r3.0 Public Comment Letter to I?SB: Nonsensical Definition / Definitional Cooptation and Sociopathic Materiality

  • Thresholds: first, they fail to integrate normative thresholds, which are definitional to sustainability;[iii] and
  • Outside-in / Inside-out: second, they focus only on effects of the external operating environment on the enterprise (ie outside-in), not the enterprise’s effects on its external operating environment (ie inside-out) .
  • “significant sustainability matters”: This term tells us absolutely nothing about what specific matters this might entail, and tells us absolutely nothing about the definition of sustainability being employed.
  • “important sustainability topics (environmental, social, governance — ESG)”: This formulation inaccurately (and dangerously) conflates sustainability with ESG, on two levels: first, ESG is a purely incrementalist doctrine, whereas sustainability is a normative doctrine,[v]predicated on respecting sustainability thresholds; second, ESG is solely concerned with the outside-in impacts of environmental, social and governance elements on the enterprise, and not at all with the inside-out impacts of the enterprise on the health of its external operating environment (in environmental, social, economic, and governance elements).
  • “effects of sustainability”: This formulation is particularly telling, as it conceives of sustainability as something that creates outside-in “effects” on an enterprise; the formulation elides that fact that enterprises are also the cause of sustainability — or unsustainability — in their external operating environments through inside-outimpacts.
  • In other words, I?SB inhabits not a “cause-and-effect” reality, but rather simply an “effects” reality, as if causes (if they originate from reporting enterprises) do not exist.
  • Sustainability-related financial disclosures: Disclosures about sustainability-related risks and opportunities that are useful to users of general purpose financial reporting when they assess an entity’s enterprise value, including information about its governance, strategy and risk management, and related metrics and targets.
  • Sustainability-related financial information: Information that gives insight into sustainability-related risks and opportunities that affect enterprise value, providing a sufficient basis for users of general purpose financial reporting to assess the resources and relationships on which an entity’s business model and strategy for sustaining and developing that model depend.
  • First, the pilot testing companies were able to implement essentially all of the indicators, demonstrating the feasibility of thresholds-based sustainability measurement and reporting;
  • Second, the pilot testing companies embraced a context-based approach to materiality.

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r3.0

r3.0

r3.0 is a pre-competitive & market-making non-profit delivering groundbreaking Blueprints, Transformation Journeys and Conferences for system value creation.