“What IS Sustainability?” It depends on whom you ask: OECD, the UN, or Harvard Business School

» Posted by on Apr 9, 2021 in business, environment, ESG, ex-post evaluation, foreign aid, Impact, impact investing, OECD, Sustainable development | 8 comments

“What IS Sustainability?” It depends on whom you ask: OECD, the UN, or Harvard Business School

Recently I’ve had conversations where I had to define which sustainability we were talking about. Was it:

  1. ex-post-project sustainability of outcomes and impacts,
  2. environmental sustainability, or
  3. business sustainability?

 

Since I spend most of my time evaluating the ex-post sustained and emerging impacts of foreign aid projects years after projects close, or at least advocate for it, let’s start there.

  1. The Organisation for Economic Co-operation and Development (OECD) is a “forum and knowledge hub for data and analysis, exchange of experiences, best-practice sharing, and advice on public policies and international standard-setting.” Regarding evaluation specifically, the OECD has “established common definitions for six evaluation criteria – relevance, coherence, effectiveness, efficiency, impact, and sustainability – to support consistent, high-quality evaluation”. Focusing on long-term sustainability, their evaluation guidance is:

 

 

Source: OECD, Better Criteria for Better Evaluation, 2019

 

The good news is that in this recent publication on Applying Evaluation Criteria Thoughtfully (2021), OECD keeps the updated definition but inches towards recommending actual ex-post project sustainability evaluation, rather than just projected (and assumed “likely to continue” sustainability). For this, “likely” is the most significant reason evaluators for donors and implementers have assumed, rather than evaluated, sustainability for decades. Further, positive, ‘sustained’ trajectories are also assumed at close-out/ exit, but rarely tested ex-post.

The OECD criteria give not evaluating it as an option. I far prefer “net benefits of the intervention continue” as it is a marching order: Prove that results were sustained. In this evolution, this 2021 report states, “After the completion of the intervention, and evaluation of sustainability would look at whether or not the benefits did continue, this time drawing on data and evidence from the intervention’s actual achieved benefits.”

 

OECD even goes on to recommend implementing and monitoring for sustainability. The new piece de resistance is: “Sustainability should be considered at each point of the results chain and the project cycle of an intervention”:

  1. “The sustainability of inputs (financial or otherwise) after the end of the intervention and the sustainability of impacts in the broader context of the intervention…. as well as whether there was willingness and capacity to sustain financing (resources) at the end of the intervention
  2. For example, an evaluation could assess whether an intervention considered partner capacities
  3. Built ownership at the beginning of the implementation period…. And
  4. In general, evaluators can examine the conditions for sustainability that were or were not created in the design of the intervention and by the intervention activities and whether there was adaptation where required.”

Yes, Valuing Voices highlighted this at the American Evaluation Association presentation “Barking up a Better Tree: Lessons about SEIE Sustained and Emerging Impact Evaluation” in 2016, and we have developed this into 2020’s Exiting for Sustainability trainings and checklists. Wonderful to see implementing for sustainability in guidance by the OECD!

 

Moreover, while the 2019 OECD report mentioned resilience in passing, related to sustainability, “encourages analysis of potential trade-offs, and of the resilience of capacities/ systems underlying the continuation of benefits”. Such resilience and continuation of benefits evaluation involve examining huge systems (the financial, economic, social, environmental, and institutional capacities) that projects and programs are implemented within, whose stability is needed to sustain net benefits over time. Yes, for ex-post sustainability questions for evaluators to consider should include: “To what extent did the intervention contribute to strengthening the resilience of particularly disadvantaged or vulnerable groups” on which the sustained impacts of so much of our “Leave No One Behind” myth of Sustainable Development rely.

 

However, OECD makes suggestions to evaluate even broader, overwhelming what is feasible: “…this involves analyses of resilience, risks, and potential trade-offs.” Whose? All stakeholders, from participants to local partners and national and international implementers, and international donors? How far back and how far forward? What a huge undertaking. Further, the OECD points evaluators to define resilience, but as I learned in my Famine Early Warning System research and a current ex-post evaluation process for the Adaptation Fund, that involves creating evaluable boundaries by determining resilient to what kinds of shocks? Vital questions current industry monitoring and evaluation budgets for all evaluations, much less (too-rare) ex-post project evaluations, are insufficient for as they hover around 3-5% of total costs.

 

  1. Slight progress at OECD is being made by acknowledging environmental sustainability first brought up by the Brundtland Report, “Our Common Future” back in 1987. This linchpin report highlighted that “critical global environmental problems were primarily the result of the enormous poverty of the South and the non-sustainable patterns of consumption and production in the North. It called for a strategy that united development and the environment – described by the now-common term “sustainable development”… that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

 

While an OECD brief in 2008 considers the environmental aspects of our thinking about sustainability, it argues that sustainability primarily about “using economic development to foster a fairer society while respecting ecosystems and natural resources.” The 2021 Applying Evaluation Criteria Thoughtfully rather unhelpfully mostly ignores the environment’s role in sustainability: “Confusion can arise between sustainability in the sense of the continuation of results, and environmental sustainability or the use of resources for future generations. While environmental sustainability is a concern (and maybe examined under several criteria, including relevance, coherence, impact, and sustainability), the primary meaning of the criteria is not about environmental sustainability as such; when describing sustainability, evaluators should be clear on how they are interpreting the criterion.” Given rapid climate change, I would argue that any sustained and emerging outcomes and impacts of projects that does not include an evaluation of the environmental context will fail to foster sustained resilience. Yet donors’ fixed funding timeframes that set completion to disbursement without evaluating sustainability or resilience continue to be huge barriers.

 

  1. Finally, business sustainability brings together these impacts on communities and society along with impacts on the environment. These are called ESG (Environmental, Social, and Governance) criteria. A Harvard Business School brief defines sustainability as “doing business without negatively impacting the environment, community, or society as a whole. “Where applied well, the aspiration is that “beyond helping curb global challenges, sustainability can drive business success.” While Harvard Business Review highlights “What Works’ in Calculating the Value of Impact Investing, they are, like almost all of global development ‘while- we-are-there’-measures. There is one mention of ‘terminal value’, 5 years after close of ownership, and they estimate social return on investments. This is a good, step, but as insufficient as foreign aid – for these are projected, not actual results.

At Valuing Voices, we have found hopeful examples such as IKEA as well as where ‘impact investing’ hype does not match the claims. Nonetheless, increasingly businesses are trying to consider circular economy systemic principles of “economic development designed to benefit businesses, society, and the environment.” This is regenerative, aims to decouple growth from the consumption of finite resources, not generate excess waste that cannot be reused and actuals seem to be measured at least during investments. As Harvard notes, “this leads investors to look at factors such as a company’s carbon footprint, water usage (both Environment), community development efforts (Social), and board diversity (Governance).” We encourage them to measure long-term/ longitudinally. A current Harvard Business Review sobering article on the ineffectiveness so far of measuring environmental sustainability and ESG. “…reporting is not a proxy for progress. Measurement is often nonstandard, incomplete, imprecise, and misleading. And headlines touting new milestones in disclosure and socially responsible investment are often just fanciful ‘greenwishing’”.

Australia’s RMIT defines business sustainability as comprising 4 pillars: Human, Social, Economic, and Environmental which combines a) “Human sustainability focuses on the importance of anyone directly or indirectly involved in the making of products, or provision of services or broader stakeholders;… b) Social sustainability focuses on maintaining and improving social quality with concepts such as cohesion, reciprocity and honesty and the importance of relationships amongst people;… c) Economic sustainability aims to improve the standard of living [and] the efficient use of assets to maintain company profitability over time;… d) Environmental sustainability places emphasis on how business can achieve positive economic outcomes without doing any harm, in the short- or long-term, to the environment.” But how well measured?!

Would ESG success be sustained over the long-term rather than short-term shareholder profit cycles? Will the OECD start to recommend extensive ex-post evaluation? Will they develop guidance to incorporate environmental concerns in evaluation for our common good? I do not yet know, but I implore these silos to start talking. No time to waste!

As my colleague and  collaborator Susan Legro commented, we need to:

1) Continue to seek clarity and specificity in the terminology that we use, ensuring that it is clear to all stakeholders and beneficiaries; and

2) Find ways to study projects and initiatives over the longer term, which is the only way to study the designation of “sustainable” for any initiatives seeking that label.

What are your thoughts?

 

31 years of Valuing Voices of national participants, project partners, donors and technical staff. Let’s have sustained impact!

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8 Comments

  1. The topic of what Sustainability is….in different contexts, including sectoral-based…its meaning and importance depending on whose point of view…..how to measure depending on that context and point of view…..was seriously discussed in USAID circles and Agency wide in 1986. As well as in other donor agencies and international institutions. My point? What have we learned through the years applicable to questions about sustainability today? Perhaps the focus should be on the institutional barriers to taking sustainability seriously in design and implementation because so much has already been learned that can be applied and checked up on with partners and beneficiaries.

    • Yes, you’re so right Patricia, this is not even starting to incorporate views of CBOs or participants themselves, or other stakeholders like doctors, businesspeople etc… Yes, USAID did terrific ex-posts in the 1980s until they went out of ‘vogue’… Institutional barriers (or as ex-head of PPL/LER at USAID, Cindy Clapp-Wincek said) INCENTIVES. I wonder what you mean about ‘so much has already been learned’? Please tell me more… Thanks!

  2. Thanks for these thoughts, Jindra! I want to second your discussion of the usage of “sustainability” that is implied in “sustainable development.” The emphasis on SDGs in the development community is omnipresent these days, and its meaning in this context is slightly different. Some definitions (the Brundtland report) look at generational trade-offs, while others emphasize human development and environmental sustainability.

    I would suggest that the take-away from your piece the same for “sustainable development” concepts and definition as it is for the three other concepts and definitions: 1) Continue to seek clarity and specificity in the terminology that we use, ensuring that it is clear to all stakeholders and beneficiaries; and 2) Find ways to study projects and initiatives over the longer term, which is the only way to study the designation of “sustainable” for any initiatives seeking that label.

    • Susan, Yes! That is it… we so rarely go back to see how sustainable our development has been, why/ why not and SO SO SO rarely cross silos to understand different definitions of sustainability, and haven’t even asked locals! Many thanks…

  3. In my 30+ years of development work for WHO, FAO, UNIDO and ILO, mostly in LMICs, I came to the conclusion that sustainability is closely linked to quality and to being responsive to community needs. Projects and activities designed principally to further the agendas of development organizations, rathar than those of the communities of interest they are trying to serve, weill fail, and deservedly so. Sustainability has a quality dimension. If it genuinely serves the real needs of a community, it will be sustained.

    • Chris, thanks for your comment. I so agree! If you see our 2016 blog, some sectors (self-generating income as the best incentive) lend themselves to sustainability for it benefits our participants directly: https://valuingvoices.com/what-happens-after-the-project-ends-lessons-about-funding-assumptions-and-fears-part-3/. Sadly, I fear you’re right, for if there is no interest in returning to see what most sustainably served our participants’ needs (or not), then sadly they are only “designed principally to further the agendas of development organizations”. Have you seen sustained success anywhere in your 30+ years? What worked? Why? Many thanks!

  4. In my view, understanding of, and measure of sustainability is more skewed to levels of resilience which in context, is the ability to adopt and adapt a development idea to the specific context. Resilience can be looked at at all levels of programming, therefore, once each level can be in position to adopt and adapt a development context (resiliency) then whatever development policy, programme, project etc will definitely be sustainable. Once there is resiliency at all contextual levels of development programming, it makes it easy to have a buy-in from all perspectives of desired social and economic change (Sustainable Impact).

    • Dear George – interesting. Resilience to what? climatic shock, political upheaval, or __? Can you share an example? Thanks so much!

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