sustainability at the organizational level requires allocations — in other words, setting fair-share “slices of the pie” for the shared burden of meeting these thresholds (as Plato reminds us above). So, achieving sustainability in aggregate, at the societal

TSC, Cool Farm Alliance Helping Food Companies Better Manage Farm-Level Sustainability Data

The Sustainability Consortium (TSC) and the Cool Farm Alliance (CFA) — a nonprofit industry platform and creator of the Cool Farm Tool sustainable agriculture calculator — have signed a memorandum of understanding to improve alignment and reporting of farm-level metrics data. Through the partnership, TSC aims to make the process of reporting on farm-level metrics easier for farmers and food manufacturers. Under the agreement, TSC

Study: More ‘Human’ Companies Outperform Business-As-Usual Competitors

More evidence has emerged linking business performance with a company’s purpose beyond profit. Global customer agency C Space has released a new study, Unlocking Customer Inspired Growth, detailing how companies can generate consumer inspired growth and describes the behaviors that consumers actively seek from companies, translating them into five distinct customer imperatives matched against company

Mapping Maturation Pathways & Building Bridges to an Integral Economy

Part Ten in a 10-Part Series by Reporting 3.0. See previous parts below. “If you don’t know where you’re going, you might not get there,” U.S. baseball icon (and meister of understated irony) Yogi Berra famously stated. This quip accurately describes CSR / ESG incrementalism, which heads in a direction without a clear destination. By contrast, context-based multicapitalism (as advocated by Reporting 3.0) provides not only a clear destination, but also a timeline for tracking the rate of progress needed – across multiple, interrelated dimensions. But even with strong navigational tools such as this, sometimes the journey seems like one of those movies where the camera pans back to reveal a painted

Scalability: Upshifting from Micro- to Macro-Level Sustainability

Part Eight in a 10-Part Series by Reporting 3.0. See previous parts below. In a textbook demonstration of unfortunate asymmetry, sustainability problems typically develop incrementally, accreting undetected in the background. Sustainability solutions, on the other hand, generally afford us such luxury: When sustainability thresholds loom near, solutions require an exponential pace and scale totally out of sync with the standard, creeping rate of development. The mindset shift from incremental to transformative solutions is daunting for humans and our institutions, but it’s non-optional as we navigate the Great Acceleration into the

Closing the Context Gap: How Companies Can Transform Degeneration to Regeneration

Part Seven in a 10-Part Series by Reporting 3.0. See previous parts below. 0.3 percent — a mere 31 of 9,000. This stunning statistic, to be published in next month’s edition of the Journal of Cleaner Production, represents the profound paucity of companies disclosing their environmental impacts in the context of ecological limits — including strategies for meeting these limits. The comprehensive Danish study examines a decade-and-a-half’s worth of (so-called) sustainability reports (40,000+ released since 2000), and finds only 5 percent citing ecological limits at all — with no rise in the referencing rate (despite the advent of the “planetary boundaries” concept 2/3 of the way through the period under study, when one would expect a

Integral Success Measurement for True Future Value Creation

Part Six in a 10-Part Series by Reporting 3.0. See previous parts below. “We have an economy where we steal the future, sell it in the present, and call it GDP,” said Paul Hawken in 2009, hearkening back to the 1968 Robert F. Kennedy quote that GDP “measures everything, in short, except that which makes

New CDP Research Finds Cities Catching Up to Companies on Water Security Development

International environmental reporting and data non-profit CDP has released new research in partnership with global infrastructure firm AECOM revealing that $9.5 billion worth of city water projects are now open for investment. Released for World Water Week (27 August – 1 September) the new infographic report, Who’s Tackling Urban Water Challenges?, shows the

Why Water Scarcity-Adjusted Targets Are Not Context-Based Water Targets

Around this time last year, during World Water Week in Stockholm, a session was hosted which sought to explore the concept of Context-Based Water Targets (CBWTs). The event featured the first working version of the paper (subsequently released in April 2017), “Exploring the case for corporate Context-Based water targets,” jointly developed by CDP, United Nations Global Compact, The Nature Conservancy, World Resources Institute and WWF, which outlined a case for why company water targets should be informed by the best available science on hydro-ecological conditions at a basin

Beyond Integrated Reporting: Multicapital Accounting of Integral Data

Part Five in a 10-Part Series by Reporting 3.0. See previous parts below. The 2013 launch of the Integrated Reporting <IR> Framework from the International Integrated Reporting Council (IIRC) swung a double-edged sword through the disclosure field: Helpfully, one side carved a space to firmly establish the integration of the multiple capitals (natural, social, human, financial, etc) into corporate disclosure; Problematically, the other side sliced the carrying capacities of capitals (which measure sufficient resource levels

3 Ways to Measure and Mobilize Corporate Culture to Scale Purpose, Profit

As Jack Welch, longtime CEO of General Electric, has said, “no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.” It follows that businesses are actively competing to attract and retain top talent. Financial motives

Purpose + Context = Connectedness

Part Four in a 10-Part Series by Reporting 3.0. See previous parts below. The term “Purpose” has emerged as a business buzzword of late, obscuring its essential role in defining the sustainability journey of companies. We at Reporting 3.0 (R3) welcome the more disciplined definitions of Purpose, such as this one from a recent report from Sustainable Brands and EY (as articulated in the Introduction by R3 Steering Board Member Brendan LeBlanc): “We define Purpose as an aspirational reason for being, grounded in humanity, which galvanizes stakeholders to drive innovation and growth. However, it is important to recognize that not all Purpose statements are created equal. Not all Purpose

Companies Committed to Sustainability but Relying on Old-Economy Metrics Will Never Get There from Here

A close friend and colleague of mine, Joe Firestone, once pointed out that along with new conceptions of the world (i.e., new paradigms) come corresponding requirements for new measurement models. We simply cannot measure things in old ways when the things we’re trying to measure are entirely new. New constructs usually call for new metrics. This problem is by no means new. Consider, for example, Newton’s invention of calculus in the 17th century. In order to make headway in his development of gravitational theory (a new paradigm at the time), Newton had to invent a new math because

How to Transform Today’s ‘Senseless’ ESG Data into Tomorrow’s Actionable Knowledge

Part Three in a 10-Part Series by Reporting 3.0. See previous parts below. “Big Data has limited value if not paired with its younger and more intelligent sibling, Context. For organizations and businesses to survive today, they have to contextualize their data.” So wrote Alissa Lorentz of Augify on Wired in 2013, addressing not corporate sustainability/reporting data (as those of you who know our work might guess), but the data field writ large. She goes on to cite the example of a company using business intelligence (BI) software that “has not leveraged its data to its potential” because it fails to link internal data to external data about the outside