integral thinking and true materiality: how to catalyze a regenerative and inclusive economy

Integral Thinking and True Materiality: How to Catalyze a Regenerative and Inclusive Economy

Ralph ThurmA|HEAD|ahead@aheadahead1

© 2016 Ralph Thurm

A systemicanalysisoftoday’ssustainabilityfailure– 4startingpoints

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• Current reporting isn’t ‘future-fit’ – Sustainability Reporting is still nascent and only produces ‘ESG Progress Reporting’ – the question about ‘sustainable companies’ is unanswered mainly due to neglect of context;

• Sustainability rankings/ratings/indices are unable to name ‘sustainable companies’, they deliver ‘best-in-class-of-the-less-bad’; more than 580 products deliver incomparable outcomes; the SRI/ESG ratings & rankings market is too small given min. 21 trillion AUM;

• Current sustainability management is still not part of the genes and DNA (with a few exceptions). Most corporate leaders are still mentally absent. 90% of global multinationals are not engaged or actively disengaged;

• Our current economic system boundaries drive unsustainable behavior, create perverse incentives and fail to serve all humans.

• In sum: Corporate sustainability strategies are optimized within existing economic system boundaries. ‘There is no sustainability without a link to economic system boundary changes’.

© 2015 A|HEAD|ahead

Thebuildingblocksofagreen&inclusiveeconomy:3globalpublicgoods,governedbynot-for-profits,offerasystemicapproach

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- pre-competitive platform (500+ strong)- Organized 3 global conferences (2013/14/15)- Initiated Blueprint Projects combining reporting,

accounting, data, new business models into one seamless work ecosystem

- International Steering Board- Issued GISR Principles- Initiated CORE Strategy- Administrates the GISR HUB- Launches CORE Labs- Offers trainings- Works on accreditation scheme

- Convening big shift discussion from ‘ability to sustain’ to ‘ability to thrive’

- Organizes Masterclasses all overthe world

- Book: A Leader’s Guide to ThriveAbility- Develops ThriveAbility Index

© 2015 A|HEAD|ahead

Threemain‘shifts’inapproachingaThriveAbility transformation

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INNOVATION

© 2016 Ralph Thurm

Nearing‘Purpose’–>Ambition/Contribution/Positioning–>Strategy

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Source: A Leader’s Guide to ThriveAbility

© 2016 Ralph Thurm

Why‘activatingpurpose’forthrivingoftenfails• Sustainability contextgapjustone

ofthreegaps

• Contextof‘acitvating purpose’

needssuitable linksbetween

macro-urgenciesandmicro-

deliveries

• ‘Integratedthinking’stillneglects

‘integral’purpose discussion,

makinga‘contribution’ tosociety

andtheplanet(IIRC&SDGsjust

interimsteps, reportingstandards

curesymptoms)

• Materialitydiscussion therefore

neglectsaspectsof‘cumulated’

impactswhendiscussed asasilo

issue.

• Successful organizationstackleall

threegapssimultaneously.

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Source: A Leader’s Guide to ThriveAbility

© 2016 Ralph Thurm

Disclosurerelatedtoa‘purpose’perspective- ExamplesContextualization:

• Whatisour‘WorldView’?

• Whereareweonthecontinuum?

• Dowecuresymptomsorarewehaving

impactbytacklingrootcauses?

LeadershipAttitude:

• Dowehaveasocio-cultural leadership

gap?Andatransformationgap?

• Whatroledohierarchyandfunctions

playinforour‘thriving’ organization?

• Inhowfardoesleadership addressthe

economicsystemmalfunctioning?

Ambition Level:

• Howdoweaddressgrowthand

differentiatesustainable from

unsustainable?

• Areallemployees involved?

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© 2016 Ralph Thurm

Amulti-capitalsuccess‘litmustest’– CrownEstate• TheAccountinglitmus testquestion:

‘Havewebuiltfinancial capitalon

thebackofanyothercapital?’

• Companies onthecontinuumfrom

sustainable tonetpositive togross

positivewillneedaproperproof

• TheIIRCdifferentiatesbetween

inputcapitalsandoutcomeson

outputcapitals(6capitals)

• TheCrownEstatelooksat6capitals,

aswellasinternalandexternal

‘depreciation’ and‘appreciation’ of

eachindividual capital

• Monetization,interrelationbetween

capitalsandaccumulationinap/l

andbalancesheetdifficult

• NeedforCONVENTIONS

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© 2016 Ralph Thurm

Disclosurerelatedtoa‘multi-capital’successperspective- examplesMeasurement:

• Isthereaninventory ofimpacts/ stresstest

regardingthecapitals?

• Areexternaleffectsproperlyaddressed and

assessed fromacapitalsperspective?

• Doesthecompanycollectdataonallthreegaps

(sustainability/transformation/leader-ship gap)?

Target-setting:

• Are‘science-based-goals’ assessed andcontext

usedforconnectingto‘socialfloors’ und

‘environmental ceilings’

• Howarelong-termtargetsdefined andthenused

tobackcast mid- andshort-termtargets?

Incentives:

• Doestheorganizationincentivizesustainable

performance?Howdoes itpunish non-

sustainable performance?

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© 2016 Ralph Thurm

Theimpactofgovernanceinscalingimpactsfor‘thriving’• ESG‘Push’ hasn’tresolved scalability

issues, fewCorporateGovernanceCodes

addresssustainability aspotentiallyTHE

coreissue ofsurvival

• NewCorporateGovernanceCodes like

KingIVaskfor‘ethicalmanagement’

• AneedtomovefromESGPushto‘GSE

Pull’ needsawareandtrainedboardsto

understand‘integralgovernance’that

needsresponsibility beyond the

corporatelens

• Economicsystemboundary change,the

ideaofprivateandpublic governanceof

agreen&inclusive economy,needs

strongadvocation fromthecorporate

sectortocreategloballevelplaying

fields

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© 2016 Ralph Thurm

Disclosurerelatedto‘scalability’perspective- examplesEducation:

• Are‘WorldView’, ambitionlevelandtherelated

(ONE)strategyaddressedtoallemployees through

educationandtraining?

• Aretherejointeducationalprogramsdeveloped for

thewholevaluecycle?

Collaboration:

• Inhowfaristhecompanyengagedbeyond its

associations andinterestlobbying?

• Doemployees havetimeforsocietalengagement

tohelpfind long-termsolutions?

Advocation:

• Isleadership activelyengagedinthepromotionofa

green&inclusive economyandthenecessary

changesinboundary setting,e.g.internalizationof

externalcosts,changestowardsamoresustainable

taxsystem, creatingoflevelplayingfields in

internationalrelations?10

© 2016 Ralph Thurm

Outcomesofthenewimpetus

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An Invitation to Participate in the

Reporting 3.0 PlatformBlueprint ProjectsOn Reporting, Accounting, Data & New Business Models

Catalyzing Future-Fit Reporting for a Regenerative & Inclusive Economy

September 2016

About The Reporting 3.0 Platform

• Global Public Good: multi-stakeholder community generating knowledge to design future-fit reporting in a neutral, pre-competitive space

• Collaborative: co-creating solutions that spur deeper transformation than organizations can achieve individually within institutional constraints

• Positive Mavericks: constructive engagers who transcend incremental progress to align reporting practices with the necessary ambition to achieve a regenerative & inclusive economy

• Blueprinting the Future: After 3+ years of community-building through curated convenings, the Blueprint Projects shift Reporting 3.0 into action mode through Working Groups to identify, design and spur the needed changes at the systems levels.

A Growing Global Network since 2013

2016-2017 Blueprint Project Structure…

Month 1-2: Recruitment and Research

Month 3: Draft 1 & Convetit Thinktank

Month 4: First WG Meeting

Month 5-6: Draft 2

Month 7: Second WG Meeting

Month 8: Draft 3 (pre-final)

Month 9: Public Comment Period

Month 10: Finalization of Blueprint

Working Group Expectations…

• Positive mavericks committed to advancing the reporting field beyond current best practice to the needed ambition to help achieve a regenerative & inclusive economy

• Contribute thought leadership, experience, feedback

• Participate in 1:1 interview, monthly conference calls, virtual dialogue, in-person meeting

• ~3-5 hours / month

Projected Blueprint Outcomes

• Recommendations for reporters, accountants, IT/data managers,new business model innovators & others for collaborative design of elements necessary for achieving regenerative

• Cross-fertilization of “positive maverick” thinking & “future-fit” actions to spur needed change

• Revolving process updates blueprintsyearly to keep innovation focus current

• Continued activation of purpose,success and scalability

Who is supporting Reporting 3.0?

• IIRC (<IR> Framework),• Shift (Human Rights Reporting), • WRI (Science-based Reporting), • A corporate leader in the retail sector, • Autodesk, • Cabot Creamery,• Crown Estate, • Swiss Government, • Chair, Group of Friends of Paragraph 47, • Wikirate, • Preventable Surprises, • Pivot Goals,• Sustainability Context Group, • EY

• PwC, • Stellenbosch University (South Africa),• Durham University (Australia), • Beijing University (China),• Boston College (US),• Tellus Institute (US), • Volans (UK), • Center for Sustainable Organizations (US),• the Governance & Accountability Institute (US), • Convetit (US), • UNEP Inquiry• Pax World Mutual Funds• BSD• …and many others have shown an interest

Robin EdmeSenior Advisor Responsible FinanceFrench Ministry of Ecology, Sustainable Development & Energy

Reporting 3.0 Steering Board

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Bill BaueCo-FounderConvetit, Sustainability Context Group

Claudine BlameyHead of Sustainability & StewardshipThe Crown Estate

Cornis Van Der LugtSenior Research Fellow Stellenbosch University Business School

Ralph ThurmManaging PartnerA|HEAD| ahead

Peter TeuscherManaging PartnerBSD Consulting

Stephen RussellSenior AssociateWorld Resource Institute

Sarah GreyMarkets DirectorInternational Integrated Reporting Council

Mairead KeigherAdvisorShift

Brendan LeblancPartner Climate Change & Sustainability ServicesEY

© 2016 Ralph Thurm21

CONTACT: Ralph A. ThurmKooigroet 6 | 1722KP Zuid-Scharwoude | The Netherlands

Cell: +31646001452 | Skype: ralphthurm | Email: [email protected]: www.aheadahead.wordpress.com

Linkedin: nl.linkedin.com/in/ralphthurm/ | Twitter: aheadahead1TEDx Talk: http://bit.ly/2d7N9Mk