Public not yet ready for "Green Revolution." It's too complicated!!
Corporations have been criticized for their environmental mistakes for over one hundred years, so it is not surprising that the public views corporate methods to sustainability with skepticism. There have been many reports of green-washing. Other forms of misleading advertising, seen by a small percentage of corporations serve to reinforce this negative perception.
An email question to us recently brought this idea to the fore....
"I want to buy a new dining table, chairs as well as a bed, but I don't have any way of knowing if the company is 'Sustainable.' What do I do? How do I find out?" The question is not "how do I find out?" but "Is the system working which we have set up?"
Maybe we should be regulating in the same way as other industrial polluting activities. Laws require corporations to disclose information on their polluting activities. These activities are wrongs to society: corporations should be required to engage in an internal accounting of their unsustainable practices. Corporations should be required to assess the sustainability of their operations in standardized disclosures and take their resulting, publicly-administered medicine, whether it involves being shamed in the marketplace or subjected to greater regulatory control with respect to resource use or disposal practices. Information about an industrial sector’s sustainability profile—for example, a life cycle analysis of a typical facility—has clear public good qualities associated with it. If sustainability analyses concerning various production processes and services are produced in the first instance by publicly funded, third-party experts rather than extracted from private actors, the resulting reports are more likely to be reliable, complete, and accessible to a wide-range of stakeholders who can use them in public-benefitting ways.
We need to treat corporate sustainability as a public good, rather than as a corporate bad The need for much greater information on the sustainability of corporate practices. rigorous sustainability assessments of major corporate production processes are a valuable tool for directing change, and that life cycle analyses excel in providing this kind of comprehensive assessment. We want to advance corporate sustainability, but we need greater information about corporate practices. Individual corporate decisions about production processes,
Information is not just an important ingredient, but it is essential to establishing a meaningful sustainability program. At the most basic level, rigorous information on corporate sustainability informs the market—not simply downstream consumers, but also insurers, investors, corporate partners, and others who ultimately keep the corporation in business.
Rigorous information on corporate sustainability informs internal practices as well: Enhanced corporate self-assessment is touted as one of the primary virtues of mandating information disclosures. Corporate sustainability information also identifies corporate practices that are most likely to benefit from greater regulatory oversight or market intervention.Yet current regulatory programs provide only limited information on corporate sustainability.
The Right-to-Know Act in the United States requires annual disclosures of corporate use and disposal of large amounts of hazardous substances.
The resulting Toxic Release Inventory (“TRI”) disclosures provide useful information about corporate sustainability with regard to handling and disposal of hazardous substances, but these load estimates offer little insight into meaningful opportunities for a facility to reduce natural resource use, to minimize pollution, or to otherwise decrease a facility’s ecological footprint.
The Global Reporting Initiative (“GRI”), established by the United Nations Environment Programme (“UNEP”) and the Coalition for Environmentally Responsible Economies (“CERES”), provides a more robust measure of a corporation’s ecological footprint because it measures not only outputs, but natural resource use as well.
The GRI offers external parties, like investors and customers, an even stronger basis for evaluating a corporation’s commitment to and progress toward sustainability as compared with the TRI disclosures. GRI reporting is voluntary, however. Thus, participation in GRI still remains the exception rather than the rule. GRI and TRI provide useful barometers to measure corporate sustainability, but because both are exclusively input and output focused, they miss opportunities to focus corporations on the ways that production operations can be altered to provide significant sustainability advances.
GRI and TRI also allow firms to be self-referencing in benchmarking their progress, a focus that neglects to reward ecologically-innovative business practices. Indeed, because both measures simply report on input and output over time, they are indifferent to the possibility that some types of processes or firms are unsustainable relative to competitors and need to be phased out.
In addition, rather than keeping a firm focused on sustainability goals, a “good score” in the GRI risks becoming an end in itself which can distract firms from searching for design and other process innovations that may make more significant progress in the firm’s sustainability profile.
