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by webster s. walker, community outreach administrator
[webmaster's note: The article below is an introduction, not a summary. For the full report, scroll to the bottom of this article, or click here.]
Central Co-op is not in business simply to make money. Our purpose statement refers to “the earth and its people” alongside “financially sound principles.” Long before the phrase “triple bottom line” was coined in 1994, we had the commitment in 1978: run a business that is financially sound, socially responsible, and ecologically positive.
That’s easy to say, but how do you do it? Specific things may be obvious – recycle your paper! – but how do you actually measure ecological and social impact? “Triple bottom line” sounds solid and professional, but the fact is, there is only one bottom line and that is at the bottom of the income statement or balance sheet, showing net profit or net worth, in terms of money. There is no equivalent “bottom line” in terms of people or the planet.
Under GAAP (Generally Accepted Accounting Principles) there are financial accounting standards that businesses follow. GAAP standards allow anyone with training to read a financial report, and understand the actual financial status of an organization. There is no GAAP for ecological or social accounting. Financial accountants call the social and ecological impacts of businesses “externalities,” and do not account for them. Can we be accountable without standards for accounting? It is easy to say “green” or “sustainable” when no one can measure that claim.
It is also easy to say “profitable” but the truth can be measured by an honest accounting of your income and expenses, assets and liabilities. Even if you hide the truth, the actual flow of money cannot be hidden forever. Enron claimed huge profits, and “creative accounting” cooked the books to make it look that way, but when it became clear they were not generating the profits they claimed, the business went poof.
There is no such “reality check” for social and ecological accounting. The only reality check that bites is when ecological or social systems are degraded, and the most vulnerable among us typically pay those costs first. This allows for green-washing in which businesses can claim ecological and social responsibility with no way to assess the “bottom line,” and no reality check to put them out of business if they are lying.
Many groups are working to devise accounting standards for the triple bottom line. The Food Trade Sustainability Leadership Association (FTSLA) was founded in 2008 for businesses in the organic movement. FTSLA worked for two years with focus groups from the organic sector to devise initial metrics for 11 categories of ecological and social accounting:
• Organic
• Distribution and Sourcing
• Energy in Facilities
• Climate Change
• Water
• Waste
• Packaging
• Labor
• Animal Care
• Consumer Education
• Governance.
In March 2010 Central Co-op joined FTSLA. We published our initial sustainability report on December 2, 2011.
Because of GAAP and legal reporting requirements, Central Co-op has a five-person finance department that tracks, logs and reports our money transactions on a daily basis. We have no such team to track ecological and social transactions, and are not in a position to hire workers to develop these systems. Two workers – me as Community Outreach Administrator, and Meg Kennedy as our new Sustainable Product Advocate – squeezed these reporting duties into our existing jobs.
Also we are measuring things we have never measured, such as the percentage of our waste that goes to landfill vs. being recycled, and we made numerous rough estimates. Some things we simply cannot assess yet, such as the labor practices of all our suppliers all the way up the supply chain. Our first report is inevitably not as detailed as a financial account would be. That said, there is much to learn from it, from the process of putting it together and from the information itself.
This article is not a summary of the report; it is an outline of how we have begun our long process of learning to account for our social and ecological commitments. We will run ongoing articles on sustainability, but I encourage you to read our first report. It is only 11 pages long, with a 3-page summary and 8 pages of metrics.
The Central Co-op FTSLA Sustainability Report is available for viewing here, and at our Info Central desk. You may receive an electronic copy by e-mailing a request to community@centralcoop.coop. For more information about FTSLA, visit their online home, here.
