More Innovation is Needed in Sustainability Reporting: Consider '4-D'

By Caterina Camerani 

The business world is filled with efforts to enhance sustainability, measure sustainability and spread the mantra of sustainability.

Sustainable Brands’ recent New Metrics ’15 conference in Boston included a plethora of experts from around the world lauding new methods to measure environmental, social and governance (ESG) impacts of their companies. The innovation represented was at once encouraging and discouraging.

There is no doubt that adopting sustainability requires a complete shift in energy use, material use and daily behavior. The corporate world has far to go before we can achieve a sustainable society where carbon footprints are minimized and efficiencies and profits are enhanced.

How are we going to get from where we are today to where we need to be?

The question is overwhelming and hugely significant. Sustainability is not about reporting, but reporting is the basis for real actions leading to change.

The New Metrics ’15 conference featured a number of promising experiences from companies around the globe.

It was clear that one of the most difficult puzzles facing corporations is determining the sustainability of their value chain. To do so requires standardized measurements and capabilities, resources, and availability of good data.

These elements are not universally available in the corporate world, and yet, they are invaluable to advance the ongoing shift toward combined reporting that incorporates economics and sustainability.

At the conference, I had the opportunity to share AkzoNobel’s experience with a process we created called 4-D reporting, which measures impacts as they relate to environment, people, society and financial capital at large. It was clear that the approach would be difficult for some to emulate.

Although larger corporations have been measuring their environmental impacts for many years, the real complications arise when they seek to measure – and improve upon – their social and human capital impacts and costs. To do so requires a methodology for monetizing human and social capital, along the entire value chain.

The biggest challenge then to determining true sustainability of a value chain is to accumulate high-quality information along the chain, measuring all four elements from suppliers to customers.

AkzoNobel was able to accomplish these measurements during a pilot program involving six plants in Brazil. The work wasn’t easy. The effort took Klas Hallberg, manager of new developments in sustainability and 4-D profit and loss project manager, over a year to develop the methodology, working with external partners such as True Price and GIST, which helped validate the process.

We found great value in what we learned. A study like this makes everything more transparent and creates a new sense of urgency – and it helped advance AkzoNobel’s ongoing commitment to sustainability. The results are now used to stimulate innovation in the right direction for our ongoing efforts to do more with less in a value chain perspective, which we call Planet Possible.

I said that what I learned at New Metrics ’15 was both encouraging and discouraging. Yes, we have far to go in what should be our collaborative goal toward a sustainable world. But the interest in 4-D reporting, and the energizing conversations among experts and corporate executives from around the world, is exciting. Companies have started to show that future reporting will be about far more than various measures of profit. Combined reporting is being used for improving the quality of strategic decision-making.

And that is an encouraging thought.

Image credit: Pixabay 

Caterina Camerani is the sustainability manager for Pulp and Performance Chemicals at AkzoNobel. She works to ensure the business’ efforts enhance performance and support the long-term interests of AkzoNobel globally. She has been with AkzoNobel for 12 years. Camerani has been a guest lecturer on sustainable development, innovative sustainable solutions, sustainability reporting, “Zero Waste,” biodiversity and ecosystem services. She has a Doctor of Philosophy in Inorganic Environmental Chemistry from Chalmers University of Technology, in Gothenburg, Sweden.