At last the USA has begun to engage with the thorny issue of sustainability KPIs in an important new report - From Transparency to Performance – sponsored by Harvard’s Hauser Center and the Initiative for Responsible Investment. Is this a shot across the bows of the clever clogs at the GRI or a Harvard push to extend the balanced scorecard concept into the sustainability space? Well probably neither actually. The GRI gets plenty of due deference in the report, which was reviewed by Mike Wallace of the GRI, but one can’t help feeling that this report might not help the uptake of the GRI indicators in the USA – where support has been reasonably lukewarm so far – since it muddies the waters somewhat.
The diagram on page 19 (see below) looks like a balanced sustainability scorecard template to me so clearly the report is haunted by Kaplan and Norton but the content is a lot more substantive than just some sustainability BS – if you’ll forgive the connotation.
sustainability-bs
In any case, the report is a ‘thought-experiment’ and Harvard is generally obsessed with innovation so it’s not a surprise that this popped up. No doubt we will soon see sustainability efforts being hailed as yet another example of the power of ‘disruptive innovation’ in various case studies.
The authors have been rigorous in their proposal of a 6-step methodology for developing industry-specific KPIs and what is most useful about their approach is that the outcome includes both quantitative and qualitative indicators – the GRI seems more focused on qualitative indicators which are harder to compare. And their list of material issues across their six chosen subsectors does a great job of indicating the breadth and depth of the scope of corporate sustainability issues and opportunities.
Personally I’m not sure about their broad categorization of KPIs into Impacts and Innovation, Why not simply stick with existing categories like environmental, social and governance and use impacts, innovation and risk as dimensions or lenses within these categories? But in the end, whatever you think of the content, you can’t quibble with the conclusion:
By establishing mandatory reporting on sustainability KPIs for publicly traded corporations in the United States, competition on important dimensions of sustainability can be encouraged and entire industry sectors channeled towards the creation of a more just and sustainable society.
Plus a carbon tax and my 4 simple lines…
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