Statistics Netherlands, Global Reporting Initiative, and The Sustainability Consortium have released a report examining alignment of their (respective) national, company, and product level sustainable development (SD) metrics.
The report argues that continued alignment is undoubtedly desirable and makes several suggestions for achieving harmonisation between national, company and product SD metrics. It predicts that general movement towards alignment will accelerate in the short term, in line with the new post2015 SD process, but recognises that completion of a truly shared SD metric must be viewed as a long term goal as it inevitably requires “…a great deal of cooperation between the many stakeholders involved.”
The authors highlight two sides to the huge enthusiasm for measuring SD through metrics like Sustainable Development Indicators (SDIs), and both Economic Composite and Non-economic Composite Indicators. On the one hand, the excitement behind these measures has pushed the cause of SD forward, with a strengthening consensus amongst stakeholders on its importance to business and society and with activities like corporate responsibility reporting moving “…from a minority undertaking to a mainstream activity.” But at the same time, this momentum has led to a proliferation of incompatible metrics, with almost as many SDI or Economic Composite sets as there are reporters. Confusion reigns when it comes extracting a shared definition of SD from the various frameworks adopted by these individual actors.
Central to the report is the importance of recognising the direct trade-off between ‘materiality’ and ‘comparability’ in a given measurement framework. Materiality – the idea that all SD relevant material should be included in the measurement framework – is in direct conflict with the potential for comparability between the framework’s targets; be they nations, companies or products.
“The more differentiation there is in the measurement system, the less comparable things become. At the national level, [international] comparability is very important, while at the product and company level, the differentiation is crucial.”
Products/companies are much more heterogeneous than nations, meaning that for them there is a wider variety of SD relevant material to track and there will always be some indicators not relevant to a given product/company. The diversity of companies/products and similarity of nations implies core methodological differences for each framework and represents a limit on the possibility for, and advisability of, complete harmonisation.
To conclude, the report argues that alignment and harmonisation between framework levels is crucial, but there is a limit. Identical systems will not be practical as there are “…perfectly legitimate reasons why some indicators are relevant (material) at one level and not at the other.” The process will be a long term one and institutional sponsors, as well as the large network of partners available through the MWM project, must be utilised. Momentum is currently behind the post2015 SD process, and this must be harnessed to make the successive small steps toward unified SD metrics.