The Next Step: Meeting the Need for Universal Measurement, Transparency and Accountability

Increasingly the term ‘corporate sustainability’ is being used to bring together the related concepts of sustainability, sustainable development, environmental sustainability, corporate citizenship and corporate social responsibility. As the verbiage around sustainability matures, so must the standards that we use to evaluate our efforts.

By John Friedman

While the disparate terms have done nothing to help the ‘movement’ stay focused and organized, it is going to take more than a reconciliation of nomenclature to bring together the many different perspectives, ideologies and models that have grown organically over the years. Make no mistake, at the beginning it may have been necessary to create the current patchwork because it facilitates a local ownership and empowerment of efforts, but as we have matured so must our thinking. Like any company that encourages improvisation at the local level, there comes a time in the maturation of a business model when an effort must be made to identify those ideas that rise to the level of ‘best practices’ so that they be shared across the enterprise. Being too decentralized has had the consequence of undermining the overall, global effectiveness of a business model that seeks to leverage the value of longer-term thinking and deliberative and mindful action.

We’re not there yet, but we are getting closer. There is no universally accepted standard for what sustainability is, or what it looks like, how it will be measured and reported. In fact, beyond the clearly articulated concept that we must be continue to meet our current needs without compromising the needs of future generations, there is still discussion about what the proper social responsibility of business is. How do we reconcile the desire to have business be advancing of the human condition with the equally moral imperative to be respectful and protect local cultures? What one person may defend with all sincerity as ‘culture’ may contain practices, behaviors and attitudes that others may find distasteful (such as the age at which children join the work force, attitudes toward people based on ethnicity, faith or gender, etc.)

Companies that grow beyond one or two local operations face this conundrum just as their global counterparts do. In his book ‘Moral Capitalism’, Steven Young, global executive director of the Caux Roundtable (CRT) stresses the critical importance of developing programs that are mindful and respectful of the local indigenous cultures that may be ill equipped to “fight back” against a more technologically advanced one. He writes: “In the deployment of its power, business has a responsibility to moderate its impact on those communities, which can hardly protect themselves against the intrusions.”

Through a collaborative process CRT developed its Principles for Business; a worldwide vision for ethical and responsible corporate behavior and serve as a foundation for action for business leaders worldwide. The principles are rooted in two basic ethical ideals: the Japanese concept of kyosei and human dignity. Kyosei means living and working together for the common good enabling cooperation and mutual prosperity to coexist with healthy and fair competition. “Human dignity” refers to the sacredness or value of each person as an end, not simply as a mean to the fulfillment of others’ purposes or even majority prescription.

Of course there are other sets of principles that offer important and valuable guidance as to what constitutes acceptable corporate behavior including the UN Global Compact’s 10 principles, the Global Sullivan Principles.

Recently there has been some traction behind the Global Reporting Initiative (GRI) to serve as the standard. This article cites five compelling reasons why GRI should serve as the new standard for measurement.

1. Universal appeal – GRI is already in use by hundreds of the biggest national and international companies as well as smaller organizations, and was announced recently as the official reporting standard of the UN Global Compact, and the framework will be recommended for the more than 5,800 companies associated with the compact.

2. Longstanding, stringent, and iterative guidelines that take into consideration literally dozens of existing protocols including Kyoto, Montreal, the International Organization for Standardization’s (ISO) Energy efficiency standards and testing procedures and World Resources Institute/World Business Council on Sustainable Development (WRI, WBCSD).

3. GRI funding is separate from certification process, increasing objectivity.

4. GRI fosters transparency and reports are totally transparent – GRI’s reporting methodology is free and available for anyone to view, as are the reports companies publish using the framework. All of this data is the pinnacle of transparency, and transparency is the first step to sustainability.

5. Universal application – GRI manages to strike a balance between universal standards and historical records of company performance (thereby recognizing both achievement and effort), the guidelines have been translated into many languages, and GRI offers sector and nation-specific guidance, as well.

But perhaps the most compelling reason to consider GRI standards is the triple bottom line approach to sustainability. Many reporting guidelines focus primarily on environmental issues but that only presents part of the picture (can we morally or realistically risk consigning populations to economic stagnation in the name of saving the planet?) Thankfully GRI’s most recent set of priorities include: human rights, community impacts, and gender in addition to environmental sustainability. And I absolutely love that they take into consideration the ability – and responsibility – of organizations to look beyond their own footprint and down their supply chains so that they are not claiming superiority while supporting or relying on inappropriate practices.

I would argue that something is still missing from the discussion that is critically needed if sustainability is going to become fully integrated into business – like any other corporate initiative, in addition to being accountable for our impacts on the environment and society, a truly sustainable business must be financially successful. We need to also hold our efforts accountable for achieving measureable, positive business impacts.