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French jewellery house Chopard has joined Eco-Age creative director and founder of the Green Carpet Challenge (GCC), Livia Firth, to launch ’The Journey’, its commitment to sustainable luxury, with the presentation of its first Green Carpet Collection.

The diamond bracelet and earrings were hand-crafted in Chopard’s 'High Jewellery' workshops. For the first time, the pieces have been set in sustainably sourced Fairmined gold from artisanal community mines in South America, supported by the Alliance for Responsible Mining (ARM) – a Colombia based charity and developer of the Fairmined standard - and use diamonds from mines certified to the high standards of the Responsible Jewellery Council (RJC), sourced from IGC Group.

Caroline Scheufele, co-president and artistic director of Chopard said: “As a century old, family-run business, we are very aware of our responsibilities as we strive to create sustainable luxury. It is not easy, but it is right and The Journey is the start of a very exciting new multi-year programme that will ensure we are working towards our goal of sustainable jewellery. One of the first steps is our partnership with ARM, which will support the families and communities of the artisanal miners in South America.” 

The High Jewellery Green Carpet Collection bracelet and earrings by Chopard are the first pieces of jewellery to be awarded the GCC Brand Mark. 

Deutsche Post DHL is switching to electric vehicles for its delivery services in Bonn and the surrounding region, making the city the first location in Germany with a carbon-free vehicle concept.

In the initial phase, 79 vehicles will be put into service by the end of the year in Bonn and the surrounding area for the parcel delivery and the combined mail and parcel delivery. The pilot project sees about 141 electric vehicles on the road by 2016, resulting in decreased CO2 emissions of over 500 tons per year. Even at the start of the project, Bonn will already be host to one of the world’s largest fleet of electrically powered commercial vehicles for combined delivery.

“This pilot project is unique worldwide and can serve as a role model for other cities and regions,” said Frank Appel, ceo Deutsche Post DHL . “As the world’s leading logistics company, we operate one of the world’s largest vehicle fleets. And because we see the effects of global trade on the environment, we accept responsibility: alternative drive systems have already been in use in our fleet for years.”

Deutsche Post DHL is a partner in many alternative drive technology pilot projects and is working with many major automobile manufacturers, helping to gain important insights for the refinement of new technologies. In 2011 it also began to develop a dedicated electric vehicle; the vehicle was developed for mail and parcel delivery in cooperation with StreetScooter GmbH and institutes at the RWTH Aachen University.

The “StreetScooter” is an electric vehicle with a range of up to 120 kilometers (neatly accommodating the daily postal routine  of around 80 km). An initial production run of 50 vehicles will be delivered starting in summer of 2013. Twenty vehicles will be put into service in the pilot project for carbon-neutral delivery in Bonn and another 30 will be used throughout Germany to transport mail and parcels.

“The pilot project in Bonn has model character. Focusing on city deliveries, we can lower both environmental and noise pollution, and we will be able to reduce our fuel consumption. As we operate one of the largest vehicle fleets in Germany, we have a particular interest to utilize innovative and eco-friendly vehicles. I am especially pleased that we can make use of our own electric vehicle in the project,” said Jürgen Gerdes, corporate board member MAIL at Deutsche Post DHL.

The investments in alternative drive technologies and reduction of CO2 emissions are part of the group-wide GoGreen program at Deutsche Post DHL. The programme includes a specific CO2 efficiency target: a 30% improvement by 2020 in its CO2 emissions compared with the 2007 baseline. The company is already halfway to achieving its CO2 goal with an efficiency increase of 16%. 
 

Last fall, the first phase of our series on the Refrigerant Revolution® explored the challenge in depth, looking at the history, policy backdrop, key issues including R-22 phase-out, and implications for future sustainability. We continue with a series of posts focusing on multi-sector solutions to this global environmental challenge.

A tale of two fridges

After years of quiet, dedicated service in our homes, more than 9.4 million fridges and freezers reach the end of their useful life in the U.S. each year.

Every wonder what happens to these unsung heroes of modern life?

First, we should point out that refrigerators and freezers are unique from other appliances and household items because they contain refrigerants and blowing agents, which are powerful greenhouse gases. They also contain polyurethane foam, another GHG contributor. Depending on the type of refrigerant and blowing agent, a single refrigerator can contain the climate equivalent of driving an SUV for an entire year and up to 8 cubic feet of foam.

In the U.S., most refrigerators take one of two paths once leaving our kitchen or garage. The “common cooler” ends up heading directly to a metal scrapyard where its refrigerant and insulation foam are rarely dealt with properly. Conversely, the “lucky fridges,” like those Triple Pundit profiled  last September, are properly de-manufactured in accordance with EPA’s Responsible Appliance Disposal (RAD) program.

The common cooler

Of the more than 9 million fridges and freezers discarded each year in the U.S., approximately 10 percent are managed under EPA’s Responsible Appliance Disposal (RAD) partnership. The remainder are either resold into the after-market, or end up in landfills or metal scrapyards, where the focus is on extracting value from the scrap metal, and where recovery of the refrigerants, while required by law, is not guaranteed.

Federal regulations require that the refrigerant first be recovered from discarded equipment, but lack of oversight and transparency in the value chain means proper recovery is highly unlikely. “Cutting the line,” i.e., venting the refrigerant before the appliance arrives at the refrigerator recycling facility is, unfortunately, a common practice before your beloved old fridge is crushed for scrap metal. Intentional venting of refrigerant carries steep fines under the Clean Air Act, but the risk of getting caught is slim. In fact, venting is so widespread and enforcement so rare, that there are even instructions on the practice. The result is tens of millions of metric tons of CO₂-equivalent is released into the atmosphere annually in the U.S. from common coolers.

A rare enforcement case in Portland, Oregon illustrates the common practice and also the exposure and risk related to supply chain integrity.

In addition, the polyurethane foam insulation is typically shredded along with the rest of the unit, and then landfilled.  Approximately 65 million cubic feet of foam are buried in landfills each year in the U.S. alone. For some perspective on that volume, this equates to one Empire State building completely buried beneath ground and a second buried to the 76^th floor!

The lucky ones

Through a combination of utility energy efficiency incentives, technological advances, business and logistics innovations and a government-industry partnership (EPA RAD), over 800,000 discarded refrigerators and freezers encounter a better, more sustainable outcome: complete de-manufacturing into component materials.

With 28 refrigerator recycling centers serving 28 states, JACO Environmental is responsible for the majority of RAD compliant units in the U.S. At JACO, lucky fridges are completely de-manufactured, refrigerants are recovered; and foam and blowing agents are recovered and either destroyed or returned as raw materials to the manufacturing ecosystem. Metal, glass and plastics are also recovered and recycled, resulting in less than a shoebox’s worth of material being sent to the landfill per lucky fridge.

Unfortunately for the planet, common coolers are, indeed, common, and lucky fridges are few and far between. Despite successes under RAD, the 800,000 units moving through the program represent a drop in the bucket compared to more than 9 million appliances discarded each year. So what can be done?

When it's time to part ways with your trusty refrigerator, consider its next stage of life. Ask your retailer, manufacturer or hauler about their program for refrigerator end-of-life and make sure that they have visibility and control of their supply chain.

Signs of progress

RecycleBank and JACO Environmental, in conjunction with New Jersey Clean Energy Program and Sears, recently piloted a program to engage consumers at the point of purchase regarding the path of their trusty old fridge in its “next life.”  The program assures stakeholders of responsible appliance disposal to conform to EPA RAD requirements.

Time for a revolution

EOS Climate, JACO, Hudson Technologies and other organizations spearheading the Refrigerant Revolution® recognize refrigerants as valuable assets. The approach is changing the way refrigerants are managed throughout their lifecycle, improving operational efficiency, protecting organizations from regulatory and reputational risk, and facilitating the transition to a more sustainable future. For the first time, companies will know the full extent of their environmental impact relative to refrigerant use and be able to take proactive steps to manage these critical inventories like other parts of their supply chain.

Over the last three years, EOS has worked closely with JACO to maximize the rate and efficiency of refrigerant recovery nationwide. In concert with JACO's managers, Todd English, EOS Climate's VP of Operations, and EOS co-founder, developed operational procedures and quantification tools for all 28 locations. These efforts have resulted in best-in-class refrigerant recovery preventing significant GHG emissions for appliances at end of life.

The potential impact of this new approach is substantial. Based on data from the U.S. EPA and the California EPA, annual emissions of refrigerants in the U.S. equal approximately 250 million tons of CO2* which is the equivalent emissions from 44 million cars, or from power use by 28 million homes. Solving the problem may start by telling a “new tale” with your old fridge.

“And a beautiful world we live in, when it is possible, and when many other such things are possible, and not only possible, but done-- done, see you! -- under that sky there, every day.”

– Charles Dickens, A Tale of Two Cities

Ed Note:  TriplePundit's Nick Aster took a trip to JACO's facility in Hayward, CA, to learn first hand how refrigerators are recycled.  Please enjoy the short video below!

http://www.youtube.com/watch?v=TkHbbiTGOUE

I recently finished reading The Ecology of Commerce, by Paul Hawken.  Like other environmentalists, he describes all the harm that multinational corporations and industry are doing to the world.  It’s depressing, but he’s not just a naysayer.

In a nutshell, the way to solve all the world’s environmental (and perhaps social) problems is not CSR. It’s not simply joining the "green team" with Con Edison or recycling your office paper or carpooling. That helps. But it’s not enough.

Changing the world from a linear system (in which inputs become outputs that become waste that goes into pollution that leaks everywhere) into a cyclical system, like nature, requires a change in consciousness.

Not surprisingly, you might notice that a lot of people who care about sustainability also meditate. In meditation, you don’t stop thinking. You don’t force yourself to think about nothing. The word “meditation” is simply the act of placing your mind on something. Usually, it’s a stream of consciousness, one thought after another, jumping around all over the place. In the practice of meditation, by placing the focus repeatedly on the breath, one becomes aware of the mind’s natural habits. As I recently learned at the Shambhala Meditation Center in NY, in Tibetan, the word for meditation is “gom” – which means “becoming familiar with.”

If you want to change yourself to become a more compassionate human being, try meditation.  Just 10 minutes a day  (or even 10 minutes three times a week) makes a huge difference. You might notice that you stop reacting to things and start responding more consciously to the world around you. Maybe you notice some habits about your thinking patterns that you didn’t see before.

If we want to change the world, we need to start by changing our consciousness. To acknowledge the suffering around us, to acknowledge our habitual patterns of thought and action, and to not subject ourselves to the fallacy that past performance indicates future financial or environmental returns.

We need to start understanding the “restorative economy” based on “industrial ecology.”  This means thinking about business like a natural system, for example, a forest. For designers and engineers and businesspeople and civil servants of all kinds to think about some big questions.

What would it look like for wastes to become fuel for another department, company, or industry, like the Kalundborg Eco-Industrial Park in Denmark?

How can citizens nudge government to set up restorative policies?  Such as:

• Requiring consumables to be biodegradable (pesticide-treated food doesn’t count)


• Requiring manufacturers to take back everything they produce which is not biodegradable (like phones, cars, and refrigerators)?


• Requiring “unsaleables” (toxins that don’t biodegrade) to be disposed of at the manufacturer’s cost

The perspective shift is required is not beyond our ability. It merely requires the courage to see things as they are, acknowledge the truth of what is happening, and imagine how to emulate natural processes in business processes…to secure a sustainable, livable future for all. As Hazel Henderson says, “The only thing humans need to scale up right now is our level of planetary consciousness and awareness.”

Along these lines, I interviewed Hazel Henderson and Anders Ferguson, who are leaders in creating triple bottom line value through mindful business practices. I asked them about for-profit companies or market-based NGO leaders whose missions align both with mindfulness AND serving the poor, and how suggestions for how managers can deliver their mission through meditative focus.

Along with Envision Solar and NatCore, Hazel Henderson particularly recommended Biomimicry 3.8 as a leader in reinventing business processes to align to natural processes. (Full disclosure: Henderson has financial interests in these companies).

Biomimicry 3.8 teaches industrial production methods that work within nature’s cycles. Taking inspiration from 3.8 billion years of evolution by nature, they offer biomimicry courses as a two-year Master’s program as well as a six-month program for corporate executives. Henderson describes:

Biomimicry 3.8 has scientists that go into all kinds of companies, advise on what to stop producing, and here are some products that you can re-engineer to be sustainable. Then, they go to the company’s production line, and show that you can do this, this, this, to change your production methods to fit within life’s principles.

Henderson summarized how business can follow fundamental natural principles. “Nature doesn’t use heat or combustion.  Nature creates things at room temperature in non-toxic solvents like water.”  Also, did you know that in manufacturing clothing, you can dye fabrics with CO2 rather than water?  She pointed out that having manufacturers take back everything that’s not biodegradable and making everything biodegradable is just the start.

Henderson’s company, Ethical Markets Media (USA and Brazil),  and Biomimicry 3.8 partnered to produce their joint Principles of Ethical Biomimicry Finance.™  Henderson explains:

Corporations are all puppets to finance, and it shouldn’t be that way, but it is.  And so you have to swim upstream, which is what I did many years ago when I realized that the financial sector is the flywheel for all the social and environmental destruction on the planet.

So my mission in life has been figuring out how to engage the financial players and re-train them, because they’ve all been trained on faulty economic models that go into faulty financial models that crashed in 2008, which are likely to crash again because they’re not likely to learn any of the lessons.

The Principles of Ethical Biomimicry Finance take these lessons into the financial community. And our approach is trademarked and licensable, because there is no way to engage financial asset managers unless you actually have a product, an intellectual product that you can sell them for a lot of money, because it’s the only thing they understand! And Ethical Markets and Biomimicry 3.8 share in the licensing fees.

Cancer cells grow; healthy cells replicate their DNA. So what we’ve tried to do is replicate our ethical business DNA into other companies’ cultural DNA. The way you do this is with licensing. And if the other company messes up your cultural DNA, you can pull the license from them.

Anders Ferguson is a partner and co-founder of Veris Wealth Partners, which is focused on impact investing for families and foundations. In 2000, he co-founded Spirit in Business, an NGO in the intersection between ethics, mindfulness, leadership and business performance. He co-hosted three dialogues with the Dalai Lama at UC Irvine, Amsterdam, and in The Hague.  Launched 11 years ago in NYC, he convened 600 business leaders from around the world from 35 countries to examine mindfulness in business.

Ferguson notes that science was the key connection between mindfulness and better business:

One insightful moment that came out of that [conference] work was that for many people, they’re drawn to this field out of their interest and practices in various kinds of spiritual reality, and those are very informative in creating meditative compassionate and mindful, ethical approaches.

However, in American business, they’re not necessarily all that useful in terms of developing these ideas on a more systemic basis. We are a largely secular country, and American business is definitely secular.

Beyond the spirituality that often leads to mindfulness, the big “AHA!” moment for us was the rapidly growing research in neuroscience, integrative healthcare, quantum physics, and so on. The scientific approach of understanding and studying mindfulness and interconnectedness was one that people could talk about, from any background…people could talk about that.

With science as a common language to describe the benefits of mindfulness, business leaders now have an easier time seeing the bottom line benefits for people who meditate and who are active in business operations. “So many practices that lead to good health, lead to good leadership,” Ferguson summarizes.

Sustainable business practices mean transformation of business operations with some “hidden and surprising” results, like potentially lowering risks, improving potential returns, speeding innovation and better relationships with suppliers.  These can be direct results of building more transparent, mindful, kind, open, innovative, empowering business cultures.

Mindful business leaders help increase organizational transparency and improve corporate governance.  Ferguson mentioned 20 years of research by Robert Eccles, Ioannis Ioannou, and George Serafeim (published in HBR), comparing top-ranked and bottom-ranked sustainable companies. Companies that ranked highly on sustainability metrics took a longer-term approach in their communications, paid more attention to non-financial metrics regarding employees, supplier relationships, and generally had more transparency in disclosing non-financial information. Companies that ranked highly on sustainability metrics also had better long-term accounting and stock market performance. Indeed, we live in a profoundly interconnected world where we cannot separate who we are as human beings from our economic activities.

The lesson to business leaders is clear: If you build companies with people who are more mindful and connected, your business will likely do better. But, Ferguson warns, “You can’t get those good results if you’re approaching meditation like a day on the beach…As any guru/teacher tells their student, bring change into this world, don’t float off somewhere and think it’s all going to change without your actions on the ground of life.”

Admittedly, the world still largely operates in a siloed way, where many believe in the idea of “making money first, then giving it away.” As Ferguson says, “It’s easier to shop at Whole Foods and buy a Prius than deal with whether your investment portfolio is full of fossil fuels and companies furthering climate change. Indeed, the vast majority of foundations still try to maximize financial return on their investments while their portfolios are actually at odds with the mission and programs of their foundation.”

For more on mindfulness in business, see work by Dan Goleman on “Emotional Intelligence,” Jon Kabat-Zinn’s work on mindfulness-based stress reduction, David Cooperider at the Weatherhead School of Management on organizational transformation through appreciation, and the Garrison Institute Center for Contemplative Studies (all recommended by Ferguson).

Image credit: Sage Friedman/Unsplash

What is wealth?  What if wealth were measured in different ways, like intelligence?  Howard Gardner’s theory of multiple intelligences has been around since 1983. After all, there is more to intelligence than just IQ. Let’s examine wealth in a similar way.

For some people, wealth is financial: the amount in your checking and savings accounts, retirement fund, and the monetary value of everything you own. In New York, a lot of time and energy is spent chasing more financial wealth – sacrificing sleep, health, social time, sartorial comfort (suits are not sweatpants) and more, for money.

As the saying goes, many people can end up “working at a job they can’t stand, to earn money to buy things they don’t need, to impress people they don’t like.”  For those who don’t work in highly paid jobs, life in New York City can be a different sort of struggle, where making ends meet means longer commutes from more affordable neighborhoods, and juggling several part-time jobs. But what unites New Yorkers in a way I haven’t found in other cities, is the sense of ceaseless striving that goes with living in one of the financial capitals of the world.

Wealth can also be found in a spirit of community.  When I visit other cities, like Chicago, I’m often struck by the spirit of friendliness that contrasts to the “ignore the stranger next to you” mentality of NYC. People don’t have emotional defenses up as much; they seem to assume the best in others. To generalize: those in a community who expect the best in others, who care about their fellow citizens and colleagues, who offer help without expecting anything in return – those people are wealthy in terms of community spirit.

One thing many city dwellers miss is the wealth of nature.  I think that San Franciscans are some of the luckiest people on the planet, since they have an economically and culturally vibrant city near some of the most accessible parks in the U.S.  The air is clean, the buses run on electric overhead wires or natural gas, the city composts its food waste and you can bike half an hour from downtown and find yourself in the middle of magnificent forests.

Although Central Park in New York City is pretty nice, it doesn’t compare to Muir Woods, full of redwood trees overlooking to the Pacific Ocean. Natural wealth is a catalyst for introspective growth. The magic of natural beauty is that something as simple as sunlight on cherry blossoms can remind you of how precious and fragile life on this planet is.

Human capital is also a kind of wealth. To paraphrase Shabana Basij-Rasikh’s TEDx talk, Dare to Educate Afghan Girls, your education is “what remains when the Taliban take away everything else.” If that sounds too far afield from your experience to really “get it,” try imagining that you’re moving all your stuff from one place to another. Imagine that as you’re driving along to your new home in a separate car from the truck with your stuff, you cross a river. A crazy driver swerves ahead and cuts off the truck, driving it off the guardrail into the river.  Suddenly, everything you own is gone. Or imagine your house burning down in an electrical fire after you evacuate due to a hurricane. That happened to some unfortunate New Yorkers just a few months ago. If you had no possessions left other than the clothes you’re wearing – what remains?  Your education and the value of the knowledge in your head will still be there. Human capital wealth is what you can do with the sum total of what you’ve learned.

In Adam Baker’s TEDx talk, Sell your crap, pay your debt, do what you love, he asks, “What does freedom mean to you?”  People have fought wars and thousands have died for that question. But have you ever thought about what it really means, not for your parents or your friends or your colleagues, but for you?

Economists assume that people are rational utility maximizers, but they do not define what utility is. It’s very easy to measure utility in terms of money, though, because it illustrates tradeoffs quite sharply: hours of leisure time vs. hours of work time, and varying incomes therein. But economics can’t measure everything that matters.

As Robert Kennedy said in 1968:

Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product...if we should judge America by that - counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.

What if you prioritized your life to maximize the kinds of wealth that YOU value? 

Image credit: Joice Kelly/Unsplash

Submitted by Guest Contributor

By Katie Schmitz Eulitt and Marisa Mackey, SASB

Is the info in CSR reports truly not useful to investors or does it need to be put into a different language or source document?

This was one of the many questions that came up repeatedly during a recent webinar/tweetchat, titled Materiality Matters, co-hosted by CSRwire and the Sustainability Accounting Standards Board [SASB]. The session discussed how sustainability fits into the legal definition of materiality (under U.S. securities law) and provided an overview of SASB’s work to develop standards that help companies address, and investors analyze, the most material environmental, social and governance (ESG) issues in their industry.

Here were some key takeaways from the webinar that might surprise you:

1. Investors do care about sustainability—they just aren’t necessarily calling it that.

We must disabuse ourselves of the notion that investors aren’t interested in ESG — institutional investors, for example, have been concerned with the “G” for decades. A 2003 study by Harvard, Stanford and Yale professors showed that an investment strategy between1991-1999 that bought firms with the strongest corporate governance practices, and sold firms with the weakest practices, earned annual abnormal returns of 8.5 percent.

What investors need is useable and comparable ESG data that is presented in a format and medium they’re accustomed to, such as the Form 10-K, to bridge the obvious translation gap.

2. There’s too much noise. 

SASB’s preliminary research shows that 60 to 70 percent of data in CSR reports is immaterial (based on the Supreme Court definition of the term: information is material if “a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of the information made available”).

This represents a major challenge for investors in the form of an overwhelming amount of immaterial sustainability data that is not comparable or benchmarkable from company to company.

SASB standards, which adhere to the Supreme Court definition of materiality, enable corporations and investors to drill down to the material ESG issues that drive long-term financial performance and value-creation. 

3. SASB, GRI and IIRC are complementary, not competing. 

The efforts of SASB, the International Integrated Reporting Commission [IIRC] and Global Reporting Initiative [GRI] contribute to a common end goal: the advancement of corporate sustainability reporting.

The products of all three organizations can be used in complementary ways — the SASB standards to guide the inclusion of sustainability in a 10-K form for investors, the GRI framework to guide the development of a sustainability report for all stakeholders, and the IIRC guidelines to inform the development of an integrated annual report. All companies—including those that are not yet using the GRI or IIRC frameworks, can use SASB standards.

One point of distinction to note is that SASB provides standards for mandatory filings, whereas GRI and IIRC provide frameworks for voluntary reporting.

4. SASB standards can benefit you—now.

While SASB’s full set of standards for 88 industries will not be completed until 2015, SASB tools are available now. SICS, our sustainable industry classification system, groups industries based on resource use and opportunity for innovation. Our materiality map presents the relative priority of sustainability issues within an industry. Consultants, corporations and investors are already using these tools to evaluate risks and opportunities for their industry or portfolio.

5. SASB standards will alleviate—not add to—reporting fatigue.

Sustainability executives may grumble at the idea of new required disclosure. Companies often cite being overwhelmed by the number and complexity of surveys and disclosure forms sent to them by customers, investor groups, activist groups, and others—it’s ‘death by a thousand cuts.’ However, SASB standards will alleviate reporting fatigue by providing clear guidance on what ESG issues are material for companies to report on within their specific industries.

In other words, companies can use SASB standards to identify which ESG issues to prioritize operationally—toward the goal of improving performance—as well as emphasize in their CSR or integrated reports. [SASB will offer a webinar series for preparers and users of the Form 10-K (as well as other stakeholders, such as sustainability consultants) that want to learn how to use SASB standards. Stay tuned.]

6. Mandatory sustainability reporting is in the future (and is already required).

As SASB develops standards for 88 industries, they will be available for companies to use in the Form 10-K. Regulation S-K already requires that all material issues must be reported in the Form 10-K. SASB’s vision is that every publicly-held corporation will disclose material ESG issues in the Form 10-K; enabling companies to manage the sustainability issues that are most germane to their industry and investors to drive capital to the most sustainable outcomes.

We promised during the webinar to keep the conversation going as we develop more sector standards and reach our goal of 88 industries by 2015. Stay tuned for more updates, questions and opportunities to get involved.

And join a SASB working group as we develop sustainability accounting standards for your industry.

By Nancy Mancilla

Though we often struggle with interpretive guidance of the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines, we can easily say that overall, the world has done a fairly good job of embracing the majority of the protocol. Nevertheless, there are a few gray areas that reporting organizations continue to struggle with. Out of the 590 submissions (not representing actual participant numbers) during the G4 development public commentary period some of the highest concerns were related to the following:

• General Questions/ External References: 394
• Application Levels: 394 
• Boundary: 335
• Disclosure on Management Approach: 317
• Governance and Remuneration: 336
• Supply Chain: 370

Accordingly, these are just some of the issues where multi-stakeholder development committees focused a great deal of attention over the last few years.

As number two in our five part series leading up to the G4 launch in Amsterdam, we’re dedicating this write-up to the ever challenging Disclosure on Management Approach (DMA). So what are DMAs anyway? When we think of "Management Approach," it all seems quite easy; it’s a statement describing the approach taken to manage specific issues. So…why do we struggle to pull together a simple disclosure or align key points to our Content Indexes as a last ditch effort to tie up loose ends on final report drafts? Could it be that we just don’t understand where they should be placed in the document or that we frantically scramble to hit all the key points required for the DMAs?

According to the GRI G3.1 Guidelines:

The Disclosure on Management Approach should be a brief overview of the organization’s management approach to the Aspect (sub-topics to the lay) defined under each Indicator Category (Social, Environmental and Economic pillars) in order to set the context for performance information. The organization can structure its DMA to cover the full range of Aspects under a given category or group its responses on the Aspects differently. However, the Disclosures should address all of the Aspects associated with each category regardless of the format or grouping.

The challenge for reporters really lies within the final point highlighted above. If an organization has effectively applied the "materiality principle," then it should have a basic understanding as to why it has omitted certain "Aspects." Ideally, it would be beneficial for organizations to justify their reasons behind issues determined to be non-material. Of course, the discussion would require even more space when technically, our goal is to prepare a concise report that focuses solely on "material issues."

Furthermore, the DMA has been developed with the intent of providing a deeper discussion on how the organization detected risks and opportunities within a particular issue area, policies implemented to combat related challenges, interventions and training efforts, achievements, and goals for moving forward. Unfortunately, various formats for different Aspects were prescribed in the G3.1, which made for a writer’s labyrinth when determining where exactly to plug these into a story-based narrative.

Up until recently, only Level C reporters were exempt from this reporting requirement. As the GRI application levels we’ve long confused with scholastic grading will give way to an “in accordance” system, we have yet to see who will be exempt from this extra step in the process. What we do know is that a combination of generic format and specific format were proposed in the G4 exposure draft. We now have an indication that a general format will be consistently applied when drafting DMAs.

Additionally, DMAs and Indicators will be required only for material Aspects - and only where the Aspects are material. There will be one simple format prescribed by GRI and no disclosure or explanations will be required for "non-material" Aspects.

In less than a month, we will all have our answers as to what the changes will actually be! Are we ready to take sustainability reporting to the next level?

In an effort to bring everyone up to speed, we will be reporting LIVE from Amsterdam with 3p and will be following up with a free one-hour webinar to brief everyone on those changes. We’ll also be tacking on a G4 bridging module to all ISOS scheduled courses through the remainder of 2013.

Disclaimer: The thoughts shared here should not in any way be taken as factual evidence supporting expected G4 changes. They are based on the thoughts of affiliates of GRI in the U.S. who are worthy of sharing perspectives of how possible changes may be implemented upon the release of the final G4 document at GRIs Amsterdam Global Conference on Sustainability & Transparency May 22-24, 2013. This piece is part 2 in a series of weekly postings leading up to the global conference and will be revisited after the release of the G4.
[image credit: pinprick: Flickr cc]