From ESG to ‘True Sustainability’ in Oslo … Do sustainability standard setters have a moral obligation to deliver sustainability? +++

April 2022 | Edition 13

I am back at home after an exciting trip to Oslo, where I keynoted and added opinions to two workshops at the Sustainability Hub Norway Summit 2022 (#SHUBSUMMIT2022). And I got Covid three days after my return, so this Lighthouse Keeper is written on my first days of slow recovery, working only for a small amount of hours, and see how far it takes me. The Oslo trip was my first business trip in 2.5 years, and now became a reminder that governments have actually given up on Covid restrictions, after economic support became impossible any longer and vaccination strategies are far enough to defend death from Covid  and overshooting hospital capacity, but can’t give us immunity. So the only restrictions that remain are those we as individuals have to personally deal with. I am feeling it first-hand right now, and it feels ugly. We learn to live with vulnerability and our Old Normal created a feeling of anxiety of what’s to come still (new variants, long-Covid effects, huge numbers of depression and hopelessness amongst younger generations and other psychological illnesses), quite the opposite of what we would wish for. And that gets me back to that opposite, and to the Oslo event.

From ESG to ‘True Sustainability’ bridge-building in Oslo

First of all a big shout-out to @Sustainability Hub Norway to having so wonderfully orchestrated a conscious tension in their 2-day Summit between on the one hand the playful ESG-proponents, the hooray-sayers that find it wonderful that we are now finally getting beyond voluntary schemes and towards regulation that carries the ‘S’ in its name (especially consultants and assure providers are in heaven). On the other hand those that poke quite radically towards System Transformation and how to build bridges from ‘necessary, but insufficient’ ESG to what’s actually needed (and not just politically opportune or practically possible), and asking for proof if what’s proposed gives us … sustainability (and they can’t). Amongst the latter we also heard keynotes of Kees Klomp and Frank Dixon, apart from my own.

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And as I was showing different sets of slides building on each other in my keynote and workshop contributions, I later composed one concise deck and offered it to everybody, feel free to have a go at it.

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I proposed nine maturity pathways to build the bridge, building on the extensive work that r3.0 had done over the last decade. I could have gone way more granular, but needed to restrict myself to about 30 minutes keynoting and 15 minutes in a workshop, see slide 9 in the deck or here a screenshot of what I proposed:

Here are some anecdotes from the conference, as they describe quite well what the struggles are that ask for some deeper reflections, and that became very obvious in these two days:

  • When I asked how many of the 200 people in the room ever read the Brundtland Report from 1987 or being asked to ever do so, less than 10 hands went up.
  • When Kees Klomp asked how many people have actually read the brand-new IPCC report, less than a dozen hands went up.
  • It was amazing to see the reactions by young ESG practitioners that clearly felt at home with what I addressed as problematic, they understand the shortcomings, but they are blocked by career risk in highly hierarchical organizational structures. 
  • I often got the question ‘where would I start?’ or ‘how do I best address my concerns and bring in new ideas, especially when the leadership doesn’t listen?’ It shows how helpless some of the ready and willing new generation are in existing strait jackets, not incentivised to go left or right of the mainstream.
  • There is a huge demand for ‘safe-space’ training and education opportunities. Interestingly I was asked by two of the big 4 afterwards if I could provide that. I said for sure, let’s discuss.
  • I also took part in a CFO workshop where r3.0 Advocation Partner Delphine Gibassier presented the concept of the Chief Value Officer MBA of Audencia Business School in front of about 20 CFOs. Two companies presented their sustainability approaches and reports. I had only one question to them: ‘So, how sustainable are you then?’ Quietness. What was revealing to me was one CFO that said ‘Don’t hold us accountable for what we don’t have to comply with’, as if proving sustainability was not part of the concept of a sustainability report. And honestly, I thought he was right, current standards don’t give you that compliance task, so they don’t ask for that in a way that an assurance provider has to make a statement about the level of sustainability a company is at.
  • A last observation related around the question ‘What’s a regenerative & distributive economy for you? Do you know your ideal arrival point’? Again, very little feedback to that question. It occurred to me that when I asked that question people were prompted to that for the very first time, and some light bulbs went on.

 

Two more slides from my deck provoked specific attention and discussion: what’s the value of the EU Taxonomy and what we can expect from ISSB, CSRD? 

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This one looks back at the fatal flaw right at the start of the Taxonomy work. The outcomes we now have, the complexity and the unbearable amount of bureaucracy (as we hear from users) are just the logical consequence of that.

Another question posed at me already by the organizers was what to expect from all the standard-setting approaches underway right now, so here’s how I answered that:

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This conference, the organizers said, would be the starting point to further engage. I believe they triggered exactly the right questions amongst participants and offered ways forward. I am quite hopeful that this dialog will lead to fruitful outcomes in the years to come. I’ve seen a lot of willingness to go the ‘necessary’ mile! Fingers crossed.

Do sustainability standard setters have a moral obligation to deliver sustainability?

The last weeks have seen both I?SB and C?RD offering first standards, and I just refuse to acknowledge the ‘S’ for sustainability in their name until there is proof they deliver on the ‘S’, like many others now also question. This all happens rather quick, seen that I?SB has only officially started beginning secretariat functions beginning of the year. C?RD (through EFRAG, with the help of GRI) throws out documents of unbearable volume that are impossible to grasp for people that are not full-time and fully paid on the job. Whatever Council or Expert Group is called for, whatever public comment is asked for, it’s always unpaid commitment, it categorically throws out views of those that are in need for support, which to me is an act of ignorance. Many voices call them out to be open for dialog around how to get there, but not the slightest note of interest has been voiced so far, the train rolls on in the ‘materiality for enterprise value determination field’, and having tricked us all into the ‘double or dynamic materiality concept’, which again has nothing to do with context-based materiality ‘for sustainability’, see my slide in the conference deck for that.

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The question of the moral integrity of these standard-setting processes comes up. We now see Boards of Directors of Corporations being sued for their organization’s wrongdoing in the climate field. Would Boards of Standard Setters, misleading on sustainability, be potentially next? I am truly not alone with this opinion. Our close collaborator and Advocation Partner Mark McElroy from the Center for Sustainable Organizations voiced similar issues with the I?SB and their Chair Emmanuel Faber in this post.

Crossing a sixth ecological boundary

When looking at the shortcomings of ESG standard-setting and the lack of embodied moral obligation by standard setters as it stands, the crossing of a sixth environmental boundary comes in extra hard. It’s water, not some sort of invisible gas or toxic pollution. No, it’s our utter source of life, and it is as if one wants to throw it right at #ESGLaLaLand: ‘When will you finally understand? You don’t read the IPCC report, you don’t know what the Brundtland Report says, you are flying completely blind, why should we call you experts in sustainability?’ And still, the System Transformation camp needs to offer the bridge to a regenerative & distributive economy.  So just let these 2 pictures sink in, 7 years of time in between them. And then look into the mirror, and come on board, take our hand and actively work with us. The concepts are there. There is no ROI beyond no water.

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Here’s the press release of the Potsdam Institute for Climate Impact Research that is useful to read, especially understanding the difference between Green Water and Blue Water.

Sunday Thoughts

Something nice to end with: 5 weeks ago, I started a new little experiment, and I’d like to call it a success. It’s called ‘A Sunday Thought’: just one idea about regeneration at a time. The response has been between 10k and 30k views, with quite some fruitful threads below them. It has already sparkled the idea if some of the readers want to continue this on different workdays, so I’ll see if that idea meanders forward and develops into something. For now, I’ll just enjoy to continue offering ‘A Sunday Thought’:

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Onwards and upwards, positive mavericks unite and tackle what’s necessary! Happy to see you coming on board. The r3.0 Conference on 6/7 September might then be your place to go, either in-person in Amsterdam or online, and get ready to meet Vandana Shiva, Tariq Fancy, Helena Norberg-Hodge, Mark McElroy, Allen White, Wim Bartels and many others, see www.conference2022.r3-0.org. And hey, it’s FREE, both in-person and online!

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