The sustainability agenda of both companies and their stakeholders runs the risk of drowning due to a lack of focus.

Recently the Financial Times reported on the need to standardize sustainability criteria for investors (German managers want common ESG standards Augsust 9, 2010). Research had found that the market for sustainability funds is too opaque and that there are no common standards about what makes an investment sustainable. Investors can basically define their own guidelines. This way sustainability funds may become PR vehicles more than anything else.

 

In a way one may think that corporations don’t mind this confusion too much. If investors make their own guidelines, corporations are likely to make it into some kind of sustainable fund. However, poor quality of sustainable investing standards will hurt all companies that are pursuing a material sustainability agenda. The fact that BP, a recent Dow Jones Sustainability sector leader, caused the biggest oil spill of this decade, is bad news for all companies in the index. The quality of the DJSI assessment process can rightly be debated. How sustainable are you, if you have made it into the index? For all those CEO’s whose bonuses are now linked to the position of their company in this index, such debate is undesirable (I will touch upon the “wisdom” of linking these bonuses to the DJS Index in a next blog).

 

The point is that many of those indices, sustainability investors and corporations alike have not focused on those sustainability aspects that are truly material to them. Moreover, other stakeholders try push their individual agendas into the domain of companies. Notably financial institutions have to deal with issues presented by a wide range of NGO’s that all try to sell their case as a vital one to deal with. The sustainability notion that “less is more” should be lived more vigorously by all involved. Dare to communicate that you can not and will not try to be everything for everybody, and act accordingly. It is time to be more sustainable, which requires less sustainabull!