Business sustainability: We need to talk about measurement
First, and for a long time, we had philanthropy, and there was no need to measure that, except in cash given, and tax breaks received.
Then we had early CSR, let’s say at some point in the 1980s, and that was about happier communities, some more motivated employees, the odd bit of PR and some early SRI investors (remember that? now it’s called ESG).
There wasn’t much need to measure that. The methodologies that existed were pretty rudimentary: Did SRI investors hold our stock? Did the employee survey say people liked it? Did local newspapers mention it sometimes?
Then came CSR as response to fears about globalisation, corporate size and power, and the outsourcing of supply chains. (remember the late 1990’s people, and the early ‘noughties’). There was more measurement here. Employee satisfaction, “hiring the best people”, more active and bigger SRI funds, and NGOs really getting on the case, with campaigns and solutions.
Measurement improved, with a big focus on reputation too, but the methodologies, and the processes that supported it, were pretty weak. Environmental measurements beyond basic compliance started to creep up the agenda.
Then CSR turned into corporate responsibility, (let’s say mid 2000’s) and demands for measurement increased. Suddenly it wasn’t just community giving, reputation, SRI questionnaires and some NGO partnerships on ‘awareness’ or some supply chain certification (which sounded like measurement, but really wasn’t).
Suddenly, we were into carbon footprints, offsets, and much more serious environmental impact measurement, at least on a Scope one and two basis, in places.
Then came today’s era (let’s say, around 2010, for many it was sooner, whilst many are still stuck today in CSR) of sustainability and sustainable business. Yes I know sustainability as a term dates from 1987, but for companies, let’s say it’s a relatively recent iteration from corporate responsibility, although some still mix up both.
Today’s context matters
In 2018 we see demands for Shell to work on Scope three GHG emissions, for companies to complete CDP, or risk the ire of trillions in investment, and Blackrock CEOs writing chiding letters to companies about measuring their ‘impact’. We see corporate human rights benchmarks, modern slavery indexes, deforestation spanking and rankings, CO2 emissions watched closely, and even conversations about being carbon positive, net positive and so on. We can almost watch some parts of supply chains live on our smartphones.
Measurements have moved on enormously, focusing as they should, on very specific issues, from localised community consent to millennial and beyond consumer expectations of your ‘brand’.
Despite all this, heads of sustainability, those who get 15 minutes at the end of the board meeting to update the already-now-slightly-disinterested board level execs (the average company is not Patagonia, or even Unilever, we know this) are still under huge pressure to justify themselves, their spend, and now, it’s impact for society AND the company.
You wouldn’t imagine so, if you just came from outer space, and read the first part of this post. But it’s entirely true. The journey I described, of course, only ever applied to the biggest, most impactful or interested companies, leaving out a huge strata of others.
Even for these biggest companies, the threat of yet another corporate re-organisation or a takeover, or a merger, is ever present. In recent years giant private equity groups, such as 3G Capital, for whom three years is long term, have just added to this pressure to deliver zero-based budgeting, cost reduction and profit maximisation as competition increases for almost all companies. Look at retail, in the midst of change we’ve not seen before.
So, given measurement methodologies have improved, and desire for ROI data has grown, you’d think we’d have nailed it by now. By ‘this’ I mean the holy grail, the “business case for corporate sustainability” (itself an oxymoron), but the time horizons, as described are so short, whilst the challenges, still long term, creep ever closer to actualisation. Climate change may be a 30-40-50-100+ year challenge, but water and other natural resources, and input availability, are not.
We’ve come a lot closer to ‘proving’ the ongoing business case for individual companies, but we are not there yet. From the inside of the modern boardroom, big challenges remain, as high pay in these roles demands global issues are often parked at the door.
For those depressed by this, let me refer you to the many benchmarks aiding measurement above, and point out that big issue by big issue, aided by technology, we are ‘getting there’ on proving that sustainability investment is a worth-while one.
We should recognise this progress, and keep looking outside our immediate environments and sectors for inspiration, examples, new approaches and ways to keep building that business case. Your job, and the progress of your company on sustainability journey, depends on it.
To that end, we’re bring together 100 odd companies to discuss this in about a month, on the 19-20 June to be precise, and in London, to be exact. I hope you can join us there. I for one am looking forward to the discussions and debate hugely. Here’s the detail.
Upcoming Innovation Forum, PPT-free, nonsense-free, pontification-free, meetings that you should come to:
How business can tackle forced labour and modern slavery– 12-13 June 2018 – New York
Comply with legislation, mitigate risk and eliminate slavery from your operations and supply chain
How business can measure the impact – and ROI – of corporate sustainability– 19-20 June – London
This two-day conference will highlight the latest methods being applied by business to measure the impact of their sustainability programs. We’ll discuss the pros and cons of the different tools and techniques available, whilst assessing what has really worked for companies in practice.
Why (some) plastics are essential – and how to make them sustainable
Overcome barriers to collaboration, and drive progress that works for consumers, the environment, utility and business reality. A two-day business conference, Amsterdam, 16th-17th October 2018. Email firstname.lastname@example.org to get involved.
Innovation Forum’s Sustainable Landscape Forum: Land, Forests, Farmers, Livelihoods: How business can manage risk, improve relationships and drive resilience in agricultural supply chains 6th-7th November 2018, London. Email email@example.com to get involved.