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Discussion: How Do We 'Hardwire' Sustainability Into Business? sustainablebrands.com

Burgess COMMENTARY

Peter Burgess

Corporate Social Responsibility CSR and Sustainable Development
17,459 members Member

Courtney Pankrat Marketing & Partnership Coordinator at Sustainable Brands

How Do We 'Hardwire' Sustainability Into Business? sustainablebrands.com

While there are myriad perspectives on sustainability and CSR, I often find myself focusing on sustainability’s operational aspects: What can we do to increase the pace at which belief in sustainability translates into concrete actions that...

Like Comment (3) Unfollow Reply Privately7 days ago

I like HARDWARE....

Like Reply privately Flag as inappropriate 3 days ago

This article had a lot of potential ... but in the end, disappoints. I was a corporate CFO some years back and I know very well the enormous power of internal analytical accounting metrics to get the business behavior one wants. They have to be designed correctly, but, given that, they are powerful.

The problem, as I see it, is that nobody seems to be grappling with the fundamental job of reforming basic double entry accountancy so that it does as good a job for impact on people and planet as it does for profit.

I also take issue that the primary objective of economic activity should be to optimize simply for organizational profit. This was a simple idea that worked in the days of small enterprises, low energy and low productivity manufacturing that Adam Smith wrote about, but does not work well in the present situation. Money profit accountancy was good enough as well until relatively recently.

Now we need rigorous metrics about all economic activity systematically organized so that the data may be aggregated by implementing organization, by financing organization, by place and by product.

The data should be about revenues and costs that results in profit. Also about impact on people in all the manifestations of people as investors, executives, workers, suppliers, customers, family members, community members, etc. Also about the impact on planet whether it is the consumption of resources, the use of water and land, the disposal of waste, solid, liquid and gaseous.

In order for this to work, there has to be a way to quantify impact. This can be done using the concept of standard value, somewhat similar to standard costs in cost accountancy. Understanding standard values in itself will help to make a lot of sustainable issues much more actionable.

The importance of place is that it is in place that an economic activity is understandable, and more important can be made accountable. A place is also where impact on people and planet comes together in an understandable way.

The idea of aggregation by product is important, because a product (goods and services) is a point of decision. At the moment the decision to buy or not to buy a product is driven by advertising and brand PR sponsored by corporate interests. Complementary data about a product is needed just as easily accessible about the impact of a product on people and planet.

I don't sense that much, if any, of what I am talking about is going to be presented at the upcoming conference, which is a pity. Unless we really get serious about the metrics that matter, the whole business of sustainability will get little traction.

Peter Burgess TrueValueMetrics Delete 3 days ago

Peter is right on the money (pardon the pun!). Adam Smith's model was good for an agrarian based village society a few hundred years ago. We need something better.

Peter's idea on aggregation by product is fundamental to the discussion. We don't know the total cost (financial, environmental and social) of a product until they are all identified and measured. Some of this work is being done by an emerging field of social accounting but it needs to get better traction.

I think one issue that remains obscured is the role of PR. PR is not usually about better information, but about exacerbating the problem of information asymmetries which are a well acknowledged form of market failure. While more good, carefully presented and limited information will be a key, there also needs to be discussion about limitations on permitted misinformation--something the US Supreme Court rejects as unconstitutional limitations on (commercial) free speech. Hmmm....

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