Why Monetize Sustainability?

Reposted from: André Reichel | Sustainability Research

When talking about corporate responsibility, the issue of measurement comes up after a while. And rightly so, because if you cannot measure it you can hardly formulate goals, develop programs for implementation and evaluate your success in achieving them. But what is measured? The answer is simple: money. Regardless if you are trying to measure your company’s ecological or societal impact, most of the times you end up with calculating in Euro, Dollar, Pound and other currencies. It appears to be the one best way to do it, to get the numbers right and legitimize decisions. This is of course not the case.

Monetizing sustainability is not the one best way – it is a value judgment. Putting a price on something is a normative statement; it is not an “objective” thing to do. We have become so used to monetizing what is important to us that we assume there is no other way. It is important to remember that this is totally contingent and everything else but objective or “natural”.

Especially the introduction of triple bottom line accounting by John Elkington has influenced thinking about sustainability in terms of calculating an actual bottom line – which we normally do with money. However, the problem with monetization is… the results are totally normative. How to calculate for CO2 emissions? Well, take the market price for a ton of carbon e.g. in the EU emissions trading scheme. But wait, that price is distorted by its structure, by price effects of different policy instruments like the German renewable energy law, by speculation and so on. But maybe the brave new world of carbon trading is really not a good example how monetization works in pursuing sustainability.

Beyond that, what does it actually mean if a ton of carbon costs 4.54 EUR? You can pose this question to a lot of other monetized measures, from biodiversity loss to workers’ health. Although modern capitalism works so well in turning everything into a commodity, and that involves putting a monetary value on it, this apparently doesn’t solve any of the sustainability issues at stake today.

There are other options of course. Don’t monetize. It is as simple as that. In the case of carbon, just let it be carbon. Calculate your bottom line with CO2 and not with money. The measure of Ecological Allowance is doing that. It calculates for an absolute product-related ecological bottom line for a company. Within these non-monetized boundaries, monetization as regards different products, different strategies, and different business models can take place. The same logic can also account for other ecological variables like water or even a sort of “total ecological footprint”. It may well extend towards social variables like social capital as the basis of a measure of a company’s contribution to social sustainability. You could imagine a basic necessary yield of social capital amongst its employees in the social environment of the company. Thus a company would become a producer of social capital, a truly inspiring thought for the future of business and its legitimacy in a changing world.

As soon as you stop being fixed on monetizing “things”, the important issues are showing up. And best of all: they are calculable and thus manageable.