standardizing sustainability context
TRANSCRIPT
Standardizing Sustainability ContextBrief Introduction: What Is Sustainability Context?
A Presentation by Mark W. McElroy, Ph.D.Executive Director, Center for Sustainable Organizations
New Metrics of Sustainable Business ConferenceWharton Business School
September 28, 2012
What Is Sustainability Context?
Let’s start with GRI’s definition (GRI 3.1)Performance information should be placed in context
Copyright © 2012 Mark W. McElroy, Ph.D.
What Is Susty Context? (cont.)
GRI’s definition (cont.)Performance information should be placed in contextThe underlying question of sustainability reporting is how an
organization contributes, or aims to contribute in the future, to the improvement or deterioration of economic, environmental, and social conditions, developments and trends at the local, regional, or global level
Copyright © 2012 Mark W. McElroy, Ph.D.
What Is Susty Context? (cont.)
GRI’s definition (cont.)Performance information should be placed in contextThe underlying question of sustainability reporting is how an
organization contributes, or aims to contribute in the future, to the improvement or deterioration of economic, environmental, and social conditions, developments and trends at the local, regional, or global level
Reporting only on trends in individual performance (or the efficiency of the organization) will fail to respond to this underlying question
Copyright © 2012 Mark W. McElroy, Ph.D.
What Is Susty Context? (cont.)
GRI’s definition (cont.)Performance information should be placed in contextThe underlying question of sustainability reporting is how an
organization contributes, or aims to contribute in the future, to the improvement or deterioration of economic, environmental, and social conditions, developments and trends at the local, regional, or global level
Reporting only on trends in individual performance (or the efficiency of the organization) will fail to respond to this underlying question
Reports should therefore seek to present performance in relation to broader concepts sustainability
Copyright © 2012 Mark W. McElroy, Ph.D.
What Is Susty Context? (cont.)GRI’s definition (cont.)
This will involve discussing the performance of the organization in the context of the limits and demands placed on environmental or social resources at the sectoral, local, regional, or global level
Copyright © 2012 Mark W. McElroy, Ph.D.
What Is Susty Context? (cont.)GRI’s definition (cont.)
This will involve discussing the performance of the organization in the context of the limits and demands placed on environmental or social resources at the sectoral, local, regional, or global level
For example, this could mean that in addition to reporting on trends in eco-efficiency, an organization might also present its absolute pollution loading in relation to the capacity of the regional ecosystem to absorb the pollutant
Copyright © 2012 Mark W. McElroy, Ph.D.
What Is Susty Context? (cont.)GRI’s definition (cont.)
This will involve discussing the performance of the organization in the context of the limits and demands placed on environmental or social resources at the sectoral, local, regional, or global level
For example, this could mean that in addition to reporting on trends in eco-efficiency, an organization might also present its absolute pollution loading in relation to the capacity of the regional ecosystem to absorb the pollutant
GRI’s Technical Protocol Sectione.g., water consumption might be expressed “in relation to
available supply in a particular location”
Copyright © 2012 Mark W. McElroy, Ph.D.
9
The world’s first
SustainabilityThreshold
Ecological Footprint Method
Source: World Wildlife Fund, 2012
Num
ber
of P
lane
t Ea
rths
Year whenperformancefirst became
unsustainableGaps
Copyright © 2012 Mark W. McElroy, Ph.D.
Types of MetricsConventional
“Absolute” e.g., Gross CO2 emissions or water use by a company Doesn’t take changes in company size, etc. into account
Copyright © 2012 Mark W. McElroy, Ph.D.
Types of MetricsConventional
“Absolute” e.g., Gross CO2 emissions or water use by a company Doesn’t take changes in company size, etc. into account
“Relative” Expresses absolute emissions relative to some other variable of
interest (e.g., emissions or water use per unit of production, dollar of revenue, FTE, etc.)
Copyright © 2012 Mark W. McElroy, Ph.D.
Types of MetricsConventional
“Absolute” e.g., Gross CO2 emissions or water use by a company Doesn’t take changes in company size, etc. into account
“Relative” Expresses absolute emissions relative to some other variable of
interest (e.g., emissions or water use per unit of production, dollar of revenue, FTE, etc.)
New Metrics“Context-Based”
Expresses impacts relative to social and/or environmental limits or thresholds – a more literal measure of sustainability performance
Copyright © 2012 Mark W. McElroy, Ph.D.
e.g., Context-Based CO2 Metric
Source: Wigley, Richels and Edmonds, 1996
Copyright © 2012 Mark W. McElroy, Ph.D.
2005 2006 2007 2008 2009 2010 2011
Absolute- tCO2 78,122
74,777
76,924
80,827
80,372
77,576
76,577
Relative- kgCO2 per 1000 lbs. of product produced
370.21 343.51
355.50
343.89
309.94
259.45
213.33
Context-Based- Actual emissions/normative emissions
1.000 0.905
0.740
0.871
0.794
0.822
0.762
Multi-Metric Study of Cabot’s CO2 EmissionsCopyright © 2012 Mark W. McElroy, Ph.D.
Notes:1. = Trending Favorably; = Trending Unfavorably2. = Sustainable3. Any Context-Based Score of < 1.0 = Sustainable; > 1.0 = Unsustainable
Os Os Os Os Os
Os
Os
2005 2006 2007 2008 2009 2010 2011
Absolute- tCO2 78,122
74,777
76,924
80,827
80,372
77,576
76,577
Relative- kgCO2 per 1000 lbs. of product produced
370.21 343.51
355.50
343.89
309.94
259.45
213.33
Context-Based- Actual emissions/normative emissions
1.000 0.905
0.740
0.871
0.794
0.822
0.762
Multi-Metric Study of Cabot’s CO2 EmissionsCopyright © 2012 Mark W. McElroy, Ph.D.
Notes:1. = Trending Favorably; = Trending Unfavorably2. = Sustainable3. Any Context-Based Score of < 1.0 = Sustainable; > 1.0 = Unsustainable
Os Os Os Os Os
Os
Os
Summing Up
Different ways of defining context for measurement and reporting purposes
‘Sustainability Context” per GRI, in which social or ecological limits or thresholds are involved, or…
Context more broadly defined
Different contexts serve different purposes
Question is: How do each of the 4 existing and emerging standards define context; what is its role in the standards; and what is its future?
Copyright © 2012 Mark W. McElroy, Ph.D.