Steps towards a Green, Inclusive and Open Economy
The evidence is clear, society faces a seemingly insurmountable task: to rapidly transform our economic system to operate within the earth’s social and ecological thresholds, whilst at the same time meeting the needs of all humanity. We need to accelerate progress towards a Green, Inclusive and Open Economy – one which is regenerative and redistributive by design.
The current pace of business action – CSR, ESG and incremental gains – although needed and heading in the right direction is not sufficient in terms of scale, scope or pace to create the necessary change. Indeed, these efforts often fail to address the sustainability of actions, instead focusing on indicators and impacts without placing them in the necessary context. All in all, these efforts result in plateaued ambition, incremental changes, or ‘doing less bad’, without catalysing transformational change.
I was lucky enough to attend Part One of Reporting 3.0’s Transformation Journey Program in Amsterdam – Basecamp, kindly hosted by global financial services provider ING. The Transformation Program, mirrored by others around the world, aims to accelerate progress towards a Green, Inclusive and Open Economy. It aims to fill the gap in organisation’s plateauing ambition, and accelerate the transformation towards what is needed.
Drawing on Ray Anderson’s famous metaphor in which he speaks of climbing Mt. Sustainability, the Reporting 3.0 Program is working its way up towards Mt. ThrivAbility, providing the context and guidance necessary for organisation’s to reach the peak. Here, a business is balancing all of humanities wellbeing within the means of one planet – no small achievement!
Below, I explore a few key learnings on what’s needed to reach the peak:
Finding your North Star
Backcasting is the planning method which starts with designing a desirable future, and then works backwards to identify the policies and programmes which will connect that future to the present. The fundamental question it asks is “if we want to attain a certain goal, what actions must be taken to get there?”.
We are very trained in forecasting, and the implications of where we are going. Looking into the future and identifying what is demonstrably necessary – your North Star – introduces new trajectories and necessary preconditions to achieve your long term goals. Rather than taking steps that are merely a continuation of the present, you are working towards the future which is needed.
Liberate the transformational power of reporting
Done well, it is clear that reporting has the power to drive transformational change. Unfortunately, reporting is often seen as the glossy booklet which comes at the end of the year, not all the (important!) processes in-between. Reporting 3.0, with its mission to help catalyse the trigger-function of reporting to spur the emergence of a regenerative and inclusive global economy, is out to change this view and turn reporting back into the powerful tool which it is.
People have often felt that the platform does so much more than reporting, and is misleadingly named, however once we see reporting as the strategic process which it is, it begins to make more sense. It is a journey which starts and ends with a report, but everything in-between is part of this all-encompassing journey.
The takeaway is simple. If done well, reporting and everything it involves has the ability to catalyse systems change.
Bridging the context gap
We need a much better understanding of underlying ecological and social thresholds and norms – in other words, the carrying capacities of the resources we need for society and the environment to survive and thrive. Kate Raworth’s Doughnut is a great visualisation of this. Only with this understanding, can companies set meaningful targets based on allocations or shares that are fair, just and proportionate.
We have seen the beginning of this with Science-Based Targets, but to drive transformative change we need to apply this to everything else (for example, the UNGP’s as social norms). And, we need a platform coordinating and regulating these efforts. This is where Reporting 3.0’s Global Thresholds & Allocations Council (GTAC) comes in. Building on efforts to establish science-based targets, GTAC will identify thresholds & norms for sustaining the carrying capacities of capitals (that is, the doughnut), design and validate allocation methodologies (the pie), and create off-the-shelf solutions.
This approach is much needed to take us from an inherent incrementalism to a more normative and transformational change.
Mono- to multi-capitalist
Multicapitalism starts with a critique of mono-capitalism. The extensive use of financial capital as a proxy for other capitals is clearly faulty – the state of collapse in our social and natural environments has shown this.
During our time in Amsterdam, we were lucky to hear from Michel Scholte, Executive Director at True Price. Everything we buy leaves a trace, and often natural (e.g. air pollution) and social costs (e.g. extremely low wages) are involved yet not accounted for in the price. True Price has made it its mission to expose the true price of products, and guide organisations and consumers to use this knowledge to inform change. This is just one example of how we can begin to understand how companies create value beyond the financial.
It is clear that the rate and complexity of environmental and social change poses unique challenges, and developing ways to address these challenges demands innovation, flexibility, and the capacity to think across existing disciplinary boundaries. The Transformation Journey Program, and indeed all of Reporting 3.0’s work, cuts across these boundaries and has resulted in some truly innovative thinking, which when applied to business has the potential to drive transformational change.