Future-FitBusiness Benchmark

The Benchmark provides a vision of a truly sustainable company and helps investors to identify the leaders of the future, accelerating our transition to a prosperous future for all.

An overview forTBLI Nordic 2016

Imagine a world …

… where we understand the true effect any investment portfolio is having on the planet and society

Future-Fit Foundation, a UK charity, creates tools that empower companies and investors to achieve this vision.

… where we design investment products to achieve the financial aims of our clients whilst also reflecting their values and furthering their positive impact on issues that matter to them

… where we no longer need to worry about negative screening because we're too busy screening in positive investments

Given the systemic issues society faces, we must think beyondShareholder Value – and even Shared Value – to measure all of the ways in which a business can Create System Value

But what is the social and environmental break-even point for business? And how can we measure progress toward it?

Business

Environment Society

Shareholder ValueBusiness is all that matters:

privatize gains, socialize losses

Environment

Society

Business

System ValueBusiness reaches a well-defined socialand environmental ‘break-even point’

Environment Society

Shared ValueBusiness comes first: negative impacts are justified by ‘doing good’ elsewhere

Business

When it comes to environmental and social performance,business leaders and investors have been lacking a cleardestination to aim for, and a way to monitor progress toward it

To get the full picture we must measure progress toward (and beyond)

required practice

Measuring a company’s performance relative to a past year doesn’t tell us where it is heading

Measuring best practiceby sector (sustainability

ratings do this) only drives a race to be ‘least bad’

Measuring progress toward short-term goals is relevant

only if they are set in the context of long-term plans

requiredbreak-even

state

a pastyear

anothercompany

arbitrary short-term

goals

anothercompany

Company today

currentstate

Future-Fit company

ß Past Future à

The starting point: Earth as a system

These system conditions originate from 25+ years of peer-reviewed research by leading environmental, social and system scientists – led by the founders of The Natural Step.

Inasustainablesociety,natureisnotsubjecttosystemicallyincreasingconcentrationsof

minedsubstances

Inasustainablesociety,natureisnotsubjecttosystemically

increasingdegradationbyphysicalmeans

Inasustainablesociety,peoplearenotsubjecttosystemicbarriers

tohealth,influence,impartiality,competenceandmeaning

Inasustainablesociety,natureisnotsubjecttosystemicallyincreasingconcentrationsof

substancesproducedbysociety

We asked: how must a ‘typical company’ operate to ensure it adheres to the system conditions for a sustainable future?

What is a ‘typical company?Every company has an Operational Presence in or near local Communities. It sells Products (goods or services) to Customers who use and – for many types of physical goods – eventually dispose of them. Company operations rely on Employees and Physical Resources, which are often sourced from Suppliers. And how the company is run both depends upon and affects Society as a Whole.

Environment

Society

CompanyResources

PhysicalPro

ducts

Waste

Presen

ceOpe

ratio

nal

Communities

Customers

Employees

Suppliers

The future-fit goals were derived by examining all of the ways in which a typical company must avoid breaching the system conditions in the course of its interactions with its critical stakeholders.

Energyisfromrenewablesources

Waterisusedinanenvironmentallyresponsibleandsociallyequitableway

Future-FitGoal

ß NegativeImpact

Productsdonotharmpeopleortheenvironment

Release 1 identifies 21 future-fit goals which together define the social and environmental break-even point for business

Release 1 of the Benchmark also offers a set of Key Fitness Indicators that help a company assess its progress towards each goal, identify performance gaps and

prioritize corrective actions. It is free to download from our website now.

Progress to date Performance gap

Release 2 will build on this foundation to also capture the restorativeeffects a company can have – we call this Creating System Value

Some future-fit goals stop at the break-even point and some have a natural positive extension. Release 2 will extend the Benchmark into this positive territory, augmenting it with a few

additional goals to capture all of the ways in which companies can have a restorative impact.

Productsmeetabasicneedofunderservedcustomers

Energyisfromrenewablesources

Waterisusedinanenvironmentallyresponsibleandsociallyequitableway

Productsdonotharmpeopleortheenvironment

Interventionsimprovepeople’shealth

Future-FitGoal

PositiveImpactà

ThesearesamplerestorativemetricsTBC

ß NegativeImpact

Future-FitBusiness Benchmark

Benefits of the Future-Fit Business Benchmark

It empowers business leaders to think long-term, by shifting focus from today’s best practice to tomorrow’s required practice.

It inspires and rewards true leadership, by showing the full extent ofthe gulf between companies striving to make real progress, andthose that are doing just enough to be ‘less bad’ than their peers.

It offers actionable strategic insight, equipping investors to assesswhich companies are acting effectively to close the gaps between where they are now and where they need to be, reducing risk and increasing the likelihood of better returns.

It enables deeper integration of ESG analysis into portfolio construction, offering greater opportunity for tailored product design and market differentiation.

Future-FitBusiness Benchmark

The Development Council: Future-Fit’s first movers

Christopher DavisInternational Director of CSR

“… a North Star by which to guide our journey to true sustainability.”

Susanne StormerVP of Corporate Sustainability

“… helping us to think through how we can have an even greater impact on society.”

Helen SahiDirector of Sustainability

“… offers a ready-made way to operationalize our

2025 targets.”

Work in progress…

Partnership with one of the world’s biggest providers of ESG data to institutional investors, to create a tradeable index in <3 years.

Partnership with Shell Foundation, to adapt the Benchmark for impact investors to enable credible, comparable assessment of the impact of social enterprises and social investment funds.

Partnership with ’top six’ accountancy firm, to create a Future-Fit assurance process that any accredited assurer will be able to use.

Growing our Development Council and creating an Investor Coalition, so we can learn from and leverage the credibility of first movers.

Fostering a Future-Fit solution ecosystem to embed our approach in third party offerings (e.g. Embedding Project, Supply Shift).

Creating tools to accelerate adoption, such as our “workshop in a box”.

Future-Fit ‘pledge’ and membership program, for users of all sizes.

Future-FitBusiness Benchmark

Please contact us to find out more

Visit us at FutureFitBusiness.org

Martin Rich, Co-founder & ChairEmail: martin@futurefitbusiness.org