4 May 2021
EUR 104.6 million
As a teenager I listened to hard rock. The first guitar riff I learned was from AC/DC's “Highway to hell”. When playing it, one had to strive for the cool style of the lead guitarist Angus Young. More difficult was trying to sound like the lead singer Bon Scott: “No stop signs, speed limit, nobody’s gonna slow me down…”
The lyrics of this song can illustrate the basic narrative of our time: that the path we are on is not sustainable regarding the limits of our planet. If nobody slows us down, we may be on the highway to hell.
Fortunately, the world has started to place stop signs and speed limits on the highway. The most significant milestones have been the Paris agreement and the UN’s Sustainable Development Goals (SDGs). For the practitioners of sustainability reporting and communication, this has led to the emergence of a new jungle of abbreviations and frameworks. This is of course positive: something is happening! Nevertheless, I must confess that this jungle is somewhat difficult to navigate.
Welcome to the jungle: wide range of sustainability frameworks and initiatives have emerged during recent years.
The Nordic Investment Bank was established by the Nordic countries in the seventies to serve societal interests and to do good. Environmental analysis became integrated into our lending process in the 1990s, whereas socio-economic considerations were part of the Statutes from the start. Over the years, we have developed our own operational system, the “mandate rating framework”, which is used for all the projects we finance. This is also how we structure our reporting.
With all the new frameworks emerging, we also need to consider how we take them into account while having our own system.
Let’s take the example of SDGs. The first step for us has been to map the projects we finance according to the SDGs. Basically, our activities cover the economic, social and environmental aspects of sustainability. As we have our underlying analysis, this mapping is not very complicated.
This is not the same as having SDGs as drivers for our business - as we have our own mandate rating system - but it is rather a way to provide a common language with our external stakeholders. The benefit is also that SDGs provide a holistic view of sustainability, which ties in with our philosophy.
One example of the common language used with the investor side is our NIB Environmental Bond report, where we disclose the data regarding the impact of our projects and tag them according to the applicable SDGs.
Another example is a certificate for our customers that shows their project has been funded with our environmental bonds. Here we also indicate the relevant SDGs.
Coming back to the jungle, SDGs are one of the many frameworks by which you may communicate your impact. I think every institution should conduct a major exercise where they think hard about what makes sense for them. Otherwise, the risk is that you start putting together and adding up different frameworks, and in the end you risk losing your own story, and possibly your audience, while reporting yourself to death.
This brings me back to the importance of sustainability communication. Bear in mind that while reporting is becoming more and more complicated, the attention span of people is shortening. You need the data and impact reports, but don’t think that would be enough. You need to tell the story and you need to communicate, simplify and visualise: not all your target groups are sophisticated investors or sustainability experts.
One example of a key target group is your own employees. You may have thick reports and brand promises, but if your staff are unaware of all this and not living the brand, then it all becomes meaningless. This does not mean you have to produce glossy PR, on the contrary, you should just tell the truth in an authentic tone so that everyone understands. Avoid elitist bubble language. Include. Do not exclude.
You do not move the masses by adding excel sheets. Professor Yuval Noah Harari has said that humans can create mass cooperation networks, in which thousands and millions of complete strangers work together towards common goals. The motivation behind such endeavours is the stories we believe in. I guess that Greta Thunberg is proving this by mobilising young people all over the world behind her message. This is also the case with SDGs; they have already proven to be a powerful story and in order to have an impact, you need both sound data and powerful communication that is pushing for action.
Samuli Paronen was a manual worker who lived in Finland in the last century. He lived in very modest circumstances at the margins of society. He lost his parents as a child, had no particular education, and lived and worked here and there. His life would have passed largely unnoticed, were it not for the aphorisms he wrote.
In my view, one of his aphorisms summarises nicely Harari’s thoughts on Homo sapiens being organised around a concept or a story they believe in. Samuli Paronen wrote: “After having thought about it for 50 years, I have come to the conclusion that the world is a word.”
The column follows the presentation the author gave at the Sustainability Reporting and Communications Summit on 16 October in Amsterdam.