Authentic Sustainability Reporting is here … ‘Pure ESG’ further ridicules itself … Collapse is not Apocalypse … Sunday Thoughts
Ralph Thurm
Founder A|HEAD|ahead, Co-Founder r3.0 & Managing Director OnCommons gGmbH
Edition 16 | November 2022
I started the writing of this new Lighthouse Keeper on the day of the release of the UNRISD SDPI Indicators (UN Research Institute for Social Development Sustainable Development Performance Indicators), a very important milestone in the development towards ‘authentic sustainability assessments’, and an evenly important moment in time for r3.0. It’s the culmination of 4 years of hard work in designing ‘true sustainability indicators’, piloting them with all sorts of organisations around the world, working on a Synthesis Report, and now helping with the release of the SDPI User Manual and the aligned Microsite (see more below).?
We’re breathing out now, but only for a moment, before breathing in again to help boost activating what we call ‘leverage vectors’, including all sorts of constituencies that now have to pick up context-based sustainability reporting and information for the many constituencies that can use the SDPI, no limits here (as literally everybody can), with a focus from standard setters to standard users and report writers, from rating/ranking/benchmarking organisations to all sorts of players in the financial sector that allocate investments, and from stock exchanges to governments. This release just marks the starting point of this new era.
At the same time there’s hardly one day without another collapse-announcing report (the authors may call it differently, but you know my take by now) or other greenwashing farces by the ‘pure ESG’ folks in #ESGLaLaLand . The contrast between what’s necessary and the failure of the current incrementalistic approaches couldn’t be starker!
It’s important to mention that my take on an inevitable collapse shouldn’t be confused with the ‘apocalypse’, the end of humanity or anything else doomy. So, it makes sense to clarify my view and to prevent to be put in the wrong corner of the wider discussion. That’s what I try to already do with my Sunday Thoughts, so I’ll give you the latest reports, my take on Degrowth, and my package of Sunday Thoughts that I offered since the last Lighthouse Keeper.
Authentic Sustainability Reporting is here!
To honour the achievement of the just released SDPIs I’ll let two of the key instigators speak with whom I had the honour to work with, while not forgetting the UNRISD folks and advisors that have been so instrumental in driving this project to its release point. My sincere thanks to Bill Baue , Senior Director of r3.0, and Mark McElroy , Founding Director of the Center for Sustainable Organizations, this great achievement would not have been possible without those two fantastic sustainability experts.
Bill Baue wrote a great post?here ?on Linkedin that I’d like you to read in full:
A "Brundtland moment"!?
That's what?Global Reporting Initiative (GRI) ?Co-Founder?Allen White ?calls today's?publication by?UNRISD ?of "Authentic Sustainability Assessment: A?User Manual?for Sustainable Development Performance Indicators" (SDPIs).??Others agree about the significance of these new thresholds-based and transformation-based indicators:?
“A major inflection point”?(Jonathan Morris ?of?BSR )?
“Sustainability history in the making”?(Kees Klomp ?of?THRIVE Institute )
“An enormously consequential development…”?(Jon Shanahan ?of?Radley Yeldar )?
Given that we at?r3.0 ?supported the 4-year development of the SDPIs,?Ralph Thurm ?and I?[Bill, added]?wanted to reflect on the significance of this "new era" in *authentic* sustainability assessment (by which, of course, UNRISD asserts that status quo "sustainability" assessment regimes are "inauthentic.") So we wrote a Medium article (link below).
As the COO of GRI who directed its Principles workstream 20 years ago when the Sustainability Context Principle was conceived, establishing the need to assess “the performance of the organisation in the context of the limits and demands placed on economic, environmental, or social resources at a macro-level,” Ralph had this to say:
“While I lament GRI’s predatory delay in failing to provide the sorely needed guidance on implementing Sustainability Context, I now celebrate that companies large and small?finally?have the guidance needed to readily fulfill the Sustainability Context Principle, two decades after its inception, thanks to the UNRISD Sustainable Development Performance Indicators.”
For my part, I see the SDPIs as hugely significant for offering an alternative (with the?United Nations ?imprimatur) to the problematic standards from the?International Sustainability Standards Board ?(I?SB) and?EFRAG , which both *neglect* to contextualize sustainability vis-a-vis thresholds.?
Importantly, the SDPIs also offer an alternative to the?Science Based Targets initiative ?(SBTi), which of course integrates thresholds but problematically bars use of the most robust science-based target (SBT) method (according to the 2 extant comprehensive scientific assessments of SBT methods.)?
Here's what I?[Bill, added]?say in the article:?
“The SDPI Manual provides a better alternative than the Science Based Targets initiative, seeing as UNRISD took a ‘universal principles’ approach and appealed to scientific evidence of the best science-based target-setting method for greenhouse gas emissions. This example further illustrates how SDPI’s?authentic?approach to sustainability assessment transcends the path dependency of what’s available from incumbent frameworks and standards. The SDPIs thus usher in a new generation of?bona fide?sustainability assessment.”?
The article that Bill refers to can be found at?https://lnkd.in/evPujmXc , and the UNRISD User?Manual?is available for download at?https://lnkd.in/eHgqHiPd .?
Mark McElroy had evenly important things to say?here ?on Linkedin about the SDPI release:
For the past 4 years, I have been serving as special advisor to the?United Nations ?on a project aimed at developing more effective indicators for assessing the sustainability performance of organizations.?
Framed in the context of the 2030 Agenda’s Sustainable Development Goals (SDGs), the UN project is now complete, with a final report being issued today.
As indicated by its title, the report put out today is more a ‘manual’ than a ‘report’, since it includes detailed specifications for a set of indicators organizations can use to assess their own perfromance across the triple/multi bottom line.?
Most important in all of this is that the UN has come down firmly and unequivocally in support of ‘Context-Based Sustainability’ (CBS), a measurement doctrine or methodology that makes authentic sustainability assessments possible by taking resource limits and demands explicitly into account instead of ignoring them. In order to do so, they’ve adopted the ‘Sustainability Quotient’ formula (S=A/N) for context-based metrics (https://bit.ly/3zvZLo8 ) I first put forward in my doctoral dissertation in 2008 and which has been growing in use ever since -- now including the UN itself!
The contrast between what we can now say is the UN approach, too, and the arguably more incrementalist, inauthentic alternatives being promulgated by the?IFRS Foundation ,?EFRAG , and the?Global Reporting Initiative (GRI) ?is palpable and couldn’t be more vividly on display. Indeed, if it were not for the persistent absence of authentic CBS measurement on other fronts, this project would not have been necessary.
I want to publicly thank my friends and colleagues at the UN agency that undertook this project (UN Research Institute for Social Development, or?UNRISD ), as well as my close collaborators on other fronts, most especially?Bill Baue ?and?Ralph Thurm ?at?r3.0 , without whose deep involvement and support this project would not have been possible.
Let’s hope this all has the intended effect of (a) promulgating greater authenticity in the way organizations measure and report their performance, and (b) encouraging standards-makers themselves to more aggressively embrace the same principles in their own frameworks, and not only for the narrow benefit of investors!
What to take away and do now?
Let’s capture the essence as such:?
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Pure ESG further ridicules itself
We are already used to new greenwashing claims by financial institutions. I have covered many in the last Lighthouse Keepers. Now HSBC is the next in line. A lot of what’s awkwardly wrong has to do with labelling. In the case of HSBC billions of dollars that the bank labels under the header of sustainable finance is actually put towards deforestation, airlines, the cement industry, or fossil fuels. Haven’t we heard that already in the DWS case earlier? The Buerau of Investigative Journalism?reports ?in an article called ‘Mines, Pipelines and Oil Rigs: What HSBC’s “Sustainable Finance” Really Pays For’ that ‘HSBC has committed to contribute up to $1 trillion in sustainable financing and investment by 2030. However, the Bureau can reveal that billions of dollars being counted towards this target are in fact helping to fuel the climate crisis.?Central to the issue is a relatively new financial product known as a sustainability-linked bond (SLB). SLBs are an ostensibly green type of debt, designed for companies to raise money to fund their transition to more sustainable activities.??Companies that raise funds through SLBs do not face tight restrictions on how that money is used; instead they agree to certain targets related to sustainability. But these targets are often remarkably weak and the penalties for failing to meet them can be paltry – leaving SLBs as a way for companies to give the appearance of environmental concern while continuing to worsen the climate crisis.’ Here’s the real problem: ‘Gustavo Pimentel, chief executive of NINT, an ESG research and advisory company, said calling this debt “sustainable” is greenwashing. “Somehow the market converged to call everything ‘sustainability-linked’ and I think this does a poor job of informing investors and society in general of what each transaction actually contributes to society,” he said.’
As a consequence, as the Guardian reports in an?article ?called ‘Watchdog bans HSBC climate ads in fresh blow to bank’s green credentials’, ‘HSBC has suffered a fresh blow to its green credentials after the UK advertising watchdog banned a series of misleading adverts and said any future campaigns must disclose the bank’s contribution to the climate crisis.The ruling by the?Advertising?Standards Authority (ASA) followed dozens of complaints over posters that appeared on high streets and bus stops in the lead-up to the Cop26 climate change conference in Glasgow last October.?The watchdog said the adverts, which highlighted how the bank had invested $1tn in climate-friendly initiatives such as tree-planting and helping clients hit climate targets, failed to acknowledge HSBC’s own contribution to emissions.’
Should we be surprised? Probably not. A couple of examples:
Let me not even continue to write about the?anti-ESG movement , or?anti-”woke capitalism” movement ,?a lot has been written about that?here ?and?here . It's nothing else than neoliberal destructivism, but given in by the weakness of 'pure ESG' itself.
Collapse is not Apocalypse
The Economist, not known to be a much environment-focused weekly magazine came out with this cover this week, and it sums up quite well where we stand:
In the run-up to COKE 27 (oh, excuse me, COP 27; an insider joke), a plethora of new reports just underscored the fact that 1.5 degrees is a pipe dream, except for the technology lovers (even some scientists are in that court) that believe in massive CCS (Carbon Capture & Storage) and other technologies and think we can slurp so much CO2 out of the air to still to still meet the target. Here are just some of these reports:
I am personally at beyond the point that I believe collapse can be avoided. In fact, it is happening already right now, in many different places. As Richard Lowenthal writes in his?long essay ?‘How Close Are We, Really, to Societal Collapse??Our persistent, delusional belief systems are leading to social and ecological catastrophe’: ‘The thing is, though, that we’re not talking about a discrete event or a sudden “Oh shit!” moment of horror — or even several such events or moments (though these are likely to occur also!). Rather, societal collapse?[as a consquence of ecological collapse (added)],?takes place gradually, in an escalating series of small, painful changes, losses, and disruptions. It’s not an?event?or several events, it’s an intensifying, ongoing?process?— a gradually worsening, accelerating?series of downward spirals .?In truth,?we’re already in its early stages?— and how we respond to intensifying collapse will determine how, or even whether, humanity survives and finds new, better ways to thrive on planet Earth: Our one and only beautiful, irreplaceable Home.’
So, while this is sad, even disastrous on one side, there’s one thing for sure: the meandering towards collapse doesn’t mean ‘apocalypse’ for humanity; at least it doesn’t have to. It offers opportunities for a world beyond the failed one we know so well, and therefore my energy goes towards the creation of post-collapse readiness.
But first of course a realization, riffing off David Wallace-Wells’ recent NYT essay ‘Beyond Catastrophe?-?A New Climate Reality Is Coming Into View’: ‘What will the world look like at two degrees? There will be extreme weather even more intense and much more frequent. Disruption and upheaval, at some scale, at nearly every level, from the microbial to the geopolitical. Suffering and injustice for hundreds of millions of people, because the benefits of industrial activity have accumulated in parts of the world that will also be spared the worst of its consequences.?[…]?At two degrees, in many parts of the world, floods that used to hit once a century?would come every single year , and those that came once a century would be beyond all historical experience. Wildfire risk would grow, and wildfire smoke, too. (The number of people exposed to extreme smoke days in the American West?has already grown 27-fold ?in the last decade.) Extreme heat events could grow more than three times more likely, globally, and the effects would be uneven: In India, by the end of the century, there would be 30 times as many severe heat waves as today,?according to one estimate . Ninety-three times as many people would be exposed there to dangerous heat.’ Phew, that’s hard to grasp. But… the article goes on by saying’?“We live in an?unimaginable future,” says the writer Rebecca Solnit, who has grown increasingly focused on the political and social challenges of climate change. “Things thought impossible or inconceivable or unlikely not very long ago are accepted norms now.” Today, as a result, “a lot of my hope is just radical uncertainty,” she says. “You see that the world can’t go on as it is — that is true. But it doesn’t mean the world can’t go on. It means that the world will go on, not as it is but in some unimaginably transformed way.”’
Tom Murphy recently wrote an?essay ?he called ‘A Climate Love Story’ and presented?a set of principles?that offer a starting point to ‘envisage the unimaginable’, and create a mindset shift:
1.?????Humans are a?part?of nature, not?apart?from nature.
2.?????Non-renewable materials cannot be harvested indefinitely on a finite planet.
3.?????The ability of Earth’s ecosystems to assimilate pollution without consequences is finite.
4.?????Energy throughput is essential to all human activities, including the economy.
5.?????Technology is a tool for deploying, not creating energy.
6.?????Fossil fuel combustion is the primary cause of ongoing global climate change.
7.?????Exponential growth, whether of physical or economic form, must eventually cease.
8.?????Today’s choices can simultaneously create problems for and deprive resources from future generations.
9.?????Human behavior is consciously and unconsciously shaped by mental models of culture that, while mutable, impose barriers to change.
10.??Apparent success for a few generations during a massive draw-down of finite resources says little about chances for long-term success.
I first looked at those as being ‘dah…isn’t that all self-evident?’ On second thought it pushed me to go to the ideas that felt most logic: Bioregionalism and Degrowth. Is there something else than those two concepts as a post-collapse alternative? At this moment I wouldn’t know. I have written quite a bit about Bioregionalism in the last couple of Lighthouse Keepers already. Now what about Degrowth?
That attracted me to Samuel Alexander’s?essay ?‘Life in a degrowth economy, and why you might actually enjoy it’, first explaining the link between Degrowth and the Steady-State-Economy (hat-tip to the late Herman Daly who passed away two weeks ago). ‘The idea of the steady-state economy presents us with an alternative. This term is somewhat misleading, however, because it suggests that we simply need to maintain the size of the existing economy and stop seeking further growth.?But given the extent of ecological overshoot – and bearing in mind that the poorest nations still need some room to develop their economies and allow the poorest billions to attain a dignified level of existence – the transition will require the richest nations to downscale radically their resource and energy demands.??This realisation has given rise to calls for economic “degrowth ”. To be distinguished from recession, degrowth means a phase of planned and equitable economic contraction in the richest nations, eventually reaching a steady state that operates within Earth’s biophysical limits.?[…]?The very lifestyles that were once considered the definition of success are now proving to be our greatest failure. Attempting to universalise affluence would be catastrophic. There is absolutely no way that today’s 7.2 billion people could live the Western way of life, let alone the 11 billion expected in the future. Genuine progress now lies beyond growth. Tinkering around the edges of capitalism will not cut it.’
Alexander continues ‘Degrowth, by contrast, would involve embracing what has been termed the “simpler way ” – producing and consuming less.?This would be a way of life based on modest material and energy needs but nevertheless rich in other dimensions – a life of frugal abundance. It is about creating an economy based on sufficiency, knowing how much is enough to live well, and discovering that enough is plenty.?The lifestyle implications of degrowth and sufficiency are far more radical than the “light green” forms of sustainable consumption that are widely discussed today. Turning off the lights, taking shorter showers, and recycling are all necessary parts of what sustainability will require of us, but these measures are far from enough.’
He then brings together localization, sufficiency and degrowth: ‘In a degrowth society we would aspire to localise our economies as far and as appropriately as possible. This would assist with reducing carbon-intensive global trade, while also building resilience in the face of an uncertain and turbulent future.??Through forms of direct or participatory democracy we would organise our economies to ensure that everyone’s basic needs are met, and then redirect our energies away from economic expansion. This would be a relatively low-energy mode of living that ran primarily on renewable energy systems.?Renewable energy?cannot sustain ?an energy-intensive global society of high-end consumers. A degrowth society embraces the necessity of “energy descent”, turning our energy crises into an opportunity for civilisational renewal.?We would tend to reduce our working hours in the formal economy in exchange for more home-production and leisure. We would have less income, but more freedom. Thus, in our simplicity, we would be rich.?Wherever possible, we would grow our own organic food, water our gardens with water tanks, and turn our neighbourhoods into edible landscapes as the Cubans have done in Havana.’
The?essay ?goes on in much more detail on various other fronts of life, lifestyles, togetherness, so I recommend a thorough read. He closes by saying ‘We need to create new, post-capitalist [I'd prefer post-collapse, added] structures and systems that promote, rather than inhibit, the simpler way of life. These wider changes will never emerge, however, until we have a culture that demands them. So first and foremost, the revolution that is needed is a revolution in consciousness.?I do not present these ideas under the illusion that they will be readily accepted. The ideology of growth clearly has a firm grip on our society and beyond. Rather, I hold up degrowth up as the most coherent framework for understanding the global predicament and signifying the only desirable way out of it.'
Sunday Thoughts
In closing, here are my latest ‘Sunday Thought’s, one at a time, every Sunday morning CET on Linkedin. They receive great attention. They also seem to inspire and help rethinking some of the mainstream thinking. May they continue to do so! Your comments and private comments are uplifting!
Leadership for Sustainability: helping make change happen as consultant, facilitator and podcaster.
1 年Ralph Thurm resurrecting an old thread here, but I’m surprised that "Authentic Sustainability Assessment" methodology has absolutely no mention of biodiversity. Am I missing something?
Thank you Ralph!
Smart World in Green?
2 年Thank you for the "collapse is not apocalypse" message. Because collapse danger is becoming evident, but there is indeed no U-turn possible. That simply means we all, incl. COP27 have to become seriously result oriented instead of bablah concentrated.
Believer in a Better World for all beings | ESG & CSR | iGaming | Content Marketing | Entrepreneur | Public Speaker
2 年Thanks for writing this. You mention great sources and provide a good summary. I've just spend 3 days at #websummit taking about ESG and it was just another confirmation that most people are oblivious about what's happening and what is coming. Most solutions I hear about are based on linear thinking without comprehension of the complexity of the underlying structural problems of the current systems in place that incentivice the wrong behavior. The only response I see is to brace ourselves, prepare the community you live in and lead by example and accept that a lot of people will suffer due to capitalistic greed. Those who are in the position to do something are very privileged but they don't realize it. It all comes down to story telling. That's the only thing that can open minds and inspire change.
Sustainability | ESG | Climate Disclosure | Climate Change Action | EHS | ESMS | ESIA | CESMP | Environmental Compliance | Environmental Management | Ecosystem Services
2 年Wow! Wow! Transcends different topics but with an underlying theme of bringing sustainability to the forefront.?You have covered a lot referencing various sources, but have kept it clear and indicating that an optimistic solution is possible provided 'simpler way' or simpler living is practiced. Continuous and constant growth is not possible as the resources are finite.?What do we mean by growth??Is it just increase in the share indices and GDP or is it growth in wellbeing, happiness, education and knowledge, eradicating poverty and hunger for the entire global population? When I read these, I always think of Mahatma Gandhi and his thoughts.?He was a visionary and his social and economic policies were not appreciated at that time and was not taken seriously, but would have been very apt.?We would not have come to this dire stage. Anyway, lot of things to ponder about.?I hope SDPI forces everyone to relook at sustainability (and ESG) properly. Many thanks Ralph for the wonderful post.?