I first heard the words “meeting under the mango tree” as a euphemism for having a predictable, easy to access process for enabling community members to raise issues and concerns in a safe and familiar place. There is no fixed agenda and no one-size-fits-all for these exchanges. With one company we set up drop-in centres in each local village with a designated community officer in attendance everyday. Another made it known that a company person would be available “under the mango tree” for two hours every market day. I am hoping this blog will achieve something similar – the regular, free and open sharing of ideas and experiences. Time will tell how well it works out.
Researching for a presentation to a class of Masters’ students at Curtin Uni on the subject of the triple-bottom-line unsurprisingly took me to the work of the author of the phrase – John Elkington. In one of his papers he makes the point that, “…the advent of the TBL became a branching point and it was followed in rapid succession by Double and Quadruple Bottom Lines, Social Return on Investment (SROI), Full Cost Accounting, ESG (a framework focusing investors and financial analysts on Environmental, Social and Governance factors), Net Positive, Shared Value, Integrated Reporting, Impact Investment and, most recently, BCG’s Total Societal Impact framework.” Time now to have a look at some of them and see what they are about, starting with the triple-bottom-line itself.
- Triple-bottom-line: Borrowing from the same article – Elkington says “…In the simple terms the triple-bottom-line agenda aims to focus corporations not just on the economic value that they add, but also on the environmental and social value that they add – or destroy”. He also makes the point that “…the TBL wasn’t designed to be just an accounting tool. It was supposed to provoke deeper thinking about capitalism and its future, but many early adopters understood the concept as a balancing act, adopting a trade-off mentality.” As a last word, in a 2018 HBR publication, Elkington suggested it might be time for “strategic recall to do some fine tuning”.
- Social Return on Investment (SROI): SROI is a framework for measuring and accounting for a broader concept of value than can be captured in financial terms. It does this by incorporating social, environmental and economic costs and benefits. The Wikipedia entry for SROI references the standardized method used by Social Value UK as “a consistent quantitative approach to understanding and managing the impacts of a project, business, organisation, fund or policy. It accounts for stakeholders' views of impact and puts financial 'proxy' values on all those impacts identified by stakeholders which do not typically have market values”.
- Borrowing from a 2018 Forbes Magazine article “the story of ESG investing began in January 2004 when former UN Secretary General Kofi Annan wrote to over 50 CEOs of major financial institutions, inviting them to participate in a joint initiative under the auspices of the UN Global Compact and with the support of the International Finance Corporation (IFC) and the Swiss Government. The goal of the initiative was to find ways to integrate ESG into capital markets. A year later this initiative produced a report entitled “Who Cares Wins,” with Ivo Knoepfel as the author. The report made the case that embedding environmental, social and governance factors in capital markets makes good business sense and leads to more sustainable markets and better outcomes for societies. At the same time UNEP/Fi produced the so-called “Freshfield Report” which showed that ESG issues are relevant for financial valuation. These two reports formed the backbone for the launch of the Principles for Responsible Investment (PRI) at the New York Stock Exchange in 2006 and the launch of the Sustainable Stock Exchange Initiative (SSEI) the following year."
- Borrowing again, this time from a 2016 BSR article: “Net positive is a way of doing business that puts back more into society, the environment, and the global economy than it takes out.” However, as the piece goes on to say “There is no commonly accepted approach to measure and report on net positive claims. As a result, there is a high risk that companies will invest in redundant, fragmented, or misaligned approaches to net positive that waste money, confuse stakeholders, and create conditions ripe for greenwashing.” The Net Positive Project aims counter this risk by developing a credible net positive approach, supported by a common set of principles and best practices.
- Shared Value, is a term coined by Porter and Kramer in 2011. The role of business, according to this model, is to create value for its shareholders but in such a way that it also creates value for society, manifesting itself as a win-win proposition. While this is very appealing to the private sector, it does have its critics , one of the concerns being that “it ignores the tensions between social and economic goals...” and does not provide guidance for the many situations where social and economic outcomes are not be aligned for all stakeholders.
- Impact Investment: The Global Impact Investing Network describes Impact investments as “ investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending on investors' strategic goals. The growing impact investment market provides capital to address the world’s most pressing challenges in sectors such as sustainable agriculture, renewable energy, conservation, microfinance, and affordable and accessible basic services including housing, healthcare, and education.”
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