Impact assessments: When responsibility converges

A number of issues seem to me to be on their way to converging in the sustainability space.

Firstly, more and more companies are starting to measure their economic footprint and communicate, a little, about their contribution to economies and jobs in various countries.

Rolls-Royce in the UK is just the lastest example. Unilever, Heineken and SAB Miller are others, and there are further examples.

Secondly InterfaceFLOR is pushing for a shift beyond the standard environmental lifecycle analysis report that has become more common for products in recent years. They are campaigning for EPDs, (environmental product declarations), over LCAs. More on that, here, and here.

Thirdly, companies are starting to show how deep their supply chain interest is becoming, as their offerings become ever-more linked with contract firms in emerging and developing economies. A few smart firms are beginning to look hard at quality of management in contract business, and even capacity in government, due to the inter-connected nature of some of the social, environmental and governance related issues they have committed to work on.

(As Mallen Baker points out in a recent blog post, a lot of the challenges we face in the responsible business world: “The fact is that nine times out of ten, irresponsible corporate behaviour comes from bad system design, where perverse incentives are created to do the wrong thing.”)

This shift, in fits and starts, in disparate pockets, is by no means a coherent, planned change.

In most cases, it’s not even the same companies who are involved in all arenas.

But if you look across these strands, you start to see where big business is headed in terms of both accountability, reporting and communications on ESG (environmental, social, governance) impact.

These still-nascent projects, campaigns, ideas and reports will take years, if not longer, before they are linked. The smarter companies are starting to join the dots.

The resulting drawing being one showing a company able to measure relevant and meaningful environmental product impacts, show how programmes, outreach and NGO/IGO support are contributing to building capacity where it’s lacking, and demonstrate that economically, the firm adds value to countries across national boundaries.

Now that’s the kind of company we’d all like to see. For shareholders and investors, it is the sustainable company of the future.

P.S. Ethical Corporation will publish an in-depth study called “How to measure socio-economic impact”, based on case studies from the leading companies in the space, in just a few weeks. More on the report here.

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