Ideas
Mark McElroy

Context-Based Sustainability (CBS)

Burgess COMMENTARY

Peter Burgess

About Context-Based Sustainability (CBS)

Context-Based Sustainability (CBS) is a compelling new approach to CSR and sustainability management that takes social, economic and environmental thresholds in the world explicitly into account when attempting to assess the performance of an organization. In order for an organization’s use of natural resources, for example, to be sustainable, it must neither put the sufficiency of the resources involved nor the well-being of those who depend on them at risk. And since many of the resources involved are shared, CBS makes it possible to assign fair, proportionate and organization-specific shares of the responsibility to preserve and/or produce and maintain them to individual organizations.

Originally developed by Mark McElroy at the Center for Sustainable Organizations as a way of assessing only the non-financial impacts of organizations, CBS has now been extended into the economic/financial domain by Thomas & McElroy LLC, resulting in the creation of the MultiCapital Scorecard™ (MCS). In the case of non-financial impacts, the MCS is designed to assess organizational impacts on natural, human, social/relationship and constructed capitals* relative to thresholds for what they would have to be in order to be sustainable. In the case of financial impacts, MCS does the same thing relative to impacts on economic capitals. Only the capitals change when attempting to assess the financial versus non-financial performance of an organization. Performance in all cases, that is, is capital-based and so the same general principles apply.

Of particular relevance to both CBS and MCS is the concept of carrying capacity and the idea that the carrying capacities of vital capitals must be maintained in order to ensure stakeholder well-being – anything less is unsustainable. Thus, it is the effects an organization’s activities have on the carrying capacities of vital capitals and the well-being of those who depend on them that determines whether or not its activities are sustainable. The MCS, then, is an integrated (financial and non-financial) application of CBS that makes it possible to quantify and assess the sustainability of an organization’s impacts on all vital capitals in these terms. Indeed, it is the world’s first and only such context- and capital-based Triple Bottom Line method that can help organizations answer the all-important questions: Are we sustainable? And where not, how big are the gaps and what can we do about them?

*All four of which may be inclusive of intellectual capital