How to integrate planetary boundaries into corporate reporting and action
1. Reach zero GHGs then sequester. 2. Reach zero deforestation & biodiversity loss then support prevention. 3. Advocate for ‘contextualised’ sustainability reporting.
The single biggest barrier to useful action and reporting on sustainability is failure to align with the Earth’s ecological limits — the planetary boundaries (PBs). The solutions are complex and systemic, but businesses can take specific actions — starting now — to drive meaningful progress.
This article provides a brief reminder of what the PBs are, outlines why the failure to integrate them into sustainability strategy and reporting matters; and recommends a sequence of practical steps businesses can take to integrate the planetary boundaries into strategy and reporting.
The Planetary Boundaries (PBs)
The planet has maintained fairly stable conditions over the past 12,000 years, but due to human activity, this is no longer the case.
The PBs define the safe operating space we must stay within to preserve the Earth conditions in which we can survive and thrive. Viewing the Earth as a single complex system with interrelated processes that maintain stability, it defines nine global processes that represent the state of the Earth System: climate change, biosphere integrity (think biodiversity), land-system change, freshwater use, biogeochemical flows, ocean acidification, atmospheric aerosol loading, stratospheric ozone depletion, and novel entities (see definitions).
The status of each process is defined by a control variable (e.g. C02 concentration for climate change).
Each boundary is defined by a specific measure of its control variable that, if crossed, could generate unacceptable change to the functioning of the Earth System (e.g. 350ppm for C02 concentration).
Four of the nine planetary boundaries have been transgressed: climate change, loss of biosphere integrity, land-system change and biogeochemical flows.
Not all boundaries are created equal: core boundaries (climate change and biosphere integrity) will have more significant knock-on impacts than others. They are the two boundaries which, once transgressed, drive a significant change in the state of the Earth system. They have already been transgressed.
The issue with reporting and action on sustainability to date
There has been a collective failure to ‘contextualise’ sustainability data — and action — within the ecological limits of the planetary boundaries.
‘Contextualising’ sustainability data can only be done with reference to ecological limits (Junxion, 2020). In the words of environmental systems scientist Donella Meadows (1998),
“[S]ustainability indicators should be related to carrying capacity or to threshold of danger… Tons of nutrient per year released into waterways means nothing to people. Amount released relative to the amount the waterways can absorb without becoming toxic or clogged begins to carry a message.”
The GRI acknowledged the conceptual importance of contextualisation back in 2002, but has failed to provide guidance (r3.0, 2020). The result — unsurprisingly — is that companies are not integrating ecological limits into their reporting, or their sustainability strategies and targets. A 2016 study examined 12,000 sustainability reporting companies, and found that only 5% mentioned ecological limits at all per year, while 0.28% ‘planned to align performance or products to limits’ (Bjorn et al., 2017). The vast majority of sustainability data therefore doesn’t inform the users — the companies themselves or their stakeholders — how sustainable the reporting company actually is.
Applying the planetary boundaries to business
There are multiple steps a business can take to apply planetary boundaries to their own internal practices, reporting and levers of influence.
1. Reduce any impacts on climate and biodiversity to zero as fast as possible — including in the supply chains
The core boundaries — climate change and biodiversity loss — are in overshoot. Regardless of the extent of your company’s impacts on climate and biodiversity, these two boundaries should be considered as high priority alongside other material issues. They must be addressed within the supply chain too, given that’s where typical companies’ main contributions towards the planetary boundaries occur (particularly at raw material sourcing).
Research by the CDP (2018–19), for example, found an average 5.5:1 ratio of supply chain to direct carbon emissions ratio across industries (see industry-specific ratios in image above), and Kering (2019) found that 90% of its impacts occur in its supply chain, 66% of which occurred in production and processing of raw materials. Therefore:
- Place GHG emissions & biodiversity loss/protection as high priority alongside any other social/environmental issues arising from your materiality assessment.
2. Address the PBs in your sustainability strategies and priorities — including zero deforestation and other opportunities to actively address multiple thresholds simultaneously
The nine systems are interconnected — climate change, biodiversity and land system change particularly. For example, deforestation of the three major forest biomes which stabilise the Earth’s climate, although directly contributing to the land-system change boundary, also impacts climate change and biosphere integrity. Similarly, biosphere integrity is affected by increasing ocean acidification, eutrophication from nitrogen and phosphorous pollution (biochemical flows) and overuse of freshwater resources.
While many business decisions can result in trade-offs (negative impacts elsewhere), prioritising issues based on planetary boundaries and the way they interact does the opposite — it drives positive spillover effects. For example, preventing deforestation helps us stay within not one, but three planetary boundaries. Although collaboration is required to develop whole-sector approaches to PB challenges, your company can begin by:
- Ensuring zero contribution to deforestation including in its own supply chains — and if possible support collective action reduce it, especially in the major forest biomes of the world.
- Building targets and/or projects that have multiple benefits by addressing multiple planetary boundaries, such as reforestation. This may involve further research into how the nine processes interact.
3. From downscaling to upscaling: change your mindset from exploitation to restoration
Downscaling is the creation of limits/targets at regional and local levels, based on the PBs. It sounds useful, but is hard to do well, because the science behind the framework is based on the Earth system as a whole. The approach tends to lead to a ‘fair share’ approach — despite that once a PB has been transgressed there is no ‘fair share’ left to exploit. With climate change for example, we’ve long transgressed 350ppm.
The ‘fair share’ approach technically works better for the PBs whose control variables are consistent globally (climate change, ocean acidification, and stratospheric ozone depletion) — but we don’t yet have the data we need to practically apply this approach. For the boundaries with strong regional variations (land-system change, biogeochemical flows, freshwater use, atmospheric aerosol loading and biosphere integrity), the ‘fair share’ assessment would need to account for boundaries relevant to the particular location. This gets complicated: the land-system change boundary, for example, varies according to type of forest, as boreal and tropical forests have more stringent boundaries than temperate ones.
In early November 2021, the Impact Management Platform (IMP) released a new website page including guidance on Thresholds and Allocations, which provides an initial, high-level outline of how to apply them to impact measurement, management and reporting (see video). However, it doesn’t yet provide a clear step-by-step approach or the data companies need to credibly calculate their own quantifications. Despite this emerging progress, we still don’t have the data to credibly use this downscaling/allocations approach (Kering, 2019).
Upscaling, rather than seeking to identify how much there is left to exploit, and what a business’s fair share of that is, explores business impacts at local and national levels through their contribution to global changes, focusing on the ultimate consequences. It enables companies to consider their impacts holistically and identify where innovations can maximise opportunities. Therefore:
- When undertaking materiality assessments or designing targets, evaluate how local impacts influence global processes. For example, analyse local site-based impacts of global supply chain activities such as agricultural production and mining operations in terms of their global-level contribution to the PBs, as well as through a local lens.
- Make sure to examine PBs with regional variations at a local level. For example, appropriate freshwater consumption levels will be different depending on location (the WRI Water Risk Atlas is a useful tool here).
- Shift the question from ‘how much is there left to exploit?’ to ‘what we can do to restore a well-functioning planet?’ The latter should become the driving force of your company. Future-Fit’s Break-Even Goals provide a clear destination to aim for — especially if applied across the entire value chain. They are grounded in the same systems science as the PBs, and outline a clear journey to ensure any business in no way contributes to planetary overshoot. Alternatively, for an example of a sustainability report using planetary boundaries, see Houdini’s seminal corporate sustainability report based on the PB framework.
5. Collaborate to usefully integrate ecological limits into reporting and action
The above actions are a good start, but most companies’ leverage to drive significant change is through collaboration and collective influence over the broader system. Therefore:
- Work with those in your industry, regulators and policymakers to drive the regulations, policies and incentives which will tip the sector as a whole towards a regenerative approach, particularly on climate change and biosphere integrity (Kering, 2019).
- Openly and actively push for standard setters to provide better guidance on contextualised reporting, such as by advocating that the GRI to provide robust guidance on its Sustainability Context Principle (r3.0, 2020). Focus especially on IMP members, listed below.
- Do not underestimate the importance of this last step.
Sources
Please note that this article draws substantively on Kering’s report, ‘Linking planetary boundaries to business’, which is well worth reading in full.
Baue, B., & Thurm, R. (2021) Reporting Standard-Setter Network Embraces Sustainability Thresholds & Allocations. Accessible online (https://r3dot0.medium.com/reporting-standard-setter-network-embraces-sustainability-thresholds-allocations-41d711c7269f). Accessed 25/11/21.
Bjørn, A., Bey, N., Georg, S., Røpke, I., Hauschild, M. (2017) ‘Is earth recognised as a finite system in corporate sustainability reporting?’ Journal of Cleaner Production. Accessible online (https://backend.orbit.dtu.dk/ws/portalfiles/portal/129908498/Bj_rn_et_al._2016a_Word_with_DOI.pdf). Accessed 19/11/21.
Carbon Trust (2018–19) ‘CASCADING COMMITMENTS: Driving ambitious action through supply chain engagement’. CDP. Accessible online. (https://6fefcbb86e61af1b2fc4-c70d8ead6ced550b4d987d7c03fcdd1d.ssl.cf3.rackcdn.com/cms/reports/documents/000/004/072/original/CDP_Supply_Chain_Report_2019.pdf?1550490556). Accessed 24/11/21.
Future-Fit Foundation (2020) ‘Methodology Guide: What the Benchmark is, Its scientific foundations, How it was developed’. Accessible online (https://futurefitbusiness.org/wp-content/uploads/2020/05/FFBB-Methodology-Guide-R2.2.pdf). Accessed 19/11/21.
Houdini (2018) ‘Planetary Boundaries Assessment 2018: This is Houdini’. Accessible online (https://api.houdinisportswear.com/storage/2A69199BFCBA925CC9260D61F41301EA566C760FB9A727B5DABB2C330C13D1BC/08df8496f36f49f0bb821fdeafdd775e/pdf/media/e5eec5e201b242e9a2aa14aba9c3b696/Houdini_Planetary_Boundaries_Assessment_2018.pdf). Accessed 19/11/21.
IMP (2021) ‘Thresholds and allocations’. Accessible online (https://impactmanagementplatform.org/thresholds-and-allocations/). Accessed 23/11/21.
Junxion (2021) ‘Sustainability Reporting — but this time with meaning’. Available online (https://junxion.com/insights/indicators-for-a-meaningful-sustainability-report/). Accessed 19/11/21.
Kering (2019) ‘Linking planetary boundaries to business’. Available online (https://keringcorporate.dam.kering.com/m/43d9531b53ac34e1/original/Planetary-Boundaries_en.pdf). Accessed 19/11/21.
Meadows, D. (1998) Indicators and Information Systems for Sustainable Development. The Sustainability Institute. Accessible online (https://donellameadows.org/wp-content/userfiles/IndicatorsInformation.pdf). Accessed 19/11/21.
r3.0 (2020) ‘r3.0 Urges GRI’s Global Sustainability Standards Board to Provide Robust Guidance on Sustainability Context’. Available online (https://r3dot0.medium.com/r3-0-urges-gris-global-sustainability-standards-board-to-provide-robust-guidance-on-2ed00349e234). Accessed 19/11/21.
Stockholm Resilience Centre (2015) ‘The nine planetary boundaries.’ Available online (https://www.stockholmresilience.org/research/planetary-boundaries/the-nine-planetary-boundaries.html). Accessed 23/11/21/
UNRISD (2019) ‘Thresholds for pilot testing’. Accessible online (https://www.r3-0.org/wp-content/uploads/2020/10/UNRISD-r3-SDPI-Brochure-Final.pdf). Accessed 19/11/21.
