Why Sustainability Reporting Is Revolutionary

The following was adapted from the acceptance speech given by Nike's Hannah Jones at the Ceres-ACCA North American Awards for Sustainability Reporting, where Nike won top honors for Best Sustainability Report.

We stand teetering between the old and the new. This next decade, we predict, will be the test of all of us. Not because of what might be, but because of what is.

We have long said that things we have taken for free will become the new gold – water, waste, carbon. Today as we speak, externalized costs are being forcibly internalized into cost structures, economies and incomes. The weather is not waiting to be regulated. We believe we have entered the era of climate adaptation, where we are no longer contemplating the potential, but beginning to grapple with the consequences.

Ceres 2011Five years ago, we worked with a number of key stakeholders to scenario plan for the volatile and resource constrained world we saw emerging. We identified key indicators of stress that would force change upon economies and businesses: Peak oil and rising gas prices. The number of weather disruptions that then led to droughts or floods impacting commodity prices. Growing inequity between rich and poor. Breakdowns in global governance mechanisms. Greater transparency and access to information as an accelerator of change.

Today all those indicators are flashing amber. And because of that, we collectively must create a new pace and scale of change. One that is measured against a ticking clock that counts in days, not decades.

Back then we saw three potential scenarios that could unfold in the face of these new constraints and volatility:

The "thoughtful paced transition" scenario was one in which business, government and communities had prepared and begun the journey to transition economies and business models. Through planned incentives, investments and regulations we would have begun the journey to mitigation and adaptation. (I had great hopes for this one).

The "rapid crisis response" scenario was one in which we were collectively late, had had our heads in the sand, and awoken to crisis. (As Tom Friedman said: either $200 dollars a barrel or the mother of all environmental disasters.) As a result of the rude awakening, disruptive and significant change would be led by the political systems, with coordinated global governance and regulation creating the architecture for new models to emerge. Overnight there would be winners and losers.

And then a third scenario emerged: the "winner takes all" scenario. In this scenario, early leaders recognize that there is competitive advantage to decoupling economic growth from scarce natural resources fast, which leads both to rapid innovation and new business sectors emerging, but also fragmented policies, protectionism and fragmented policy responses -- which in turn make the cost of losing less obvious until it's too late. Who will own the gold of the future? Who will reap the rewards of early leadership in the cleantech industry? Who will own the scarce natural resources, who will own the resources of the future economy?