Sustainability is, at last, becoming deeply embedded into business decision-making and practice. "Mo'Data" is my translation of the mantra I heard from business leaders last month, as they described what is needed most to get this job done. From KPIs (Key Performance Indicators) to EPDs (Environmental Product Declarations) to LCAs (Life Cycle Assessments), "Mo'Data" is the focus of this month's installment of InnovatingSMART's 2013 GreenBiz Forum Series.
Beginning with the business-accounting side of things, new and newly emphasized players include, respectively, SASB and Trucost. The innovators at SASB are working hard to get sustainability accounting reported as "materiality" for business investors. The goal is to get SASB (Sustainability Accounting Standards Board) data reported along with FASB (Financial Accounting Standards Board) data, and introduced into Investor-directed SEC "10-K" and "20-F" reports as part of an Integrated Reporting effort. The effect of this development could be huge, as the investment community (including, in our own ways, you and me) drives, rewards, and punishes much of what happens and doesn't happen in our economy.
Meanwhile, Trucost, a UK company which has been putting a price on natural capital since 2000, has this year become a partner to GreenBiz in the telling of their annual intelligence narrative. Trucost characterizes the natural capital costs embedded in global industries and uses environmental performance data (carbon, water, land use, pollutants, waste and commodity flows) to help companies, investors, governments, researchers and academics understand the "economic consequences of natural capital dependency".
Complementing industry-level accounting (Trucost) and corporate-level accounting (SASB), is a new program by Microsoft which introduces business-unit accounting for sustainability. Shared in the "One New Idea" segment of the Forum, Microsoft's internal carbon fee holds each business unit accountable for its carbon emissions, and makes each financially pay for or substantively mitigate these costs.
On the product-development and -procurement side of things, is The Sustainability Consortium (TSC) and one of its underlying methodologies, LifeCycle Assessment (LCA). TSC was founded by two universities and one very, very large retailer to create a system for measuring and reporting (through KPIs and other knowledge products) the sustainability impacts of consumer goods. Joined now by many players, including many other large but less diversified retailers, this difficult effort continues to be led by university efforts and shaped by the needs of Walmart - perhaps the most influential and diverse retailer in the world. This is hard work, which builds on top of the work of others while also - and uniquely - tackling a multi-stakeholder, multi-sector, and soon-to-be international scope.
Meanwhile, LCA informs TSC's work, but is not yet a core element. LCA is a decision-support methodology that looks at the full lifecyle of a product -- from material extraction and processing, to manufacturing, distribution, use, and ultimate disposal. A decades-old methodology, LCA is slowly beginning to extend its outlook beyond "cradle-to-grave" and toward a "cradle-to-cradle" mentality. A new audience that has energized LCA in recent years is the building construction industry; there has been an enormous effort to develop building product EPDs to facilitate greater transparency and better decisions.
Coupled with LCA but not discussed explicitly at the GreenBiz Forum is Materials Flow Analysis (MFA). Focusing on the stocks and flows of the underlying materials, MFA brings a critical lens which moves beyond the product level to the materials behind them. Look for more on materials management in our April issue; my own view is that much work is needed on closing materials loops and supporting large-scale industrial ecologies within and across industries. We cannot afford to be an April Fool about this one.
Mo'Data, Mo'Data, Mo'Data. Only when we get smarter and better informed will our decision-making rise to meet the urgent needs of sustainability.