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woensdag 20 juli 2016 New GRI Standards are coming, are you prepared?On April 19, 2016,the first set of drafts of the new Global Reporting Initiative (GRI)Sustainability Reporting Standards (SRS) were presented to the public. In orderto become future proof, some quite drastic changes have been made to thestructure compared to the previous G4 guidelines. The new standards are aimed atimproving quality and flexibility and have a larger focus on material issues.It is expected that a final version will be presented to public at the end of2016. Time isshort!If GRI sticks to its current planning, companies will have until December 31, 2017 to publish a (sustainability) report according to the 'old' GRI guidelines. As of January 1, 2018, all companies that wish to be GRI compliant must report according to the GRI SRS. This means that your organisation's AR2017 is the final report that will be acceptable within the 'old' GRI G4 guidelines. What iscoming your way?From principle to rule-based Oneof the main transition points is a larger focus on DMAs and the reportingprinciples. The new sustainability reporting standards are stricter and ask forthe purpose of a management approach as well as a description of policycomponents and actions. A modular structureThereare big changes in the numbering system (e.g. G4-10 becomes 201-8) and changesto the format. Companies that wish to report in accordance with are required to use all three universalstandards of SRS 101(foundation), 201(general disclosures) and 301(managementapproach) and select the relevant topics of SRS 400(economic),500(environmental), and 600(social) based on their materiality. Criteria: Shall, should or can? The new standardsdifferentiate criteria into requirements, recommendations and guidance.Requirements are mandatory and are denoted by the word shall. Recommendations are not mandatory but are encouraged and thisis denoted in the criteria by the use of should.Lastly, the Guidance aspects are also not mandatory and can be used. The new standards also provide background context andexamples to better understand the disclosure, and describes possible,achievable, or allowed scenarios for reporting information. If you wantto know more about these and other changes, more information on the upcomingGRI Standards can be found here. How can Iprepare myself?To prepareyour organisation, you can (should or shall) start by comparing the old and thenew standards by taking a helicopter view. After reflecting these changes inyour organisations reporting, a gap-analysis can provide knowledge on what ismissing. As some organisations might have only just gotten their heads aroundG4, it might seem like a big effort to make the transition to GRI SRS.Fortunately several fundamental concepts in the GRI G4 guidelines have beencarried over into the new standards. However, as the time to make thetransition is short (only two reports away), we advise starting as soon aspossible. Nick de Ruiter is a partner at Sustainalize. He is aspecialist in CSR strategy setting and performance monitoring.
Alissa Daurer-Stolker Mart van Kuijk are consultants at Sustainalize. They specializein CSR reporting and international benchmarks.Gepost doorSustainalizeop06:28Geen opmerkingen: Dit e-mailenDit bloggen!Delen op TwitterDelen op FacebookDelen op Pinterestdinsdag 28 juni 2016 Science-Based Targets (SBTs) helping to prevent the world from warming up by more than 2 degreesThere is no denying that climate changeis now widelyrecognized as the major problem facing the earth. Climate change is going to directlyimpact human health, livelihoods and the economy.Extreme weather,drought, heatwaves, sea level rises, storms and floods will all causeirreversible damage to infrastructure and agriculture.If humans want toreverse this, emissions of CO2 need to be cut immediately! Luckily, we have had COP21 where agreements were made tolimit global warming to 2C. And please also take a look at our Januaryblog. There we argued that stricter guidelines and regulations on emissionreduction and energy consumption targets were to be expected. However, as things go, the market is already ahead of policymakers. For instance with new target setting initiatives and benchmarks. Afirst concrete example of this is the Science-BasedTargets initiative (SBTI), a partnership between CDP, UN Global Compact,WRI and WWF. SBTI aims to support organisations in taking emission targetsetting to the next level. But what are science-based targets? Why are they needed? What are the benefits andhow can business integrate them in their strategy? What areScience-Based Targets?Science-based targets (SBTs) are organizational targets thatare in line with scientifically confirmed requirements for the transition to alow carbon economy through which we can stay within the 2 degree threshold. Theefforts around the 2 degree approach are then cascaded to countries sectorsand organisations. One method used to determine such targets is the SectoralDecarbonization Approach (SDA).[1] The underlying idea of science-based targets is prettysimple. Currently, most organisations have integrated emission reduction,climate change, or environmental goals into their short- and long-termstrategies. They have set relevant targets for their own operations or evenexpanded these efforts to their value chain. But how can we ensure that all the ambitions and effortscontribute to staying within the 2C limit, and at the pace climate scientistsbelieve is needed? This is where science-based targets become relevant. Themore organisations that align their greenhouse gas emission reduction effortsto the science-based targets, the higher the probability of limiting climatechange consequences. All thanks to concept of critical mass effects. But why?We all want to protect the planet we live on. The more wework on this together, the bigger the impact and the more streamlined effortswill be. That is the most obvious benefit of SBT. But there are more benefits to be had for organizations, especiallyfor the big players who have a huge impact because of their size and globalfootprint. They now have a validated way of setting their targets whilesimultaneously linking their efforts to the worlds biggest threat. Additionalbenefits are a closer alignment with the requirements of the Carbon DisclosureProject (CDP) which in turn will satisfy investors. Another big advantage isthat, with comparable targets, benchmarking between companies becomes mucheasier and a level playing field is created. How do we work withScience-Based Targets?The remaining question and challenge concerns howscience-based targets can be applied. The Science-Based Targets initiative(SBTI) provides a manualcovering this and an overview of the different methodologies that can be usedto align GHG emission reduction efforts to science-based targets. According tothe SBTI, a 3 stage process should be followed to integrate SBTs into practice.1.Getting starteda.Make the business caseb.Understand the methods2.Setting the Science-Based Targeta.Choose a SBT methodb.Determine the target3.Announcing and implementinga.Gain internal buy-inb.Report and communicatec.ImplementOrganizations should create a business case to enable themto understand the relevance and impact for their own business. This also helpscreate an understanding about their needs and so identify a SBT method that bestsuits their organization. Having identified a method, such as (a) theContext-based Carbon Metric (CSO), which allows for multiple scenarios coveringdifferent regions, target years or industries, or (b) the 3% Solution, focusingon reducing energy-related corporate emissions by 3.2% by 2020, the target canbe set accordingly. Of course the process does not end after having determinedthe SBT. Crucial steps for a successful integration include getting commitmentfrom internal stakeholders and decision makers, reporting and communicating thetarget, and implementing initiatives in order to make the target achievementpossible. So lets see if can make this thing big! Lets make our ambitionsbigger and bolder and send a signal to policy-makers that companies really arewilling to accept their responsibilities as regards saving the world. Right nowis always a good time to get started and find out how SBTs can be integratedwithin your organization! Nick de Ruiteris a partner atSustainalize. He is a specialist in CSR strategy setting and performancemonitoring. Lena Hülsmannisa consultant at Sustainalize for the German speaking markets. She is aspecialist in CSR target setting, benchmarking and reporting.
[1]Science-Based Targets Initiative (2015). SECTORAL DECARBONIZATION APPROACH (SDA):A method for setting corporate emission reduction targets in line with climatescience. Retrieved from http://sciencebasedtargets.org/wp-content/uploads/2015/05/Sectoral-Decarbonization-Approach-Report.pdf http://www.wri.org/our-work/project/science-based-targets-initiative Gepost doorSustainalizeop21:23Geen opmerkingen: Dit e-mailenDit bloggen!Delen op TwitterDelen op FacebookDelen op Pinterestvrijdag 13 mei 2016 Fine tuning your strategy with the United Nations Sustainable Development Goals On September 25th2015, the Global 2030 Agenda for Sustainable Development was officially adoptedby the United Nations General Assembly. Since then, the Sustainable DevelopmentGoals (SDGs) have become especially hot in sustainability world and with policymakers. As these goals define global priorities and aspirations for 2030, theywill definitely influence future regulations. But, what is actually behindthese goals? What is expected from the private sector? How, as a private organisation,can you implement and work with these globally accepted goals? And moreimportantly, how will results be measured and achieved? With a set of 17 SDGsand 169 associated targets, the SDGs define global priorities and aspirationsfor the year 2030. Unlike the UNs Millennium Development Goals, which mainly focusedon developing countries, the SDGs are relevant for any organisation, in any sector.The first 15 goals relate to the well-known triple P: people (social), planet(ecological) and profit (economic). However the last two goals go a stepfurther and relate to the aspects of peace and partnerships. The United Nations 193 member states which haveratified this Sustainable Development agenda are now under pressure to set newregulations and clear actions. However, it is not yet clear what regulationsour governments (specifically in the Benelux) will implement to achieve thesegoals. This raises the question of how your organisation can stay ahead (of anyregulations) and work towards these globally accepted goals. Below we havelisted 3 steps which will help you implement the SDGs in your organisation. Step 1. Value creationand impact analysisThe first step is tounderstand the organisations impact on society and the environment. This isnot a new approach as such, as a lot of organisations are already embracingthis and take the whole value chain into consideration while mapping theirvalue creation. Nevertheless, this approach is key in order to identify theright and relevant sustainable goals on which to focus. In essence, if anorganisation has insight into its inputs and can clearly describe its businessactivities and the unique properties of its operations, then the outputs,outcomes and the implicit positive and negative impacts will follow naturally.More information on value creation can be found in one of our previous blogs - October 6th. Step 2. Identify theright goalsOnce the impacts havebeen identified, the relevant SDGs can be chosen. When your organisationselects the SDG, the number of goals should not be leading. Specifically, goalsshould be selected based on their relevance for your operations and its activities.The SDG Industry Matrices[1]from the United Nation Global Compact can serve as a guide. They provideindustry specific information and best practice examples such as AbInbev, Heineken,Unilever and Rabobank. Not surprisingly, companiesthat have set a Big Hairy Audacious Goal (BHAG) can align their strategy morenaturally to the SDGs. This is, for example, the case with Philips[2].Its BHAG is to improve the lives of 3 billion people a year by 2025 and thislinks directly to SDG number 3 Ensurehealthy lives and promote well-being for all at all ages. Setting a BHAGcan help organisations structuring their ambitions and push them to translate aset of results into concrete impacts on society. Step 3. Set the rightindicators and measure the resultsThe most important andchallenging part is to measure the results of the chosen SDGs. Measurementshould be done with a selection of KPIs. Although Inter-Agencyand Expert Group on Sustainable Development Goal Indicators provide a firstdrafted set of indicators for each of the 169 targets[3],it may not be very helpful as these KPIs are related to the global goals. Wetherefore see the importance of linking the chosen SDGs to the current organisationsstrategy and objectives. A useful tool for this has been developed by SDGCompass[4],which links all 169 targets with indicators from internationally recognisedstandards such as GRI G4 and the CDP Benchmark. A big challenge stillremains to realistically translate and account for an organisations results againstthe SDGs targets and goals. This challenge relates directly to the currenttrend of monetarisation and lifecycle assessments as it requires the quantitativetranslation of achievements into more understandable and comparable metrics. TheDanish chemical company Novozyme has already made some steps in this area bystarting to assess the impacts of its products and solutions against the first15 SDGs[5]. Go for itThe SDGs came right ontime. Organisations are looking for cohesion and are becoming more willing to incorporatethe impacts of their initiatives and activities on society and the environment.Implementation of the SDGs may require your organisation to address its valuecreation model or to start the journey toward monetarisation. Either way, this transformationwill definitely help your organisation to stay ahead of upcoming regulations. Solets use these newly framed goals to fine tune and improve your strategy!
Nick de Ruiter is a partner at Sustainalize. He is aspecialist in CSR strategy setting and performance monitoring. Lola Debersaques is a consultant at Sustainalize for theBelgian market. She is a specialist in CSR strategy setting, performancemonitoring and reporting.
[1] https://www.unglobalcompact.org/library/3111[2] http://www.theguardian.com/sustainable-business/picture/2015/aug/19/philips-sets-their-sights-on-these-three-sdgs-for-a-healthier-sustainable-world-infograph[3] http://unstats.un.org/unsd/statcom/47th-session/documents/2016-2-SDGs-Rev1-E.pdf[4] http://sdgcompass.org/business-indicators/[5] http://www.novozymes.com/en/sustainability/novozymes-sustainability-approach/Pages/from-life-cycle-assessments-to-SDG-assessments.aspxGepost doorSustainalizeop03:25Geen opmerkingen: Dit e-mailenDit bloggen!Delen op TwitterDelen op FacebookDelen op Pinterestmaandag 22 februari 2016 Benchmark season is coming!While mostof us are still busy finishing up our annual reports, invitations are alreadystarting to roll in for benchmarks like the Carbon Disclosure Project (CDP) andthe Dow Jones Sustainability Index (DJSI). With a well-deserved break withinreach after the long days and short weekends that accompany the reportingmonths, suddenly the benchmarking season starts and you need to start runningagain. But it doesnthave to be like this. To help you, here are our 5 tips for a more relaxedbenchmark season. Tip 1: Start nowWe regularlysee companies starting too late with their benchmarks. This puts a lot ofpressure on the organisation. At the very last moment the hunt for crucialinformation begins and you are depending on colleagues that dont havebenchmarking at the top on their priority list. Favours are asked and given,frustration builds, and the information obtained is often of a low quality.Just before the deadline, the sustainability officer is processing all the input,editing the questionnaires, and trying to add as much information as possible. Onceagain facing long days and short weekends. So why notdo it differently? Think of announcing the opening of benchmarking season earlyin the year. Organize a working session with key people in the organizationduring which you celebrate last years success and look ahead. Emphasise thevalue of involved colleagues contributions and provide insight into theirrole. Set up a detailed planning schedule and communicate continuously ondeadlines and input. Doing so makes sure everyone can prepare themselves for theirinvolvement in the project. Tip 2: Involve higher management and the boardTo obtain ahigh score, you need to depend on the specialists in risk management, carbonmanagement and health safety matters, to name just a few. Although the entirecompany benefits from a higher rating or score, most colleagues probably wontbe too eager to participate. They will need a little nudge in the rightdirection and it surely helps if a senior decision maker creates a sense ofurgency. Additionally, in many cases the board is keen on a high positioning inthe ratings and benchmarks, but doesnt get involved enough. Make sure to focuson senior management involvement and creating that sense of urgency. It givesan almost direct improvement on the scores and makes the lives ofsustainability officers a little easier. Tip 3: Integrate and combineWe knowthat larger corporations have to deal with many different ratings andbenchmarks. Just think of CDP, DJSI, FTSE4GOOD, Oekom, Vigeo, Sustainalytics. Youmay feel as if you keep asking your colleagues for the same information overand over, for different purposes. And thats exactly the case! Luckily, theoverlap between the different rating schemes is increasing. For instance, your CDP questionnaire can beuploaded to DJSI and different benchmarks are tying their questions to the GRI G4indicators. It may be a useful exercise to make a complete overviewof all the information youre going to need and how it relates to G4. You can thenarrange that the requested data and content for the annual report can also beused for benchmark purposes. Youll only need to ask for information onceinstead of multiple times, youll be more efficient, and youll also keep yourcolleagues happy! Tip 4: Establish a data trailMost of thetime the information you need to provide to the rating schemes is about 80% to90% the same as the year before. Policies, procedures, key risks and importantprograms probably dont change on a yearly basis. Its therefore worthwhileestablishing a data trail of the information you have provided to the differentrating schemes. Simply secure basic details such as which department providedwhat information and how data was gathered and consolidated. This allows you toquickly gather base information for the benchmark or rating you are complying withand to build from there. Tip 5: Dont be the judge!Too many times we see companies notsending in useful information to rating agencies because they doubt if it isgood enough. Yet for most of the rating schemes it is not very clear how the criteriaare to be interpreted, so making such acall is dangerous. Its better to work within a broader interpretation ofcertain requirements, send in information you think is relevant and let therating agency judge. This allows for more specific feedback from the ratingagency on the information provided and youll know where to improve and how. ConclusionWhile theadministrative burden of complying with benchmarks and ratings is stillconsiderable, we believe that with some changes the life of your sustainabilityofficer can be made easier. Getting the right people involved, workingaccording to predefined procedures, and the ability to provide valuableinformation are important prerequisites. After all, it would be a missedopportunity if your companys sustainability performance was not reflected andrecognized fully in the important benchmarks and ratings. Nick de Ruiter is apartner at Sustainalize. He is a specialist in CSR strategy setting,benchmarking and performance monitoring.
Wouter van t Hoff is aconsultant at Sustainalize. He specializes in a variety of areas including sustainabilitybenchmarks and ratings such as CDP, DJSI, and the Dutch Transparency Benchmark.Gepost doorSustainalizeop03:20Geen opmerkingen: Dit e-mailenDit bloggen!Delen op TwitterDelen op FacebookDelen op Pinterestdonderdag 7 januari 2016 Buckle up, 2016 has something sustainable in store for you!2016 hasofficially kicked off. We expect that this year is going to be a great year fororganisations that invest in sustainability and corporate responsibility. Fromambitious new targets to trending tools: read on for our predictions for 2016. -COP21Theinternational climate change conference held in December 2015, COP21, has ledto an international agreement that aims to limit global warming to 2 C. Inresponse, governments will likely start formulating policy measures on anational or even regional scale. We expect that more stringent energy targetswill be set in 2016, demanding more from businesses in the near future. See ourDecember blog for what your businesscan expect from the COP21 outcome. -TheNetherlands as EU presidentTheNetherlands holds the presidency of the European Union from January 1 to June30, 2016. Innovation and a forward-looking climate and energy policy are just afew of the topics that the Netherlands wants to focus on during its presidency[1].The aim is to create a more future-proof model for sustainable growth. Thiswill provide opportunities for business to benefit from this momentum byjumping on the bandwagon of sustainable innovation and energy management. -SustainableDevelopment GoalsIn 2015 theUnited Nations updated their Sustainable Development Goals (SDG). These humandevelopment targets have been renewed for the 2015-2030 timeframe. In particularin Belgium, the SDGs are increasingly being used to frame sustainabilityefforts. We expect that the popularity of the SDGs will increase even furtherin 2016 and that they will also make their entry into the Dutch CSR arena. -IIRC- Integrated reporting and strategiesIntegratedReporting is gaining ground in corporate reporting. In a relatively shortperiod it has changed the reporting landscape and connected the report more closelyto the company that is behind the report. It has also become a starting pointfor integrating sustainability within the core business strategy oforganisations. We believe that in 2016 integrated reporting will become thestandard for how most businesses communicate their (non-financial) performance.We expect more value chain reporting, more integrated and interconnected information,and more forward looking and strategic reporting. -ImpactMeasurementAnimportant element of integrated reporting is the focus on creating value andhaving a positive impact. More organisations will be judged by theirstakeholders on the value they create, in particular social and environmentalvalue. As already described in our NovemberBlog, insights into the impact of your organisation can create substantialbenefits for business. In 2016, organisations will continue to develop and use variousmethods in order to map the value they create for society. 2016 will be theyear in which we expect several more Puma-cases of impact monetization andenvironmental/social profit and losses. -BigHairy Audacious GoalCompanies taking sustainabilityserious tend to set mega-targets or Big Hairy Audacious Goals. We expect thatmore companies will formulate BHAGs and follow frontrunners such as Unileverand Philips in developing a bold vision statement. In our client base, we seemany companies considering such a target. Most organisations see a BHAG as themost inspirational means to clarify their goal. It is not important whether youaccomplish the goal or not, it is more of a unifying focal point for a companyseffort. It is a true differentiator and lifts your external communication,marketing and reporting to a next level. Conclusion2016 has something sustainable in store for you! With all these trends for 2016, it appears that sustainability will continue its trajectory of becoming a more mainstream element of doing buisness. This is a good development for society at large, but it will become more challenging to stand out from the crowd. Luckily, there are numerous methods and tools that you can use to tailor your sustainability strategy. Be it inspiring BHAGs or outstanding sustainability performance. Use this to your advantage and try to keep in mind the following message: distinguish your business from the others - be a leader in something! Nick de Ruiter is a partner at Sustainalize. He is a specialist in CSR strategy setting and performance monitoring. Mart van Kuijk Marcella van Steenbergen are consultants at Sustainalize. They specilize in CSR reporting and impact measurement and -monetization. [1] http://english.eu2016.nl/eu-presidency/input-and-prioritiesGepost doorSustainalizeop23:38Geen opmerkingen: Dit e-mailenDit bloggen!Delen op TwitterDelen op FacebookDelen op Pinterestdinsdag 22 december 2015 Act now: Take the initiative for COP21Should businesses wait for explicit targetsfrom policy makers in order to start mitigating climate change? No. From November30th to December 12th, 2015, the 21st Conference ofParties (COP) took place in Paris. For 12 days representatives of nations and variousorganisations gathered in Paris to formulate a universal agreement on climatemitigation and adaptation. This agreement aims to restrict the maximum warmingof the global temperature to 2 degrees Celsius. However, past conferences havenot brought what the world was hoping for: a concrete, global carbon emission policy.Companies are therefore increasingly taking matters into their own hands and settingup ambitious projects. And so can you! What does my company have to do with COP 21?Diplomats and heads of state recently gatheredin Paris and, for the first time, each of the represented nations listedconcrete proposals for future climate policy. For example, the European Unionand its Member States are committed to a binding target of at least a 40%domestic reduction in greenhouse gas emissions by 2030 compared to 1990[1].The United States intends to achieve an economy-wide target of reducing itsgreenhouse gas emissions by 26-28% below its 2005 level in 2025[2].Although democratic institutions are not usually known for their decisiveness, TheCOP21 agreement aims to achieve a significant decrease in carbon emissions. The intended decrease in carbon emissioncan have a wide range of implications at a company level. Countries can makelaws on energy efficiency, they can come up with taxes on carbon intensiveproducts (including fossil fuel use), or they can impose increased importtariffs on unsustainably managed forestry etc. The impact of these measuresdiffers per type of business and per sector, but it most certainly has animpact, either direct or indirect. Be a frontrunner, not a laggardIn the light of these importantdevelopments, companies are realising that the outcome of COP21 may affect theirbusiness proposition. But instead of waiting for politics to unfold, thebusiness world is using the momentum created by the Conference to showinitiative. Corporations like Danone and Unilever are voluntarily pledging tostringent emission targets[3],[4].Furthermore, the CEOs of 78 major companies, including Siemens and HSBC, havecalled on world leaders to include carbon pricing in a global climate deal atCOP21[5].Even major oil and gas companies (BG Group plc, BP plc, Royal Dutch Shell,Statoil and Total SA) have, Taking the summit in Paris into consideration, setout their position in a joint letter to introduce carbon pricing systems[6]. These companies have already started recognizingand identifying the implications of a changing climate on their business proposition.By anticipating the outcome of COP21, they are taking a pre-emptive approach toprevent any potential damage in the future, or to improve their position in themarket by grabbing the first-mover advantage. Those who move quickly maygenerate not only a head start on their future targets, but also a competitiveadvantage from a boost in reputation or increased efficiency. So what can you do?For companies that want to anticipate on achanging climate, there are several options for a climate change strategy. Foran organisation that wants to get involved with climate change action, it issensible to formulate a clear strategy plan. Should the focus be on mitigationor adaptation? What targets do you want to set? Here it can be useful to first mapthe impact on your business so that you know where the easy wins and biggestchallenges are. With this knowledge, you can build a strong plan to act on. A second step in corporate climatemanagement is measuring your impact. CO2 footprint, Life CycleAssessment, and impact monetisation are all methods that can be used to gain aninsight into the impact of your business practices. Not only do they measure theimpact on the climate, but some also provide data on other environmental factors,which could prove to be valuable information in reducing your impact, or,costs. To harness the beneficial effect on yourbusiness reputation, it is vital to report on your efforts. Reporting is agreat tool to track and communicate progress. On the topic of climate change, numerousbig corporations take part in the Carbon Disclosure Project (CDP). The CDPrequires an organisation to report on its climate performance, risks andopportunities, and strategy. The outcome is a dual score: one for the actualperformance of the organisation, and one for the quality of the disclosure. Theperformance score is relative to other organisation in the specific industry,making it easy for a organisation to compare itself with its competitors. Jump onWhile bureaucracy is typically a slow-pacedenvironment, companies are much better equipped for fast change. In fact, as anearly mover, you can prepare yourself for future regulations while you reap thebenefits of being progressive. So dont wait for the COP21 outcome. Use thismomentum to get your company in the leading group in the battle against climatechange now. Nick de Ruiter is a partner at Sustainalize. He is a specialist in CSR strategy setting and performance monitoring. Misha Elkerbout is a specialist in life cycle analyses, impact monetization and CSR performance improvement. Marcella van Steenbergen is intern at Sustainalize with a profound interest in CSR, CSR strategy setting, impact measurement and CSR reporting. [1] Latvia/1/LV-03-06-EU INDC.pdf [2] U.S. Cover Note INDC and Accompanying Information.pdf[3]http://www.danone.com/uploads/tx_bidanonepublications/DP_DANONE_Climate-Policy_EN_091115.pdf[4]http://www.theguardian.com/environment/2015/nov/27/unilever-to-stop-using-coal-for-energy-within-five-years[5]https://agenda.weforum.org/2015/11/open-letter-from-ceos-to-world-leaders-urging-climate-action/[6] http://www.shell.com/global/aboutshell/media/news-and-media-releases/2015/oil-and-gas-majors-call-for-carbon-pricing.htmlGepost doorSustainalizeop22:56Geen opmerkingen: Dit e-mailenDit bloggen!Delen op TwitterDelen op FacebookDelen op Pinterestmaandag 9 november 2015 Its all about the money: Turning non-financial indicators into financial impactAccountantswill save the world was what Peter Bakker, president of the World BusinessCounsel for Sustainability (WBCSD) in 2013[1]stated about how companies should measure and compare their sustainabilityperformance. Although he didnt say how, he was right. This is reflected in an upcomingtrend; the emergence of different methods to measure and compare non-financialssuch as the environmental and social impact of organisations. These methods are often based on quantifying theoutcomes of an organisation in financial terms, better explained or popularnamed as the monetisation of impacts. Considering the early developmentphase in which these methods are currently positioned, a variation in design isapparent, and no dominant design has evolved yet. Therefore, to get a clearview on these developments, this blog outlines the current state of monetisationmethods and will explore why monetisation of impacts is important to organisations. Why monetise impact?Valuingimpact can create several opportunities to organisations, as they gain insightinto the organisations impact on society and the environment:Better overview of risks, which canbe foreseen in an earlier stage. Thiscan prematurely mitigate potential problems and greatly improve decision making.Comply with the growing demand from stakeholdersthat increasingly ask for a larger focus on non-financials.It can reduce costs because of abetter understanding of the internal processes (e.g. allocating resources and theimpacts of safety and energy reduction), and could foster new innovations.From an external perspective, thereis an opportunity for improved communication as society requests moretransparency.Consumers and future employees areincreasingly appealed to buy and work for responsible and/or sustainableorganisations. Integrating Impact
Our world is full of societal and environmental challenges, and it seemsobvious that we are in need of a system that is able to provide us with insightinto the actual impact of our choices. This is also echoed by the InternationalIntegrated Reporting Council[2],which states that the value that an organisation creates is based on fourstages. Namely, the input-, business model-, output- and outcome stage (moreinformation on this value creation model is provided in our last blog on Integrated Thinking[3]).These four stages eventually result in the impact an organisation has on theenvironment and society. But how can organisations translate different impactsinto a monetary value? A lot of organisations are experimenting with methods tomonetise their impacts. Although there is no leading method yet, monetisationseems to have great potential for organisations to improve their performance. Therefore,some assistance is needed. At this moment, only several experts are able toprovide this service. Albeit the market for providing this service is stillrelatively small, it is growing and shows a promising future. Should your organisationbe on the sideline waiting for this market to move forward or engage in anactive manner by experimenting with this method? Best practicesSeveral organisationsare experimenting with new methods of monetising impacts. Currently, theydiffer largely on their scale of application, namely by product, project,region or organisational scale. PUMAwas one of the first organisations that monetised the environmental impact ofits product. They used a method that calculated the true costs producing a pairof shoes by incorporating environmental costs into its production costs. Basedon this information PUMA has madedrastic changes and now aims to find alternative substitute leather types. The PUMA case dates back to 2011, howeverother have followed since then, such as Natuurmonumenten.This is the largest nature conservation society in the Netherland. Theorganisation monetised its impact of societal services such as CO2storage, particulates storage and natural water purification. With this methodthey found out that nature conservation does not halt economic development butinstead is an important carrier for economic recovery, which strengthened theorganisations license to operate. On a more regional scale, Heinekenaimed to quantify the effects of itsactivities by performing socio-economic impact studies in several East Africancountries. This greatly helped the organisations management to make betterbusiness decisions based on actual facts on the impact it has onsociety. This study also gave insight in how Heineken could help to increasethe yields of small-scale farmers, which indirectly improved their sales and income. These organisationshave benefited from monetising impacts, but we believe many more organisationscan benefit from this approach. Monetization will repay youreffortsThe main goal of impact monetisation for organisationsis to better allocate resources in order avoid or decrease negative impacts and/orto increase the positive impacts. This is endeavoured by taking into accountthe different values of these impacts in different contexts, and therebygaining a more comprehensive view of the total impacts of an organisation onsociety. It should however, be noted that monetising and valuing anorganisations impact is not an one size fits all approach, is organisationalspecific and requires a high level of insight in an organisations impact.Nevertheless, despite the initial effort that the monetisation of impactsrequires for organisations, these are in our opinion most definitely outweighedby the benefits. Nick de Ruiter is a partner at Sustainalize and has produced several Integrated Reports. He is also a specialist in CSR strategy setting and performance monitoring. Mart van Kuijk is intern at Sustainalize. He is writing his master thesis on impact measurement and impact monetization. [1]https://hbr.org/2013/03/accountants-will-save-the-worl/[2]IIRC, 2014 (http://integratedreporting.org/wp-content/uploads/2015/03/13-12-08-THE-INTERNATIONAL-IR-FRAMEWORK-2-1.pdf) [3]Integratedthinking: how to smartly visualise your unique selling points (http://cr-reporting.blogspot.nl/2015/10/how-to-smartly-visualise-your.html, 2015, 2015Gepost doorSustainalizeop03:58Geen opmerkingen: Dit e-mailenDit bloggen!Delen op TwitterDelen op FacebookDelen op PinterestOudere postsHomepageAbonneren op:Posts (Atom)Blogarchief2016(5)juli(1)New GRI Standards are coming, are you prepared?juni(1)mei(1)februari(1)januari(1)2015(4)december(1)november(1)oktober(1)september(1)2014(5)december(1)augustus(1)mei(3)2013(5)november(1)oktober(1)september(1)juli(1)april(1)Over mijSustainalizeSustainalize is a consulting and interim-management firm specialized in Corporate Social Responsibility (CSR) and sustainability. We help organizations with every aspect of CSR implementation: from strategy development to the actual reporting, and from the initial stage to anchoring of the strategy, control and management of CSR. Sustainalize is very experienced in dealing with large companies, SMEs and public institutions.Mijn volledige profiel tonen