Open.com - The role of open data in corporate responsibility and sustainability

23 May 2010Patrin Watanatada

Can sustainability reporting in its current form really drive the radical insight, collaboration and behavioral change that we so need?

As the Economist reminds us in a recent report (“Data, data everywhere”, February 27th, 2010), “The point of open information is not merely to expose the world, but to change it.”

My colleagues and I work with companies on disclosing and communicating sustainability-related information — corporate sustainability reporting — because we believe it can be an effective way for a company to develop a sustainability strategy, hold itself accountable, and engage stakeholders. But like many observers over the last decade, we think there is a lot left to be desired.Companies know they’ve reached a crossroads. The leading reporters are experimenting with new platforms, channels, and forms of assurance. These are all good developments — but they don’t feel like enough.

And it’s not because a lot of smart and passionate people aren’t thinking about making sustainability reporting more valuable. There is something structurally wrong — but what?

Turns out it’s the US and UK governments who are breaking new ground — by harnessing the power of ICT and social media to make government more transparent (promote accountability), participatory (strengthen decisions by tapping into society’s expertise), and collaborative (engage staff, citizens, non-profits and businesses in the government’s work).

The day after he took office, President Obama signed the Open Government Memorandum calling for “a new era of collaborative democracy and open government.” His is the first US administration to appoint a Chief Information Officer, Vivek Kundra.

In the UK, World Wide Web inventor Tim Berners-Lee has been working with the government to open up databases, while new Prime Minister David Cameron has been giving talks at TED on his Open Government and Transparency Plan.

There are three big themes in Obama’s open government plans that have implications for next-generation corporate sustainability reporting.

The first is openness: the move to make government datasets publicly available — to build trust and credibility, and to allow anyone to crunch that raw data into valuable information. As journalist Daniel Roth says, arguing that financial oversight is best applied not by a ‘finite group of bureaucrats’, but by an army of investors crunching open data (Wired, February 2009): “[Put data] in the public domain and suddenly it takes on new life. People start playing with the information, reaching strange new conclusions or raising questions that no one else would think to ask.”

The second is participation and collaboration: enabling citizens to give time and brains towards a common goal. Immediately following the Haiti earthquake, some 2,000 online volunteers took just two days to create a complete digital map of Port-Au-Prince, later used by the World Bank and the Red Cross in relief efforts.

The third is putting data so that it leads to insight — and action. As journalist Marc Gunther says, “A naked body is not necessarily a well-toned body.” Three popular ways of getting to the gym:

  • Data visualization: As our world floods with data, teams such as the New York Times graphics department and San Francisco designers Stamen have been busy turning numbers into beautiful, interactive — and useful — pieces of information and journalism. Edward Tufte, high priest of quantitative information design, has been appointed to the US Recovery Accountability and Transparency Board to promote ““the clarity of intense information()”:http://www.nytimes.com/2010/03/22/business/media/22link.html.”
  • Mashups: Combining two or more sets of data can lead to insight. HealthMap.org takes “data of varying reliability,” from Google search queries to World Health Organization alerts, and mashes them to estimate infectious disease outbreaks in real-time.
  • Mobile apps: Feeding data into software running on portable devices helps people to access and use it as they go about their days. Apps can inform purchase decisions (GoodGuide), help people to monitor energy consumption (Google’s PowerMeter has released the API for developers to build supporting devices), or provide access to business intelligence (Nokia’s Life Tools provide farmers with market prices and weather data).

Musing on these three themes as I listened to a brilliantly galvanizing talk by US Chief Technology Officer Beth Noveck here in San Francisco, it struck me that corporate sustainability reporting is woefully behind on all of them.

And the problem isn’t just that there’s not enough openness (the usual complaint, and one the Global Reporting Initiative, the Carbon Disclosure Project, and others have sought to address). It’s not even just the challenge of producing robust, comparable data on sustainability-related impacts (crucial though this is).

No, the problem is that corporate sustainability reporting is still in a broadcast mindset. There is, as yet, little participation and collaboration. It’s where journalism was 10 or 15 years ago — and we’ve all seen what’s happening to journalism now.

Genuine two-way examples of corporate engagement through social media remain hard to find (see SustainAbility’s 2009 research on Web 2.0 and stakeholder engagement[LINK]). Most companies are still focused on getting their message out, rather than harnessing what they get back. Even SustainAbility’s own hub-and-spoke model for targeting reporting is still essentially one-way (Tomorrow’s Value [LINK], p. 27).

And the problem is, we’re not thinking enough about how data leads to insight and action — management feedback, evidence-based persuasion, and consumer behavioral change. Instead, we have reached a point where we’re happy if stakeholders just read the things.

Of course, companies aren’t governments and there are plenty of reasons why companies do not publish their raw datasets — sustainability-related or not — for all to see. But as public attitudes to privacy evolve in a world awash with information and sharing, similar pressures on companies can only grow.

Now there are signs that companies are moving to share what was once private (at least with each other), knowing that this is what’s needed to move ahead — to name a few, the GreenXchange patent commons, the Fair Factories Clearinghouse social audit database, and Bloomberg’s ESG data service.

There are emerging efforts, too, to engage in genuine online dialogue on tough issues (see Timberland’s frank discussion on factory wages and SAP’s 2009 sustainability report, designed to encourage commenting and interaction throughout).

And the express goal of initiatives like Wal-Mart’s Supplier Assessment questionnaire — which feeds into a Sustainability Index intended to drive product innovation and communicate with consumers — is for data to lead to action.

But much more is needed. There is so much potential to take advantage of technological advances and ask some disruptive questions:

Openness:

  • What if companies opened up sustainability datasets so that outsiders could look for patterns or devise ways of better measuring impact?
  • What if companies treated sustainability reporting as a source of business intelligence?

Participation and collaboration:

  • What if companies asked stakeholders to contribute data (not just opinions)? What if, instead of a jumping-off point for dialogue, the report was the dialogue?
  • What if companies in an industry got together to jointly define and report on impact metrics, where it’s difficult to attribute cause-effect to any one company?
  • What if social auditors used portable devices to share data and combat fraud?

Insight and action:

  • What if companies mapped sustainability data in real-time?
  • What if companies in a value chain pooled impact data? Think of the difficulty of “carving up scope 3 emissions across a value chain“ where no one company takes responsibility for emissions outside the direct footprint.
  • What if companies reported via apps that delivered information in the retail store?

Efforts to improve sustainability reporting have focused on making it more like financial reporting: quantitative and comparable. No doubt that this matters. But financial reporting is essentially a backwards- and inwards-looking process, focused on the past performance of a single entity. And if you think of the challenge of sustainability — managing very long-term future impacts caused by many entities, and that fall outside the walls of any one company — it becomes clear that a much broader, forward- and outward-looking, mindset is needed.

This is a participatory and collaborative mindset unafraid of open, unexpected dialogue and harnessing the wisdom of the crowd to solve the enormous challenges we face. This is a mindset bent on using insightful and actionable data to influence thinking and behavior outside the company’s walls. This is the vision towards which the US and UK governments are headed, and next-generation corporate sustainability reporting must follow suit.

Sidebar:

Here are some of the things the US government has been up to, according to Beth Noveck, who leads the Open Government Initiative:

  • Launched Recovery.gov and the Federal IT Dashboard, enabling Americans to monitor stimulus spending and IT investments and hold it accountable for fraud and waste.
  • Piloted the Peer-to-Patent project to open the bureaucratic and patent examination process to public contribution and peer review.
  • Set up a social network, Aristotle, to enable Department of Defense scientists to tap more easily in to each others’ expertise.
  • Placed over 200 of the Army’s field ops manuals online in wiki format to let soldiers of all ranks edit or change.

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