On September 24th, the Sustainability Context Group (SCG) submitted a comment (warning: PDF) to the Global Reporting Initiative (GRI) asking for clarity on how to put organizational performance into the wider context of sustainability. Lack of guidance from GRI has led to many organizations making statements like, “we emitted 90,000 tons of CO2 last fiscal year — a 20% reduction from the year before,” without saying anything about whether that performance is sustainable or not. That’s a problem, because an organization reducing emissions, increasing recycled content, and so on is not necessarily becoming sustainable. Organizations have to ask themselves: in order to be sustainable, what should my impact be? The answer to that question is not at all easy to find.

Why bother with context-based sustainability?

In its comment, SCG had this to say about placing performance metrics in context:

Organizational sustainability performance (non-financial) should be measured and reported relative to norms, standards or thresholds for what social, environmental and economic impacts would have to be in order to be sustainable – that is, able to continue without causing systemic degradation or collapse.

From a systems perspective, it only makes sense to give context. No organization is an island (and of course even islands aren’t isolated from the impacts of climate change); instead, all institutions are intimately connected to numerous social, environmental, and economic systems. If these systems aren’t sustainable, then the organizations that depend on them aren’t sustainable either. When I read something in a report like, “we’re 78% of the way to our goal of a 50% water intensity reduction by 2015 vs. a 2008 baseline,” I have to ask myself: “is that good enough?” Context-based metrics allow organizations to anchor themselves to real-world stocks of natural and social capital, like the level of water in a reservoir or the number of employed people in a town. This gives institutions the ability to reveal much more about their own performance, internally as well as to stakeholders.

An anchoring to real-world parameters also raises a critical truth about context-based sustainability and sustainability in general: shared responsibility. The level of water in a reservoir and the number of employed people in a town are the results of actions by multiple institutions — really, this is true for the performance of almost all resource stocks. Given this fact, how can an institution go about determining what its impact should be?

Normative impact: science and values combine

SCG leaves the topic of normative impact relatively untouched in its comment and only gives two example calculations (perhaps because it didn’t want to be too prescriptive about how to determine normative impact) but I believe that the whole usefulness of context-based sustainability goals and metrics depends on how we determine what our impact should be. This isn’t at all easy, because different people have different beliefs about sustainability and responsibility — so when we make decisions around normative impacts, we inherently use both science and human values.

To talk about the sustainability of any particular stock of natural or social capital, we first have to ask ourselves what system quality we want to sustain. Is it biodiversity? Ecosystem services? Aesthetics? Employment? Human health? This is a value judgment — there’s no right or wrong answer. Next, we have to determine how to sustain that particular quality, and this is often a question of science. For instance, maybe to sustain the level of water in a reservoir, we have to reduce consumption of it by 50,000 gallons a year. Then, we have to decide on a metric by which to measure the performance of each institution drawing on the stock. Should we pick an absolute metric, like tons of CO2? Should we pick a relative metric, like gallons per dollar contribution to GDP? This is also a value judgment. Finally, we have to ask ourselves what a “fair” impact by each institution should be — needless to say, this is definitely a value judgment!

Quantitative information isn’t useful simply because it’s quantitative — numbers can mislead, which means that context-based sustainability metrics must themselves be placed in context. Stakeholders in an organization and in a stock of natural or social capital need to know the answers to these questions:

• Why did an organization choose a particular set of metrics and goals — what’s the justification?
• Who benefits from the use of that particular set?
• Do the metrics and goals have buy-in among all stakeholders of the stocks the organization depends on?
• Are other organizations dependent on the stock using the same goals and metrics? If not, why not?

Without this level of transparency, I believe that context-based sustainability reporting is no more useful than the “context-free” GRI reporting that many institutions do today. How can we determine whether a resource stock is sustainable if the organizations using it don’t agree on how to sustain it?

Working together on what “should” be: the need for place-based dialogue

There’s no shortage of challenges for organizations that choose to embark on the (important) journey toward context-based sustainability reporting. With challenges come opportunities, and I see a major opportunity for institutions to move toward place-based dialogue with the stakeholders of the resource stocks upon which they depend. A beverage producer sharing its best practices with other producers at an industry conference is a good thing, but a beverage producer conferencing with the citizens, businesses, and municipal departments of the underground river it’s drawing on is an even better thing. The systems we care about exist in real, physical places; in many cases, we may not be able to avoid a tragedy of the commons without place-based decision-making and agreement.

The challenge of assembling place-based conversations increases with increasing spatial scales and is tremendous at the global scale (with global climate change, the global atmosphere is the stock of interest) — the more stakeholders you have, the more difficult it is to agree on anything. It’s obviously impossible to get every stakeholder of the global atmosphere into one room, much less into any agreement. Perhaps, though, there will come a day where city and state representatives across the world share best practices and come to consensus on context-based sustainability. Unreasonably idealistic? Maybe so. Necessary? Possibly.

Beginning the journey

Sustainability communications are most useful when placed into context, but context-based sustainability reporting and goal-setting are fraught with challenges. Context-based quantitative reports are not automatically useful — without being placed in context themselves, they will mislead. Organizations and stakeholders must inevitably confront differing value systems and come to shared value judgments; for that reason, there’s no substitute for place-based dialogue. If you’re leading an organization beginning the context-based sustainability journey, here are some questions to answer:

• What stocks of natural and social capital do we depend on?
• Who are the other stakeholders in those resource stocks? Are there existing venues where we can communicate with those stakeholders, or should we extend the invitation to a new dialogue?
• What system qualities do we want to sustain in those stocks, and what system qualities do other stakeholders want to sustain?
• What context-based metrics and goals do we feel are most useful, and what context-based metrics and goals do other stakeholders prefer?
• Is there a way for us to come to consensus?

See also:

• Ethics and conservation biology.

Photo “Crowd” by James Cridland on Flickr.