Sustainable Development Reporting: Evidence of agenda for change or soothing palliative

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Sustainable Development Reporting Evidence of
agenda for change or soothing palliative? Markus
J. Milne College of Business and
Economics University of Canterbury Presentation
at NZVCC CFOs 2008 Conference 14-16 May 2008
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• Outline/overview
• Focus - Sustainability (and Climate Change) and
  how organisations take-up these agenda.
• Compare and contrast some alternative mental
  models or paradigms as articulated in literature
  and by New Zealanders.
• Examine and critique some practical efforts to
  date and warn of dangers of becoming confused,
  self-deluded, and/or perhaps downright misleading.

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Where are we? And what should we
do? Are we at, below or beyond the point of
sustainability? Can we know in advance?
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Hopwood et al (2005) Mapping the Sustainable
Development Debate
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Some examples Frontier economics/Promethean
optimism/DSP were fine, keep going as we have
before. nature does not exist, save as a source
of matter to be rearranged in the human interest
through the application of energy and
technology(Dryzek, 1997). In the longer run, it
is likely that we will change our energy needs
from fossil fuels towards other and cheaper
energy sources maybe renewables, maybe fusion,
maybe some as-of-now unimagined technology. Thus,
just as the stone age did not end for lack of
stone, the oil age will eventually end but not
for lack of oil. Rather, it will end because of
the eventual availability of superior
alternatives. (Lomborg, 1998).
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Environmentalists, politicians and others are
wrong its all eco-scam and doom-saying They
take a current trend and project it into the
future. Almost without exception such projections
are virtually worthless because they ignore the
fact that changing conditions change incentives,
which in turn change human behaviour. We know
that humans do respond to incentives and change
their behaviour. And this is the major reason the
doomsday predictions have been wrong they forget
that people have minds. (Peron 1995, p. 24-25,
emphasis in original).
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Kerr (2002) making sense of sustainable
development
Efforts to pursue intergenerational equity need
to take account of the fact that future
generations will almost certainly be far, far
better off than present generations.
sustainable development and economic growth are
quite consistent - indeed that growth promotes
sustainability Worse, for some environmental
advocates, sustainable development is essentially
concerned with putting boundaries around economic
growth. This would make it impossible to improve
environmental conditions around the world Most
of the environmental trends that we observe today
suggest a sustainable present and future.
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Some examples Survivialism. We and much of
nature are stuffed if we dont make radical
changes now. world consists of finite ecosystems
with fixed stocks of resources, where human
population explosion and economic growth threaten
to overshoot the limits of these systems.(Dryzek,
1997). Global emissions of CO2 reached a new
high in 1996 - nearly four times the 1950 total.
In 1996, 25 per cent of the world's approximately
4630 mammal species and 11 per cent of the 9675
bird species were at significant risk of total
extinction. If present consumption patterns
continue, two out of every three persons on Earth
will live in water-stressed conditions by the
year 2025 (UNEP Global Environmental Outlook 2,
2000).
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Two spare planets in 50 years?

• WWF Living Planet Reports
• UNEP Global Environmental Outlook
• Worldwatch State of the World
• World Resources Institute Reports
• Millennium Assessment Reports
• IPCC Reports

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Parliamentary Commissioner for the Environment
(2002, 2004) Creating our Future See Change
The fundamental task in front of us over the
coming decades is to redesign our
socio-political-economic system in ways that
reintegrate the dependencies between people and
our underpinning ecological systems. And redesign
we must This century may well be one of
relearning on a grand scale relearning how we
Homo Sapiens can sustain ourselves on a planet
that has limits I am suggesting that we need a
much deeper understanding of the demands and
pressures of our current society and its economic
systems on the health and long-term
sustainability of our natural resources We are
living beyond natures income
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Linear throughput model (take, make, use, waste)
Sustainable model living in material comfort and
peacefully within the means of nature.
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Are we capable of turning things around?

• The tyranny of now
• A lack of long term vision
• The tyranny of small decisions
• A lack of cumulative, ecological and systems
  thinking

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And what do we mean by sustainable?
Sustainability implies maintaining or
sustaining something(s). If these
things/conditions are worth sustaining, then
their un-sustainability matters What is to be
sustained? How long is it to be sustained? And
in whose interests is it to be sustained?
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WCED (1987) Our Common Future
Sustainable development is development that meets
the needs of the present without compromising the
ability of future generations to meet their own
needs. (Futurity inter-generational
equity) ________________________________________ I
t contains within it two key concepts The
concept of needs, in particular the essential
needs of the worlds poor, to which overriding
priority should be given and (Equity
intra-generational equity) The idea of
limitations imposed by the state of technology
and social organisation on the environments
ability to meet present and future needs
(Environment carrying capacity)
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Daly, 1992 Hawken, 1996 Sachs, 1999 Scale
of economic activity relative to its ecological
life support systems. Maintaining natural
capital, or critical natural capital intact
and learning to live off natural
income Specifies (1) rates of use for renewable
resources that do not exceed their rates of
regeneration (2) rates of use for non-renewable
resources that do not exceed the rate at which
sustainable renewable substitutes are developed
and (3) rates of pollution emission that do not
exceed the assimilative capacity of the
environment.
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• What sense, then, are organisations and
  businesses making of sustainable development?
• Some key developments (and places to look).
• TBL and SD reporting
• Associations like WBCSD, NZBCSD
• Consultancies and de-facto standards setters like
  SustainAbility (John Elkington), GRI, Accounting
  Bodies.

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Triple Bottom Line Reporting

• Longer history in Europe (Environmental, HSE,
  Social)
• Series of international benchmarking surveys
  since 1990s (KPMG, UNEP/SustainAbility)
• Reporting Awards schemes (ACCA, UK KPMG, NZ)
• During 1990s very few NZ companies involved
• From 2000 onwards more development (NZBCSD)

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So what is the Triple Bottom Line?

• The phrase is attributed to John Elkington (1997)

The triple bottom line involves incorporating
economic, environmental and social performance
indicators into an entitys management,
measurement and reporting processes.
The three lines represent society, the economy
and the environment. Society depends on the
economy and the economy depends on the global
ecosystem, whose health represents the ultimate
bottom line.
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Hubbard Foods
The Warehouse
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• NZBCSD 2002 Reporting Guide
• TBL becomes SDR

Sustainable Development Reporting (SDR) is one
tool organisations can use to identify their
economic, environmental, and social impacts,
assess their performance in these areas, make
improvements, and identify new opportunities that
are consistent with sustainable development SDR
is preferred to TBL, however, because the
emphasis on economic, environmental and social in
TBL can encourage thinking in silos and conceal
other dimensions of sustainable development
such as culture that may not be fully reflected
in social dimensions.
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How good/complete is TBL reporting? UNEP/SustainA
bilty TBL Benchmarking Criteria 50 reporting
items (each item is scored from zero to four)
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Conclusions about TBL practice

• The quality and, especially, the completeness
  of many reports are not high.
• Reports cover few stakeholders, cherry pick
  elements of news and generally ignore major
  social issues that arise from corporate activity.
  
• Reporters do well in areas that require dialogue
  only, but badly in areas where quantification
  (performance measurement and reporting) seems
  necessary.
• The voluntary adoption of independent
  verification is patchy - practices are largely
  organisation controlled

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• Talking sustainability sustainable
  development.
• Key messages (language used)
• Journeying a start, progress, learning,
  continuous imprv. leadership, knowledgeable
• Expert management measure to manage,
  rational, science, efficiency, being in control
• Win-win eco-efficiency (less waste, less cost),
  competitive advantage, risk reduction, doing
  well by doing good.
• Caring for stakeholders commitment
• Balancing achieving economic growth and
  ecological conservation at the same time.

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NZBCSD Leading the way
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Some examples Caring for stakeholders
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Some examples Eco-efficiency
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Some examples Measuring managing carbon
offsets
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Some examples Measuring managing carbon
offsets does it work?
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Core business up for change? Reducing scale of
impacts? - Paul Hawken (2002)
The question we have to ask is what is enough? Is
it enough that one in five meals in the US is a
fast food meal? Does that satisfy McDonald's? Or
do they want that figure to be one in three, or
how about one in two?... Do they think every
third global meal should be comprised of greasy
meat, fries, and caramelized sugar? They won't
answer those questions because that is exactly
their corporate mission. A valid report on
sustainability and social responsibility must ask
the question What if everybody did it? What
would be the ecological footprint of such a
company? What is McDonald's footprint now?
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Revisiting carbon offsets can it work for
everybody? Can everybody fly more, etc and
offset their activities with tree planting, etc..
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Revisiting carbon offsets NZ emissions, Kyoto
and beyond..
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Not likely! Smith Roger 2007 Air Travel Study
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Summarize

Use
Make
Waste
Take
Model 1 Exploitationist/Materialist/Growth
forever thinking
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Use
Make
Waste
Take
Model 2 Conservation, Eco-efficiency, Measuring
managing, stakeholder caring sharing more
from less (for real? or fantasy land?)
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Problems with Model 2 thinking

• Rebound or Boomerang eco-efficiency needs
  to deliver at the scale of ecosystems, the
  economy and the planet, and not just the product
  or organisation it requires systems level
  thinking
• (2) The triple bottom line (as practised) is
  illusory - Social and environmental interactions
  are not given equal billing with the financial. A
  company (university?) must be managed for the
  financial bottom line.
• (3) Stakeholder engagement is often nothing short
  of stakeholder management - Stakeholders are
  often engaged as a threat to be managed for the
  ultimate stakeholder to protect economic
  returns for the shareholder.
• (4) Dematerialisation is also not sufficient.
  -while it reduces absolute levels of resource
  use, it still involves waste and toxic emissions,
  just less of them.

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Ecological illiteracy?
Those who advocate eco-efficiency talk about
ecology when they really mean environmental
protection. This is because they do not perceive
any difference. Ecologists know that the scale on
which we do things is too massive, complex,
unwieldy, exploitative and alienatingEco-efficien
cy must fit within the growth paradigm and, in
fact, it is subtly designed to re-enforce it.
(Welford, 1998) Businesses find it almost
impossible to conceive of a situation where they
are selling less and the emphasis is on ecology
and quality rather than growth and quantity.
(Welford, 1997)
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Use
Make
Take
Waste
Model 2 a myth? A soothing palliative?
rebound, scale, throughput, metabolism
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Time for a new model?

Use
Make
Take
Ecological (and hence sustainable) thinking Solar
powered, nature safe (food, scale speed)
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Towards ecological literacy? What will it take
to become more ecologically literate? Does
measuring, managing, etc actually help or impede
such thinking?
We can track and trace our impacts at micro and
scaled up macro levels, but why do they occur in
the first place? And does such accounting
actually address those fundamental causes, and
arguably the ultimate consequences of those
behaviours?
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Aldo Leopold inspires us to think about and
develop an ecological conscience, so we can
think like a mountain The cowman who clears
his range of wolves does not realize that he is
taking over the wolfs job of trimming the herd
to fit the range. He has not learned to think
like a mountain. Hence we have dustbowls, and
rivers washing the future into the sea. But how
do we develop these capacities?
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Beyond eco-efficiency? Might make a start by
getting beyond eco-efficiency, offsetting etc

• Burden to base
• Ecological (carbon) footprints
• Ecological (carbon) rucksacs MIPS
• Factor-10, breaking step-locks and decarbonising
  activity
• Products as services (leasing vs. ownership)
• Design, cradle-to-cradle, wastefood
  bio-mimicry
• Redefining success sufficiency, selective
  slowness

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• Concluding remarks
• Organisations conceptualise sustainability in
  terms of (eco) efficiency, stakeholder
  engagement, etc Model 2 thinking.
• At best this is necessary but insufficient first
  step towards a new model of ecological
  consciousness. At worst, it is a serious and
  deliberate impediment to transformed thinking.
• Either way, we have still to learn that
  sustainability is a systems - not an
  organisational - concept. Nature and ecology know
  nothing of our companies and institutions. We
  need to reconceptualise our organisations along
  ecological lines.
• Ecology will not reconfigure along our modern
  lines.

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Further Reading