Week 41: What Does the Average Joe Get from Integrated Reporting, Double Materiality, and a Zillion Reporting Initiatives?

Dear all,

The essence of the sustainability transition, as the name alludes, is not a destination; rather, it is a journey where the underlying fundamentals of the societies we live in and the businesses we run fundamentally change for the benefit of people and the planet (including shareholders, who are, after all, people, not robots). In the simplest terms, it promises a better life for the average Joe and generations of Joes to come. Sustainability has always had a political dimension as well, demanding its rightful place in the halls of policy alongside other policy areas. In retrospect, one of the wins—regardless of how futile these wins may really be—is the influence on policy in the EU that sustainability has managed to muster over the last 10 years of its long existence as an approach to changing things. Focusing on policy changes would, in the minds of sustainability champions, create preconditions for the economic incentives that corporations would embrace and adjust to. The expression "win-win" has been one of the cornerstones of this sustainability proposal to the world. Yet, it seems this concept is not really understood by the very Joes it is meant to help achieve a better life.

For Europe, given its diverse and complex internal dynamics, as well as its aging and declining population, the sustainable transition serves as one of the potential competitive advantages against its real adversaries, the US and China. The pacifist narrative embedded in the approach to sustainable transition, such as "win-win" and collaboration, is now changing to become protectionism and fierce competition.

In other parts of the world, such as the US, where the tradition of business is politics and politics is business, the sustainability narrative has never really gained traction, mostly because US business and political power structures understood early on the true threat that a genuine sustainable transition would pose to those structures, just as they have with other approaches aimed at improving the lives of the average Joe. The US approach to sustainable transition has always shielded any fundamental policy changes (like interpretations of fiduciary duties), favoring opportunistic and, in many cases, costly business ventures (like green hydrogen), subsidized by the average Joe’s tax money while simultaneously giving tax breaks to companies.

In simpler terms, the US approach has been, and still is, one of not wanting to change anything while seeking to profit from whatever is available. The US has been the biggest oil producer in the world, increasing its annual shale production (with significant environmental impact) throughout all subsequent COP conferences and intends to continue doing so. The sustainable transition carries no geopolitical weight in the US; it brings little to the power table right now.