Sustainability 101: Data Overload
“I read your articles, but you’re going to need to sit me down and explain every bit of it.” - That's Ben, a good friend of mine and a retired Canadian Army serviceman who is likely also reading this article. Hi, Ben!
Ben is the inspiration for this Sustainability 101 series. There are many people like him. They’re interested, motivated, and curious about sustainability – but we as sustainability pros are not making any of our knowledge accessible or even understandable. A stretch goal for me is to make it enjoyable to learn about!
The more educated we all are about sustainability, the better conversations we can have about planning our future. These conversations should include everyone. If you aren’t in sustainability and tried to understand my article about the differences in reporting between the USA and Canada… I’m sorry. I’ll go over the basics of that here.
What info is out there?
We sustainability pros generate a LOT of data. Much of it we put out there for other professionals to look at on publicly-available sites. Even more of it goes to private sites where paying customers can get nicely digested scores or breakdowns of how sustainable companies are. Yet more stays internal and is used by companies or governments to make decisions.
Some of this information, usually only the publicly-available info, gets gathered up by news sites and rankings (like 100 Most Sustainable US Companies or 100 World’s Most Ethical Companies). Have you ever wondered where they get the information to make these lists? Well hold on tight, because it’s a bit of a spider’s web of sources.
CDP – The environmental reporting standard
One of the largest data-gathering projects is the CDP. It was formerly known as the “Carbon Disclosure Project,” but now it includes data on more than just carbon. It also collects data from companies on water use, forest products, and supply chain. So it just goes by CDP now.
The CDP has a massive annual questionnaire where they ask companies, along with some cities and states, to give very detailed information about their environmental impacts. I don’t think the scale or detail of this project can be understated. For example, to just respond to the carbon questionnaire my last employer needed a company-wide system to collect and analyze:
I made a very long list of data here, and removed it to save you the headache. Suffice to say it was eight line items, then spread across ~120 locations, collected monthly or quarterly, and estimation calculations for anywhere we didn't have real data. You're welcome for the omission.
All of that just to support our carbon reporting! I should also mention that our reporting didn’t include the carbon footprint of our supply chain (products or services we purchased). This was something we were working on adding to our system. Like I said – lots of data!
Large companies are pushing a lot of data in different topics for you to review.
We had that system collecting all of that data year-round, had an outside auditor check our system and numbers every year, and then provided this data sliced and diced every which way to the CDP. CDP then looks at our data and gives us a score on how well we’re doing at being transparent and doing our best to reduce our impact. They also take everyone else’s data and can serve it up with some really impressive insights. They can look at individual companies to whole industries, countries or regions.
If you want to check out this year’s data, there’s a nice easy table with companies and scores in it here. See how well some of your favorite companies are doing! If you want to see more detailed information, like the actual numbers and responses you can search the responses for cities or companies, here. Below is a handy tool for interpreting what the letter scores mean, and what percent of North American companies fall into each level.
GRI – The scaffolding behind corporate sustainability reports
If you have visited the websites of your favorite brands and looked at their pages on Sustainability, you have likely seen some beautifully composed reports. The most cynical of you might say it’s all greenwashing with no structure or “real” content to it. I’m happy to tell you that this cynical opinion is not exactly correct. There is a structure that sits behind almost every one of those glossy reports. The guidance for this structure comes from the Global Reporting Initiative, or GRI.
There have been several versions of GRI’s guidance, but they all involve a list of standard “disclosures” – specific data or information that should be reported. The GRI makes its current list of standards available online. Every sustainability report worth its salt will have a GRI index to either give information on this list of disclosures, line by line, or cite where in their report that information is.
I’ll use Walmart as an example, because they are pretty demanding in their sustainability programs, are transparent about their information, and at least in North America you have all heard of them. They have a broad and thorough Global Responsibility Report that they release every year. It’s easy to find their GRI Index. I found it directly under one of the top drop-downs, clearly labeled “Global Reporting Index.” Here you can see the line-by-line response to every reporting criterion – sometimes writing the answers in-line, sometimes referring to where in the downloadable report the info is located, and sometimes referring to SEC financial documents such as the 10-K or Proxy.
As you can see, GRI is the scaffolding that corporate reports like this are built around.
DJSI – Who’s who for investing in sustainable companies
If you listen to financial reports or catch snippets of business news, you have likely heard of Dow Jones. This is an index of 30 large publicly traded companies, which the Dow Jones Index uses as a barometer of stock market health and activity. There are other indices out there – NASDAQ, S&P 500, and FTSE 100 to name three that you may see on stock market tickers.
There are several indices based on sustainability performance too. The most well-known of these is the Dow Jones Sustainability Index (DJSI) family, administered by RobecoSAM. Every year DJSI looks at ~10,000 companies across the globe, choosing the top ~4,500 of them to be invited to send detailed information on their Sustainability/ESG performance. As someone who has participated in these submissions, I can tell you that the questionnaire is intensely broad and thorough.
Of the companies that respond, the top 10% based on performance are then placed into the DJSI World index. The top 20% in each region go into each DJSI region index, and the top 30% in some countries go into their own index – for a total of nine indices. These then serve as the Dow Jones or NASDAQ of sustainable companies, and the financial health of these indices are tracked.
It’s a great achievement for a company to be named to the DJSI indices. It’s an indication that the company is stable and a potential good investment in more than just financial terms (back to that “triple bottom line”). There are quite a few ethical investors out there who will look at DJSI and other ESG performance indicators to choose which companies to make long-term investments with. If you’re interested in investing sustainably, this might be something to look into. The most recent indices at time of writing this are here. There is also a list of the top company within each industry here.
UNGC - The UN of the Business World
When people think of the United Nations, they picture delegates or world leaders assembling to coordinate the mutually beneficial future of the world’s people. Did you know that the UN has many different departments and offices, one of which is essentially the “UN for business?” The UN Global Compact supports a network of companies who have signed on to work together and support the UN’s goal of a peaceful and prosperous future for all. At time of writing there are nearly 13,500 participants (companies, nonprofit foundations, non-government organizations) signed on in support of the UNGC.
Central to both the UN and UNGC’s approach to sustainable development are the 17 Sustainable Development Goals (SDGs). These are 17 ambitious goals from ending world hunger to heading off climate change, with nearly 170 specific targets that sit underneath these goals.
Companies who have signed on to participate in the UNGC are required to give an annual communication on progress (COP). These COPs are then aggregated by country, region, and globally to see how the world is tackling big problems that solving might lead to a more prosperous future. There is a great page to see the SDG progress by these divisions. Below you can see one of my many available datasets, showing the number of North America companies focusing on each SDG.
Private Reporting Services
Those four cover the big avenues of reporting that I spoke about in my article on reporting in the USA compared to Canada. There are even more ways that companies and governments share information on their sustainable development activities. There are a number of private services out there that are used by large companies to collect information on their suppliers.
I’ll again use an example to illustrate how a service like this works. A large company (picture your favorite Megamart) would pay for this service and provide the names and contact information for every one of their suppliers. Let's say that one of these suppliers is a company called WidgetMaker. The suppliers then get a notification from the service, saying that their customer (Megamart) wants them to respond to the service’s questions. WidgetMaker then answers a large list of questions, very similar to the CDP or DJSI. At the end of the questionnaire, the service gives a score to WidgetMaker on how well they are performing. The service then shares this info with Megamart, and MegaMart might decide to do more or less business with suppliers like WidgetMaker based on their scores. They also have the option to have a meeting with WidgetMaker to discuss how they can improve their sustainability score.
The cycle of private reporting goes on and on.
This is a cycle that repeats just about every year, with customers driving constant improvement from their suppliers. Honestly, I would love for such an in-depth process to be visible to the public. How much change would be driven if you could see exactly what brands had great social or environmental policies, and you could compare them directly to each other?
So how do you make sense of all this?
You’re a person living your life, and if you’re reading this you probably want to be a more responsible consumer. You may want to have a smaller environmental footprint, be more socially conscious, or understand big concepts that might seem to have come out of nowhere (looking at you, carbon tax*). I just threw a lot of information at you. Where is the best place to go for a general consumer to understand the triple bottom line for what they buy – without looking through hundreds of pages of reports?
I hear you on that. Even we sustainability pros are getting what we are calling “reporting fatigue.” We are spending so much time communicating out our results that some of us don’t have as much time as we would like to actually make the changes we want. It’s a frustrating situation that fortunately we’re slowly doing better on. There’s some effort out there to combine these reporting avenues so there’s one standard and one central location for information.
However, until that happens your best bet is to rely on third-parties who do the reviewing, digesting, and scoring for you. The above lists are good places to start to see if your favorite brand is a stand-out. Unfortunately without a private service focused only on consumer goods it’s hard to get a quick snapshot of a broad picture. Ranking lists seem to focus on “most environmentally friendly,” “most ethical,” or “most socially responsible” so you get bits and pieces of the full picture.
B Corp certification is one way to find “good guy” companies
One recommendation I can give is to look for is a B Corp Certification seal on your brands. It’s kind of like looking for a Rainforest Alliance certification on your coffee. Companies who get B Corp Certified have passed the very highest levels of sustainability scrutiny. The nonprofit organization B Lab assesses companies on their labor, customer, community, and environment performance. They also require B Corp certified companies to have a balance of profit and purpose written into their legal governance documents – so you know they’re serious and are held to their sustainability commitments.
There are currently almost 3,000 B Corp certified companies in 64 countries, including some of my favorites in the grocery store. Have a look at the directory to see if there are some brands you can be proud to have in your shopping cart!
* No worries, I’ll be addressing climate change and carbon taxes in later articles. Stay tuned!
Thank you for joining me for this Sustainability 101 explanation. There is a lot of ground to cover in this series, so please join me for upcoming articles on subjects like climate change and science-based targets, the UN’s Sustainable Development Goals, and solutions like RECs, carbon offsets, and carbon taxes.