Measuring What Matters: The current economic model is not working for the majority of the world…

kristy Sustainability News, Beyond GDP

Measuring What Matters

By Lisa Cowan, European Correspondent, Ethical Markets Media

The new lecture theatre at the International Institute for Environment and Development had standing room only as The Green Economy Coalition gathered in London, 15th Feb 2012, in preparation for the Rio+20 UN summit. The current economic model is not working for the majority of the world. Challenging the current metrics and opening the debate on what is important raises the real question of whether there is in fact a better, greener, fairer and more sustainable economic model.

The proposition behind the evening debate was that measurement activities at the corporate, national and global scale are important but the agenda will only be transformative if considered together. Specifically the measures discussed were:

1) corporate reporting
2) beyond GDP
3) sustainable development goals

The discussion opened with Richard Mattison from Trucost. He has been working with the CEO of Puma who wants to measure the true cost of doing business in order to make sustainable choices. At first glance, a drought in Russia might not seem significant for a global shoe manufacturer. But, the drought made wheat scarce, which drove up the price. Cattle are fed on wheat which drove up the price of cattle and therefore the cost of leather and overall profitability of the Puma business was affected. Internalising externalities is a key step in understanding the true cost of operating a business both now and in the future.

Staying in the corporate realm, we then heard from Teresa Fogelberg of the Global Reporting Initiative. There are now 6000 corporations submitting reports incorporating the GRI measures. This includes 95% of the AO Global 250 for whom reporting has become defacto. Reporting has become ‘professionalised’ and has moved to many boardrooms. While this is encouraging, there are around 82,000 multinational companies across the world, so there is still a lot of work to do. To influence policy at the national or intergovernmental level, information is required on environmental and social impacts of business. To galvanise momentum towards 2015, the GRI has launched a campaign ‘report or explain’ which asks all large and medium size companies in OECD countries & large emerging economies to report publicly on their economic, environmental and social performance. Or, explain why they are not.

Farooq Ullah, head of policy and advocacy for Stakeholder Forum, took us into the beyond GDP strand of discussion with Einsteins comment: ‘not everything that can be counted counts and not everything that counts can be counted.’ GDP and well being measures can present a snap shot of where you are, but not where you are going. There are planetary boundaries which are not taken into consideration. Unless we can measure and share resources fairly, the world is heading towards a scarcity of resources with dark implications. To make a difference the measurement of what matters cannot simply come from the top down. At the same time, there needs to be a groundswell from the bottom up expressing what we value. Proper sustainability shouldn’t actually ‘cost’ anything.

Finally we heard from Camilla Toulmin, International Institute for Environment and Development, who opened her comments with the concern that no one is arguing against the green economy, so it hasn’t got nearly enough bite. There is a lack of energy around the subject. What is needed is for Rio+20 to kick off a 2-3 year process of establishing global sustainability goals. There is an emerging consensus on the power of reporting and a recognition that corporations should be rewarded in some way for creating environmental and societal benefits.

The floor was opened by the evening’s chair, Oliver Greenfield from the Green Economy Coalition, where voices from NEF, Friends of the Earth and Aviva among many others were heard.

Having attended the OECD progress report meeting in Paris in October, 2011, it was useful to see the combined perspective of the corporate, national and international levels. The coalition expects that Rio+20 will move forward on the metrics agenda and is preparing a post-Rio scenario for next steps.