In the field of sustainability today, we have many grass-roots sustainable development programmes making an impact. For example, remotely sensing forest risk, community landscape stewardship, technology for safer workplaces, energy efficiency, design-for-environment, agricultural labour standards, social mobility projects and more.

Yet, in business, many ‘sustainability’ approaches are not working as intended, with a particular focus on disclosure frameworks and standards. The goal of ‘sustainability in business’ is to try alternative ways of operating to resolve serious negative impacts, prevent further damage, and foster new ways of thinking, governing, assessing risk and reporting, while using core principles and respected, international, multi-stakeholder frameworks.

What has emerged is something of a ‘sustainability industrial complex’, involving a proliferation of eco-labels (460 at last count), certification systems, codes, platforms, standards, reporting frameworks (some 125) and guidelines.

These include the hotly debated European sustainability reporting and disclosure regulations. The noble intention of all of these is to enable comparable, decision-useful information for investors and others so that capital flows to certain projects and programmes.

But the goals of ‘sustainability in business’ and the ‘sustainability industrial complex’ appear to be misaligned. One swamps the other, creating frustration and excessive cost. Further, corporations and their advisers seem to be boxing themselves into a certain way of thinking, like being trapped in Plato’s Cave. Well, is it time to step outside it all and reassess?

Perhaps boards should apply a more ruthless, risk-based approach to setting priority topics in a strategy. Should they separate ESG (compliance/finance/customer procurement criteria) from the business strategy of sustainability? Another idea is to expand the worldview beyond tick-box approaches and a laundry lists of topics.

Boards and executives could: ask themselves how to apply core principles more ruthlessly, while remaining compliant; to check they are not captured by some dogmatic way of thinking; ask if they are applying critical or even disruptive approaches to business strategy, or merely ticking boxes.

Sustainability trade-offs

The concept of sustainable development has three legs, like a stool: environmental, social and economic. Crucially, they are interconnected—go big on one, and there will likely be trade-offs in the others. Commentators argue that ‘net zero’ policies, or unconscious bias training, are examples with trade-offs. Any function in a business can—and sometimes must—embrace the concept, particularly in a 24-hour digitised world in which companies can be instantly called to account for externalities relating to any of the ‘legs’ (for example, pollution, child labour, deforestation).

The complexity and interconnectedness create waves of uncertainty. Generally, company boards are pretty good at addressing uncertainties such as market volatility, geopolitics, digitisation, cybersecurity, artificial intelligence and weather variability.

Yet sustainability is a curious animal, suggesting ‘certainty’ when, in fact, reality is more nuanced and complicated. For example, by definition, science is never settled. Consequently, one should avoid claims of consensus on complex phenomena, or worse, claims of crisis, which then trigger substantive economic policy, when there is so much uncertainty in play, when unintended consequences hit, and there is a complete absence of the precautionary principle!

Data, modelling and double-counting uncertainties affect metrics and life-cycle assessments. Diversity training can generate prejudice. Child labour is hard to measure. Committee members’ ethics differ. Materiality assessment scoring methods vary among corporate advisory firms. And now AI could threaten innovative thought.

The business model

Sustainability/responsible business programmes must add value: save cost, retain customers, improve liquidity and help access finance, for instance.

So what is needed now is a grown-up conversation about how the business model connects to actual and potential impacts (negative and positive). Boards must not trapped into labyrinthine disclosure framework spreadsheets handed down by unelected and unaccountable standard-setters.

Let’s explore the ‘wider risk’ events, the consequences, the risk controls, and the impacts near and far on human flourishing or environmental integrity. Tighter, risk-based approaches could liberate funds and avoid excess opportunity costs. New projects might then proceed on global issues such as education, agricultural R&D for cheaper food, e-procurement systems, nutrition, chronic disease, newborns’ health, malaria, highly skilled migration, land tenure security, judicial court systems, recycling infrastructure…

The sustainability industrial complex should help to manage and communicate performance—not be the ‘tail wagging the dog’. I look forward to positive, creative and even disruptive conversations as we apply the core principles in our projects. We could even avoid using the “S” word.

Alex Nichols is the founder of sustainable development consultancy Alex Nichols Consulting.