The big “sustainability” news this summer—aside from fires, floods, the hottest temperature ever recorded on earth, death threats against weathermen, and Ron DeSantis denouncing Fireman’s Fund for actually doing the actuarial math (while surrounded by downright crazy ocean temperatures)—has got to be the long-awaited release of the first two standards from the International Sustainability Standards Board.
This isn’t the place for a detailed analysis, but let me offer some initial impressions of this “high-quality, comprehensive global baseline of sustainability disclosures focused on the needs of investors and the financial markets”:
  • Coherence and interoperability among the alphabet soup of standards is very welcome—a possible antidote to the huge demands of feeding the reporting beast with small armies of people checking the boxes on checklist after corporate reporting checklist.
  • But finding common denominators can be a mixed blessing. Harmonization can bring more people to the table, but with something lost to Pareto. Compromise is the price of any political process, I guess, so perhaps that’s inevitable; hopefully wise advocates can continue to move/cajole/shove the goalposts in the right direction.
  • One of the things lost is life. Notice that the ISSB has focused on “the needs of investors and the financial markets;” at least for now, they’ve dropped the “double materiality”—financial and impact—required by the European Sustainability Reporting Standards (ESRS). (And never considered, AFAIK, either the 3D materiality I proposed in 2018, nor the triple/contextual materiality that Bill Baue of Natural Logic partner r3.0 proposed more recently.)
  • Once again the tail is wagging the dog, which begs Bob Dunham’s wonderful question: “For the sake of what?” What is the purpose of all this reporting? “Sustainable profits”? Or a sustainable world? Checking the boxes, or guiding the global (financial) economy into harmony with the planetary (living) economy? *Where then do we address the needs of the living world on which all we value depends?*

As Dylan Siegler writes in GreenBiz, “in many companies, these new disclosure rules hit a nerve…because they call for cooperation and lock-step alignment in precisely the areas where there is most often dysfunction: Misalignment between sustainability and other key business functions…Shallow commitments where a deep sustainability strategy with buy-in from the Board on down should be.”

Or, as I wrote in 2015,

“Whether to do the right thing is a moral decision, not an economic one. How and when to do the right thing is an economic decision.”

What do you think? How is your company—or the companies you work for, buy from, or invest in—moving on these matters?


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