What is the point of sustainability impact investing?

What if the sustainability impact investing problem is not just a matter of judiciously supporting business policies and practices likely to enhance the long term viability of life on earth? What if the sustainability impact investing problem is better conceived in terms of how to create markets that function as self-sustaining ecosystems of diverse forms of economic life?

The crux of the sustainability problem from this living capital metrics point of view is how to create efficient markets for virtuous cycles of productive value creation in the domains of human, social, and natural capital. Mainstream economics deems this an impossible task because its definition of measurement makes trade in these forms of capital unethical and immoral forms of slavery.

But what if there is another approach to measurement? What if this alternative approach is scientific in ways unimagined in mainstream economics? What if this alternative approach has been developing in research and practice in education, psychology, health care, sociology, and other fields for over 90 years? What if there are thousands of peer-reviewed publications supporting its validity and reliability? What if a wide range of commercial firms have been successfully employing this alternative approach to measurement for decades? What if this alternative approach has been found legally and scientifically defensible in ways other approaches have not? What if this alternative approach enables us to be better stewards of our lives together than is otherwise possible?

Put another way, measuring and managing sustainability is fundamentally a problem of harmonizing relationships. What do we need to harmonize our relationships with each other, between our communities and nations, and with the earth? How can we achieve harmonization without forcing conformity to one particular scale? How can we tune the instruments of a sustainability art and science to support as wide a range of diverse ensembles and harmonies as exists in music?

Positive and hopeful answers to these questions follow from the fact that we have at our disposal a longstanding, proven, and advanced art and science of qualitatively rich measurement and instrument calibration. The crux of the message is that this art and science is poised to be the medium in which sustainability impact investing and management fulfills its potential and transforms humanity’s capacities to care for itself and the earth.

The differences between the quality of information that is available, and the quality of information currently in use in sustainability impact investing, are of such huge magnitudes that they can only be called transformative. Love and care are the power behind these transformative differences. Choosing discourse over violence, considerateness for the vulnerabilities we share with others, and care for the unity and sameness of meaning in dialogue are all essential to learning the lesson Diotima taught Socrates in Plato’s Symposium. These lessons can all be brought to bear in creating the information and communications systems we need for sustainable economies.

The current world of sustainability impact investing’s so-called metrics lead to widespread complaints of increased administrative and technical burdens, and resulting distractions that lead away from pursuit of the core social mission. The maxim, “you manage what you measure,” becomes a cynical commentary on red tape and bureaucracy instead of a commendable use of tools fit for purpose.

In contrast with the cumbersome and uninterpretable masses of data that pass for sustainability metrics today, the art and science of measurement establishes the viability and feasibility of efficient markets for human, social, and natural capital. Instead of counting paper clips in mindless accounting exercises, we can instead be learning what comes next in the formative development of a student, a patient, an employee, a firm, a community, or the ecosystem services of watersheds, forests, and fisheries.

And we can moreover support success in those developments by means of information flows that indicate where the biggest per-dollar human, social, and natural capital value returns accrue. Rigorous measurability of those returns will make it possible to price them, to own them, to make property rights legally enforceable, and to thereby align financial profits with the creation of social value. In fact, we could and should set things up so that it will be impossible to financially profit without creating social value. When that kind of system of incentives and rewards is instituted, then the self-sustaining virtuous cycle of a new ecological economy will come to life.

Though the value and originality of the innovations making this new medium possible are huge, in the end there’s really nothing new under the sun. As the French say, “plus ça change, plus c’est la même chose.” Or, as Whitehead put it, philosophically, the innovations in measurement taking hold in the world today are nothing more than additional footnotes to Plato. Contrary to both popular and most expert opinion, it turns out that not only is a moral and scientific art of human measurement possible, Plato’s lessons on how experiences of beauty teach us about meaning provide what may well turn out to be the only way today’s problems of human suffering, social discontent, and environmental degradation will be successfully addressed.

We are faced with a kind of Chinese finger-puzzle: the more we struggle, the more trapped we become. Relaxing into the problem and seeing the historical roots of scientific reasoning in everyday thinking opens our eyes to a new path. Originality is primarily a matter of finding a useful model no one else has considered. A long history of innovations come together to point in a new direction plainly recognizable as a variation on an old theme.

Instead of a modern focus on data and evidence, then, and instead of the postmodern focus on the theory-dependence of data, we are free to take an unmodern focus on how things come into language. The chaotic complexity of that process becomes manageable as we learn to go with the flow of adaptive evolving processes stable enough to support meaningful communication. Information infrastructures in this linguistic context are conceived as ecosystems alive to changeable local situations at the same time they do not compromise continuity and navigability.

We all learn through what we already know, so it is essential that we begin from where we are at. Our first lessons will then be drawn from existing sustainability impact data, using the UN SDG 17 as a guide. These data were not designed from the principles of scientifically rigorous measurement, but instead assume that separately aggregated counts of events, percentages, and physical measures of volume, mass, or time will suffice as measures of sustainability. Things that are easy to count are not, however, likely to work as satisfactory measures. We need to learn from the available data to think again about what data are necessary and sufficient to the task.

The lessons we will learn from the data available today will lead to more meaningful and rigorous measures of sustainability. Connecting these instruments together by making them metrologically traceable to standard units, while also illuminating local unique data patterns, in widely accessible multilevel information infrastructures is the way in which we will together work the ground, plant the seeds, and cultivate new diverse natural settings for innovating sustainable relationships.

 

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