In the 2004-2005 report, Marv Adams, Senior Vice President, Corporate Strategy and Chief Information Officer, is quoted as saying: “To me, the idea of sustainability is simple. It means thriving, adapting, and prospering as the world changes around us.” In a sense, this is sustainability out of the dictionary: we’re sustainable if our business continues to grow.

Niel Golightly, Director of Sustainable Business Strategies, cites a different definition, based on the now-familiar triple bottom line:

Our working definition of sustainability: a business model that seeks to create value for stakeholders by preserving or enhancing economic, environmental, and social capital.

Golightly’s definition hews closer to a “green” definition of sustainability than does that of Adams, but as we have seen in previous installments of this series, many corporate definitions of sustainability contain more financial terms than environmental terms, and often fail to define exactly what a sustainable world might look like.

Ironically, both economic and sustainable development theories could be described as examinations of the most efficient use of available resources; however, each field’s definition and valuation of “resources” are as different as chalk and cheese.

Ford’s Sustainability Report uses Global Reporting Initiative (GRI) guidelines as a framework for the methodology of its reporting ( as do General Motors, Matsushita, Hewlett-Packard and Microsoft).

The GRI organization describes itself as “a multi-stakeholder process and independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines.”

Started in 1997 with funding for the United Nations as well as private foundations, GRI became an independent organization in 2002, and is headquartered in Amsterdam. Its first Sustainability Reporting Guidelines were released in 2000, and updated in 2002. A third proposed revision, referred to as G3, is available for comment until the end of March at www.grig3.org.

GRI guidelines are flexible, supporting organizations of varying levels of experience and sophistication. GRI recognizes the need to build reporting capacity incrementally, moving gradually toward greater coverage, transparency, and structure in terms of continuity and consistency from year to year.

It is important to keep in mind that GRI’s reporting guidelines are simply that, and no more: the organization does not promote the guidelines as a code of conduct, performance standard, or management system.

GRI uses the “triple bottom line” method of defining sustainability because that definition, it says, “is currently the most widely accepted approach to defining sustainability.”

No evidence of the assertion is given, and the triple bottom line is popular in the corporate world, but the Brundtland definition of sustainability (development that meets the needs of the present without compromising the ability of future generations to meet their own needs) appears to be the most widely used definition worldwide.

No opinion is given as to whether GRI believes that the triple bottom line, which it helps to promote, is an effective framework with which sustainability might be defined, understood, and achieved—simply that it is the most popular framework. As one industry wag has quipped:

It’s hard to plan strategically for something when you don’t know exactly what you are planning for.

Upon completing its own inaugural Sustainability Report in 2004, GRI found that “we had been neglecting a fundamental truth: that even though an organization may base its entire existence around promoting sustainable development, it is still necessary to take basic steps toward ensuring that its own operations are in line with such goals.” Sustainability is not easy to achieve, it seems, even for its proponents.

Although the Ford Sustainability Report does not contain a formal definition of sustainability outside of Golightly’s quote, a definition can be found in a companion piece of sorts, the Ford Report on the Business Impact of Climate Change (earlier post), published last year. That report’s overall definition matches Golightly’s words, and goes on to expand on Ford’s concepts of economic, environmental, and social capital:

By environmental capital we mean both the natural resources and ecosystem goods and services that are used or impacted in the production and use of the goods and services that businesses provide. Some forms of environmental capital are finite. There is a given quantity of crude oil in the Earth’s reservoirs...Other natural assets, like wind power, can be renewed indefinitely. Ecosystems also provide “goods,” like clean water, fresh air, biodiversity and unspoiled land, and “services,” like the ability of wetlands to cleanse water and the atmosphere to protect us from harmful radiation.

Unusual though it may seem to describe our natural resources as providers of goods and services, such descriptions are common in the tentative world of corporate sustainability, which remains more economics-centric than eco-centric. Ford’s concept of social capital is somewhat less conventional:

Social capital refers to the capacity of people in our communities to participate fully in both the production and consumption of our products and services...

Although the definition goes on to describe many worthwhile concerns, such as education, working conditions, and human rights, but it is odd, to say the least, to find a definition of the social aspect of sustainability which describes that aspect in frank terms of society’s ability to contribute to a corporation’s ability to produce and consume products.

Economic capital is defined by Ford as one might expect, including money available to invest, tangible assets created by capital investments in property and facilities, and intangible assets such as brand value. Ford also counts investments in partnerships, tax payments and other contributions as economic capital.

From BICC: Ford has room to improve on its fuel economy to mitigate CO2 emissions.

The Ford Report on the Business Impact of Climate Change concludes with an explanation as to why Ford supports a lawsuit to overturn California’s vehicle greenhouse gas emissions standards set forth in AB 1493 (earlier post). Activists have assailed the report, noting that the average fuel economy of Ford products actually worsened between 2003 and 2004, with a corresponding increase in production of carbon dioxide per average vehicle mile driven.

As does BMW (earlier post), Ford seems eager to show its stakeholders that it cares about sustainability, and that the concept is a core belief of the company, yet—again, as with BMW—the message is so often couched in financial terms, and the definition so vague, that the message is mixed even before one has time to dwell in the details of implementation, and the path to success is unclear. Exactly how can attention to economic, environmental and social issues transform the company into a sustainable organization?

Does Ford have a plan to reduce the worldwide annual carbon dioxide emissions of its products while satisfying its stockholders by increasing sales? And if it does, will the company have enough time to implement that plan?

Next week: Honda: “Striving to be a Company that People Want to Succeed”

Resources:

• Does Ford Have a Better Idea About Sustainability (i)?

• Ford 2005 Business Impact of Climate Change Report

• 2004-2005 Ford Corporate Sustainability Report(HTML version)

• Ford’s use of the GRI Index

• GRI website

• GRI 2003-2004 Sustainability Report