Building a Holistic View: Sustainability Standards as a Panorama and Portrait

As sustainability and sustainability-related standards continue to evolve, it’s imperative that we remain focused of the overarching progress that’s needed. This is crucial as sustainability-related disclosures are increasingly adopted by governments globally — and, with that, there’s a chance that we only focus on what is measured, rather than focusing on the larger systemic issues that require our attention and necessitate the development of sustainability standards. 

Today, sustainability-related standards are in portrait mode. By calling a robust selection of elements into reporting, the details of reporting becomes more vivid, while the foreground or the contextualizing, systemic elements become a bit blurred. In service of enhancing the rigor of reporting, we risk losing focus on what is at play in the larger picture. 

As an example, this month, the US Securities and Exchange Commission (SEC) adopted new rules mandating companies disclose Scope 1 and 2 greenhouse gas (GHG) emissions — as they have been deemed material to investors. Notably, Scope 1 and 2 GHG emissions fall into the realm of environmental impacts within the direct control of a company; however, GHG emissions resulting from their value chain and the suppliers they select (Scope 3) were omitted from this rule. While this new regulation represents a vital step for corporate sustainability-related disclosures by providing a deeper look into Scope 1 and 2, it fails to detail the full picture of a company’s climate related impacts. 

While getting granular is a vital step to tracking and reporting on a company’s impacts, sustainability standards must broaden to a panoramic view — ensuring the details that companies dive into are contextualized within the larger systemic picture. Building system-level standards and regulations involves addressing broader societal, environmental, and economic goals beyond individual company actions. 

A few ways to build this, based on SIRI research conducted by the team I’m on, working with a bellwether organization within the United Nations, include: 

• Integration of Externalities: Standards and regulation should internalize externalities, ensuring that companies account for the full costs and benefits of their operations — including their value chains. This involves valuing natural capital, social capital and human capital, alongside financial capital, to provide a more panoramic picture of value creation and risk. 
• Policy and Regulatory Alignment: Alignment with international law, national policies and regulatory frameworks are essential to addressing systemic challenges. This involves advocating for policy reforms that support the United Nations Sustainable Development Goals (SDGs). 
• Collaborative Action: Addressing complex sustainability challenges requires a collaborative mindset — and actions that bridge the gaps between and within industries, governments, investors, civil society organizations and other stakeholders. This involves fostering partnerships and multi-stakeholder initiatives (e.g., PRI and Climate Action 100) to catalyze collective efforts towards achieving shared sustainability objectives. In order to ensure global goals are met, we must have a systemic approach to measuring our collective progress toward them. 

These methods are possible and, I believe, on the distant horizon. As my team continues to map the sustainability standard landscape, we are set to deliver our full report in the next month. As we look ahead to this, we are thinking through a panoramic view — one that builds on the portrait of sustainability we have today.