By Bill Baue
Welcome to the inaugural blog post for the newly launched Sustainability Context Group Website!
First things first – you need to understand what the hell Sustainability Context is.
In a nutshell, Sustainability Context calls for assessing "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," to quote the Global Reporting Initiative (GRI), which coined the concept as one of its core Principles in 2002. Or, as GRI Co-Founder (and SustyContextGroup member) Allen White says, “Sustainability requires contextualization within thresholds. That’s what sustainability is all about.” In other words, what's the micro-macro link? Are a company's micro-level social and environmental impacts sustainable at the macro social and ecological levels?
The problem is, most so-called corporate sustainability programs focus just on the micro level, advancing incremental improvements in company social and environmental performance, as compared to past years or to peers – but not as compared to limits and thresholds in the broader social and environmental levels. Put bluntly, corporate sustainability as currently practiced lacks context – and therefore is destined to fall short of solving our sustainability challenges. It is precisely because of the absence of context at the micro level in most organizations that the impacts of commerce at the macro level is so often unsustainable.
Enter SustyContextGroup! In early 2012, as GRI prepared to revise its Sustainability Reporting Guidelines from G3.1 to G4, Mark McElroy and I recognized the need to gather together the many voices in the field calling for better guidance, seeing as the Sustainability Context Principle is almost universally ignored in GRI-compliant reports. So, we decided to form the SustyContextGroup, with our first course of action drafting a joint statement on G4 to submit to GRI in the second Public Comment Period. This submission, which you can check out here, lays out a general specification for applying Sustainability Context, thereby allowing for innovation and competition amongst methodologies for enacting the concept. A subsequent SustyContextGroup submission to GRI detailing how to handle greenhouse gas (GHG) emisssions reporting in a context-based way, which you can view here, includes a very useful bibliography on applying SustyContext to GHGs.
Of course, standards represent a high-level leverage point, and as luck would have it, a number of sustainability-related standards are emerging – so the SustyContextGroup used the opportunity to advocate for the inclusion of Sustainability Context in these standards. We were quite successful with the Global Initiative for Sustainability Ratings (GISR), which has embedded SustyContext as one of its 12 core Principles (see our Comment Letter here). The International Integrated Reporting Council (IIRC) has also largely embraced SustyContext, in that it calls for assessing the “carrying capacity of capitals” – which is essentially synonymous. See here for our Comment Letter to IIRC, and see below for text from the Value Creation Background Paper that aligns with our thinking:
58 Ultimately value is to be interpreted by reference to thresholds and parameters established through stakeholder engagement and evidence about the carrying capacity and limits of resources on which stakeholders and companies rely for well-being and profit, as well as evidence of societal expectations. Interconnections between corporate activity, society and the environment and the purpose of the corporation should therefore be understood in terms of what the corporation, society, and the environment can tolerate and still survive – that will be the main determinant of value. The challenges will be to reach agreement at corporate, national and international level on what those thresholds and limits are, how the resources within those limits should be allocated, and what action is needed to keep activity within those limits so that value can continue to be created over time.
As with IIRC and GISR, the Sustainability Accounting Standards Board (SASB) embraces a multiple capitals approach to sustainability, which encompasses Natural Capital, Social Capital, Human Capital, Constructed Capital, and Financial Capital (or variants thereof). SASB has even gone so far as to coin the term “Common Capitals,” we assume in a nod to the fact that Capitals most often represent resource pools that exist in – and hence are borrowed from – The Commons. However, SASB has yet to take the next logical step of acknowledging the need to manage capitals within their carrying capacities, as we advocated in our Comment Letter (see here.)
The Resources section of our Website acts as the repository for all of these advocacy submissions. As well, you can find links to instances where the SustyContextGroup has been cited in recent reports (such as in the Goals section of the SustainAbility Changing Tack report) and articles (such as Francesca Rheannon's column on CSRwire). It also includes instances where Context-Based Sustainability (a specific framework for implementing SustyContext conceived by Mark McElroy) has been applied, such as the Climate Counts #CarbonScore Study and the accompanying conference presentation and Webinar based on it, hosted by Sustainable Brands.
We hope that the Website will serve as a valuable resource in helping advance the mission of the SustyContextGroup, and we trust that the utility of the site will only increase going forward with future enhancements.