Reporting Standard-Setter Network Embraces Sustainability Thresholds & Allocations
Launch of Impact Management Platform Website Represents a Watershed Moment
By Bill Baue & Ralph Thurm
Today, standard setters — after two decades of increasingly dropping the ball on integrating sustainability thresholds & allocations at the core of sustainability reporting standards and guidelines — have finally picked up the ball; we welcome them all now running with it!
At its launch today, the Impact Management Platform (IMP) unveiled a new website with a standalone page devoted to Thresholds and Allocations that explains just how to apply these necessary elements of sustainability measurement, management, and reporting. Thresholds & allocations — the key concepts first suggested in reporting frameworks in 2002 in the Sustainability Context Principle that calls for assessing “the performance of the organisation in the context of the limits and demands placed on economic, environmental, or social resources at a macro-level” — are also embedded throughout IMP’s “wheel” of actions organizations can take to measure, manage and report their sustainability impacts (especially when it comes to the “Assess Impact” stage). And last but certainly not least, thresholds & allocations are the primary focus of the excellent video animation on the About page of the IMP website.
IMP’s embrace of thresholds & allocations represents a watershed, hope-filled moment, precisely because the Platform consists of the very players who have, until now, been diluting the rigor of sustainability reporting:
- Earlier this month, the IFRS launched its International Sustainability Standards Board (ISSB) that fails to embrace the core tenets of sustainability, such as thresholds & allocations as well as inside-out impact and risk assessment. (The ISSB consists of the Value Reporting Foundation, itself a merger of the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB), as well as the Climate Disclosure Standards Board (CDSB).)
- Earlier this year, the Global Sustainability Standards Board (GSSB) released the GRI Universal Standards that eviscerated the Sustainability Context Principle by removing the requirement to assess performance — a hallmark of the Principle for the past two decades — despite pleas to retain this vital performance standard.
These stances of ISSB and GSSB both fly in the face of guidance on the IMP Thresholds & Allocations landing page, creating confusion for sustainability standard users, who are now confronted with two legitimate options:
- Demand that IMP members now walk their talk by aligning their own standards with the IMP guidance on thresholds & allocations; or
- Apply the IMP thresholds & allocations guidance, and ignore the elements of the various sustainability standards that contradict this consensus guidance.
The IMP Thresholds & Allocations landing page walks users through a step-by-step explanation of thresholds first, then allocations. The explanation uses the Doughnut visualization conceived by Kate Raworth to introduce the concepts of ecological ceiling and social foundation thresholds.
To add allocations to the mix, the IMP Landing Page uses the example of greenhouse gas emissions, where the global threshold must be “downscaled” to the organizational level via “fair and just allocations.” The Available Thresholds section of the Thresholds & Allocations Landing Page links to external resources for further guidance, including the Science Based Targets Network and the United Nations Research Institute for Social Development (UNRISD) Sustainable Development Performance Indicators.
The Landing Page also uses the example of Living Wages to illustrate an instance where allocations are not required, as paying sufficient wages is not a shared burden, but one that falls exclusively on the employer.
The Impact Management Platform, which for the last several years has operated as the Impact Management Project that facilitated collaboration amongst the Structured Network of 16 organizations linked to standard setting, adopted this approach to thresholds & allocations in part due to its participation in the piloting of a set of thresholds-based (and transformation-based) sustainability indicators in a project hosted by the United Nations Research Institute for Social Development (UNRISD) and managed by r3.0 (with support from our Advocation Partner, the Center for Sustainable Organizations.)
IMP’s embrace of thresholds & allocations represents a huge step in the right direction for the future of sustainability reporting that warrants applause. The path is now paved for sustainability reporting standard setters (see list below) to advance authentic, rigorous sustainability reporting in ways that reflect real-world impacts.
