Absolute beginnings – the rise of sustainability context


Are you paying attention?

“For me context is the key – from that comes the understanding of everything.”

Kenneth Noland

Sustainability is innately all about context. Pretty much anything can be sustainable if the circumstances are right or the scope of assessment is too narrow. Sustainability as it is Crate Expectationsmostly commonly understood nowadays could be cynically defined as “an activity that someone or something hasn’t stopped you doing yet”.

Sustainability is a vastly abused and misused term. In politics and economics it tends to mean that something financially ‘washes its own face’ over the short to medium term, rather than something is capable of persisting in perpetuity.

Sustainability is contingent. If it was located in outer space, you might consider a leaky nuclear reactor to be sustainable. Located up the road from your house though? Maybe not.

The judgement of what is sustainable is fundamentally contextual, and the only true context we should be interested in is that of the planet.

Almost all of the ‘sustainability’, CSR and environmental management efforts of the past few decades have been relative in both nature and intent. They are based upon the idea that reducing impacts relative to previous ones produces either sustainability itself or delivers progress on a pathway to sustainability (sustainable development).

Of course, without context, such assertions are impossible to prove. Who could possibly say that a company reducing its fossil fuel use by 10, 20 or even 30% is sustainable without first figuring out what a sustainable use of fossil fuels would be, in the context of the planet as a whole?

This is where concepts such a planetary boundaries, critical thresholds and context-based sustainability analyses come in. These either focus upon thresholds in environmental quality beyond which we might risk significant ecological instability, or upon types of behaviour that can be classed as sustainable because they do not disrupt the functions of natural (or possibly also social) systems.

Such approaches are intended to go beyond relative judgements, to place behaviour in an absolute context.

Whose context is it anyway?

“Sometimes your greatest strength can emerge as a weakness if the context changes.”

Harsha Bhogle

Contextual analysis is not a new thing. Hordes of strategic managers swarm out of MBA programmes every year, trained in the orthodoxy of strategic analysis and ready to join teams of similarly driven people in the companies of the world. Strategic analysis is the lookout in the crow’s nest of the ships of capitalism. Yet sadly, most of them still spy the horizon with blinkers on.

A plethora of whizzy analysis tools purport to allow the identification of strategic issues, risks and threats. However, all too frequently in practice their scope and vision is narrowed by a lack of understanding or recognition that the context they need to encompass is far larger and more complex than they are willing to admit. Systemic, contextual or existential risks can only be identified through an understanding of the proper scope of context. This context is the planet and the planetary systems upon which our life and health depends.

Responses to this perspective problem are in development, approaches to quantifying physical planetary limitations upon activity are emerging and being slowly explored by companies and policy makers. These include the nine planetary boundaries, doughnut economics and context-based sustainability.

From a reporting perspective, context based sustainability has received a boost with its inclusion in the UNEP (United Nations Environment Programme) report “Raising the Bar – Advancing Environmental Disclosure in Sustainability Reporting” (November 2015) which emphasises a fundamental requirement for companies to undertake strategic contextual analysis and also to contextualise their performance.

Approaches to the categorisation and quantification of the natural resources that support the functioning of natural systems are also being established, alongside tools that support individual companies and countries to place themselves and their impacts in the proper context. These include multiple capitals, ecosystem services, and natural capital accounting.

Knowledge and numbers

“Every man is a damn fool for at least five minutes every day; wisdom consists in not exceeding the limit.”

Elbert Hubbard

Sustainability of systems, societies and people on our finite planet is absolutely impossible without a recognition of the need for contextual understanding and contextual responses.

However the challenge for true sustainability context to become a defining strategic factor remains a significant one for two key reasons.

Firstly, because assessing legitimate “share” is difficult in a complex and interdependent world and, secondly; because in some respects context only requires us to pay attention to what we already know, that we urgently need to focus upon developing the capability for sustainable production and valuation processes.

Context tells us just how urgent that need is becoming.


Coming soon – Towards 9 Billion book series

We are packaging a range of our writing over the last few years into a series of short, free E-books, to be available in late 2015.The Elephant is the Room - Towards 9 Billion Book 3

Here are just some of the kind things people have said about our writing:

Big ideas for massive challenges: Terrafiniti’s Towards 9 Billion provides a wide range of solution-oriented perspectives on the prospect – often seen as daunting – of accommodating 9 billion people within the remits of our one planet.

David Nussbaum, Chief Executive, WWF-UK


“The Doughnut of social and planetary boundaries highlights the scale of the challenge humanity faces. Terrafiniti’s Towards 9 Billion is a fount of refreshing ideas for surmounting that challenge, imagining economics, finance and enterprise for a flourishing future.”

Kate Raworth, Creator of Doughnut Economics and Senior Visiting Research Associate, Environmental Change Institute, Oxford University


Towards 9 Billion addresses the critical issues that face our planet in the 21st century, from business and economics to sustainable energy and technology. I love its wide-ranging intelligence, lucid prose and interdisciplinary approach to scoping a new economics for our age.

Jane Gleeson-White, author of Six Capitals: The revolution capitalism has to have – or can accountants save the planet.


Sowing the seeds of a sustainable world?

Just as plants and animals broadcast seed and progeny in vast numbers in the hope that some will survive and flourish, we hope that our ideas might have the chance to do the same; to find receptive places in which to thrive.

We hope that our writing and the books might play a small but useful role in imagining and building a future fit for people and the planet.

If you would like to be notified when they are published please get in touch.

Contact Terrafiniti

Truth and reason – Natural philosophy for sustainability

“We should remember that there was once a discipline called natural philosophy. Unfortunately, this discipline seems not to exist today. It has been renamed science, but science of today is in danger of losing much of the natural philosophy aspect.”

Hannes Alfvén

The new natural philosophy?

Natural philosophy was, put simply, the antecedent of what we now know as science. Before the codification of science and sciences as aligned but separable disciplines for A different way of looking - Copyright J. Montalbettithe study of the world, its causes and effects and underlying principles, such study and exploration was called natural philosophy. This can be defined as the philosophical (the study of the fundamental nature of knowledge, reality, and existence) examination of nature and the physical universe in order to understand the ways in which they work.

Natural philosophy still has much to tell us, not as an attempt to re-brand science to an older label, but because of the activities of the natural philosophers of history have resonances and implications which might be of value for those of us seeking to explore and stimulate sustainable change.

Whilst natural philosophy has a history dating back thousands of years, it played a significant role in the European Renaissance in developing the intent and principles of what we now call science.

In the 16th, 17th and 18th centuries such figures as Francis Bacon, Robert Boyle and Isaac Newton were as much Natural Philosophers as they were mathematicians, chemists and statesmen.

What has natural philosophy got to do with sustainability?

 “Read not to contradict and confute, nor to believe and take for granted… but to weigh and consider.”

Francis Bacon

Firstly and most literally, natural philosophy is essential for sustainability because it is about science, and the need to be able to provide evidential proof of the way that our physical existence works. This is at the heart of any efforts to demonstrate that given courses of behaviour have cause and effect relationships that we may conclude have better and worse implications for the future of (our) life on this planet.

Secondly, and more avowedly philosophically, because the Renaissance philosophers were involved in a task with many parallels to the efforts of sustainability advocates now. They were comparing the observations and findings that arose from their natural philosophical investigations against the orthodoxy of what was considered to be “truth” in their time. This has a direct parallel to the work of many sustainability advocates, who explore whether the truisms and “laws” of economics and markets can be proved through evidence or whether they are in reality orthodoxies which do not stand up to scrutiny.

Thirdly, because philosophy is a critical component of navigating change, and in understanding why change is welcomed or rejected.

Why don’t facts change the world?

“Stuff that the public won’t believe aren’t facts. Being true only makes ’em worse.”

H.G. Wells

The third point is a key one in many discussions of sustainability. It is often a strongly held belief of environmentalists that facts alone have the ability to create change, that the “truth” has the ability to drive a shift from unsustainable to sustainable outcomes.

Indeed in my previous life in an NGO, it was possible to come across the attitude that time spent upon understanding why and how changes takes place (starting from the perspective that all behaviour arises from both custom and reason and is therefore innately complex in origin and in resistance to change) was a waste of time. The real way to create change, I was told, was to get people to read the latest study or set of scientific data, and that would itself drive change.

This is based upon the truism that the “truth will set you free”, however, if the truth contradicts your worldview, it can sometimes be easier and less stressful to either simply ignore that ‘truth’ or to find a truth of your own to provide competition.

Philosophy is intended to make sense of the world and it is just as important to explore and understand how things that may not make sense from one perspective might make sense from another. In situations like these, understanding what may look like irrational behaviour from one perspective but intensely rational from another should be the subject of philosophical, psychological and sociological inquiry, not just the province of the physical sciences.

To some extent, the idea of a new natural philosophy, a natural philosophy for sustainability, is seeking to emphasise that the science that has taken us for far in explaining the world around us must recombine with its philosophical component in order to play a role in delivering the future we want.

Sustainable change requires many components, facts are just one of these. Change occurs through a complex mix of factors, of which “truth” can often take a back seat to tradition, fear, self-interest and both psychological and economic investment in the status quo.

Understanding the range of reasons behind why change either does or doesn’t take place is a critical element of supporting and driving sustainable change, just as the physical sciences are in helping us understand both how the world works, its limits and trends. Combining these two dimensions of investigation and knowledge are essential, a Natural philosophy for the 21st century.


Coming soon – Towards 9 Billion book series

We are packaging a range of our writing over the last few years into a sNew=Natural-Philosophy-T9Beries of short, free E-books, to be available in the Autumn of 2015.


Here are just some of the kind things people have said about our writing:

Big ideas for massive challenges: Terrafiniti’s Towards 9 Billion provides a wide range of solution-oriented perspectives on the prospect – often seen as daunting – of accommodating 9 billion people within the remits of our one planet.

David Nussbaum, Chief Executive, WWF-UK


“9 billion people living within ecological limits requires us to rethink and redesign our human systems so that they are in tune with natural systems. To do this we need both critical thinking and generative solutions that are rooted in purpose, inclusivity and creativity. Towards 9 Billion e-book series is an important contribution to humanity’s great transition for living thriving on planet earth.”

Jen Morgan – Co- Founder – The Finance Innovation Lab


“To all who are disenchanted by the lack of a coherent global approach to achieving sustainable development, take heart. Drawing on a vast array of theory and practice from systems thinking and natural law to finance, economics, literature, philosophy and corporate behaviour, Terrafiniti’s Towards 9 Billion helps us navigate the path to an uncertain future. Read and act on their work now or prepare for subsequent regret that you did not recognise them as geniuses of their time.”

Lois Guthrie, Founding Director, Carbon Disclosure Standards


Sowing the seeds of a sustainable world?

Just as plants and animals broadcast seed and progeny in vast numbers in the hope that some will survive and flourish, we hope that our ideas might have the chance to do the same; to find receptive places in which to thrive.

We hope that our writing and the books might play a small but useful role in imagining and building a future fit for people and the planet.

If you would like to be notified when they are published please get in touch.



Biodiversity – there is no wealth but life

Why we need a world with more life in it now.

I tore myself away from the safe comfort of certainties through my love for truth — and truth rewarded me.

— Simone de Beauvoir

The good news is that there is probably more biodiversity (types) of life on earth than we currently know or even imagine.

The bad news is we are killing it off very fast.

What is biodiversity?

The term biodiversity (a contraction of ‘biological diversity’) was coined in 1985 and popularised by biologist Edward Wilson in 1988 in his book of the same name. Given that the term is only 25 years old, it has gained remarkable traction in everyday life.

Together with Natural Capital, biodiversity is one of the current buzz words in corporate sustainability. Businesses actively engaged with sustainability realise that single issues such as energy use, climate change or workers’ rights are interrelated with others such as water use and biological diversity. As extended scrutiny further illuminates the nether regions of value/supply chains, complex impacts and inter-dependencies are uncovered.

In practice, biodiversity is in trouble in reality and as a concept. The term is very difficult to define, potentially ranging as it does from genes to entire ecosystems. There are two main approaches to categorising biodiversity, the functional and the compositional (as suggested by Callicott et al 1999). Functional approaches consider ecosystem and evolutionary processes, while compositional approaches look at organisms in terms of their populations, species, taxa and other groupings.


Chinstrap penguins, Baily Head, Deception Island, the breeding area for 200,000 chinstrap penguins. Polar regions have low species diversity and high abundance – that simply means there’s not very many different kinds of animal but when you find them there’s a lot of them. There’s also an interesting story behind this picture. The penguins here have been lying on their nests incubating eggs, you can see their dirty fronts. They are hungry and have walked up to 2 km to get to the sea. They are torn between hunger (and the need to get into the sea to fish) and the danger of entering the sea first where they may be eaten by patrolling leopard seals. They shuffle and run down the black volcanic gravel beach, vying to stay at the rear or middle of the group, while carefully scanning the sea for possible threats. The white specks are wind-blown foam from the waves – not snow. Photo: © Dominic Tantram 2006.

The complexity of the term biodiversity means that it is often poorly understood in wider society. But this reflects a wider malaise; in many ways we have lost view of our connections – and dependencies upon – the natural world. Most people view biodiversity as something of nebulous but rather removed value, rather than a way of interpreting the ecosystem which provides us with life. We see ourselves apart from nature rather than as an intrinsic part of it.

This disconnect, in both perception and behaviour is having massive and perhaps unprecedented impacts upon our ecosystem.

What’s the problem?

A range of studies suggest that by whatever measure we use biodiversity is in rapid decline. Uniquely among other species, humans have had a dramatic and globally reaching negative impact upon the number of and abundance of many species.

Many scientists have suggested we are entering the sixth great extinction, a man made loss of species at rates equal to exceeding other great global extinctions we can see in the geological record. Current extinction rates are between 100 and 1000 times the ‘natural’ background rate. Some have suggested this new epoch should be called the Anthropocene.

What is causing this decline? There are a number of interrelated factors, often grouped under the acronym HIPPO (increasing in importance from left to right).

  • Habitat loss – the loss, destruction or large scale disturbance and modification of habitats through clearance for agriculture or development or through fire, modifies ecosystems and removes space and opportunities for species to live.
  • Invasive species. Human actions, primarily through trade, or development and population of uninhabited areas helps move plants and animals deliberately or accidentally into areas where they have no inherent predators or other control mechanisms and where consequently they disrupt and damage local ecosystems.
  • Pollution – the widest form of pollution impact is through greenhouse gases causing global warming and moving climate ‘envelopes’. Other types of pollution including industrial chemicals, oil spills, plastic particles and pesticides interfere with physiological and biochemical processes and poison and weaken organisms and their ability to successfully reproduce.
  • Population – or more precisely the impact of human populations as a driver of the above impacts, is growing as consumption and the related production impacts grow, requiring land use change, land for growing food and further disturbance.
  • Over-harvesting occurs when stocks/populations of species are harvested at a greater rate than they can replenish. Different wild fish stocks provide key examples.

Why is it a problem for us?

People, companies and governments often tacitly acknowledge the importance of biodiversity but struggle to make it a priority. Like many other environmental issues this at least in part due to the complexity of the issues and their possible solutions. While there is a crisis with respect to geological and evolutionary timescales this is more difficult to understand and translate into human timescales.

To put it simply biodiversity is a metaphor and an indicator for the natural vitality of life on earth. And earth is our habitat – our only home. Something is going very wrong with where we live and we need to take more notice and (more importantly) more action.

Despite studying the biology of our planet for several hundred years (at least in western science) we still know woefully little about what other life we share the planet with. We still don’t really know how many species there are on earth. The table below headlines what we know using the (normally maligned – but not in this case) Rumsfeld framework:

Known knowns 1.2 million species
Known unknowns 8.7 million species*
Unknown unknowns Whatever doesn’t fit our models and assumptions

* eukaryotes (single or multicellular organisms, their cells have a membrane bound nucleus). Nature 2011

These estimates suggest that a staggering 86% of land species and 91% of marine species remain undiscovered. A further, more worrying, implication is that given the accelerated extinction rates of the Anthropocene, it is highly probable that we are causing the extinction of species before they have been discovered.

Not just for nature lovers

OK – so it’s complicated and we know that our knowledge has gaps, but why does this matter? The main problem outside the field of ecology is one of value – and management. Biodiversity at some level (a level we are struggling to fully understand) is vital to life on earth and we need to value and protect what is important.

It also has another critical dimension – biodiversity loss is generally irreversible.

Because of its importance and the fact that the main pressures upon biodiversity stem from industrial production processes, poverty, globalization and social injustice, the solutions must be enacted by a far larger group than biodiversity savvy ecologists or biologists.

Biodiversity & ecosystems – bridging the knowledge gaps

Because we don’t even know how many species there are, it is difficult or impossible to assess how much diversity we can lose while maintaining the ecosystem services we rely upon for survival.

Our knowledge is incomplete; biodiversity encompasses the twin components of unknown variety and unknown value.

Yet despite this lack of knowledge we understand some important principles:

  • We share our origins, DNA and environment with other species – they are part of our ecology/we are part of theirs’.
  • Our ecological understanding is incomplete; we don’t yet know what the implications of modifying species abundance and distribution globally will be on the operation of ecosystems and the ‘products’ and ‘services’ they provide to us.
  • Species provide a valuable genetic resource, to support viable populations of species and for human exploitation.
  • Removing species from earth now and for the future represents a massive future ‘opportunity cost’

The ecosystem approach has been developed as a model and a metaphor to help build understanding of, and provide a framework for, the value the environment has for humans. This is of course vitally important, after all it’s us that’s causing all the damage. However, this is a very anthropocentric view and should be recognised as such.

The arguments above are utilitarian and based upon enlightened self-interest. Some argue that biodiversity, nature also has:

  • an intrinsic value, apart from human existence and values; and that
  • humans have a stewardship responsibility, based upon our unique position of power and/or a spiritual/religious basis to preserve and maintain life.

Whether justifications reside in either or both of these categories, there are compelling practical and moral reasons to act.

The need for dramatic action

We need a more sophisticated approach to our understanding of biological value, more strongly related to its intrinsic ecological value and to its functional value to us as a species. We are likely to need ecosystems with what may currently be described as perhaps low to medium biodiversity that provide us with food, fuel and other materials. In densely populated landscapes such as Europe, these will provide a range of benefits to humans and the natural environment. They are likely to offer more niches, structural and spatial heterogeneity than current intensive agricultural systems – and hence greater biodiversity. They are likely to be more resilient to climate and other disruptions while providing greener, more pleasant, places to live for us and the other species we share the landscape with.

However, we have no idea if this approach goes far enough. To paraphrase E. O. Wilson from his UK address at St Paul’s Cathedral (2014):

We are playing with the very stuff of life without understanding what it is or its value to us or the rest of life on earth”.

To meet long-term sustainability and human development goals we will need to grow more food and further develop industrial supply lines based upon biological inputs rather than less sustainable mineral based inputs.

Perhaps it’s time to return to E.O. Wilson and his conclusions based upon a lifetime of study and contemplation. His vision and solution is clear, if ambitious. He suggests that half the world should be available to humans and the other half to the other 8 million species. At first this sounds unbelievably radical and hugely impractical. But it is based upon sound logic (“never has the precautionary principle been more important”) and provides an inspiring vision. If we want to meet long term human development goals we must do so on a healthy planet and one that we can share with the other 8 million plus species of unknown future value to us and the stability of our ecosystem. We have to reinvest in our home and our integral place within it rather than considering ourselves utterly apart.

Money talks – the dark secret of the sustainability event circuit

“…almost all fortunes are made out of the capital and labour of other men than those who realise them.”

Lysander Spooner

Do you have to Pay to play?

If you are a sustainability practitioner and attend events on the topic – do you know the approach those events take to recruiting speakers, and do speakers have to pay to play? Money-talks-hereDo you know which experts are on stage because of their marketing budgets and which are there on merit?

If you don’t, I suggest you try and find out. A number of events have a policy of giving speakers slots based upon direct payment, or for associated sponsorship. The speakers at such events have paid for the privilege of sharing their wisdom.

Is there really a correlation between the size of marketing budgets and intelligence and experience? If there is, it would rather fly in the face of logic and common sense.

Here is an anonymised and wilfully exaggerated exchange I had recently with a conference sales person:

Organiser: “Hi Joss, we’d love to get your feedback on our fantastic event, see below for details.” [Below were included details of an entirely average and predictable line up of corporate names and representatives with little or no track record of innovation or the merest hint of interest in their sustainability practice].

Organiser “We still have some speaker slots, sponsorship opportunities and other things [with dubious and unprovable Return on Investment] we are sure you will be as excited about it as us!

Me: “Thanks for your message, we do quite a bit of work in the area and would love to contribute. If you want an insight into our thinking here is an example of some our analysis we published free earlier in the year as an example. However, we don’t pay to speak.

Organiser: “Sorry, we are only looking for speakers as part of sponsorship packages at present.

Me (publicly): “Thanks for the clarification, goodbye and good luck.

Me (privately): “##@}****^%!!!” [Starts to write this piece].

The above example is a relatively transparent one. Another instance occurred after a topic and slot had been discussed and many emails exchanged to secure my input at a conference, when it then transpired that I was expected to pay a fee for the privilege (through paying registration). I felt this was underhand. I refused to pay and in the end managed to contribute at zero spend (though not zero cost).

Are pay-to-play events good for the audience?

I can’t really see how they could be. Why would your best chance to getting access to useful information and expertise be by going to events that are based upon the willingness of the speaker to pay for the chance to share their knowledge? Why would the best insights correlate with the ability to pay?

Or have we forgotten that wisdom and wealth aren’t inextricably linked?

Money talks – there are a number of mainstream, recognised sustainability event organisations whose business model includes paid-for speaker slots. Just to clarify, the speaker pays the organiser, not as the naïve among us might have thought, that the organiser would [gasp] pay the speaker for sharing their expertise.

Are they valuable for the speaker?

The economics of a speaking gig for the likes of me can be tenuous at best, even when there is no money exchanged in any direction.

The complex ROI (Return on Investment) calculation for a would-be speaker (paid or unpaid) consists of the following questions:

  • Any good presentation takes time to write and rehearse, let alone deliver. Is there value for me to invest time and effort to speak at an event?
  • Can I spare the time?
  • Will it build or undermine my reputation?
  • Will there be anyone in the audience likely to think I am worth talking to if I deliver good input?
  • Opportunity cost – do I have something else to do that does pay (better)?

It is one thing to be asked to put in time, inspiration and expenses towards someone else’s event if you feel it is on balance worthwhile. Pay-to-play is quite another. It seems iniquitous to be asked to pay to speak if the event is made worthwhile because of the range of expertise and insight it gives access to.

Conference organisers tend not to bother to prove an investment case when they are trying to get you to pay-to-play – they just talk nebulously about X hundred delegates, space on a website or conference publication etc. etc. There is no evidence supplied about conversion rates for speakers, increased business or increased profile. Of course speaking at conferences can be directly valuable – people can come up to you and start talking about working together. It’s just that most often speaking slots are a long term game – brand building rather than sales building. With a shaky ROI for merely speaking for free, it is yet more marginal if you have to pay to do so.

In the last few years it has become very rare, unless you are one of the few truly global sustainability superstars, for speaking to actually pay you money. The bottom has dropped out of the market for expertise, yet the sustainability conference market appears to be booming – causation or correlation?

Some sustainability events do not take the play-to-play route. Though actual payment (for input) is rare, some give speakers free access to multi day events as part of their contribution. Not all sustainability events are the same.

Are they valuable for the attendees?

If you are thinking of attending an event – wouldn’t it be in your interest to find out how they get their speakers? Shouldn’t a responsible events organisation clearly disclose its speaker recruitment process? As a paying attendee, isn’t it your right to know and shouldn’t you be asking?

I would like to see every sustainability event have a clear, accessible statement of speaker recruitment approaches. In the future this should perhaps be a sign of the integrity of the event itself.

Money talks, but does it say anything worthwhile?

Of course, many speakers, whether they pay to do so or not, have valuable things to share. However, those companies with the biggest marketing and communications budgets for sustainability can sometimes also be those whose practice is the least advanced, or have the most ground to make up. Is it really possible that speakers from such companies win their slots on merit? It’s possible of course, just rather unlikely.

That doesn’t mean that all frequent speakers at sustainability events are promoting mediocre ambition or achievements. It’s just that if they were genuinely chosen on the merit of their expertise, achievement and organisational progress then paying to play wouldn’t work because the availability of budgets for securing speaker slots will not necessarily correlate with the value of the speaker’s content.

A shift of value – from “experts” to aggregators

I believe that this issue is reflective of a wider societal trend, the shift of value from expertise and experience towards those places that aggregate and collect knowledge, flowing from the experts at a conference to the conference organisers and news sites themselves. So it is often possible to find sustainability news sites that spend a few years gathering together (using free contributions from experts) an impressive set of knowledge resources, selling their own services as being experts themselves. You could say ‘Good luck to them, that’s enterprising!’ Alternatively you could say ‘What a con!

I wouldn’t dream of venturing an opinion myself.

Nevertheless, it seems it is becoming less valuable to have original insight and experience and more worthy to be a curator of input. In this scenario it is the conference organisers rather than the content experts who have become the true value creators…

It’s not just me complaining

I am not the only one grumbling about such things. In a post last year the sustainability reporting expert Elaine Cohen wrote a fantastic blog piece on the related, troubling, though marginally less exploitative practice of being asked to contribute time and effort for free. In her blog Elaine mentions being approached to undertake a sustainability strategy for a company for free, because of the “exposure” it would give her and her business. I think that I will try that approach to get myself a free new Tesla Model S, surely Elon Musk would benefit from the exposure his company would get if I drove his cars!

It is also not just the sustainability world that is seeing this trend, it was also a topic on the blog of Gini Dietrich, a communications and marketing expert, a couple of years ago.

A manifesto for sustainability conference delegates

 “Beware of false knowledge; it is more dangerous than ignorance.”

George Bernard Shaw

This post is of course partial – I am feeling cheesed off at an industry trend that I don’t think favours my expertise or approach. However I genuinely believe that there is a wider problem that should concern all of you who pay to attend events. Are you really getting the value that you pay for?

With this in mind, I suggest a series of questions that you should ask of any conference organiser whose event you are considering attending:

  • How do you source your speakers?
  • Are your speaker slots tied to sponsorship?
  • Do you sell your speaker slots directly?
  • (Where speakers have to pay) Why do you believe that speaker payment is the best way to serve my needs as a delegate?
  • (Where speakers have to pay) How do you justify your claims to offer the best expertise and experience when you are effectively discriminating against those experts without large promotional budgets?
  • Will you publish your speaker recruitment and remuneration policy in your event and booking materials?

Increasing the level of disclosure from conference organisers as to how they assemble the expertise at their events would be of benefit to prospective delegates, allowing them to make informed choices as to how and where to spend their money.

The sustainability of sustainability conferences depends upon the integrity and value of their content. I believe that pay-to-play makes a mockery of claims that a conference can be guaranteed to deliver value for delegates. It additionally undermines and skews the value of original, insightful and experienced expertise, just at the time when we need it most to undertake fundamental shifts to a sustainable world.

Most sustainability experts that I know are incredibly happy to give away stuff for free and are very happy to help other people whenever they can, often without charging a commercial rate. Why should this natural goodwill be further and pointlessly exploited? Can any sustainable good come of that?


Contact Terrafiniti

Questions for a sustainable world

“A prudent question is one half of wisdom.”

Francis Bacon

What’s it all about?

The quest for a sustainable future is all about questions. Some are big and some are small. Some are about the nature and purpose of our systems of value, and some about how we value our loved ones. Sometimes the smallest questions have the biggest answers.Questions questions

Human beings are good at asking questions. We start off very good indeed.

Children’s ability and commitment to asking questions often outstrips our ability to answer them. This is not merely that an incessant stream of ‘why?’ questions is tiring, it’s also that some of the time we genuinely don’t know the answers to the questions we are asked or are unprepared to deal with their true implications.

As we grow up, we often keep questioning, but the scope of those questions can narrow due to the practical need to balance a sense of wonder with passing an exam or earning an income. We still question aspects of life but often these become more about the details and less about the overall purpose. This ‘bounded rationality’, keeps our questions within a less examined frame of reference and is one of the challenges our species faces in breaking away from unsustainable ways of being and creating new ones that may differ slightly or radically.

Some questions demand answers

“I don’t pretend we have all the answers. But the questions are certainly worth thinking about.”

Arthur C. Clarke

In essence, sustainability is about one of two things; doing the same things very differently or doing very different things.

Maintaining our status-quo commits us to a collision course with the very real limits to possibility on this wonderful though populous planet.

To follow a path to sustainability we need to ask and then answer some fundamental questions of economics, finance, culture and business. Not just “can we do business with less impact?” but “how do we connect finance with a flourishing future in the first place?

Over previous centuries immense logic and ingenuity have been applied in the creation of our systems of value and enterprise. However, we face challenges which require a rejuvenation of our thinking because the logic of the past often falls short of the obstacles of the future.

Unless we ask the big questions “What is the point of capitalism?” and “How do we value a sustainable future?” we will be unlikely to find answers which meet the scale of the challenge.

The current rules of the game for capitalism are undermining its own long-term existence. Any game includes winners and losers, creativity, luck, cooperation and competition, and should do so in order to deliver creativity, innovation and the chance of individual and collective choice, reward and well-being.

Changing the rules of the game such that capitalism seeks to deliver sustainability wouldn’t affect the range of possible outcomes and types of choices within the game. Indeed it would guarantee that we all had more chance to play for longer, and indeed might guarantee that more of us might ‘win’.

Whatever will be, will be

“If single human beings — if one single rickety infant — can be born as it were by accident and die futile, why not the whole race?”

H. G. Wells

Towards 9 Billion asks some big questions about the nature of things and some naïve questions as to whether things must be as they are.

Humans tend to love and despise systems in equal measure. The systems of economics, capitalism and enterprise which surround and drive us are required and beloved but also feared and doubted.

Our writing is intended to present and explore new ideas and hopefully provide some inspiration about how we might think differently about a sustainable future and the route to achieving it.

  • Why do our systems of value and production function as they do and might they be capable of becoming truly planetarily compatible?
  • How can our markets give rise to behaviour so perverse that it’s in no one’s interest to leave them untouched?
  • Might there be a larger purpose behind these systems and might we aspire to more human approaches for the good our home and our species?
  • Do our current systems of value contain the seeds of the next ones?
  • Must profit for one always mean loss for another?
  • Must we learn to leave behind our expectations of linear cause and effect in an increasingly changeable world?
  • How do we move to a positive sum economy, where common good and private interest naturally align?

Coming soon – Towards 9 Billion book series

Such questions are at the heart of this blog.

In order to add a little weight to the questions we pose, and also some of the answers we suggest, we are packaging a range of our writing over the last few years into a series of short, free E-books, to be available from September 2015.Whats the point book cover


Here are just some of the kind things people have said about our writing:

Big ideas for massive challenges: Terrafiniti’s Towards 9 Billion provides a wide range of solution-oriented perspectives on the prospect – often seen as daunting – of accommodating 9 billion people within the remits of our one planet.

David Nussbaum, Chief Executive, WWF-UK

Towards 9 Billion addresses the critical issues that face our planet in the 21st century, from business and economics to sustainable energy and technology. I love its wide-ranging intelligence, lucid prose and interdisciplinary approach to scoping a new economics for our age.

Jane Gleeson-White, author of “Six Capitals: The revolution capitalism has to have – or can accountants save the planet?

With this series of e-books, Terrafiniti continue to not only pose the most important questions of our time – namely, how do we sustain and thrive on a planet of 9 billion people – but also propose some fantastic ideas as to how we might do just that. A must read for anybody interested in where the planet is headed – and finding solutions to our most pressing challenges.

Jeremy Leggett, author, environmentalist, activist and solar pioneer

 Sowing the seeds of a sustainable world?

Just as plants and animals broadcast seed and progeny in vast numbers in the hope that some will survive and flourish, we hope that our ideas might have the chance to do the same; to find receptive places in which to thrive.

We hope that our writing and the books might play a small but useful role in imagining and building a future fit for people and the planet.

If you would like to be notified when they are published please get in touch.



Against a dark background – the limits of certainty


“Chaos is found in greatest abundance wherever order is being sought. It always defeats order, because it is better organised.”

Terry Pratchett. Thief of Time

Through a glass, darkly

Certainty and predictability are fundamental elements for any planning process, and utterly vital for economic and investment decisions.Tunnel Vision

However, the scale and scope of ecological and social disruption envisaged by many reliable organisations and institutions over the coming decades raise some hard questions (see these from the Strategic Foresight Group) about how well humanity will fare in the coming decades.

The coming decades may result in new limits to certainty. Put simply, in a fast changing world, the assumptions that have steered us to where we are now are increasingly ill-suited for guiding our pathway forward.

The increasing dissonance between how far we can see, what we see when we look and how far we are planning, manifests in two dimensions:

  • Firstly, the divergence between the future that many studies show is coming – of restricted resources, competition for food and water, unstable climate and social disruption – and the future that we are currently planning for – a continuation of business as usual, and:
  • Secondly, the impacts that a “business as usual trajectory” has upon the predictability of the future. This is a feedback loop. The more we ignore the need for change the less predictable the change we will be forced into undertaking will be.

The first category was highlighted recently by no lesser figure than the Governor of the Bank of England, not a role usually held by a scaremonger or Jeremiah. In a speech to the World Bank in December 2014, Mark Carney highlighted what he called a “tragedy of horizons”, an emerging dissonance between recognisable problems with clear future implications and the adequate integration of the risks into corporate planning, financial valuation and risk analysis. This means that the value of companies today is calculated without enough reference to the fundamental contextual challenges that they will face in the future.

A simple expression of this challenge would be a car heading to a business meeting hurtling off the road and towards a ravine. Meanwhile, inside, the passengers discuss how rich the deal they are (still) planning to execute will make them.

This mismatch of ambition and likely outcome was categorised by Mark Carney as a “market failure”. I have previously categorised it (with wilful understatement) as a “Restraint of Future Trade”.

The second category is somewhat more difficult to get your head around, because it requires us to acknowledge and come to terms with just how much we don’t know, and furthermore don’t understand, about the world, its complexity and the limits of reliable prediction.

A light in the darkness – the Lyapunov exponent

 “…no gluing together of partial studies of a complex nonlinear system can give a good idea of the behavior of the whole.”

Murray Gell-Mann

Don’t despair though! There is a useful (if only in a metaphorical sense) tool that might help to navigate such a murky future.

It is called the Lyapunov exponent. For those of us that are not advanced mathematicians or who, when faced with a page of algebraic equations shrug and say “It’s all Greek to me” it can be simply expressed as follows:

The Lyapunov exponent is a means by which to predict, in a chaotic system, the limits of certainty – the “distance” beyond which forecasting is either inadequate, unlikely or likely to be just plain wrong.

Our world appears to be pretty predictable, the sun comes up every morning (unless you are at the Poles), spring comes around every year (unless you are on the Equator) and so on.

Yet at levels of detail our world is a chaotic system. Not in the sense that anything can happen at any time, but in the very specific sense that the complexity of the natural world (including animate and inanimate systems; life, energy and matter) interact with each other at such extreme and unmappable levels of complexity that they are essentially chaotic. Stated simply, the natural world exhibits complexity beyond our currently relatively crude understanding of cause and effect relationships.

In physics, chaos is defined as:

“the property of a complex system whose behaviour is so unpredictable as to appear random, owing to great sensitivity to small changes in conditions.”

 Chaos and order – a false dichotomy?

 “There are different kinds of rules. From the simple comes the complex, and from the complex comes a different kind of simplicity. Chaos is order in a mask…”

Terry Pratchett. Thief of Time

A strict delineation between a wanted and an unwanted state, of order and chaos, is perhaps too binary to match up to the nature of our reality. The Holocene has provided our species levels of predictability that we have interpreted too simply, and upon which we have built yet more simplistic, inchoate models of the nature of reality. Each step masking the innate and fundamental complexity of the place where we dwell.

This simplification has allowed us to feel falsely certain about the real nature of existence – that nature and physical systems on our planet are never and have never been either merely ordered or chaotic but are a mix of one giving rise to the other and vice versa.

This combination of certainty and uncertainty can be described as chaordic (a portmanteau term “coined” by Dee Hock, the founder of VISA). Facing up to a chaordic reality gives rise to a need for us to develop not only better ways of shining a light through the darkness – a Lyapunov torch perhaps – but also a different, more intuitive and less organised approach to planning and exploring an uncertain future.

The term chaordic is really trying to reflect that “chaos” is not the opposite of order, and that “ordered” or relatively predictable outcomes or conditions emerge from the complexity of fundamentally chaotic systems. These outcomes can be termed ‘emergent properties’ – aspects or characteristics that arise through complex interactions which are produced reliably enough to be capable of being considered as predictable until or unless circumstances change. Such properties have been defined as follows “An emergent property of an ecological unit is one which is wholly unpredictable from observation of the components of that unit” (George W. Salt, The American Naturalist, Vol 113, No 1. Jan. 1979).

A hard dichotomy between chaos and order is too simplistic – it is from the functional chaos of our massive complex and interdependent world that elements of predictability and order emerge. However the more we change the properties of our system, through physical interventions in ecosystems and changes to the balance of our atmosphere, water and soil systems the less predictable and reliable the properties that emerge from these systems will be. Our current civilisation has thrived because of the relative predictability and stability of the systems we depend upon. Changing the equilibrium of these systems will change the outcomes of their interactions – possibly in ways we can ill afford and predict.

Put simply, it will become increasingly difficult, unless we start to add to the quality and resilience of the ecosystems we depend upon, to rely on our ability to predict the future.

The limits to Assumptions

Given that the threshold of predictable emergence may be getting closer to us by the year and the chaotic nature of our planet is a simple and unavoidable fact, isn’t it time for us to develop systems of value and prioritisation which recognise rather than ignore the limits of uncertainty?

Our current systems of value derive from classical economics, which was developed in a time when natural resources could easily be considered as free goods and the planet as effectively infinite.

The fundamental tenets upon which classical economics is based, though venerable, remain at the heart of economic theory. They are no more right or really useful for helping our species navigate the physical world than they were when they emerged from the thinking of Adam Smith, Jean-Baptiste Say, David Ricardo, John Stuart Mill or the other pioneers and thinkers in this area (for a simple exploration of the thinkers, theories and assumptions see this overview). The difference is that now we are running out of headroom for them being as wrong as they are.

Stated simplistically, the tenets of classical economics (and therefore the bedrock of our systems of value) are as follows:

  • Ceteris parabus – that everything else is equal.
  • That economic actors take action in the light of perfect market knowledge.
  • That economic actors behave rationally.

For a discussion of these, see this discussion of the main assumptions of economic theories.

Recognising the limits to our certainty starkly reveal (as if it isn’t already obvious) that none of the above assumptions actually hold true in any real sense. The market is merely a subset of the physical system it operates within. Since we do not fully comprehend the properties and interactions of the system, perfect market knowledge is impossible. In a market which is dependent upon inflows from functioning natural systems (resources, air, water etc.) then everything is transparently not equal – some things are much more equal than others.

Finally, if rationality were a characteristic of economic behaviour then market bubbles would be unknown, we would not price and prioritise the availability of dirty energy over that of a functioning climate and preserving the quality and availability of toilets would be more important than the availability of mobile phones.

The future’s so dark…..

“What’s the use of having developed a science well enough to make predictions, if all we’re willing to do is stand around and wait for them to come true?”

Sherwood Rowland

The utility of the Lyapunov exponent in the context of our planet’s future could be to provide us with a clear idea of where the threshold of predictability lies. To project our gaze towards this threshold. Towards when, over the coming decades, all bets will essentially be off and when any investment predicted to perform beyond that time threshold could be classed as junk.

Beyond an indication of the unpredictability threshold, it might be used as a metric to tell us how we are getting on in extending that threshold away from the present.

Other such approaches exist to indicate our proximity to system-wide tipping points. The most famous is the Doomsday Clock. This initiative of the Bulletin of Atomic Scientists has, since 1947, assembled a prediction of “how close we are to destroying our civilization with dangerous technologies of our own making”. It analyses not just the danger posed by nuclear weapons and atomic energy but also the growing threat of climate change and problematic technologies.

The clock is (in 2015) at three minutes to midnight: “because international leaders are failing to perform their most important duty—ensuring and preserving the health and vitality of human civilization.

This is serious stuff. It is not the apocalyptic predictions of depressives in darkened rooms, but the sober analyses of engaged and intelligent scientists.

In addition, organisations have constructed scenarios based upon the logical possibilities arising from current and likely future trends. Many of these are from reputable and sober organisations not given to wild speculation and doom mongering, such as the WBCSD, the World Economic Forum and the US Department of National Intelligence (DNI). The best scenarios in my opinion are those produced by the Global Scenario Group.

Not one of the scenarios noted above predict a smooth transition to a sustainable world without fundamental, deliberate, planned change being undertaken. Each one, to varying degrees, predicts significant disruption to economic and social conditions over the coming decades. The scale of such disruption is magnified by each year in which the scale of coming resource, water, climate, energy, consumption challenges and changing demographic power dynamics are effectively ignored by our economic and political systems.

Pretty much anyone who stares too long into the future we are currently on course for feels at least a frisson of fear. However, such analyses, of either our proximity to catastrophe or the diminishing predictability of the coming decades, seems to have no real effect upon our systems of value or production.

We just keep on valuing fossil fuel firms as though they were companies of the future rather than of the present-past and demanding consumption-based growth irrespective of physical limits.

 A Lyapunov torch…shining a light on uncertainty

 “We can only see a short distance ahead, but we can see plenty there that needs to be done.”

Alan Turing

If the future is too dark to see clearly we need to grow our ability to be comfortable with uncertainty, to design systems and processes that are capable of flexibility, multiple redundancy and of changing tack when the wind (or the climate) changes. Of course such capabilities are hardwired into nature already, it’s just that we seem to have decided we can transcend such approaches through the linear power of our rationality.

Taking the Lyapunov exponent as an inspiration, we need a torch to light the darkness ahead as much as a clock to tell us how late it has got.

We need to be able to consistently assess and expand the limits of our ability to predict and forecast and, beyond that, we perhaps also need a Lyapunov torch to reveal the reality of our chaordic system.

The survival of our species in uncertain times will likely be because we have used our outstanding capacity for flexibility in the face of adversity to adjust to this ever-present but newly rediscovered uncertainty. To reconfigure our systems of value, production and consumption in the light of the fact that nothing stays the same forever.

The simplified picture of the world that was developed which delivered the industrialisation of the last 200 years may well fall to pieces in the face of systemic disruption to our physical and economic certainties.

Whether our massively interdependent civilisations will fall down with it depends upon our ability to perceive the limits to our certainty, and to embrace the uncertainty that has always been there.

A Lyapunov torch might be a valuable tool to help us see beyond ourselves through the coming darkness of the future. To shine a light into the chaos that surrounds and nurtures our existence.


This concept at the heart of this piece was inspired by Alastair Reynolds’ stupendous novel On the Steel Breeze, which introduced me to the Lyapunov exponent in the first place. In addition, I would also like to give huge thanks to Lois Guthrie and Alain Ruche – who each kindly lent constructive ideas and input to navigate the tangle and chaos of my own making in early drafts of this piece as well as firm ideas on the navigation of complexity. Other thanks of course go to Iain M. Banks for a title to borrow.

Contact Terrafiniti


A planetisation of finance: The Earth as a going concern

“We have statesmen and politicians who profess to guide our destinies. Whither are they guiding our destinies?”

 H.G Wells

Valuing continuing existence

In recent decades considerable effort has been invested into describing and identifying the planet’s natural environment in terms that can be appreciated and integrated into the A place to do businesslanguage of economics and finance.

From the 1997 work of Robert Constanza et al onwards, the TEEB coalition and the Natural Capital Coalition, to the multi-capitals approaches to accounting and reporting that are forming part of efforts by organisations such as the SASB (Sustainability Accounting Standards Board) and the IIRC (International Integrated Reporting Council). Each is seeking to quantify and therefore consider the value of natural systems and their outputs in comparable financial terms.

I have written extensively on these approaches – mostly from the perspective of a critical friend rather than a wide-eyed fan, mostly because I feel that the conceptualisation of natural and social capital into economic terms will lead to a commodification of nature (a financialisation of the planet) unless there is radical change to the nature and purpose of global markets (the planetisation of finance).

In order to move beyond a critical analysis of the pros and cons of the multi-capitals approach it seems to me that there is a simpler pre-existing conceptual vehicle that could be adopted to provide a forward looking perspective on the value of the planet and its assets (natural, human, built and otherwise).

This is the concept of the going concern, an accounting approach to assessing the value of an enterprise based upon its potential for continuing existence. It is at the heart of our thought experiment to explore an IPO for the Earth, a finalist in the ICAEW/ Accounting for Sustainability Finance for the Future Awards 2014.

Opportunity costs…and benefits

Approaches to the valuation of currently under-represented/under-priced sources of capital (those which are not pure financial capital) predominantly focus upon two aspects of value, of capital stocks and capital flows. A simple metaphor for these two categories is that of a bank account – where the stock is the money in the account and the flow is the interest that is generated by the capital.

I would argue that there is a more significant area worthy of attention – to focus upon the going concern value that the existence of healthy stocks and flows gives rise to. This is not a value of the stock or flow itself – but is derived from the opportunities that become possible because of the existence of the stocks and flows.

When viewed through this lens, natural capital becomes most powerful not when it is used to give rise to an asset value (“what would we get if we sell it?”) calculation, but a going concern value “what does the asset’s continued existence and health allow us to do and how valuable is that?”.

This distinction between asset price and the value of the opportunities that arise from the asset, is partially reflected in the concept of stocks and flows – but the idea of a going concern value goes beyond a flow valuation. An example of these category differences for a company like Google would be as follows:

  • Asset value – the market capitalisation of the company – what it would fetch if it were sold.
  • Asset flow value – the yearly revenue of the company.
  • Going concern value – in addition to the categories above, the value of all the things that exist because Google provides and facilitates fertile ground for a huge range of activity.

Valuing our planet as a going concern

If the motivation behind approaches to valuing natural, social and other capitals is to highlight their value to the economy rather than leave them as either economic externalities or considered as effectively free goods, shouldn’t we take a more creative approach to using the accounting techniques that already exist?

Wouldn’t it be far more productive to focus upon the value of the planet as a going concern – as a place to do sustainable business over the long term?

Luckily, there is a well-established approach to doing just that. Accountants do it all the time, all we need to do is expand its scope and scale somewhat, from the going concern value of a specific entity to the going (common) concern of the planet as a whole.

In accountancy, the going concern principle is “the assumption that an entity will remain in business for the foreseeable future.” If it can be assumed that a business will remain viable over time, it can be considered to be valuable because of its capacity to sustain economic activity “the value of an entity that is assumed to be a going concern is higher than its breakup value, since a going concern can potentially continue to earn profits.” (Accounting Tools).

Going for how long?

While it may seem perverse to say so, in cold mechanistic terms the Earth’s value to humans lies in it providing us with the means to carry on doing stuff – not in either its inherent value (what we would pay to keep it) or in its value when broken up and traded (what we would get if we sold it).

The idea of planetary going concern value is too often ignored, partly because it asks us to project value into the future. In accounting terms, going concern assessments/judgments focus upon a consideration of “the foreseeable future” but this is only judged using one year forward time horizon (aligned to annual accounting and reporting).

At a planetary scale an annual going concern perspective wouldn’t get us very far, we need to be thinking about how to project the value of a going concern much further – say to 2050.

Such projections happen for smaller things happen all the time. The world is full of news stories and analysis saying “the market for X could be worth $10 billion by 2025” or “sales of Y set to grow by 200% over the next ten years”. All such projections assume a continuation of certain elements of business as usual (i.e. a reasonably similarly functioning market to today) and certain elements of change (e.g. increased disposable income, increased urbanisation etc.) that are interpreted from various trend analyses and forward predictions.

At the planetary scale a going concern calculation could be done for a range of scenarios, e.g. where no significant strategic response is made to evolve to meet the challenges of resources, consumption increase, reduction in soil fertility, increased pollution and climate uncertainty, as opposed to the planetary enterprise that would be possible if we made the transition to a sustainable economy fit for 9 billion interdependent citizens, all capable of making sovereign social and economic decisions.

It seems clear that the former would, by its nature, be less valuable than the latter.

Not under current management….

Accountants judge a going concern according to range of criteria that could easily be adapted to apply to the planet as a whole.

The Financial Reporting Council’s Statement of Auditing Standards on the issue in 1994 states that for financial audits seeking to judge whether an entity is a going concern, they should take the following into consideration:

  • “Whether the period to which the directors have paid particular attention in assessing going concern is reasonable in the entity ’s circumstances and in the light of the need for the directors to consider the ability of the entity to continue in operational existence for the foreseeable future;
  • The systems, or other means (formal or informal), for timely identification of warnings of future risks and uncertainties the entity might face;
  • Budget and/or forecast information (cash flow information in particular) produced by the entity;
  • Whether the key assumptions underlying the budgets and/or forecasts appear appropriate in the circumstances;
  • The sensitivity of budgets and/or forecasts to variable factors both within the control of the directors and outside their control
  • The existence, adequacy and terms of borrowing facilities, and supplier credit; and
  • The directors’ plans for resolving any matters giving rise to the concern (if any) about the appropriateness of the going concern basis. In particular, the auditors may need to consider whether the plans are realistic, whether there is a reasonable expectation that the plans are likely to resolve any problems foreseen and whether the directors are likely to put the plans into practice effectively.”

The text above is mildly summarised in the interests of space, the full text is available in paragraph 23 of this document.

If a planetary-scale auditor used the criteria noted above to assess the current de facto administration of the planet (our economic and market systems) would they judge the Earth to be a going concern, and if so, for how long?

Is the simple but frightening answer that the Earth is not capable of being considered as a going concern over the coming decades under current management?

Towards a planetisation of finance.

“The twelfth law is that such things as cannot be divided, be enjoyed in common…”

Thomas Hobbes’ 12th Law

The vast majority of approaches to bring under-priced or unpriced capitals within financial domains tend to do so by treating them as adjustments to existing prices (e.g. as carbon taxes etc.) rather than focussing upon and questioning the origination of their price in the first place.

Externalities should not be priced per se. However, price must reflect them (they shouldn’t really be externalities at all, just a fundamental aspect of costs that should be naturally recognised) if any approach to building a sustainable economy is to succeed.

The point of exploring the planetary going concern concept is to provide another driver towards the more innate consideration of sustainability as a defining aspect of financial success over the long term. The planet can only be considered as a going concern if such fundamental dependencies are integrated into the heart of decision making, not considered after the fact as most current approaches to “pricing externalities” currently require.

Without a fundamental reconsideration of what actually constitutes sustainable value, and an effort to align the origination of money (and price) against that, we are just building ever more rickety structures upon the already unsteady foundations of current economic and market processes.

Valuing the planet in economic terms runs the risk of financialising, commodifying and privatising nature. The task in front of us is not to tinker with the methods, but to reverse this concept, moving from the financialisation of the planet to the planetisation of finance.

Economics and markets based upon the value of the planet as a going concern might be a powerful and positive step towards aligning financial value with the physical facts of life on this planet – the only place we have (as yet) do to business.


My profuse thanks go to Jane Gleeson-White for her feedback and comments on a draft of this piece. Any errors of logic or hyperbole are unquestionably mine. Her book “Six Capitals: The revolution capitalism has to have – or can accountants save the planet?” is a must-read for anyone keen to explore how we might meaningfully value the priceless.


Contact TerrafinitiThis piece was also published by the Toronto Sustainability Speaker Series (TSSS) Innovation Hub on 3/06/15 and Sustainable Brands on 22/06/15.

Utility – the fundamental metric of social impact

“No man is an island, entire of itself; every man is a piece of the continent, a part of the main”

John Donne

Is the world a better place because we exist?

Socially useful business is neither a new idea nor one which is particularly at odds with the fundamental point of business – to sell things which people want or need.Interdepen Dance

However, demonstrating social utility has becoming rather a burning issue in recent years, spurred not just by the slow growing questioning of the current mode of international capitalism but also by the rather more pointed challenges to the purpose of whole sections of the economy raised by the recent financial crash.

The topic was the subject of this recent McKinsey piece on business and society and also an exploration session earlier this year, hosted by innovation organisation The Foundation, which asked the question “Socially useful business – Necessity or Nonsense?”

For my answer, I am definitely in the camp of Henry Mintzberg et al when they said “Corporations are economic entities, to be sure, but they are also social institutions that must justify their existence by their overall contribution to society” – perhaps as a direct riposte to the famous quote (attributed variously to Milton Friedman or Alfred P. Sloan) of “The business of business is business”.

Set against the regular mantras of companies justifying their existence by stating that ‘We pay lots of tax’, ‘We employ lots of people’ or ‘We sell stuff that people buy’  there is an increasing groundswell towards requiring a clearer and more detailed demonstration of why the existence of any given company is a demonstrably good thing.

Of course there is a world of difference between ‘We pay lots of tax’ and ‘we pay all the tax we ought to pay’!


The economics of utility

Utility (usefulness, serviceability) has long been a fundamental component of economics. It was at the heart of the neoclassical economic approaches initiated by Thorstein Veblen and before that in the functional utilitarianism (the maximum good for the maximum number) of Jeremy Bentham and John Stuart Mill. Under neoclassical theory, individuals maximise utility and firms maximise profit.

This distinction between utility and profit maximisation within conceptions of economics goes much further back in history to the origination of the very term economics itself. In “Politics”, written in the 4th Century BC, Aristotle discussed two dimensions of activity which are at the heart of today’s perspectives on economics, capitalism and the tensions between common and private good.

Aristotle drew a clear distinction between household management (oikonomia – where the word economics originates) and wealth creation (chrematistica – from the term chrema – a ‘thing’ of which money and wealth is a specific meaning).

Aristotle describes the difference and relationships between the two (in Part IX): “the art of wealth-getting which consists in household management, on the other hand, has a limit; the unlimited acquisition of wealth is not its business.”

Under this description, the process of delivering value creation is a requirement of household management, but not for its own sake “Hence men seek after a better notion of riches and of the art of getting wealth than the mere acquisition of coin, and they are right”.

In their book ‘For the Common GoodHerman Daly and John Cobb, Jr distinguish between the two concepts further:

“Oikonomia differs from chrematistics in three ways. First, it takes the long-run rather than the short-run view. Second, it considers costs and benefits to the whole community, not just to the parties to the transaction. Third, it focuses on concrete use value and the limited accumulation thereof, rather than on an abstract exchange value and its impetus towards unlimited accumulation…. For oikonomia, there is such a thing as enough. For chrematistics, more is always better… “


Social impact metrics – measuring the symptoms not the disease?

The extent to which the creation of social utility is at the heart of organisational purpose is frequently obscured, often by company activities seemingly intended to create social value.

All too often, the social impact conversation fails to focus upon core business. Instead becoming fixated upon what is done with profits, rather than upon the overall social utility of the business in the first place. Using Aristotle’s distinction – the social dimension of a businesses activities have been interpreted through a ‘wealth-getting’ rather than upon ‘household management’ lens – where the scope of the household is increasingly not only society but also the planet as a whole.

As a personal anecdote, I was once asked to present on climate change risks to the Senior Management and Chair of a large company with significant exposure to such threats, potentially affecting every aspect of its business model. After going through the varied dimensions of the challenges they faced to their business and perhaps, over the long term, their very existence, the Chair thanked me for my input and said that it was important to remember that their ability to invest in such “good works” as responding to climate change was dependent upon generating lots of nice surplus profit by doing business as usual.

This was possibly the most spectacular example of missing the point I had come across for a long time. Yet it is reflective of a key issue in terms of attitude to impact – impacts are those that arise from the existence of a company, not ones that arise from the philanthropic activities, social investment or charitable partnerships of a company undertaken with surplus profits.

Another wonderful example is that of major company that used its philanthropic funding to secure spaces for school playgrounds and playing fields and proudly, publicly, patted itself on the back. Set against this, the business also generated large profits by being a major player in the public-private-partnerships that gave rise to vast quantities of school land being sold off for housing and shopping developments. Does the former come close to addressing the impact of the latter?

Moving beyond such simplistic, not to say actively disingenuous approaches to demonstrating social benefit is a pressing need for 21st Century businesses. It is no longer enough for companies to say that their legitimacy comes from their existence or from the way in which they spend their spare change, they need to prove their worth to society now and in the future by exploring and demonstrating their fundamental social utility.


Getting to the core of social impact – beyond charity and investment

There is a fast growing range of tools and approaches for measuring social impact, yet the majority of such approaches are designed for charities, not-for profits and impact investors. This means that most attention is paid to spending money in a way that is socially beneficial, not upon the source of the money in the first place.

Going back to the root and purpose of companies and their profits is required.

This is where initiatives such as Shared Value fit in. Moving beyond the tired old narrative of distributing pennies to the poor outside the mansion gates, Shared Value (conceived by Michael Porter and Mark Kramer), is an approach to indicating the intent for and actualisation of economic activity which spreads its benefits to all actors in a transaction, not just some.

B Corps (Benefit Corporations) also seek to demonstrate innate social benefit rather than the after-the-fact conscience-salving that has characterised much corporate philanthropy. B Corp categorises its process as a certification scheme for business, like Fair Trade labels are for products.

B Corp status can only be achieved through processes of assessment of purpose, activity and impact. There are now more than 1,000 Certified B Corps from 33 countries and over 60 industries around the world.


Exploring social utility

Below the level of the structured and detailed approaches of Shared Value and B Corps there is a fundamental and simple question about the social utility of an enterprise: “Is the world a better place because we exist?

Organisations can further examine their social utility in detail by exploring the answers to the following questions:

  1. Which of your businesses’ activities provide utility to society (beyond shareholders)?
  2. To how much of (global) society do you provide utility?
  3. To what extent does utility provide a wider benefit to people other than direct beneficiaries?
  4. How can you prove the extent and equity of sharing?
  5. To how much of (global) society do you wish to provide utility?
  6. For how long?
  7. Will your current business model support that wish or prevent it?


An issue of scale

Questions of scale and scope of social utility are critical. For instance, you could make an argument that Hedge Funds are fantastically socially useful for the property market in the West of London, for high-end restaurants and for Lamborghini dealerships as well as providing market liquidity – but would this pass a notional social utility test?

In order to find out, you would have to martial opposing thoughts on the extent to which Hedge Funds also contribute to market hysteria and instability, undermine the strategic purpose of markets, accelerate short termism and contribute towards rising social inequity.

How could these bundles of opposing things be set against each other in order to achieve an understanding of net impact? It is worse than comparing apples and pears, it is more like apples and concrete!


Towards common self-interest

 “We are all dependent on one another, every soul of us on earth.”

George Bernard Shaw

Defining and delivering true social utility without getting lost in complex and misleading net-impact calculations requires a more fundamental perspective and approach to assessing the purpose of enterprise in the first place.

The concept of ‘common self-interest’ may provide a solution; the idea that in a massively interdependent world respecting and balancing interrelationships should be a defining theme and design criteria for activity – at the heart of company purpose and activity.

Common self-interest can be expressed as follows (after Arthur C. Clarke), that ‘At scale and over sufficiently large periods of time, private interest should be indistinguishable from common interest’.

The alignment of common and self-interest in the context of a company can be explored by considering the following criteria:

  • Interdependency – how reliant are we upon others to conduct our business?
  • Inter-subsidy – how is our quality of life subsidised by other people’s quality of life?
  • Freedom of choice and opportunity – does our freedom of choice and opportunities depend upon other people lacking their own?
  • Diversity and resilience – how do our activities contribute to the capacity and strength of the societies we sell to and depend upon to survive and thrive?

A company seeking to balance self and common interest would naturally need to align its business models and social relationships with the dependencies that represent sources of potential vulnerability and risk to individuals and society over time. A company seeking to enhance its utility would naturally therefore:

  • Preserve and enhance natural capital and ecosystem services.
  • Focus on the sustainable use of scarce resources.
  • Prioritise the use of abundant and renewable resources.
  • Recognise social interdependence, prioritising personal and societal wellbeing.

Following this approach is of course, merely harnessing the existing hard-wired drivers of capitalism to a longer term perspective, reinforcing the truth that we all have to live on the same planet and depend up each other for our mutual wellbeing.

A focus upon social utility – to assess and demonstrate the contribution that a company makes to the strength, diversity and wellbeing of society as a whole – is a defining characteristic of the companies that will thrive and shape the 21st century.

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This post was republished by 2Degrees on 30/04/15 and Toronto Sustainability Speaker Series (TSSS) Innovation Hub on 29/04/15

I agree 10 per cent – the principle of minimum consensus

 “We build too many walls and not enough bridges.”

Isaac Newton

I agree 100%

How many times can we honestly say that we really agree one hundred percent with someone else on an issue? It is certainly not unknown, however it can be quite rare.The Consensual World

Often this is because finding points of disagreement with other people is one of the ways that we establish legitimacy and expertise in addition to our sense of self.

Put simply, whilst we might almost totally agree with someone on an issue, we can also be motivated to find and highlight the nuances of where and how our understanding (unrecognised genius) and clear thinking provides us with a more accurate, pragmatic or relevant analysis.

The private intent of this behaviour is pretty clear – it allows us to feel good about ourselves and superior to others as an aspect of our contribution. However, the net-public-outcome of such activities can arrest the chance of progress. By highlighting and focussing upon minor, inconsequential points of detail, it can undermine the possibility of consensus and action on really important stuff.

Turning to the murky little backwater of the world that is sustainability, the practice of arguing the nuance of everything is rather aggravating and perverse. For instance, you get collections of people who all fundamentally agree that business as currently configured is unsustainable, that capitalism’s systems of value need to change and that humanity needs to respond rapidly, innovatively and creatively in order to build an equitable, resilient and sustainable world. However despite this they will also argue endlessly over why the points they make in the service of these aims are somehow superior, more appropriate, more intelligent or based upon more years in service of a better world than their correspondent’s.

This is of course ridiculous and won’t get any of us anywhere.

As I have noted in another post, the levels of consensus required by people of definable groups can vary. An article in Psychological Science in November 2013 “Liberals aren’t like the rest, or so they think” noted that that progressives (perhaps most likely to be sustainability advocates) tend towards considering themselves distinct or different from others with similar views (they overstate this difference). While conservatives (perhaps more likely to be distrustful of sustainability), tend towards considering themselves as in greater alignment with those holding similar views.


What levels of consensus do we need to work together?

A potential approach by which to reduce the time we spend disagreeing over things that are far less important than the things we agree upon is to consider the degree of consensus that is required in a given situation. To ask, ‘What do we really need to agree upon in order to work together?

By working together I mean a variety of things. At its most basic level that we are willing to act with a collaborative and constructive intent in face-to-face and online discussions. At higher levels it means joint enterprise, mutual dependence and partnership for the common good.

The levels of desired consensus for collective action can be explored by asking other questions about working together:

  • Do we want to work together?
  • What is the additive purpose?
  • What are the benefits?
  • What do we need to agree on?
  • (and conversely) What can we disagree upon?

Given that answers to the questions above result in the potential of joint work, the following questions further refine the levels of consensus which might be needed:

  • Do we have shared understanding of our focus and intent?
  • Are there assumptions being made that are not agreed upon?
  • Which elements are good enough?
  • Which parts are not good enough and must be revised?
  • What must I share because the joint enterprise will collapse without it?
  • What should I keep quiet about because to voice it would be letting perfect be the enemy of good?
  • What is a break point beyond which I am unable to constructively contribute?
  • When is the time to stop talking and do something because we agree enough already?

Minimum and maximum consensus

The unspoken default position in many sustainability discussions is “can’t you see how clever I am?” Not a good starting point for shared action.

If we really want to make a positive contribution to a sustainable future we need to get beyond such blatant ego-polishing and figure out just what levels of consensus are required.

There are many definitions of consensus in the world (Wikipedia’s page on the issue lists a large number). They range in practice from it being defined as a need to disagree on almost nothing in order to do anything together, to the practical approaches deployed by institutions such as the International Organization for Standardization (ISO), which defines consensus as:

General agreement, characterized by the absence of sustained opposition to substantial issues by any important part of the concerned interests”.

Put simply (and learned from hard personal experience) the levels of resource and persistence a party can contribute to an ISO process (and many others) has a significant impact upon the chances of that party being considered as ‘important’ and the more likely the final agreement reached is to reflect that party’s views.

The levels of required consensus concept is not a new one. For instance it was explored in the questions and answers proposed by the great moral philosophers John Locke and John Stuart Mill while considering the limits of liberty in relation to the rights and responsibilities of both the individual and the state.

A directly applicable description of the principle to the challenge of sustainable change was articulated by the author, academic and politician Michael Ignatieff. He defined minimalism as an outlook capable of accommodating the fact that “people from different cultures may continue to disagree about what is good, but nevertheless agree about what is insufferably, unarguably wrong.” (Quoted in the Yale Journal of International Law paper “The Minimum Core of Economic and Social Rights: A Concept in Search of Content”).

The role of consensus in change is a complex one. Across human history change has frequently taken place at the behest or whim of those individuals with the opportunity and ability (power) to make decisions regardless of the views of, and consequences for, others. Change via dictatorship or tyranny is not known for prioritising consensus.

For those of us lucky enough to live in democratic countries some form of consensus, or at the least the ability to exercise or indicate our views, is at the heart of our concepts of freedom.

Similarly, the majority of us interested in contributing to a sustainable and equitable world innately believe that consensus is a fundamental component of achieving that change – you cannot have an equitable world where only certain voices are heard.

Seeking minimum consensus

“Truth suffers from too much analysis.”

Frank Herbert

If we are capable of endlessly arguing about essentially irrelevant details on topics we fundamentally agree upon, wouldn’t it be logical to stop seeking total agreement?

If constantly aspiring for total consensus on every aspect of existence is fruitless, we need to move from asking:

Why doesn’t anyone recognise that my analysis of the world is better than yours”, to “How much consensus do we actually need to create something together?

Shouldn’t we therefore tend towards desiring a minimum level of consensus?


Minimum consensus in practice

These challenges are discussed, explored and overcome in sustainability as elsewhere. The existence and success of truly participatory multi-stakeholder initiatives (MSIs) are a testament to that (this Oxfam blog by May Miller Dawkins has an interesting discussion on such initiatives from the perspective of stakeholders).

Each successful multi-stakeholder process started with the development of the appropriate level of consensus. Such a level doesn’t preclude disagreement in total, it’s just that everyone agrees to abide by the level of consensus required for achieving a shared goal. This means they might disagree on many things but that the disagreement is not bigger than the wider purpose of their joint endeavour.

An example (there are many other good examples out there) of minimum consensus in practice can be found in MSIs such as the programmes facilitated by IDH, the Dutch Sustainable Trade Initiative.

Focussed around sustainability and supply issues in key global commodity chains, the initiatives bring together organisations involved in (as participants and stakeholders) the production, supply and sales of that commodity. For instance the IDH Cocoa initiative involves a number of companies which actively compete for market share and NGOs that may be critical of business. However they agree that without significant changes to the sustainability and resilience of the supply chain all of their interests will suffer. The levels of consensus sought by such an initiative are significant but essentially low – participants agree upon a relatively few points of fundamental and unarguable fact.

Can’t we all just get along?

Of course, griping about the levels of pointless argument in on-line and real life contexts is hardly a new or earth-shattering thing to do. Many initiatives and websites don’t really exist to be drivers of collective, collaborative knowledge but as portals for self-promotion and intellectual self-aggrandisement (and few of us are truly innocent of at least a little of each).

Nevertheless, the motive behind this post is a positive one. If we are to achieve a sustainable and equitable world we need to work together – there is no discussion to be had on that point.

Finding the fundamental points of shared human experience and aspiration is key. It is clear that at the level of globally shared values, humans show a striking degree of agreement on what they aspire to for themselves and their children. A glance at the World Values Survey provides ample testament to that.

Developing and applying the principle of minimum consensus might be one way to do this that we could all agree on – if only a little!


My huge thanks to Alain Ruche for both making me aware of this concept and inspiring me to write it.


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This post was republished by Sustainable Brands on 30/03/2015

Show me the money! Sustainability and financial outperformance

“The Analytical Engine has no pretensions whatever to originate anything. Its province is to assist us in making available what we are already acquainted with.”

Ada Lovelace

At the leading edge of sustainability best practice some leading companies are already developing meaningful pathways towards truly sustainable business models. Financial questionsFor the followers, there is perhaps a perceptible acceptance that sustainability is an important aspect of good corporate management. However, there still remains a need to demonstrate, within the current modes of capitalism, how sustainability impacts upon financial performance.

In our discussions with companies and sustainability practitioners within them, we often find that establishing of a clear business case for sustainability – to show that more sustainable business practice can be measured and valued in the context of financial performance – is still required.

The world as it is and the world how it might be

Debates within the relatively small world of sustainability tend to have two broad areas of focus: conversations about how to achieve sustainability within the world (and system) that we have, and discussions of how sustainability might be achieved if the world were different.

As with any group of humans talking about stuff, a focus upon one of the categories above often gets derailed by participants asking why the other is being ignored. Participants in discussions about the business case for sustainability in the current economic reality are frequently told that there is simply so much wrong with capitalism as it is that ‘sustainable business’ is not only an impossibility but also an offensive term (random capitalisation OFTEN also GETS used).

Conversely, utopian discussions about how the world might be and how we might get there are similarly beset by people saying that we must recognise the realities of where we are and not depart into sustainable flights of fancy.

Such is the stuff of life on the internets.

Of course there is room and necessity for each type of effort. We won’t achieve a very different, sustainable world, without dreaming big, and we also won’t establish the importance of sustainable business without proving its worth in the system we have now.

While I am happy to rail against capitalism as currently configured I also see the need to try to map a pathway from here to there…which will in part involve using the finance and economics that we have now to create the case for sustainable change. Given this, there remains a consistent need to be able to demonstrate how sustainability makes business and financial sense now.

This post presents a quick overview of some of the available sources of evidence on how the financial performance of companies which are relatively more sustainable (i.e. less bad) compares with that of companies which are either ignorant of or in ‘opposition’ to sustainability.

Sustainability and share price performance

The focus of this information is primarily upon listed companies as indicated by their share performance as this is where the best data are freely available. That is not to say that privately held companies or those with other ownership structures will not have stories to tell, just that they are often more difficult to find.

A few disclaimers

Before supplying what I believe is a pretty decent set of evidence for sustainability aligning with good financial performance, it is important to establish some health warnings:

  • Sustainability is of course not a per se an indicator of business success – there are many ‘sustainability rejecters’ that sail-on doing well in terms of share price and revenue.
  • Disentangling cause and effect relationships is always difficult – therefore it is just as difficult to tell which ‘bit’ of share price performance is due to which policy, decision or happening. While it’s possible to find examples of share price dips in relation to identifiable, time-specific incidents (e.g. Tesco’s recent travails, BP and the Macondo oil spill), in other cases there may be a wide range of aspects influencing share performance (some having nothing to do with sustainability issues).
  • Sustainability can be seen as part of ‘good business’ – the cause-effect issues tend to resolve by seeing CSR/sustainability as a bundle of aspects of what could be called ‘good management’ – and arguing that prudent risk analysis, strategic awareness and responsiveness to stakeholders (investors and others) simply makes good sense!
  • Markets aren’t always very logical – hysteria and sub-second trading can easily swamp other trends (for more on the problems with current markets see here).
  • Statistics are never indicators of absolute truth and can be discussed endlessly – the examples listed below are not exhaustive and there will be other perspectives (and findings) out there!

Nevertheless, the following information presents a range of evidence as to why sustainability makes good financial sense.

Overall evidence

In my previous life at WWF-UK, we produced a range of materials on the business case for sustainability, both by presenting data on the alignments between sustainability and financial performance and by seeking to identify the mainstream investment tools and metrics which were capable of appreciating sustainability as a value driver.

A simple expression of this work can be seen here.

At a larger and more comprehensive scale, a good ‘survey of surveys’ on the evidence for alignment between more sustainable companies and positive financial performance was published a few years ago by the Natural Capital Institute – Sustainability Pays.

Reduced Volatility

Simple outperformance is not the only valuable metric for sustainability in financial terms. Share price volatility is also a critical aspect. While experts with bigger brains than mine might well argue it is simplistic to suggest that higher share price volatility is always a bad thing, it is generally thought that higher volatility is associated with greater risk, and that at a market level, it may also indicate a higher likelihood of a declining market.

There does seem to be a reasonable amount of evidence that good CSR and sustainability has a contribution to make to reduce share price volatility (which is almost as ‘valuable’ as pure outperformance). This research piece from the Network for Business Sustainability explores the relationships and the evidence.

In addition, this 2012 Deutsche Bank document presents an overview of sustainability and its impact upon long term investments.

The 2013 Business in the Community (BITC) and Legal & General report ‘Conscious Capital: Bridging the gap between business and investors’ noted the contribution of sustainability to reduced volatility.

Additionally, this 2011 White Paper from the global asset management company RCM “Sustainability: opportunity or opportunity cost?” focused upon the performance of portfolios with integrated ESG (Environmental, Social and Governance) criteria.

Financial Outperformance

Beyond the evidence for reduced volatility, some research records the pure financial outperformance of the shares of more ‘responsible’ or ‘sustainable companies’ – that such companies (or the indexes they are featured in such as FTSE4Good or DJSI) have better average share performance than those that are not prioritising sustainability.

This report from RobecoSAM focusses upon enhanced Alpha* (a relative measure of performance on a risk-adjusted basis) from more strategic sustainability.

While here is Goldman Sachs saying the same thing (warning – it is long!), and also an academic thesis finding that SRI portfolios outperform the market.

The recent report from Arabesque Partners and the Smith School of Enterprise and the Environment ‘From Stockholder to Stakeholder: How Sustainability can Drive Financial Outperformance’ presents a comprehensive overview of the relationships between different elements of sustainability with financial metrics and also focuses upon share price performance.

Finally, here is a very good overview on links, correlation, strengths and weaknesses.

Further exploration

There are many sources of useful information on this topic but one of the very best places to explore sustainability and financial performance is SRI-Connect. Run by the sustainable investment pioneer Mike Tyrrell, SRI-Connect is free to join and not afraid to ask hard questions about the effectiveness of current sustainable investment while also presenting empirical evidence and expert insight into the progress that it has been made to date.

The UN PRI (Principles for Responsible Investment) initiative presents a wealth of evidence and thinking of sustainability and finance, including this publication which presents approaches for communicating the business value of sustainability. In addition, the 2006 UN PRI document, titled (like this post) ‘Show Me The Money‘, provides a comprehensive overview of the links between ESG issues and company value.


As noted above, this piece is neither comprehensive nor the last word on the subject of sustainability and financial performance.

As is often said, correlation is not causation and it is important not to state that there is always a ‘killer case’ for financial outperformance by more sustainable companies.

Nevertheless, the available evidence is both persuasive and meaningful. Certainly there is more than enough evidence out there to persuade the potentially persuadable that sustainability is good for business right now. Until we have an economy that prioritises sustainability innately, we must use such evidence to take us another step towards a brighter future.

* Alpha is a measure of performance on a risk-adjusted basis. It takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund’s alpha. This definition was sourced from Investopedia.
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This post was also published by 2Degrees on 13/02/15 and by Sustainable Brands on 16/02/2015.