How often have we heard the words “what do you mean by sustainability?” Perhaps it avoids definition because sustainability applies to so many facets of our lives, to so many business or organizational strategies, to so many approaches we might take to moving to desirable outcomes. Does the notion of sustainability have a time period attached to it? One that says if you can keep something up for a certain amount of time you have crossed the threshold of sustainability? In the world of environmental policy, sustainability has come to mean that if an organization is not meeting certain environmental targets its activities are not sustainable. This does not mean that labeling an organization unsustainable proves we know what would be sustainable. Today we have major investors who have sustainability criteria they apply to investment decisions. Their thesis is that being sustainable is both the “right thing to do,” and that sustainable companies tend to be better managed. While there is a growing body of work that seems to suggest this may be so, it still suffers from this problem of what sustainable actually is.
Years before sustainability crept into our vocabulary in its present context, one of our founding partners at Berkshire Partners introduced, quite insistently, the idea that sustainability, and specifically the sustainability of a particular business strategy (that is the ability to execute against that strategy consistently for a prolonged period), was an essential issue that demanded understanding before we committed to an acquisition. While what sustainability meant defied definition, subsequent specific examples that came under discussion made it clear we would know it when we saw it; and if there was meaningful doubt, then we should not proceed. While this subjected the question of sustainability to our ability to discern an unknowable future and, thence, to human judgment, imperfect at best, we went with it.
Today we have a developing body of data based on criteria intended to help us measure sustainability. Quantifiable standards are being developed by an independent body, the Sustainability Accounting Standards Board (SASB), which has highly credible leadership and the work of which is being spearheaded by deeply experienced and knowledgeable academics and experienced leaders. The hope is that their work will lead to inclusion of sustainability data in public documents filed by listed companies with the Securities and Exchange Commission.
While the work of the SASB is invaluable, I prefer to think of sustainability within a context of core beliefs or values. When we started the High Meadows Foundation, we took a page from Berkshire’s book and set out our core beliefs as measures of sustainability. If, in our judgment, organizational leadership was not playing by these rules, we should be skeptical of the organization’s sustainability. These beliefs are as follows:
- We play for the long term. Think generations.
- We have articulated for all to measure us by a clear and specific purpose for our organization; and the values we believe we should live and work by.
- We believe our organization should be inclusive: employees, those who purchase or benefit from what we do, those who supply us or advise us, collaborators of all stripes, we want them all to participate in the future we seek.
- Capital, in whatever form, whether it be investor capital or donor capital or public capital, is essential to an enterprise. It comes with expectations, a cost or expectation of return if we are a business, beneficial outcomes of purpose if we are not. We must embrace its expectations and meet its needs. But in doing so we must be clear that it is consistent with our purpose and values.
- In everything we do there is no substitute for the truth. And we believe that everyone is big enough to hear the truth, no matter the consequences.
While perhaps not so measurable as the standards the SASB hopes to have deployed, if we stay close to these beliefs can we not achieve sustainability? Perhaps in a world that seeks real measurement these are less usable. But I would like to believe that informed human judgment based upon purpose and values can lead to consistent and sustainable outcomes.
-Carl Ferenbach, Chair, High Meadows Institute