In the GreenBiz Forum that took place last week in New York, I heard two main messages. First, facts don’t matter as much as storytelling – to achieve change we need better stories. Second, facts can make the difference – to move the needle, we need better data, metrics and standardization.
Confused? So was I. Should the sustainability community focus on developing better quantitative language or on improving its storytelling skills? Maybe both? And maybe, just maybe, moving the needle requires more than just a good story or better metrics. I am not sure I have the right answer for you, but the forum certainly gave me a good direction in which to start.
The quantitative side of the forum was led by the research firm Trucost, which is focused on natural capital valuations and sustainability metrics and has partnered with GreenBiz Group in the making of the State of Green Business report for 2013. Richard Mattison, the company’s CEO, provided the audience with some thought-provoking data, including the fact that if companies had to pay the full cost of their environmental impacts, it would cut profits by around 40-50 percent. In a separate workshop (Valuing natural capital: the EP&L Journey), participants learned from Mattison and Libby Bernick, Senior VP at Trucost, about the value and potential of EP&L, one of the most interesting developments in sustainability accounting.
But it wasn’t only Trucost that touted the importance of data and figures. Andrew Steer, President and CEO of the World Resources Institute said that we need to professionalize the financial side of sustainability, and are in need of better metrics. Erika Karp, Managing Director and Head of Global Research Sector at UBS, and Matthew Arnold, Managing Director and Head of Environmental Affairs at JPMorgan Chase, shared a similar sentiment – we need more standardization, they said, because without it, analysts have hard time figuring out how a sustainability strategy translates into growth, revenues and so on. You have to have a language to make an argument, Karp explained.
Another participant who believes we have a terminology problem was Meyer Frucher, Vice Chairman of NASDAQ, who said we need universal reporting standards. He made a distinction between companies based on their attitudes to sustainability, dividing them to convinced, skeptical and hostile. As an example of the skeptical, he cited a CEO who believes in sustainability but no analyst ever asks him questions about it, only to be followed an hour later by Bob Langert, VP Corporate Responsibility at McDonald’s, who told the audience how his CFO never gets questions from analysts on sustainability issues.
OK, we get it – the problem is that investors still don’t have sufficient tools to evaluate sustainability or understand its importance, and therefore they don’t ask companies tough questions about it or push them to act more boldly. Well, not so fast, cautioned Simran Sethi, Amy Hartzler and other participants at the forum who then made the argument that the facts don’t matter as much as the storytelling. In other words, data doesn’t change decision making, compelling stories do.
Simran Sethi, an award-winning journalist, strategist and educator, shared her experience as a Professor at the University of Kansas, a place where engaging with people on climate change can be quite challenging. To change the way people think about sustainability we have to tell different stories, she explained, ones that are personalized and immediate about the world we want to have now.
Dave Stangis, VP – CSR & Sustainability at Campbell Soup also talked about the challenges of communicating sustainability in and outside the company. And Tim Mohin wrote, the ability to communicate is the single most important skill of CSR professionals.
So what is the most important piece of the puzzle we’re missing now – a great story or eye-opening metrics? I believe it is a little bit of both. The financial sector is probably more interested in metrics and terminology that it can work with, and if the way to change business goes through Wall Street (and to some degree it probably does), we need to figure out how to get better with that part.
The same goes with stories – we, as Amy Hartzler, Studio Director at Free Range Studios explained, tend to listen to a well-told story and we build our lives around stories that give us meaning. So, if we want to have consumers, employees and others on board we need to improve the story of sustainability.
Yet, my guesstimation is that to really move the needle you need more than that. For companies to truly understand that their environmental impacts jeopardize almost half of their profits and translate it into action, you need more than just a good story.
As Simran Sethi said, “Data doesn’t change decision making, experience do.” In other words, unless we see a miraculously internalization of externalities, we need to wait for couple more postcards from the future, like Hurricane Sandy, droughts and significant hikes in raw material costs to finally move fast forward. This is very unfortunate, but apparently it is the most realistic story we have right now.
Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and the Parsons The New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.