Back to basics (2): Globalization and sustainability

For quite some time I do start my presentations with a slide that shows the famous graph of the world population growth in developed and developing countries. "Oh, that one again ;-(" the audience might think, but honestly, do we really understand the impact of what's in front of us?

China - although still applying a one-child policy - will grow by another 150 million people by 2050 (another one of those "rebound effects": due to a higher life span a full generation of Chinese people will "mathematically not have died" between 1990 and 2050). India will see another 500 million Indians until 2050, more than the population of whole Europe today. 90% of all kids below 18 years now grow up in developing countries - NINETY PER CENT! The sheer size of these numbers should make us think what that means in terms of sustainable development. Also, what does that say about tomorrow's markets? Here’s my take on it:

What would happen if the countries that are integrated in world markets today fail to integrate developing countries into the world markets? For sure, waves of migration, war for resources, new epidemics and negative effects on climate change strategies would be some of the effects. Our Western (and emerging) societies will simply not be able to cope with the overwhelming brutality of these effects. So, as failure would be a disaster, there is simply no other way than to accept the challenges of globalization and its world market logic. But how does that link with sustainability?

Isn't sustainability just simply a synonym for a situation where everybody on this planet has the opportunity to participate in (globalized) world markets without being restricted by any rule that favours one person or place over another? The terms fairness and balance come to mind as well. And isn't sustainable "development" not just the broad highway in front of us, aligned by stable crash barriers (meaning globally accepted and globally applicable rules of behaviour that ensure fairness and balance, based on transparency and openness)? The question that remains though: how much time do we still have to continue walking barefooted on that highway? That is the picture that I always have in mind when I read the latest about WTO's never ending tragic soap "Nightmare on Doha Street". In that sense - for me - sustainable development is the blueprint for a successful implementation of globalization.

Anniversaries: ISO 14001 is 10

Stumbling across ISO 14001 certification figures a few days ago jogged my memory to the days when it was first released - I must admit that discovering 14001 was released 10 years ago this past June was a bit of shocker - time flies!

It was controversial back then. The standard had the backing of governments and many businesses were stongly incentivized to get on board with it. I remember when Ford and GM joined forces a year or two later and made it mandatory for any company providing products or services in their supply chain to become certified under ISO 14001.

But pushback came from companies and environmentalists who said that the standard was causing weaker performance - not stronger. Some companies in Japan, the US, and western Europe had already adhered to high levels of environmental management, and the ISO standard - built with wide global uptake in mind - actually lowered the bar instead of raising it. Of course, there were the to-be-expected complaints of cost and burden as well.

Some say that ISO 14000 has been a solution to many problems: unintentional trade barriers created by environmental standards; the inefficiency of command and control regulations; and the plethora of permits, inspections, regulations and standards faced by companies trading across international borders.

I think the standard has done much for environmental management overall - not the least by creating a standardized set of vocabulary, expectations, actions, and (10 years on) a worldwide infrastructure of practitioners that can help companies cope with their environmental risks.

But is it actually improving performance? Does anyone out there know of any studies or impact assessments of ISO 14000 certifications?

Back to basics (1): The value of transparency

Sometimes overwhelmed by so many different views, details, different priorities and cultural takes on sustainable development, I find it useful to really go back to the "heart of the matter", summarizing what we really need to achieve for a better future.

I'll start with an exercise that most of us go through at a certain moment of their career in GRI, trying to explain to others in not more than 60 seconds why GRI and sustainability reporting are so important. Here's my take on it:

"In today's globalized world transparency is absolutely fundamental to create trust, which is the basic ingredient to create partnerships (we already know that we will only be able to create sustainable change in partnerships!); only through partnerships continuous improvement will be possible, which finally is a necessary essential to create sustainable change. Accepting this logic simply means that without the right level and depth of transparency sustainable change will not be achieved.

Since we know that trust in most organizations is at an all-time low all over the world (open any newspaper on any day and just count how many articles you will find on this or somehow related topics), we need to work towards higher levels of transparency to recreate the necessary trust.

This is where using the GRI Framework can help. GRI facilitates the necessary dialog of all stakeholder groups from all over the world to define the aspects any organization should take into account while assessing how to close their own transparency gap. The problems we need to solve are global, so the format that structures the expected level of transparency to create sustainable change needs to be global as well. There is no other format than the GRI Framework that serves this purpose. So, why hesitate using it?"

We all need to decide if we can agree to this simple logic. Otherwise the other simple logic of W. Edwards Deming applies: "It is not necessary to change. Survival is not mandatory!"

ISO 14001 - on the menu in Asia

I was somewhat surprised to find out that International Organization for Standardization (ISO) does not officially track the number of certifications to its 14001 environmental management standard. All these years I have been jealous of ISO assuming that they can track certifications with ease due to the compliance oriented nature of their standard. We are have always struggled to track the users of the Sustainability Reporting Guidelines because they are a flexible framework - certifications are not required, nor are companies required to inform GRI (or anyone else) when they have issued a report based on the Guidelines.

Anyway, I stumbled across some data from the German Environment Agency (UBA) while surfing the web this evening that seems to be the closest thing we have to a tally of total certifications. They tracked just over 129,000 certifications worldwide by the start of 2007 - they claim this figure represents a rise of about 25% from the previous year. I took that as a good sign that ISO 14000 is still growing that strongly.

Organizations in Asian countries account for over 45% of certifications globally - with Japan and China in the number 1 and 2 spots respectively (approximately 20,000 certifications each), and South Korea, India, Taiwan, and Thailand all in the top 20.

The ususal suspects from western Europe can be found in the top 20 as well - Spain (11,000 certifications - good for #3 spot), Italy, Germany, UK, Sweden, France, and Switzerland. But possibly more interesting is the appearance of some new CEE nations rounding out the bottom of the table - Romania, Czech Republic, and Hungary make the top 20 for the first time with a combined certification total of nearly 5000.

The USA is 5th on the list with 8000 certifications, and Canada is 11th with nearly 2600. No African companies made the top 20, but the survey shows that South Africa has over 400 certifications to-date.

I wonder if reporting rates will or do follow ISO certification rates. Has anybody out there seen any correlation?

Frankfurt Motor Show: Environment on Parade

The International Motor Show or Internationale Automobil-Ausstellung (IAA) is the world's largest motor show and it opens today. IAA is held biennially in Frankfurt, Germany and is known in English as the Frankfurt Motor Show. It will attract at least 1 million visitors and will debut no fewer than 250 new passenger vehicle models.

I am no car junkie, so don't follow this closely but I did watch a segment on the morning news today previewing the models that visitors will be treated to when they arrive at the show this year. Clean, green, hybrid, electic, and other environmentally friendly prototypes will dominate the show apparently. I saw images of tiny space-age looking electric cars, and fancy luxury brands like Audi with the word HYBRID painted over the distinctive sleek bodywork.

Growing up not far from Detroit MI where the annual Auto Show dominates people's calendars, I remember it was all about being big and bad in those days! Large Hummer-type vehicles, trucks with industrial grade power being sold on the consumer market, and big heavy fuselages (I know that is an airplane term, but some of the cars were so large they looked larger than a small plane!).

Nice to see that the most anticipated new models this year are the enviro-friendly ones. They will have their place in the spotlight over the course of the next two weeks in Frankfurt - but the real road test will come when they hit the market. How will consumers vote?