Tesla I I explored some early stage limitations of ESG rating methodologies. In short, they focus almost exclusively on an organisation’s approach to managing ESG risk. They don’t discriminate too much on how they manage these risks and ratings tend to overlook innovation at the Sustainability intersect. I’ve since learnt from my friend Phil Barttram that many raters’ methodologies include a lot more data than are formally requested, scraped by AI from all over the place. I think my key point still stands which is that these methodologies – and their disclosure expectations – are never going to be about resilience.

As practitioners and activists, we need a more practical view. We want to know whether performance and practices are actually leading to resilience – and preferably we want a methodology that doesn’t rely on machines.

I think two factors can help us gauge whether Sustainability practices are building resilience: how wide their range of practice is and how deep they go in doing it.

For range of practice, most organisations undertake practices that:

• protect current value in relation to ESG risks;
• create new value in response to ESG opportunities; and
• enable value by collaborating on systemic challenges.

As companies become more familiar at their intersect, they expand their capabilities to encompass all three. (Explore your company’s sustainability capability spectrum with The Waves.)

For depth of practice, we’d ask how they are actually going about these things, particularly in the face of disturbance.

Think of old-growth forest (or old-growth kelp forests closer to home and pictured above). Old-growth doesn’t mean that the kelp fronds are old. It implies structural complexity, creating microhabitats that increase diversity, abundance and potential resilience. Old-growth ecosystems are not impervious to disturbance – their mature characteristics evolve precisely because of their exposure to disturbance. Consider SAB’s local sourcing ability in relation to emerging black farmers and SMMEs. It may not have delivered on its potential, but localising the supply chain was beset with challenges and inconvenience. Most sustainability innovations encounter these realities as they are scaled. Inherent in that process is learning, network development and new kinds of feedback. According to scientists (and sustainability practitioners), it’s the journey that matters.

We deepen our maturity (and practice) along the way. It’s like this in nature and, from what I have seen, it’s like this in organisations.

If I were to sketch this in a 2×2, it might look something like this. All the companies roughly plotted in the matrix have been formally recognised as global leaders in sustainability or directly related fields.

I’m not proposing this as a model or a tool. In fact, I don’t think it has much value beyond making the (obvious) point that companies take different paths to enhance their resilience.

• The Leading edge have been in the game for a decade or more. Whether coming through as Leapfrogs (e.g. Interface) or Slow ‘n Steadies (e.g. Unilever), they’ve worked a few things out along the way. Often driven by an executive with a breakthrough experience, they expanded their range of practice early on and are now pushing these – along with Sustainability decision-making – deep into their organisations. An early barrier may have been finding partners that shared their perspective, but that is no longer the case.
• Slow ‘n steadies have been at it for a shorter time and are motivated to move forward in every area. The idea of being seen as slow is not acceptable to them. Focused on many areas simultaneously, coordinators are thinly spread. They are still clarifying their practices, recent appointees are still territorial and are not inclined to distribute  decision-making powers too widely. They need to consolidate to move forwards but, having appointed many experts, are tussling over the right focus.
• Leapfrogs tend to get ahead on one big thing and it generally did not emanate from the sustainability team. They found an early wormhole into profit-enabled social/environmental impact and leapfrogged stakeholder pressure to manage ESG risk. They’ve tied up the best partners for their particular innovation areas and road-tested the tech. Most of them weren’t concerned about Sustainability or ESG risk – until investors started rating them last year. Managing ESG risks (a possible gap) requires less energy than bringing innovation to market (which they’ve done already), so they are positioned well. They skirted Sustainability basics though and may need some humility to build a wider base.
• Most companies are Warming up. Struggling to see the wood for the trees, they’re still trying to make sense of their intersect with society and nature. The path seems arduous and they are highly vulnerable to Sustainability sales agents along the way.

Is your organisation progressing on this matrix? What other possible paths might we map out along the way?

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Banner photo, cropped from Kieran Wood at Unsplash, shows the kelp forest as habitat for sea otters amongst many other species.