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New Metrics
Evolution of Disclosure, CEO Engagement, Measuring What Matters Take Center Stage at #NewMetrics

As Sustainable Brands' New Metrics '17 conference kicked off in Philadelphia on Monday, speakers from SASB, CSRLab, WRI, the World Happiness Summit and more presented a range of topics revolving around a few common themes: Correctly measuring what matters, disclosing material data and knowing your audience when you do. From disclosure to performance: Building a virtuous loop By Jessica Bast

As Sustainable Brands' New Metrics '17 conference kicked off in Philadelphia on Monday, speakers from SASB, CSRLab, WRI, the World Happiness Summit and more presented a range of topics revolving around a few common themes: Correctly measuring what matters, disclosing material data and knowing your audience when you do.

From disclosure to performance: Building a virtuous loop

By Jessica Bast

Cynthia Figge, CEO of CSRHub, set the tone for day one of New Metrics ’17 by saying: “From disclosure to performance, aim for the virtuous loop.”

While the concept of ESG performance disclosure is still relatively new, Figge highlighted the increasing importance of this kind of transparency. CSRHub recently launched Bloomberg’s ESG app, which not only analyzes a company’s ESG disclosure and performance history but also showcases how disclosure and performance can overlap using a four-quadrant system.

  • Colgate: Top right quadrant (high performance, high disclosure)
  • News Corp: Bottom left quadrant (low performance, low disclosure)
  • United Rentals: Lower right quadrant (low performance, high disclosure)
  • Staples: Top left quadrant (low disclosure, high performance)

Figge went on to emphasize the need to integrate CSR into mainstream data to create and illustrate greater value in sustainability. However, company disclosure is the first step to creating that value within a company.

SASB: Helping companies meet investor demand for standardized disclosure

By Jessica Bast

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****Approximately 90 percent of companies report on ESG performance, and 90 percent of the world’s top asset managers have committed to incorporate ESG factors to determine a company’s value. With greater disclosure of sustainability performance, investors have placed greater value on sustainability factors when analyzing a company’s performance. However, issuers and investors continuously struggle to agree on the quality of information provided from ESG reports for one key reason: sustainability reports do not speak investor language. Katie Schmitz Eulitt, Strategic Advisor and Stakeholder Outreach Lead at the Sustainability Accounting Standards Board, shed light as to how SASB is working to bridge the reporting gap to better appeal to investors.

SASB provides industry-specific frameworks that cover five dimensions of sustainability and 13 metrics under each dimension. At the end of the report, the SASB framework combines ESG performance indicators with economic factors to present numerical values to investors in an easily understandable way (JetBlue recently used SASB’s framework to construct its 2016 environmental and sustainability report). SASB also provides an Investor Advisory Board to help investors to better understand and evaluate the financial impact of sustainability, providing a new market infrastructure to meet investor and issuer needs.

The evolution of CEO engagement on sustainability: What we know and how we can go faster

By Nishita Lali

The Committee Encouraging Corporate Philanthropy (CECP) is a CEO-led initiative that supports the use of social strategies to drive a company towards success. CEO Daryl Brewster is the committee’s main man in this effort to engage CEOs around the world to work towards societal improvement.

Brewster acknowledged the pressure on CEOs to focus on short-term returns and quarterly updates, but reinforced the ever-growing need for sustainable, long-term strategies. He started off by noting that while reporting on a company’s performance is essential, too many measurements may be a hindrance and provide no real output.

CECP ensures that measuring is effective through the 4 Ss:

  • Simplify
  • Specify
  • Systemize
  • Scale

“If you only care about the quarter, it’s not going to make an impact,” he said. Along with making short-term goals, CEOs must make long-term plans that go beyond financials. Investors respond to these initiatives and will back them with confidence.

CECP’s new Strategic Investor Initiative tackles these issues and hosts CEOs from around the world to talk about making sustainable long-term plans.

The evolution of consumption and its relationship with the business models of the future

By Anna Shugoll

The Sustainable Brands conference is a testament to the growing role that the corporate sector plays in addressing societal issues; however, as the World Resources Institute’s (WRI) Kevin Moss notes, attempts to address overconsumption have remained “stubbornly small scale.” In his presentation, Moss addressed the potential for businesses to confront excessive consumption, beginning by contextualizing its importance.

By the year 2050, we are expected to see a nearly 50 percent increase in population, but over a 400 percent growth in GDP. A lot of this growth in GDP is linked to the UN’s first Sustainable Development Goal (SDG), which is to eliminate poverty. As more and more people rise to the middle class, consumption rates will skyrocket. As Moss noted, SDG 12, Responsible Production and Consumption, may be the key to balancing these goals’ efforts to address social and economic concerns alongside planetary and resource restrictions

Culturally, we face many barriers in reducing consumption. As Moss pointed out: “When the economy is depressed, the government sends us out shopping … When we are depressed, our friends tell us to get a bit of retail therapy. Who are you in the business world to change anything?”

Even with a growing dialog about sustainable production, the notion of consumption reduction often goes directly against a company’s model for continued growth and sales. So, the question remains: How can future business models decouple growth from an increase in consumption? Luckily, Moss ends with an encouraging example.

Consider your average retailer: Traditionally, 100 percent of the space in a clothing store is dedicated to selling new products. What if this is no longer the norm? Perhaps in the future a third of this space is dedicated to selling gently used clothing, while the other third is dedicated to repairing items that have degraded over time. This retailer would therefore be providing a service while adding a recycling initiative. If companies think outside the box and address overconsumption now, they can maintain growth while addressing resource limitations, transforming this ecological risk into a competitive advantage.

Measuring human wellbeing and its impact on the future of the global economy

By Meg Kramer

Karen Guggenheim of the World Happiness Summit (WOHASU) wrapped up day one of New Metrics and her talk was worth the wait. It turns out that happiness, much like sustainability, is challenging to measure; but measure it we must, if we want to ensure a healthy and happy future for humanity and the planet. After all, in the words of Aristotle, often forgotten in the business world: “Happiness is the ultimate end and purpose of human existence.”

As the measurement of happiness has evolved, several surprising issues have come to light. It turns out that money does not actually buy happiness; back in the ‘70s, British economist Lord Richard Layard found that as Gross Domestic Product (GDP) of a country goes up, happiness does not follow. This paradox has economic impacts. People spend a great deal of money trying to find happiness: US consumers spend more than $10 billion per year on self-help guidance, seeking ways to be happier; and companies lose between $450-550 billion per year in lost productivity due to disengaged employees.

Prosperity, traditionally measured in economic terms, has been presumed to create happiness. But the data tell a different story. The Happy Planet Index uses four elements — well-being, life expectancy, equality of outcomes and ecological footprint — to determine how happy people are. Western countries, for all of their prosperity, generally do not get high marks for happiness. To better understand this prosperity paradox and find a path to a happier, more sustainable future for all, metrics — and indeed, what is being measured — must change, Guggenheim asserted: “We must be careful of what we measure and how we measure it.”