Certified Sustainability Zones and Why We Need Them

By Mark McElroy

Mark W. McElroy, Ph.D. is the founding director of the Center for Sustainable Organizations, a 501(c)(3) in Vermont dedicated to reform in the ways organizations and other human social systems measure, manage and report their performance. Dr. McElroy is otherwise best known for his development of Context-Based Sustainability and his co-development of the MultiCapital Scorecard, a context-based triple bottom line accounting method. He can be reached at mmcelroy@vermontel.net.

Jan 30, 2019 | Governance, Society | 0 comments

Municipalities, like all other human social systems (i.e., families, organizations, nations, etc.) are heavily dependent upon their ability to learn and adapt in order to survive. And this, in turn, means they must be capable of understanding their own impacts in the world in order to take effective action. We sense and respond, then sense and respond; and then sense and respond yet again, endlessly.

Here it should be clear that if our ability to sense is in some way impaired, our responses will be compromised accordingly, and so will our well-being. If the traffic signal facing us at the intersection is really red and yet we think it is green, the action we take in response will very likely put us at risk.

What, then, can we say about the quality and reliability of the tools, methods, and metrics we use to assess the sustainability performance of municipalities and other human social systems? Could it be that the general decline or worsening of human impacts in the world – of our environmental impacts, in particular – are attributable in part to imperfections in our measurement systems? The answer, I’m afraid, is a resounding yes.

This should matter to us greatly because until or unless a municipality is using performance accounting tools that are fit for purpose, the only way it can ever achieve sustainability is by accident!

 

A Dashboard Theory of Sustainability

Let’s give the theory that is unfolding here a name. Let’s call it the Dashboard Theory of Sustainability, or DTS. The DTS is simply this: that in order to be sustainable, a human social system, or municipality, must be using a performance accounting system that measures and reports its social, economic, and environmental performance in ways that are “context-based.”

In the world of corporate sustainability management – where most of the latest, cutting-edge developments in the field of sustainability accounting occur – Context-Based Sustainability (CBS) is regarded as state of the art. In order for performance accounting to be meaningful, CBS calls for all impacts to be assessed relative to corresponding thresholds and limits in the world and not in ways that are otherwise disconnected from them.

Take water use, for example. According to CBS, the sustainability of water use must be assessed by comparing water consumption with the limits of water supplies. It is not enough to simply say water consumption has decreased this year and that it is therefore “more sustainable” this year than last. Indeed, what if it were unsustainable in both years; and how could we possibly know when we rarely, if ever, measure and report water use relative to available renewable supplies?

Now take the same thought and apply it to impacts on water quality, the climate system (greenhouse gas emissions), solid wastes, air quality (toxic and particulate air emissions), biodiversity, ocean acidification and other ecological areas of impact. Background thresholds and limits are no less relevant in each of these areas, and yet most of what passes for mainstream measurement and reporting systematically ignores them. Instead, we measure and report impacts in purely incremental terms – more of this, less of that – but almost never with ecological thresholds and limits in mind.

But that’s the just the environmental side of the story. What about the social and economic sides?

The same principles apply on those fronts as well, except that the logic of sustainability performance reverses. Instead of operating within our ecological means in order to be sustainable, societies must create the social and economic means to live. Schools, healthcare programs, and municipal services, that is, must be produced and maintained at required levels in order to ensure human well-being. For social and environmental impacts, thresholds and limits apply, but they are lower ones, not upper ones.

Not only do planners and other administrators in municipalities therefore need access to information that reports their communities’ impacts on social, economic, and environmental resources, such impacts must be measured and reported relative to sustainability thresholds and limits. Are we living within our ecological means or not? Are we keeping pace with our community’s demands for social and economic services or not?

All of this is just another way of asking whether or not the dashboards communities rely on are context-based as they would have to be in order to be meaningful. Incremental measures are grossly inadequate, and yet I do not think it too much of a stretch to say that incremental measurement, and no more, is exactly what most communities are using in order to measure and report their performance. Energy intensity and other measures of eco-efficiency are no exception. They, too, are merely incremental.

 

Certified Sustainability Zones

In order to encourage municipalities and other political domains to reform the prevailing ways in which they assess their own performance, we created the Certified Sustainability Zone (CSZ) program. As explained on our website, a CSZ is a town, city or other political domain that has been formally recognized for its commitment to sustainability and its inhabitants’ use of cutting-edge, triple-bottom-line accounting tools – context-based tools, in particular. 

This is where, and the manner in which, the Dashboard Theory of Sustainability comes specifically into play. According to the DTS, sustainability in the conduct of human affairs cannot occur until or unless context-based performance accounting tools are in use. That said, context-based performance accounting is admittedly a necessary, but insufficient condition for sustainability. Other factors, too, will come into play, such as background social, economic and environmental conditions, political trends, and more.

Before turning to the particulars of the CSZ concept and how a municipality can take advantage of it, a brief word or two on the complementary concept of Certified Benefit Corporations (or B Corps) would be in order. Indeed, to a large extent, the CSZ concept was inspired by the concept of B Corps and the Public Benefit Corporation legislation that is now on the books in at least 33 states in the U.S. and many other countries in the world. Three thoughts come to mind:

  • First is that B Corp certifications and Benefit Corporation statutes are by design aimed at organizations, not municipalities or other human social systems at larger scales. As such, they have their effects one organization at a time. This is helpful, of course, but can it ever be possible to have the kind of global impact so many of us seek at that pace? Why not have something similar in place, I ask, which whole communities could take advantage of?
  • Next, B Corps, strictly speaking, are “benefit” oriented (as the B suggests), not “sustainability” oriented, although the two constructs can obviously overlap and often do. Still, neither the B Corp certification nor the Benefit Corporation statutes that were inspired by it call for sustainability measurement and reporting – as the CSZ does – as a condition for certification or statutory compliance.
  • And third, neither the B Corp certification process nor the Benefit Corporation statutes now in place are as singularly focused on measurement and reporting, much less context-based measurement and reporting, in the way the CSZ program is. To the extent that measurement and reporting figures into certification and compliance for B Corps at all, it is only as one of several factors that enter into the picture. For the CSZ program, however, measurement and reporting is the sole basis for certification – context-based measurement and reporting, that is.

That all said, I hasten to add that the CSZ program is heavily supportive of Certified B Corps and Benefit Corporations and that the latter have a significant role to play as members and inhabitants of Certified Sustainability Zones. Indeed, Certified B Corps, Benefit Corporations and Certified Sustainability Zones are nothing but complementary to one another.

 

Qualifying as a CSZ

A town, municipality or other political domain can qualify for certification as a CSZ by demonstrating its commitment to sustainability in two highly innovative ways:

  • First it must agree to embark upon a pathway of reform in terms of how businesses and other organizations within its jurisdiction go about the process of measuring, managing and reporting their performance. Instead of relying only on conventional financial reporting, organizations within the CSZ (or at least some of them) must agree to embrace triple bottom line performance accounting, a solution for which we (the Center for Sustainable Organizations, or CSO) provide as part of the program.
  • Second, the CSZ must also agree to participate in the preparation of an annual CSZ-wide report that measures and reports the triple bottom line performance of the political domain in sustainability (i.e., non-GDP) terms. Here again, a methodology for doing so is provided by CSO.

The controlling government of a CSZ, too, is expected to participate in all aspects of the program and to assign a staff member to serve in a role as CSZ Program Administrator (part-time). Controlling governments are also expected to provide a degree of annual funding based on the size of their populations, as are individual organizations that choose to participate in the program, although at a much lower expense.

As the owner and administrator of the CSZ program, the Center for Sustainable Organizations (CSO), in turn, agrees to provide a number of supporting services, including:

  • Coordination, training and technical support to all CSZ parties involved.
  • All triple-bottom-line accounting methodologies.
  • Local and national marketing of CSZs.

 

CSZs Just Make Sense

More than anything else, the core theory of change in the CSZ program is that in order to be sustainable, human societies and settlements must at least be measuring and managing their impacts in ways that take social, economic and environmental thresholds and limits in the world explicitly into account. How else can they know where they stand?  People can’t respond to information they don’t have – this is the Dashboard Theory of Sustainability.

Notwithstanding the practical truth of this, policymakers, municipal planners and managers, and sustainability advocates may still find themselves in positions of having to justify a CSZ, or sustainability more broadly construed. To them and their constituents, I offer the following:

  • Achieving and maintaining sustainability in the conduct of human affairs is vitally important for human well-being – economic conditions, in particular, are important for this, we know, but so too are social and environmental factors. We need all three.
  • Sustainability in municipalities is good for business, even if it costs more to achieve and maintain. Sustainability immunizes businesses from risk!
  • Unsustainability in municipalities is bad for business, both in terms of costs and human well-being. Unsustainability increases risks to businesses!
  • The purpose of government is to serve the needs of people in all respects. Municipal accounting systems that focus too heavily on economics alone are therefore arguably unfit for purpose.

As always, the devil is in the details, but we encourage municipal planners and other administrators to get in touch with us to learn more about the CSZ concept, process, cost, etc. For more information, contact me, Mark W. McElroy, Executive Director, CSO by email at mmcelroy@vermontel.net. Or visit our website here: www.sustainabilityzone.org.

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