Not a day goes by without hearing about the fragility of our natural ecosystems and the repercussions that extractive economic activity are having on them.
This state of affairs is not recent — it has been ongoing at the very least since the Club of Rome non-profit warned us back in 1972 that infinite economic growth and rapid demographic development are incompatible with life on Earth.
The situation today is even worse. Despite numerous historical conferences and countless promises to make economic activity more compatible with the capacities of our planet, the environmental progress of the last three decades is not enough to meet the challenges posed by climate change.
While the focus of climate action has often been on greenhouse gas emissions into the atmosphere, we are finally starting to realize the impact of human and industrial activities on biodiversity loss.
Earth’s diminishing biodiversity is exacerbating climate change by inhibiting Earth’s ability to protect and regenerate itself. The services biodiversity provides us are countless, and the situation remains clear: nature does not need us, but we need it.
We believe a paradigm shift is possible, and that part of this shift will involve the integration of a true sustainability approach in business. But for this approach to work, it needs to be two things: genuine and authentic.
A landmark report
A true “Brundtland moment” — in reference to the landmark 1987 report on sustainable development — is how Global Reporting Initiative co-founder Allen White described the United Nations’ Authentic Sustainability Assessment report.
White argues that historians will look back on this publication a decade from now as a great historical moment in the trajectory of sustainability. Many other leaders and experts in the sustainability ecosystem agree on the importance and relevance of this report.
Released in November 2022, this report represents the first comprehensive guide to using planetary limits as a reference point in business-oriented sustainability reporting. Planetary limits set boundaries that humanity can safely develop and live within, without depleting Earth’s resources.
The report is the culmination of more than four years of research, consultation and advocacy for a new generation of accountability tools. It is, at its simplest, a commitment to bring organizational sustainability assessment into a new era of authenticity.
At its core, the report argues that current business practices are inauthentic and insufficient for achieving true sustainability.
Central to the Authentic Sustainability Assessment report is the concept of Sustainable Development Performance Indicators (SDPIs). These indicators measure the sustainability performance of businesses, non-profits and other economic organizations using a new and improved approach.
These indicators move away from the old disclosure approach that relies on the idea of extracting infinite resources from a finite planet. Reports that contain this outdated approach include the Global Reporting Initiative, Sustainability Accounting Standards Board and the more recent International Sustainability Standards Board.
SDPIs take a new approach — one that addresses the underlying conditions that compromise sustainable development. It does this by respecting all planetary limits, whether social, economic or environmental.
Conventional disclosure involves comparing peers in the same industry or geography and disclosing one’s “good” performance in comparison to previous years.
SDPIs, on the other hand, involve comparing companies against a scientifically established, context-based sustainability threshold.
An organization’s sustainability performance is expressed in terms of the organization’s impact on vital assets, like planetary limits and social thresholds, compared to sustainability standards. This ensures the well-being of all stakeholders — human and nature alike — that contribute to social, economic and environmental balance.
According to the report, it is by comparing actual impacts with normative impacts that true sustainability can be assessed.
Take water, an increasingly scarce commodity, for example. An organization reducing its water consumption by 35 per cent or saving the most water compared to its competitors does not actually tell us anything about the sustainability of that water consumption.
An organization could be the best at saving water in its industry and still perform poorly in terms of sustainability. Sustainability is not measured by effort, but by the capacity of ecosystems — like planetary limits, pollution and biodiversity — to avoid jeopardizing the resilience of the planet.
Instead, SDPIs recommend comparing water consumption to the capacity of ecosystems and to the actual water needs of living species. It is this balance between actual consumption and resource availability, in light of ecosystem capacity, that will determine the true sustainability of an organization.
Achieving true sustainability
As time goes on, businesses will be increasingly required to disclose their sustainability impacts. This will be the case for large European companies starting in 2024, following the enactment of the Corporate Sustainability Reporting Directive.
The widespread and concerted adoption of SDPIs around the world can, as part of this growing momentum of disclosure of sustainability performance, foster authentic sustainability that will bring us closer to meeting the magnitude of the challenges ahead.
We must be collectively ambitious and take advantage of the relevance and originality of these new indicators, which offer a new trajectory towards achieving authentic sustainability.
Ghani Kolli, Managing Partner at Credo Impact, co-authored this article.