Stepping Toward Corporate Sustainability Footprinting

Guest Commentary by Bill Baue, Contributor and Curator, The Murninghan Post

The TakeAway: Corporate sustainability ratings and reports don’t really tell us if a company is sustainable, but sustainability footprinting takes a step in the right direction.

I challenge you: name a corporate sustainability rating that earns its title—namely, by rating a company’s actual sustainability.  Or a corporate sustainability report that reports whether a company is really sustainable.  In other words, do they tell us if the company is doing its part to ensure future generations can meet their needs (to riff on Brundtland) and to preserve a planet similar to the one where we developed our civilization (to riff on Hansen)?

Many ratings and reports tell us how much carbon a company emits, or water it uses, to cite two prominent issues.  Great!  Phase Three of SustainAbility’s Rate the Raters project rightly commends raters who clearly identify their objectives, and the goal of pushing for incremental advances in corporate environmental, social, and governance (ESG) performance is laudable (and may even be profitable, as many raters seek to show.)

But this approach falls short of a more necessary and transformative goal: telling us whether these emissions and water use are sustainable – in the thermodynamic, biological sense (to riff on Hawken) – for the company and the world surrounding it.  Will its shrinking carbon footprint do its part in stomping down global emissions below 350 parts per million?  Does its water footprint across all facilities allow aquifers to replenish sufficiently for locals to continue to clean their clothes and quench their thirst perpetually?

The terms footprint and do its part introduce three key concepts missing from most sustainability ratings and reports: context, impact and proportionality.

Defining Footprints

In the popular vernacular, the term footprint has become synonymous with measuring extent – the amount of carbon emitted or water used – but embedded in the underlying concept of the ecological footprint is the notion of gauging effect as well.  Coined by William Rees and Mathis Wackernagel in the early 1990s, ecological footprinting “compares human demand with planet Earth’s ecological capacity to regenerate”.

Corporate sustainability ratings and reports do a pretty good job on task #1 (measuring extent), but essentially ignore task #2 (extrapolating effect). Odd, because the Global Reporting Initiative G3 Reporting Guidelines call for a first step of Defining Content that reports Sustainability Context.

“This will involve discussing the performance of the organization in the context of the limits and demands placed on environmental or social resources at the sectoral, local, regional, or global level,” says GRI.  “For example, this could mean that in addition to reporting on trends in eco-efficiency, an organization might also present its absolute pollution loading in relation to the capacity of the regional ecosystem to absorb the pollutant.”

If this were finance, we’d see a ledger with revenues, but no costs.

“It’s like bookkeeping for our finances: if we don’t know how much we earn and how much we spend, it’s hard to know whether we go bankrupt or not, and the same thing is true for our ecology,” Wackernagel says. “If you don’t have basic tools to understand the resources we use compared to what is available, it’s hard to avoid ecological bankruptcy.”

Ironically, Wackernagel applies the footprinting methodolgy to nations on the one hand and individuals on the other, but skips the intermediary step of companies—perhaps the most powerful actors with influence to tip the balance away from – or further toward – what Wackernagel’s Global Footprint Network calls “overshoot.”

Sustainability Footprinting

It’s high time to right this oversight, by applying a footprint approach to corporate sustainability rating and reporting. Call it corporate sustainability footprinting, or simply sustainability footprinting, to gauge company contributions to achieving (or scuttling) sustainability.

To determine a company’s sustainability footprint, we need to return to the do its part question.  Or, to use the wonky term, proportionality: what is the company’s proportional responsibility?  If we consider humanity collectively responsible for achieving sustainability, then a company represents a slice of that pie: the number of employees divided by overall population (more precisely, employees spend only part of their days working for a company, so we’d need to account for that.)  Another angle: a company’s proportional contribution to gross domestic product (I know, I know, GDP is a terrible yardstick for capturing the full spectrum of productivity – more on that below – but the point here is to approximate a portion.)

These are two approaches taken by Mark McElroy, who developed the Social Footprint methodology that takes a context-based approach that Ben & Jerry’s and Cabot Creamery have used for several years to measure their sustainability footprints.

“Context-based metrics are the first serious attempt, in my view, to create a methodology that will actually help us deliver sustainable performance,” Ben & Jerry’s Social Mission Coordinator Andy Barker told me.  “I see the metric as the first step toward really taking the challenge of sustainability, properly defined, seriously.”

Nobel Laureates Joseph Stiglitz and Amartya Sen agree.

“[T]he time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being. And measures of well-being should be put in a context of sustainability,” say Stiglitz and Sen in a September 2009 report commissioned by French President Nicholas Sarkozy to envision an alternative to GDP for measuring economic well-being.  “At a minimum, in order to measure sustainability, what we need are indicators that inform us about the change in the quantities of the different factors that matter for future well-being. Put differently, sustainability requires the simultaneous preservation or increase in several ‘stocks’: quantities and qualities of natural resources, and of human, social and physical capital.”

And there’s the rub.  How do we determine the quantities and qualities of natural, human, social, and physical capital stocks needed to achieve sustainability (McElroy calls them thresholds)?  350 represents one threshold, the UN Millennium Development Goals advance others.  But generally speaking, the world lacks commonly agreed thresholds across the broad spectrum of factors that determine sustainability.

One exception: Oxfam America’s Private Sector Department is developing a Poverty Footprinting Methodology that looks at how business improverishes people – and asks how it can enrich them instead.  Taking more of a qualitative than a quantitative approach, Poverty Footprinting examines the impact of five private sector areas (Macro-Economy, Value Chains, Natural Resources Use, Product Development & Marketing, and Policies & Institutions) on five dimensions of poverty (Standard of Living, Health & Well-Being, Diversity & Gender Equality, Empowerment, and Security & Stability).  In other words, Poverty Footprinting applies to the social dimension the same approach taken with environmental issues such as carbon and water, weighing impact against resilience.

I’ve wondered why GRI doesn’t enforce – or even provide guidance for – taking this impacts and outcomes approach to reporting Sustainability Context.  GRI Cofounder Bob Massie patiently explained to me that, early on, GRI chose to advance a reporting standard, akin to GAAP, and not to advance norms for achieving sustainability.  So perhaps we need another multi-stakeholder initiative to create consensus definitions of thresholds for measuring sustainability footprints.  Or perhaps GRI’s G4 revision process will introduce guidelines for how to measure and report Sustainability Context.

And perhaps Phase Four of SustainAbility’s Rate the Raters research series, as it explores “how ratings need to evolve to add greater value,” will map out how sustainability raters can start, well, rating sustainability.  Indeed, one could argue that there is no greater value than steering our business-as-usual trajectory of ecological, social, and economic bankruptcy toward a truly sustainable path.

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18 Responses to Stepping Toward Corporate Sustainability Footprinting

  1. Judy Kuszewski says:

    Bill, an important topic, and always of interest across all sorts of audiences – companies, raters, investors and civil society alike. I, too, have followed the development of these rating systems, as well as the standards and practices around sustainability reporting, for a long time, and have had many of the same observations as you. The challenge I see is that the raters are unlikely to want to put in the effort to achieve the result you’re rightly calling for.

    Trying to rate companies on their ‘true sustainability’, or ‘sustainability impact’ is an entirely necessary challenge, but it is extremely complex. The notion of biological carrying capacity is a very useful one, but it’s not an idea with a great deal of consistent application, especially when you’re talking about the activities of a single company. Take the example of water use: we all know water scarcity is a major strategic and sustainability challenge, but it is meaningless at a global level. Water scarcity is by definition a local/regional issue – it matters how much water a company uses in Spain, but not Scotland.

    The picture gets vastly muddier when you start bringing in the social dimensions of sustainability, notwithstanding the efforts you describe above. For instance, a company’s human rights performance is not only a local issue (like water, dependent on the degree of risk at a local level), it depends in practice on factors like the government’s ability and willingness to uphold human rights. Against these contextual factors, a company’s performance may be better or worse, even given uniform policies and practices.

    It is for these reasons that investors have increasingly begun speaking of ‘sustainability risks’ – such as what proportion of a company’s operations are located in water-stressed regions or areas of weak governance. This is virtually the definition of ‘sustainability context’; evaluating it is necessary to an understanding of sustainability performance.

    But can you imagine the evaluation exercise that would be necessary for a rater to make the bold claims they do? These ratings all call themselves the “50 most sustainable” or “top ten corporate citizens” or some such – broad, sweeping accolades that ought to demand a serious and reliable review of all of these issues. But ‘real sustainability’ just seems too difficult for the ratings game – really they should be called “best corporate reporters” or “best reputations” or other, more modest titles. Nobody wants to call their survey “the 100 companies that have done the most to identify and manage myriad sustainability risks, resulting in measurable performance benefits”, even though it would be more honest, and probably more useful than what we have.

    So this seems to be the trade-off the raters have made: in the belief that an evaluation of some parts of the sustainability equation is better than no evaluation at all (true), ratings tend to over-promise and under-deliver, running the risk of appearing all hat and no saddle.

  2. Bill Baue says:

    Judy,

    Thanks so much for your perspective. I agree that the complexity of measuring a sustainability footprint is incredibly daunting. In essence, you advance the same concern that Elaine Cohen does in her excellent post on context-based sustainability:

    http://csr-reporting.blogspot.com/2011/03/context-in-context.html

    However, humans have long done exceedingly complex things, particularly when our survival is at stake — which certainly seems to be the case now. I imagine that creating GRI seemed equally daunting a dozen years ago, but now it is thriving.

    You rightly point out that raters themselves have little (commercial) motivation to take on this task — indeed, it will likely require stakeholder pressure (or entrepreneurs to innovate business models to fill this need.) Mark McElroy’s True Sustainability Index represents one model for measuring corporate sustainability footprints.

    And just today, Global Footprint Network Founder Mathis Wackernagel won the Zayed International Prize for the Environment, which comes with a significant financial award — perhaps Dr. Wackernagel will steer some of these resources into GFN advancing corporate sustainability footprint measurement.

    Best,
    Bill

  3. Mark McElroy says:

    Bill:

    Thanks so much for continuing to focus on this issue and for your references to my own work in this area. For all of the rattle and rankle about whether or not context-based sustainability measurement, metrics and reporting is possible, it still strikes me as profoundly noteworthy that very few, if any, skeptics on the subject disagree with the view that bona fide sustainability measurement and reporting can’t be done without it.

    Insofar as Judy’s issues are concerned, I think they basically reduce to the same common premise, which is that conditions vary by location, be they ecological conditions, government conditions, social conditions or what have you. The conclusion she reaches, however, does not logically follow. Indeed, that is the point of all of this, isn’t it? It is precisely because of the fact that local conditions vary that sustainability (or non-financial) performance must be measured, managed and reported in a context-based way (instead, that is, of concluding that measurement, management and reporting can’t be done because of it).

    Thus, instead of being an obstacle to sustainability measurement and reporting, the fact that background conditions vary is the key insight here — performance measurement in sustainability, that is, must be context-based, just as it is (and always has been) for financial measurement and reporting. Why should things be any different on the non-financial side of things? If the same level of water use, for example, is more ecologically sustainable in New England than it is in New Mexico, is there some empirically or epistemologically dubious reason for pointing that out? What would skeptics of context-based sustainability have us do, blindly disregard such differences and invest in companies in both places as if the local ecological differences didn’t matter?

    So I think rather than undermine the case for context-based sustainability management, Judy’s argument largely reinforces it. What’s possible for financial reporting is also possible for non-financial reporting. Context, that is, must (and can) be taken into account in both cases in order for meaningful performance measurement and reporting to occur.

    Regards,

    Mark

  4. Judy Kuszewski says:

    Hi all,

    What a great discussion – thanks! To be sure, I totally agree that context-based sustainability management, measurement and reporting can and should be happening. But reporting is one thing; ranking and rating is another. Today’s ratings aren’t based on a context-specific understanding of impacts – even if reporters are increasingly providing that information to markets. As a result, the ratings make big promises to have unlocked ‘corporate sustainability’ that they can’t back up.

    Keep up the good work, both of you.

  5. Henk Hadders says:

    Hi Bill,

    Enjoyed reading your post. My compliments, and I fully agree with your position and your vision-statement aiming for a next, more inclusive level in the evolution of sustainability measurement and reporting. Stepping from context-free sustainability reporting towards context-based sustainability measurement and reporting, or toward Corporate Sustainability Footprinting as you call it. For far too long have the needs and well-being of people, communities, society, the natural world and future generations been left out of the equation.

    I agree with you that context, impacts and proportionality are the issues mostly missing in sustainability reports. To have true sustainability performance measurement we need to link the impacts of organizational activities to the context of actual social and/or environmental conditions in the world, and the ecological limits and societal needs. Sustainability performance isn’t about outputs, but about outcomes and impacts (as a separate measurement category). The population Per Capita approach that you suggest for proportionality, recognises the needs and well-being of every global citizen on this earth and this seems to me a very fair and just approach.

    Context-based sustainability is so self-evident to me, and I see it as the blueprint for measuring “Thick Value” to be produced by new business institutions. There just isn’t another way! Being an advocate myself of context-based sustainability measurement and reporting, I’ve already commented on the post of Elaine Cohen, but I want to thank you for continuing this discussion for the Common Good. My respect …..let’s be the change!

    Regards,

    Henk Hadders

    • Bill Baue says:

      Henk,

      Thanks so much for weighing in with your support.

      You hit the nail on the head when you say “Sustainability performance isn’t about outputs, but about outcomes and impacts.”

      Interestingly, I’m writing a separate piece on Rate The Raters for posting elsewhere, and I cited this quote from IBM Vice President of Corporate Citizenship & Corporate Affairs Stanley Litow: “[C]ompanies ought to be judged on outputs and not inputs.”

      https://www-950.ibm.com/blogs/5b72ef20-a90b-46b0-ae43-f069af369eec/entry/corporate_social_responsibility_rankings_can_be_improved_here_s_how5?lang=en_us

      This heads in the direction you suggest, though you take it the next step.

      Best,
      Bill

      • Henk Hadders says:

        Bill:

        To be more precise, I think that context-based sustainability or corporate (social and ecological) footprinting should actually be about measuring “impacts”. Impacts on the vital capitals that organizational stakeholders need for their own well-being. As Mark McElroy once told me in Burlington, Vermont in a conference room: “If you are poisoning my well, you impact and threaten my well-being”. But what is “impact”, as this concept is rather loosely used, like CNN’s “….impact your world”. I happen to think that “impact” is not the same as “outcome”. The impact that an organization has had on any given outcome can be calculated by measuring the actual outcome and subtracting what would have happened anyway. Or by using capital-impact statements and performance targets reflecting thresholds, where the “sustainability-gap” can be calculated as: the gap between actual performance and what could be considered a sustainable level of impacts.

        Going one step further in line with your proposed Big Shift toward “Context”, I also think that this should have an effect on the evolution of Performance Scorecards. In mainstream business the Balanced Score Card is the de facto standard, and the marketing organization behind this approach, is sucking up all the air in this domain. But we really do need a new kind of (strategic) scorecard to emerge, which also incorporates sustainability issues and the knowledge & innovation capacity of an organization. Because to be sustainable an organiziation needs two things: knowledge of its impacts on the world and the capacity to learn and innovate in response.

        Based on the Adaptive Scorecard developed by Joe Firestone (KMCI), my friends (Joe Firestone, Steven Cavaleri (University of Connecticut) and Mark McElroy) tried to develop a new performance scorecard, accommodating for “impact” measurement and modelling. It was Mark who suggested to use a Quadruple Bottom Line as an organizing principle for our new version of the Adaptive Scorecard and who coined the term “Adaptive Quadruple Bottom Line Score Card”. You might want to have a look at my IISD/CSIN presentation of this here ( http://www.csin-rcid.ca/downloads/Adapt_Quad_Bottom_Line_1_Hadders.ppt ) to see for your self that your proposed Big “Context” Shift can also be perfectly aligned with a new generation of Performance Scorecards. So I also think -with all due respect to Kaplan & Norton- that we need a creative destruction of the Balanced Score Card, to give way to something new to emerge, ……another Big Shift!

        Regards,

        Henk Hadders

        • Bill Baue says:

          Henk,

          Wow! This is a great slide deck linked from your above comment — thanks so much for including this resource — I urge other readers to check it out!

          I’m somewhat familiar with the scorecards approach, but not the Adaptive Quadruple Bottom Line Score Card approach you lay out — which seems quite comprehensive.

          I look forward to seeing this approach implemented in practice!

          Best,
          Bill

  6. Hi Bill,

    Really appreciate your post and Judy’s and Mark’s comments.

    At an FT Responsible Investment conference this week, I was most struck by comments from Peter Knight of Generation IM who said (roughly) that to properly evaluate the “sustainability” of a company it takes A LOT of time and effort, including calls and meetings with companies. This sort of approach does not happen with the vast majority of ratings today, nor frankly does it work with the top X list model that keeps us all so busy debating and opining :)

    If one were to truly go about evaluating the true sustainability of a company, one would need to spend a significant amount of time understanding the company’s value chain, its competitive positioning, its most important issues, its footprint, etc. A firm like Generation or perhaps Goldman Sachs (via SUSTAIN) can do this, as they are selecting a smaller set of “winners” and not trying to rank a broad universe of companies.

    I do think that some raters are asking the right sorts of questions (e.g. DJSI is asking about sustainability and R&D, the role of brand, etc.). But I think all would benefit from considering your approach. And of course, we would all benefit from change in nomenclature for these ratings (e.g. Best Corp Citizens –> Most Transparent on the Issues We Care About).

    One last thought, and perhaps an obvious one. But I do think this footprinting approach is much easier to apply on the environmental side (and in particular on a company’s direct impacts). It simply gets more challenging on the economic and social side. For example, I get all of the good things that B&J and Cabot do on the environmental side, but how are they considering the social impacts they have (i.e. link between dairy products and obesity, all sorts of health ailments, etc).

    Thanks for your thoughts.

    Michael

  7. Mark McElroy says:

    Hi Michael:

    Regarding your question about how Cabot and Ben & Jerry’s have handled social impacts in a context-based fashion, the approach taken is directly analogous to the approach taken on the environmental side of things. Only the nature of the capital resources involved changes. In other words, on the environmental side of context-based measurement, we assess impacts on natural capitals. On the social side, we assess impacts on human, social and constructed capitals.

    In all cases, however, thresholds are first set as a basis for assessing performance. Those thresholds, in turn, reflect decisions or choices we’ve made (as analysts) on what the thresholds ought to be in order for the companies’ impacts to be sustainable. Here the test is (a) do the thresholds reflect the companies’ non-financial duties and obligations to stakeholders, and (b) if the impacts were generalized to the population as a whole, would the capitals involved remain sufficient?

    It is also important to understand that footprinting in a context-based fashion is not a life cycle assessment methodology. Thus, there may be up and/or downstream social impacts of a company’s operations that are not picked up by context-based sustainability reporting. Other methods for capturing such second of third-order effects on the social front exist or are in development. Still, this is not a shortcoming of context-sustainability, only a fact of how it defines boundaries. Indeed, does financial reporting include the profits and losses of suppliers, of suppliers’ suppliers, of customers, or what have you? Of course not. And yet it still serves our purposes.

    Regards,

    Mark

  8. Mark,

    My essential point re B&J and Cabot was this: there’s quite a bit of evidence that eating dairy products contributes to a host of health ailments, ie their core products have problems (regardless of all the good things they may do on the environment, with suppliers, workers, etc.)

    I raise this not really to rain on the good work they do, but rather to point out that this footprinting or context-based evaluation doesn’t really capture these inherent impacts. I would say the same thing about McD, etc. – its their core product that is inherently unsustainable.

    Regards,

    Michael

  9. Mark McElroy says:

    Michael:

    If the direct impact of consuming a product according to a producer’s guidelines on the health of a consumer is negative, then the product is not safe and the act of producing, selling and promoting it is unsustainable. Context-based sustainability would pick up on that.

    If the use of a product by a consumer is reckless or unsafe, however, it is the consumer’s behavior that is unsustainable, not the producer’s. This would especially be the case if the producer has been clear and transparent about how its products should be used or not used.

    Here it is important to distinguish between a producer’s actions and a consumer’s actions. Context-based sustainability can be used to assess the sustainability performance of either one, but only separately so. In other words, the choices and behaviors of one party should not be conflated with the choices and behaviors of another. They are analytically separate.

    Regards,

    Mark

    • Bill Baue says:

      Michael (et al),

      You hit on a debate Mark and I have been revisiting for about a half-decade: the boundary of responsibility between companies and people (this fits into the “proportionality” part of the equation). I remember sitting on the patio of a brewery in Burlington, Vermont during a conference on sustainable investing talking with Mark about where the line should be drawn. In fact, my first draft of this post included a parenthetical mention of this line of discussion, using carbon and the GHG Protocol methodology of parsing responsibility into “scopes” (Scope 1 = companies’ direct emissions, Scope 2 = indirect emissions from electricity use, Scope 3 = indirect emissions “downstream” — for example, from the use of company products) — but Marcy wisely suggested I cut it to keep thing simpler.

      While I agree with Mark in principal that, strictly speaking, companies are responsible for their direct impacts, and people are responsible for the impacts of the use of the products. But what this overlooks is the imbalance of power and influence over design: Companies obviously have much more control over how products get designed, and furthermore they exert considerable influence through product marketing (SUV marketing did a brilliant job of selling products with much higher profit margins — and much higher negative sustainability impacts…) Yes, we people are ultimately responsible for our purchasing decisions, and we do send strong signals in how we direct our spending. But there are significant limits to consumer power.

      That said, the beauty of the GHG Protocol Scopes methodology is that companies can ostensibly produce data for ALL THREE Scopes, and so we can assess both their direct and indirect sustainability impacts. In other words, we can move the boundary and see how this impacts the calculations.

      I’m currently consulting to GE on its Citizenship Report and Website, and I noticed an interesting aspect of their GHG reporting:

      http://www.ge.com/citizenship/programs-activities/environment/ghg-inventory.html

      They report on Scope 1 & 2 as required by the GHG Protocol, but don’t report Scope 3, in large part because mechanisms for collecting this data don’t exist or aren’t yet operational. “GE is currently working with WRI/WBCSD on the development of a Scope 3 Protocol,” the GE Citizenship Website currently states.

      At the same time, GE is taking a blended approach to disclosing its emissions associated with its financial services business units.

      “The Protocol asks reporting entities to report GHG emissions based on either an operational control or equity basis. Because GE has both significant manufacturing emissions as well as significant emissions resulting from equity investments in power projects, reporting on an operation control basis for the manufacturing operations and an equity share basis for the power plant investments is more accurate and more transparent than reporting on either an operational control basis only or an equity share basis only for the entire corporation.”

      So it seems that the corporate sustainability community can collectively come up with pretty innovative ways of measuring corporate impacts and sustainability footprints. It’s more a question of stakeholders exerting pressure at the right leverage points to push for more efficient and effective reporting, ranking, and rating of sustainability footprints.

      Best,
      Bill

  10. “[T]he time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being. And measures of well-being should be put in a context of sustainability,” say Stiglitz and Sen in a September 2009 report commissioned by French President Nicholas Sarkozy to envision an alternative to GDP for measuring economic well-being. “At a minimum, in order to measure sustainability, what we need are indicators that inform us about the change in the quantities of the different factors that matter for future well-being. Put differently, sustainability requires the simultaneous preservation or increase in several ‘stocks’: quantities and qualities of natural resources, and of human, social and physical capital.”

    The most apt measurement methodology that I can conceive of it based on Maslow’s heirarchy of needs.

    Any assessment that includes subjective and meta-subjective determination is going to be difficult to assess/analyze, difficult to compare one to another and over time, and vary by value system (different individuals and different communities regard different things as important).

    All of those will give fuel to criticism of any methodology that can be dismissed as subjective.

    However, the measure of a smart and wise economy is really measured by the relationship between net fulfillment generated within the economy and GDP. It amounts to a measure of productivity of productivity.

    What difference does it make if we are adept at efficiently doing nothing important. I’d rather that we be only pretty good at doing what’s important.

    The relevance of Maslow’s heirarchy as a scoring basis is that it does amount to an estimate of well-being (an estimate being better than no measure, or an irrelevant one). It is also scalable along social scales. It is possible to assess an individuals’ well-being (and then change in well-being as a result of policies or product/service), also a family’s, also a community’s, also a region’s, etc.

    • Bill Baue says:

      Richard,

      Thanks so much for adding this new perspective to the dialogue.

      I’m quite familiar with personal applications of Maslow’s heirarchy of needs, but less familiar with their application in broader, institutional levels.

      I believe that they could be applied as a way of measuring social impact in a context-based sustainability footprinting methodology. The key would be for practitioners to roll up their sleeves and determine which of the needs are most material to apply at the intersection between companies and society, and determine how to measure thresholds of sustainability.

      Best,
      Bill

      • Thanks Bill. Great work in the world. Your determination is inspiring.

        I’ve developed a mathematical methodology that I think captures the logic of Maslow’s heirarchy of needs and is scalable and applicable to various conditional settings. (“What is the impact to employees, customers, stakeholders of this new product offering?” “What is the impact of this public policy?”)

        I’ve read and lightly contributed to economic impact analyses, and they are consistently limited in scope. They consistently ignore the impact on social welfare as too subjective to measure instead relying on quantitative measurements that are often skew to social welfare.

        There is a Sufi story about a mythical modern holy fool named Nasruddin, who is seen desparately searching a dirty gutter looking for something. A friend approaches and asks, “what are you looking for Nasruddin?” “I’m looking for a coin I lost”. “Where did you lose it?” “I lost it in that building across the street.” “If you lost it across the street why are looking out here?” “I can’t see in there.”

  11. Tom Graves says:

    Hi Bill

    Great post! You also asked me for comments on this from an enterprise-architecture perspective.

    (I’d better clear up one possible point of confusion straight away. Many IT-folks would have believe that enterprise-architecture is solely about detail-level IT; but as the name of the term, the discipline is more properly about the architecture of the entire enterprise. It’s in terms of that latter sense that commenting here.)

    As you and most of the other commenters have indicated above, one of the key problems in monitoring and measuring organisations’ moves towards sustainability is that of context. Put simply, the context of every organisation is different, which makes comparisons and comparison-metrics very difficult indeed. In practice, what we need to do is measure each organisation against its own context; and from there, we have some chance of developing maturity-models, from which we can also derive meaningful comparisons between organisations.

    Enterprise-architectures provide one way to do this. The key here is the crucial distinction between ‘organisation’ and ‘enterprise’: an organisation is bounded by rules, roles and responsibilities, whereas an enterprise is bounded by its vision, values and commitments. It’s true that these boundaries can coincide, but in practice the relevant enterprise for any given organisation is at least two to three steps larger than the organisation itself (see this slidedeck for more detail). For example, the organisation, within its supply-chain or direct value-network, within a broader market of customers, competitors, standards-bodies, regulators and the like, within a broader ‘non-transaction’ enterprise of communities and governments and non-clients and environment etc which is impacted by and in turn impacts on the market, the supply-chain and the organisation. (To avoid confusion with the colloquial if misleading business usage of ‘organisation as enterprise’, some people use the term ‘extended-enterprise’ for this.)

    In essence, an enterprise is defined, and identifiable, by its vision-descriptor. This vision is not the usual meaningless marketing-puff that so many organisations parade as their ‘vision’, but instead is a very brief phrase that summarises the focus of interest, the activities that are applied to that focus, and a key qualifier that denotes the key value in and of that activity. A good example is the vision used by the TED conferences, “ideas worth spreading” – ‘ideas’ [focus], ‘worth’ [qualifier], ‘spreading’ [activity].

    Values and implied commitments devolve directly from that type of vision. And by aligning itself with an enterprise-vision, an organisation in effect indicates the values and commitments by which it expects to be measured. Hence the respective extended-enterprise itself determines the organisation’s sustainability-context, and the appropriate metrics for that context. From there it’s relatively straightforward to identify the detail for a context-specific maturity-model that can be compared against other organisations, despite the differences in context.

    A lot more that could be added here, of course, but I think I’ve said enough already! :-) Hope it’s useful, anyway.

    • Bill Baue says:

      Tom,

      Thanks so much for responding — and sorry for the delayed response.

      This is my first introduction to the concept of enterprise architecture (entarch), so it will probably take a while for me to wrap my head around it, and its significance and implications around the notion of corporate sustainability footprinting.

      My initial first thoughts are that entarch fits into the “proportionality” part of sustainability footprinting — specifically, determining the boundaries of the enterprise, and hence its proportional responsibility for contributing to sustainability.

      That said, I’m not sure I understand the distinction you make between an organization and an enterprise, particularly as it would apply to footprinting. A concrete example of how you’d parse this out for a specific company (preferably a well-known one that we can all relate to) would be helpful.

      Thanks,
      Bill

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