Sustainability: It Won’t Happen Until We Agree to Measure It

2009 October 27

Creative Commons License photo credit: LordFerguson

I’m reading Saving The World at Work by Tim Sanders. (Well, when I say I’m “reading” it, I mean I have it out from the library and it’s sitting on my desk. Along with the six other intriguing library books I have out. But I do flip through it once a day or so and I will likely give it quite a thorough skim when I get the final due date reminder email from the library and have to return it in a rush that day. Welcome to my hectic life.)

Anyway, from what I’ve seen so far, the book looks promising, and I’ll be sure to report back when I’ve finished reading (or skimming) it. In the meantime, though, I happened to notice an article at the Canadian publication FP Posted called Sustainability: The Second Business Bottom Line that references the book. Ray B. Williams quotes the book as saying:

“the responsibility revolution has arrived. It demands that companies make a difference to society,” and the ones what don’t participate risk becoming obsolete.

A bold statement, to be sure, and one that should make all but the most cynical of corporate fat cats lean in and at least feign attention. This is a difficult adjustment, after all. In most pockets of corporate culture, we’re just not used to being held accountable for anything but profit to anyone but shareholders. But as Williams wrote in the introduction to that same article:

Business can no longer operate from the perspective of short-term financial gain only. The world has become too complex, and social and environmental concerns now make financial profits at the expense of everything not only short sighted but dangerous. And we need only see the leadership debacles of an Enron, Webcom and the recent Wall Street fiascos to see what selfish financial gain reaps on everyone. There is increasing support for the notion of a business triple bottom line: financial profits, social responsibility and sustainability.

The triple bottom line concept is not new, and indeed we’ve referenced it before. It’s gaining traction… at least in the abstract.

What makes it a tricky sell, though, is the difficulty in accounting for sustainability. It’s all well and good to say businesses should make it a priority to reduce their environmental impact and so forth, but there’s no denying that when it comes to making accountable business decisions, the path of least resistance for the time being is still going to be to use a monetary basis. Cash is the capital everyone is used to measuring business by, and so far it’s just not that easy to account for a business’ use of other types of capital, like water and energy use, or to account for measurable contributions to human development, etc.

As a small business owner, I know this myself: the time I’ve spent with spreadsheets has been concerned with making sure my business has the cash flow it needs to survive. So far I haven’t invested much time at all on developing other non-monetary measures for my business. As the author of this blog, I suppose you’d expect I’d be naturally inclined to do so. It’s not for lack of interest or alignment with the idea of sustainability; it’s just that roughly 99.9% of our societal knowledge about starting and running a business focuses on cash flow and profitability. There’s precious little guidance to be found, for example, about developing a business that supports social growth as well as economic growth. What does exist is largely academic and not distilled for practical application.

So here’s what we need: we need organizations that support new and small businesses, like local chambers of commerce, SCORE, SBA, and others, to start the training early; to educate entrepreneurs about the triple bottom line and how to account for it. Educate mid-level CEOs about other measures besides profit. Help get the business community talking about why we haven’t done more with this before now and how to get started. We won’t have perfect metrics to begin with, but we’ll have a start towards adjusting our collective mindset. And you can’t improve on what you don’t attempt.

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3 Responses leave one →
  1. 2009 October 27

    Kate, check out

    “B Corporations are a new type of corporation which use the power of business to solve social and environmental problems.”, whose mission has long included sustainability, became a B Corporation last year:

    This doesn’t answer your immediate question, but it’s a goal for established medium- to large-sized businesses. I think third-party certification is definitely a required ingredient toward establishing sustainability as anything more than “nice to have.”

  2. 2009 October 27

    Very good post! Measurement is the key to sustainable sustainability efforts. In this economy, both short term ROI and long term social ROI must earn out to win the minds/hearts of business managers.

    I hope you enjoy my book – please let me know what you think.

    Tim Sanders
    author, Saving The World At Work

  3. 2009 October 27

    Ever since Coolidge said “the chief business of the American people is business” we have collectively agreed that the value of a Thing can be measured either by how much it can bring in the marketplace or how much capital it can generate. Which is why a CEO can make a million dollars and teacher can make $24,000.

    This model works for some things, but applying it to everything causes problems because humans value more intangible things than tangible things; there is no market value for a life partner. That equation can’t be written because the point is that it’s not an economic decision.

    I think the underlying flaw is not that we aren’t measuring Sustainability, Social Responsibility, Transparency, etc. Rather that we’re trying to make too many decisions economic. Not that I can suggest a solution for that problem. It’s a cultural approach to the same issue, and I don’t know if trying to make big social change or big economic change is more difficult.

    But I do think that many people would agree that clean air and water, green space, ethically produced products, and so on, are issues that transcend economics. Which suggests to me that we need a solution which also transcends economics.

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