Professor King and I have an on going conversation about how to measure the sustainability of a company. On a theoretical basis I hold that just like pregnancy, a company can not be partly sustainable and due to the interlinked nature of the global economy, no company can be sustainable until all companies are sustainable. However Professor King has persuaded me to his point of view that on a practical level this is not helpful. So we have been looking at a practical way of measuring the sustainability of a company.
The following is my attempt to capture the conversations we have had recently. In the following I use the term “for practical purposes” which is a term that is often used to describe approximations to theoretical equations used by engineers. For more on this term see below.
The sustainable company is one which, along with its supply chain, carries out its operations without causing damage to the environment. The company not causing damage to the environment by its own operations can be measured for practical purposes by the company not using more than an allotted quantity of critical resources and not emitting into the environment more than an allotted quantity of critical pollutants. The company’s supply chain not causing damage to the environment can similarly be measured by all first and second level suppliers and a weighted average of at least 85% (on the basis of value added) of third and further level suppliers not using more than their allotted quantity of critical resources and not emitting into their environment more that their allotted quantity of critical pollutants.
Critical resources and critical pollutants will be assessed on the basis of the best science available by a group of top scientists as follows:
On a regular basis that group of resources who’s estimated reserves to use is 50 years or less are to be listed as critical. The period of 50 years is to be reviewed and increased as time progresses.
The annual quantity of each resource that can be used will also be established. In general the allowable rate of use of each resource will be reduced annually so that no resource is ever completely exhausted.
Also on a regular basis that group of pollutants that is judged to be most critical will be listed and the capacity of the environment to absorb each pollutant will be estimated. The list will be expanded as time goes by.
The global allowable rate of use of each resource, and emission of each pollutant, will be allocated to each country, or group of countries, on a per capita basis. Within each country, or group of countries, a process will be established to allocate the allowable rate of use of each resource, and capacity to absorb pollutants, to individual companies that use that resource / emit that pollutant.
For All Practical Purposes
A mathematician and an engineer are posed this problem:
You are standing 10 metres away from a very desirable member of the opposite sex. You may step towards them, but each step you take may be no more that half the remaining distance between you and them. What do you do, and why?
The mathematician says I’ll do nothing because I’ll never get there.
The engineer says I’ll start walking immediately because I’ll soon be close enough for all practical purposes.
The sum of the sequence 1/2 + 1/4 + 1/8 + 1/16 + … is always less than 1. The mathematician is correct, they will never get there. However the engineer is also correct because after getting within say 1 metre when they have to start reducing their step size and then taking another 6 steps they will be within 17mm (less than 1 inch) of their target, close enough for all practical purposes.
Joint Programme Director, CSEM-BMP