Collapse Awareness … ‘Pure ESG’ Standards … UNRISD To The Rescue … Anti-Woke ESG … Turmoil In #ESGLaLaLand … More Sunday Thoughts
Edition 14 | July 2022
A good three months without a Lighthouse Keeper. Various times I thought that now would be the right moment for another edition, and then life got in the way, or more turmoil happened in #ESGLaLaLand. I got Covid after my first business trip of 2.5 years to Oslo in April, and while the symptoms were mild, it took me many weeks to get my energy level back to normal. In the meanwhile, the number of subscribers of the Lighthouse Keeper passed the 3.000 mark. Knowing how picky all we are to not overload our information food chain with the many newsletter offers we constantly get, I realise what an honour it is to have you as subscribers to this specific newsletter. A big thank you for that!
But here I am now with another edition, writing this one day before I will join my family in Germany to accompany my mother through the last days of her full life, thankful for the fact she finally got a place in a hospice. This is in full realization that all ‘the system’ (health care in that particular case) is supposed to offer is hard work to actually get it. Nothing happens automatically, nothing can be taken for granted! It’s a daily fight against the odds.
I am actually thinking a lot about ‘hospicing the old’ and ‘midwifing the new’ recently. The months in between this and the last Lighthouse Keeper have been emotionally some of the most challenging of my life. For myself, I have come around accepting that collapse will happen (in many forms, and it has started already, in many variations, in different places, and for many different peoples on this beautiful planet). It will even be necessary if humanity will stand a chance to survive. The consequences will be dire, for me, and for everybody else. But I also learned to appreciate that this collapse awareness offers new opportunities for the new to come into life already now, and while I focused my work in the past to be around ‘avoiding collapse’, I am now shifting more towards ‘post-collapse readiness.’ It actually doesn’t change so much, at least for me, but I know from our latest r3.0 Transformation Journey Program how hard it is for others. The words of the wonderful elderly wisdom of Arundhati Roy from India, and from the young Philadelphia-based poetrist Brianna Wiest, really resonated with me. I chew on many of the details of the depth they bring all the time:
I am shaking my head more often these days, given some of the insanity we humans do to each other and to the planet.
As James Lovelock, who died this week on his 103rd birthday said in conclusion: ‘My main reason for not relaxing into contented retirement is that like most of you I am deeply concerned about the probability of massively harmful climate change and the need to do something about it now.’ But looking at the most recent graph of global temperature change, have we really achieved anything from COP 1 to COP26?
‘Pure ESG’ Standards
There’s so much more clarity around the coming collapse(s) that a lot of what’s going on right now turns utterly pale. Here’s a the most prominent example: I have spent an awful lot of time in the last weeks on analysing the draft standards of both ISSB and EFRAG for their public comment periods ending July 29 and August 8. Both organizations develop standards carrying the word ‘sustainability’ in their standard titles.
I dare to say they do not even give a clear definition of what they mean by sustainability, while that should be their starting point. I dare to say they don’t understand materiality well and tinker around the edges with single or double materiality, while context-based materiality is needed. I dare to say they mostly have enterprise value in mind, when system value is what’s needed. It’ll add nothing to sustainability!
I recently put slides together that summoned around the following conclusions:
There were other voices that blew into the same horn, see here, calling ISSB a ‘flash in the pan to prolong business as usual’, quoting Mirova CEO Philippe Zaouati. ‘Commenting on an interview given by Faber [heading ISSB] to French outlet, L’Actuariel, Zaouati went on: “I now have the answers to my questions and they are not pleasant. Not only does Emmanuel Faber confirm that financial materiality remains the alpha and omega of the construction of international sustainability standards and that these are in direct opposition to the vision of double materiality of the European Union and EFRAG.” He sees in this a clear confirmation that the ISSB was created with the objective of “blocking the developments at EU level” and qualified Faber’s views as “both surprising and questionable”.’
We at r3.0 have seen more evidence that ISSB’s drafts are getting lots of flack. And of course, at r3.0 we have now submitted our own public comment letter. We conclude that what they present is a ‘Nonsensical Definition / Definitional Cooptation’ of sustainability and ‘Sociopathic Materiality’. This is a 14 pages document in which we mainly strip down their standards to showcase the utterly nonsense of what they put together and present to the world as ‘the solution.’
As mentioned above by some, there is also a deepening belief that Europe now needs to embrace stronger double materiality perspectives, but as mentioned above I don’t think that this solves the ultimate challenge – namely defining proper sustainability. My conclusion on the EFRAG drafts are therefore not much different:
How does that all sound in the light of a coming collapse, you may ask? It’s all lipstick on a pig, isn’t it? But is there no hope at all. Yes, there is.
UNRISD To The Rescue
Last week UNRISD finally issued the Synthesis Report ‘Thresholds of Transformation’, our attempt to get to full sustainability disclosure through the use of so-called Thresholds and Allocations as determining factors of any performance. This is the result of a 4-year project between r3.0 and UNRISD, defining what ‘Sustainable Development Performance Indicators’ actually are, pilot testing them and – still to come in September – offering Manuals for Implementation for FPEs (For Profit Enterprises) and SSEOs (Social & Solidarity Economy Organizations), quasi a ‘cooking book’ for the implementation. Along with that UNRISD will also come with a platform with useful information. Here’s what has been said about the report so far:
Will that avoid collapse? Most likely not. And while surely useful immediately, it allows to look at the glimpses of a post-collapse logic in measuring true sustainability and regeneration. Think about using ‘bioregions’ as the unit of measurement (say healthiness of the bioregion): how much is there to use when it comes to resources and other capitals than just natural capitals (thresholds)? How much is a fair, just and proportionate share (allocation) for all rightsholders in the bioregions? The use of Prosocial processes helps to facilitate that discussion. What can the bioregion produce by itself within the given carrying capacities? What else would they need, and where’s the nearest bioregion to receive it, avoiding logistical footprints wherever possible. What could this other bioregion want from us? How would the transaction be governed (and what currencies or tokens might be used)? And finally, how to weave governance amongst all bioregions in all parts of the world. Which bioregions would need extra support? What sort of reparations are needed due to the pre-collapse colonialization and the then past collapse? You can find a lot of inspiration in Local Future’s close to one-hour long film ‘Planet Local’, now available in many languages on youtube. How’s that as an alternative? When I immersed myself into that vision of a post-collapse world to, I also asked myself what of all that exists due to hyper-globalization right now would essentially remain as absolutely necessary? Well, not so much. But that’s for all of you to envision yourself, you’ll be surprised how little it is. But it needs an honest look into the mirror.
Another most surreal development is the whole ‘anti-woke ESG’ screaming that the Economist picked up on. Their 12-page special last week has been at least ‘surreal’, potentially just a ‘distraction’ or more concrete – annoying! No need to analyze this in depth, but it’s worth remarking that the ‘pure ESG’ approach is in fact a ‘weak ESG’ approach, unable to show system value creation, and that’s what makes it attackable from all sides. Many that I now hear in outrage about what’s happing should look into the mirror in how far they helped this utter bs to actually happen.
Turmoil in #ESGLaLaLand
It’s hard to comprehend all the scandals we’ve seen in just the last couple of months. On the other hand one can also conclude that we shouldn’t be surprised at all – it seems as if it’s inescapable. Here’s just the headlines. I want to specifically express kudos and gratitude to all prosecutors that have the guts to go deep into the matters at hand. Companies should be warned that greenwashing isn’t without consequences any longer and that prosecutors learn from each other quickly!
In the last Lighthouse Keeper, I mentioned a couple of ‘Sunday Thoughts’, an experiment to have a focused discussion around just one single thought, with just a couple of weeks of experience how they resonate at that moment. I am actually blown away by the responses and number of impressions and likes, included some very thoughtful exchanges in the comment threads, so I have just continued. Here’s what happened since then, feel free to pick any of them up on my profile.
I now wish all of my subscribers and new readers a wonderful summer. Read a great book, be with your beloved ones, enjoy nature where you can, eat and drink healthy, love abundantly. And then let’s think about what we can do together that we cannot do alone. And will I see you at the r3.0 conference on 6/7 September in Amsterdam (or online)? We have so much to offer, have a look at www.conference2022.r3-0.org.