Environment
Planetary Boundaries / Doughnut Economy

Companies failing to report their impact against planetary boundaries or social thresholds, says new research

Burgess COMMENTARY
The idea of planetary boundaries is very useful ... the idea of a 'doughnut economy' ... but it does not get much traction because the metrics to measure this are either non-existent or at best quite rudimentary. We need to figure out how to measure, account for and report on all these impacts as rigorously as we do conventional accounting and financial reporting. I am working on this ... True Value Accounting ... trying to develop an analytical framework that is coherent and consistent for everything that has value and not just the money dimension of things. People are at the center of everything, followed by nature and the environment, followed by people built systems and structures. Peter Burgess http://truevaluemetrics.org

True Value Accounting uses a variant of these ideas ... but does it using the fundamental concepts of conventional double entry accounting and includes also the many people built systems and structures that have been developed by humankind in order to improve quality of life.
Peter Burgess

A framework for understanding ... the doughnut economy

The environmental dimension

Atmospheric aerosols
Biodiversity loss
Bio-geochemical flows
Chemical pollution
Climate change
Freshwater
Land use
Ocean acidification
Ozone depletion

The people dimension

Education
Energy
Food
Gender equality
Health
Income
Jobs
Resilience
Social equity
Voice
Water

Companies failing to report their impact against planetary boundaries or social thresholds, says new research

The concept of Planetary Boundaries and Social Thresholds – that once human activity has reached a tipping point beyond the limits of our climate, our oceans, or our water, for example, there is “a risk of irreversible and abrupt environmental change” – is much more widely understood and has been incorporated into international and national policy discussions, including the UN Sustainable Development Goals.

However, the vast majority of companies are not reporting to their stakeholders how planetary boundaries and social thresholds inform their environmental and social targets and developing their long-term strategy – even among the largest businesses thought to be taking sustainability the most seriously.

That is the key finding of the new research carried out by Article 13 – ‘Planetary Boundaries and Social Thresholds: How do companies measure up? A Practitioner’s Perspective’ – which draws on the insight from 38 practitioner interviews and an extensive benchmark review of the sustainability goals set by 211 of the world’s biggest companies.

In 2012, Oxfam combined Rockström et al’s nine planetary boundaries with eleven social thresholds into a single framework, which – shaped like a doughnut – aims to define “a safe and just space for humanity” The research adopts a practitioner perspective to reveal the current position:

• Companies are not explaining how they are applying notions of planetary limits and social thresholds to their sustainability and business strategy. For instance, zero companies reference Rockström et al. Planetary Boundaries or Oxfam’s Social Threshold frameworks, and just 8% make reference to ‘Sustainability Context’ within their latest non-financial report.

• There is limited engagement with wider social issues (beyond those directly linked to core business) although the UN SDGs offer an exciting opportunity. Overall, the research found limited engagement with social thresholds, except for gender equality (23% of companies have set a target) and social equality (14%) – despite a significant number of companies (38%) citing the SDGs in their CR reporting.

• Company targets are not being derived from global targets. Only 30 companies (14%) made reference to some form of wider ‘context’, such as national goals informing their targets.

• Few companies are using science to inform their targets. Whilst, there is a wide range of different targets being set – including, quantitative (e.g. donate $10million), absolute (reduce our energy usage by 10%), intensity (5% less carbon per unit) and qualitative (assess our biodiversity impacts) – there is less clarity as to how these were established and the science or context behind these targets.

• Majority of targets are based on a 5-year time-framework – but this doesn’t go far enough towards global targets for 2030 and 2050. A significant majority of targets are set to be achieved by 2020 (48%) or before 2020 (27%). Whilst the urgency of the targets is important, limited evidence was found of companies setting roadmaps for their targets to deliver transformative impact towards 2030 and 2050.

• This new Article 13 research, which builds on previous insight gathered on the issue in 2013 and 2014, explores how organisations are downscaling ‘planetary boundaries’ and ‘social thresholds’ to the scale of their organisation, and draws on the personal perspectives of practitioners to understand what is happening, what is good practice, what are the barriers, opportunities and lessons for the wider sustainability community.

The sample of companies were selected based on four factors: Their ability to impact planetary limits; their public commitment to sustainability; representatives of the largest companies by regional stock-exchange and by sector listing. The final sample had a combined revenue of $12,815 billion, and a geographic split of Europe, Middle East and Africa (EAME) (35%); North America (42%) South America (3%); Asia and Australia (20%).

The Executive Summary of ‘Planetary Boundaries and Social Thresholds:How do companies measure up? A Practitioner’s Perspective’ is attached.

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