Who here’s heard of the GRI? Excellent, that’s nearly all of you. Those with your hands down need to go off and do a little homework .
Ah not so many of you, but then again that’s not too surprising. Both are US based sustainability institutes: Ceres looks at it from the business and investment point of view while the Tellus Institute is more involved in policy formulation and research. Together they founded GRI, although it is now a fully independent organisation.
Last question: who’s heard of GISR, the Global Institute for Sustainability Ratings?
Oooh, one, two .. a few more hands. Not that many though. Well, to be fair it was only unveiled a couple of months ago. Like GRI it’s involved in the sustainability standards game, and like GRI it’s being established by Ceres and the Tellus Institute.
So, what you might ask, is the point of GISR? What does it do which GRI doesn’t do? Apart from give us yet another acronym to get confused by, that is.
R is for Ratings
The answer lies in that “R” at the end. GRI aficionados will immediately jump to the conclusion it means “reporting”. No it doesn’t. It means “ratings”.
Ratings are those things which tell us how good something is or not. Such as “How do you rate that latest Robbie Williams album?” “He’s got one out???” etc.
Think Standard & Poor’s and you’re pretty well there. S&P produce credit reports which represent its opinion on “the general creditworthiness of an obligor, or the creditworthiness of an obligor with respect to a particular debt security or other financial obligation”.
GISR would sort of do the same thing for sustainability, except GISR would produce the framework not the rating, just as GRI produce the standard but not the report.
What, only sustainability?
Actually, no. Despite its name and the obvious inclination of Ceres and the Tellus Institute, GISR is not intended to be solely sustainability based. Yes its point of origin is to produce a “ratings framework for assessing the sustainability performance of companies”, however “over time, GISR intends to gradually expand its coverage to include other asset classes.”
Asset classes. So, stocks, bonds and money equivalents at the very least. And quite possibly others too, such as real estate and commodities.
A ratings framework which could be used to rank extractive companies against FMCG retails on sustainability? Oooh .. shiny.
The creation of a new language for business
To quote once more from GISR’s material:
The recent financial-sector meltdown that spawned a deep global recession, plus disasters like the (Deepwater Horizon) BP oil spill … are sobering examples of the severe economic and human consequences of a failure to identify unsustainable corporate practices. Currently proposed SEC rules to revamp financial ratings agencies … attest to the shortcomings in the current business model for financial raters.
This reminds me of a recent tweet by Umair Haque: “Understand: nations that endlessly bicker over “markets” vs “govs” doom themselves. The challenge is reinventing, not choosing between”, which itself echoes a recent blog post by Jeremy Williams on Make Wealth History: “Beyond left and right: new categories please” and a wonderful train of thought by Marta Gazzola called “The Hammer and The Screwdriver“.
Who are these people? Umair Haque is best known for his book “The New Capitalist Manifesto” and writing for Harvard Business Review; Jeremy Williams is a sustainability blogger and campaigner from Luton; and Marta Gazzola is an Italian economist working on various EU-aligned projects in Brussels.
And, one way or another, they and many more are saying that the current way of thinking about how we conduct business is broken. So broken that our current approaches and tools cannot fix it. We cannot convene a wise council of elders because they’re too close to the trees to see it.
We need new definitions, a new language, and new tools.
Will GISR give us those? Perhaps it will, you know, perhaps it will.
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