Real Leaders

“Sustainability” is so last year. Here’s What’s New

This week, Real Leaders is at the Sustainable Brands New Metrics ’19 event in Philadelphia. We explored the growing range of tools and tricks needed to keep up with demand for next-level goals such as plastic-neutrality, 100% circularity and properly quantified social and product impacts. Here are the main trends you need to know.

How are companies chipping away at the next generation of big, hairy, audacious goals. Read on:

A comprehensive look at IKEA’s new holistic impact measurement system

With the approach of the “4P” program — which focuses on people, planet, profit, and perception — IKEA is moving towards meeting its sustainable goals for 2030. During his Tuesday morning keynote, Peter Jones, Head of Sustainability Analytics and Impacts at IKEA, gave an overview of the program that the company is spearheading, regarding the impact and their journey to becoming a sustainable brand by 2030.

IKEA has been imagining a future for value creation and as Peter pointed out, the first task is to measure what the company is promising. Jones pointed out that some impacts are easier to measure than others, but the company has defined 9 KPIs under its People and Planet Positive initiative that are centered around three areas:

In a subsequent session on Wednesday morning, Jones was joined by his colleagues — Annamaria Malegh, Global Sustainability Analytics Leader Social & Behavior at IKEA; and Jorge Castro, Sustainable Impact Leader — for a candid discussion. One of the questions from the audience was about the increase in sales IKEA had when it began its sustainability campaigns. Malegh mentioned that one of the main components of IKEA products is always the design, so that is what the company led with; but also that half of IKEA’s product range has some sustainable features — whether in terms of material, quality, source or social/entrepreneurial innovation.

Selling based on sustainability depends on the maturity of the consumers understanding of sustainability; for some, the bar is just on whether the product is non-toxic or sourced fairly. Giving more information on sustainability to their customers has helped sales globally by approximately 15-20 percent.

Defining, setting and achieving plastic-neutrality targets

Although a wonder material, the enduring nature of plastic has become one of the biggest environmental concerns crippling our planet. In this engaging panel, leading industry experts shared insights on how they are defining and/or dealing with plastic neutrality for their companies and industries. The panelists represented different stakeholders in plastic innovation, and how it varies for companies in terms of product, manufacturing, packaging and use amongst employees. The panel, moderated by Salterbaxter’s Philip Clawson, had several key highlights:

Innovative software consultancy

As pointed out by James Sullivan, Head of Global Sustainability Innovation at SAP, the software giant is helping other businesses recognize the value in plastic neutrality, while providing them resources required for action. Last year, it launched the Plastics Cloud to push the 2030 Agenda for Sustainable Development through materials and better data collection and management. Sullivan said SAP is involved in plastic waste because it believes that resource productivity is at the heart of the connected intelligent enterprise — a critical part of a zero-waste world. So, with a goal of creating value on many fronts for and with their customer companies, SAP set out to find answers for this humongous problem. The company has done research on understanding consumer behavior with respect of plastic consumption and has worked on design thinking with their customers.

Sustainability strategy firm

While highlighting the gaps businesses are facing in terms of taking the total action for plastics, Valutus founder Daniel Aronson pointed out that there is a problem in how we define and compare different types of plastics, as they have a different effect. He said it is important to quantify not just by weight but by the impact of the type of plastic, so that we have a clear picture of what data we have and what is missing. Aronson and his team developed an enormous data table help companies quantify plastic’s true impact. He said that with our conflicting approaches to plastic usage, the fact that we look at how much but not how bad makes it hard to get from where we are to where we need to go. He stressed the need for standardization in this regard.

Product-based company

John Pflueger, Principal Environmental Strategist at Dell, described how Dell replaced its 2020 sustainability targets with a 2030 strategy, which has more extensive metrics — including a moonshot goal of going completely circular. He said that Dell has been looking into the problem of plastics for almost a decade; and in 2013, committed to use 50 million pounds of recycled plastics in its products by 2020 — a target that was doubled to 100 million in 2017. They are piloting session to close the loop for their take-back systems. The company is exploring alternative materials, including ocean plastics, in its bid to achieve circularity.

Flueger mentioned that Dell is committed to one-to-one material recovery by 2030, amplifying its current take-back program 10-12 times. He said its goal for all of its packaging to be made entirely of renewable and all recyclable materials is proving one of the most difficult tasks.

Pioneering plastic offsets

Svanika Balasubramanian, co-founder of RePurpose, introduced her startup — which is creating the world’s first offset mechanism for plastics, and offering companies solutions and certification for plastic neutrality. While her team was looking for solutions, they found many people across Southeast Asia are working on solutions around informal recycling — for example, through waste pickers. RePurpose started with the idea that while companies are taking actions for the future and transiting to a circular economy, they could offset their plastic impacts by investing in companies and initiatives that are working on solutions on the ground to support and strengthen them. As customers are demanding solutions today, RePurpose is working with businesses that have defined their plastic-neutrality goals by creating a pool of money in the form of a “plastic-neutral fund,” which is being used to fund solutions and innovation, and is feeding back data to companies, hence closing some loops.

Certified TBL Orgs: The world’s first triple-bottom line certification credential

On Tuesday afternoon, Mark McElroy, CEO of SustainAccounting LLC; and Jane Hwang,President & CEO of Social Accountability International (SAI), used their keynote to announce their partnership and launch the world’s first triple-bottom-line (TBL) certification credential. While prior guidance has encouraged context-based sustainability reporting for a number of years, there has been no specific accounting guidance or standard to achieve this goal. The new TBL certification credential will fill the existing gap, offering a context-based accounting tool to assist rigorous and actionable sustainability performance measurement and reporting.

What is the TBL accounting framework?

The term “triple-bottom line accounting” was coined by John Elkington in the 1990s as a way to interpret the performance of corporations in more than just economic or financial terms. While this concept was not new, Elkington capitalized on it by looking at the carrying capacity of all types of capital — natural, economic, and social capital.

Why now? The history of context-based sustainability reporting

The expansion to context-based TBL (CTBL) thinking began in 2002, when the Sustainability Context Principle was introduced in GRI’s G2 Standard. This principle has persisted over the years and survived many revisions of the GRI reporting standard; it remains a central core sustainability accounting principle today. But, no guidance on how to actually do context-based TBL accounting was ever developed. 

How standardized social outcomes demonstrate corporate impact

Wrapping up the final day of New Metrics, Sustainability Communicator & Media Architect Nick Aster facilitated a conversation between Jason Saul, CEO of Mission Measurementand founder of the Impact Genome Project®; and Arlene Isaacs-Lowe, Global Head of CSR atMoody’s. Saul walked us through the research and development of The Impact Genome® — a platform that standardizes the way social programs measure, evaluate and report outcomes; and Isaacs-Lowe explained how this valuable tool is being used by companies to inform and target their sustainability and philanthropy program initiatives.

The problem: Previous efforts standardizes metrics, not outcomes 

“Effectively measuring social impact is challenging, because no standards exist — no one can compare apples to apples,“ Saul said. He explained that previous attempts to quantify social impact fell short because:

  1. They tried to standardize at the wrong level — forcing standardization at the level of the metric, not the level of outcome. For example, if we’re trying to reduce poverty, measuring the number of people trained or getting a subsidy does not tell us if people actually become financial stable due to those efforts. 
  2. There is no standard-setting body in this field to say what outcomes should be measured.
  3. There are no benchmarks, making it hard to incentivize measurement when we don’t know the cost per unit of outcome. We don’t know “good” means.

The solution: The Impact Genome measures outcomes, sets benchmarks

Saul explained how The Impact Genome provides the missing metrics, stating that, “through the Impact Genome, we’ve developed evidence-based standards and now have benchmarks for common outcomes across the most critical social impact areas. Organizations find value in the common language of the standard outcomes, benchmarks to understand their cost per outcome; data to build grantee capacity, demonstrate ROI and drive ultimately more impact.”

Richa Agarwal is pursing graduate studies in environmental sustainability at the University of Pennsylvania. Prior to Penn, Richa worked with an environmental think tank in India, on topics of waste management and circular economy for India and Tanzania. She is interested in topics of global supply chain for post consumer used goods, finding partnerships between private organizations and NGOs/think tanks, and going zero waste.

Leila Goldmark is a sustainable business entrepreneur; founder & President of Green Rainbow Revolution (GRR) — an e-commerce retail business that specializes in sourcing modern, eco-friendly, ethically produced arts and school supplies, educational toys, and lifestyle goods for kids of all ages.