CCB Magazine

Christoph Harrach: “If I knew that the world would end tomorrow, I would plant an apple tree today”

Photo: © Thomas Kierok

Companies are increasingly transforming themselves in the direction of sustainability, partly because they have to. One way of voluntarily emphasizing social and ecological commitment is the common good balance sheet. What is behind it? Who is it suitable for and how helpful can it be for creative professionals? An interview with sustainability economist Christoph Harrach, who advises on the Economy for the Common Good and has written a book on the subject.
 

INTERVIEW  Jens Thomas 

CCB Magazine: Hello Christoph, you are a sustainability researcher, advise companies, cities and local authorities on the common good and have just written a book on the “Transformation of companies with the common good economy”. Before we go into detail, please introduce yourself. 

Christoph Harrach:I have been professionally involved with the topic of sustainability for over 20 years. Initially, I worked as a department manager at the pioneering eco company Hess Natur Textilien, then I started blogging about ecology, sustainability and lifestyle - around 18 years ago, I launched the KarmaKonsum conference, a think tank and specialist conference on sustainability with up to 1,000 participants every year. This also led me to the Economy for the Common Good. Christian Felber, who helped launch the Economy for the Common Good in 2010 with his book of the same name, was also a guest there. I have also been working as a consultant on the Economy for the Common Good since 2019, am a practising yoga teacher and am currently responsible for sustainability management at the TH Ostwestfalen-Lippe. Oh yes, and I also teach at the University of Paderborn on the topic of sustainability with a focus on the ECG.

CCB Magazine:For those who don't know what the ECG is: What is it?

Christoph Harrach:The ECG is a civil society movement with the aim of focusing on the common good rather than profit maximization in an economy. The term “Economy for the Common Good” first appeared in 2010. The concept was developed in Austria. In the same year, the aforementioned book “The Economy for the Common Good” by Christian Felber was published, which kick-started the movement. Overall, the ECG is based on six values: human dignity, solidarity and justice, ecological sustainability, transparency and co-decision - and a common good balance sheet can be drawn up for all points. Around 2,000 companies worldwide have now implemented such a common good balance sheet. Around 8,000 people support the movement.

The ECG is a civil society movement with the aim of focusing on the common good rather than profit maximization in an economy. It is based on six values: human dignity, solidarity and justice, ecological sustainability, transparency and co-determination

Sustainability economist Christoph Harrach. Photo: Maria Korge

CCB Magazine:Can you explain how a common good balance sheet works?

Christoph Harrach:Of course. The basis for the common good balance sheet is the common good matrix, a template that can be systematically edited. The common good matrix is open source, anyone can download it and create a balance sheet, and everything can be viewed at the end. The matrix relates the values of the ECG to the organization's most important contact groups or stakeholders. These are: Suppliers, financial partners, employees, customers and market companions as well as the social environment. This results in a total of 20 matrix fields, for which you estimate on a 10-point scale how developed your own organization is in specific topics: Zero points means that you only adhere to the legal standard. One point is awarded if there is a clear awareness of the problem but no concrete measures have yet been taken. One to three points are awarded for initial measures. For example, an employee has already switched to fair or ecological purchasing, but there is still no corresponding supplier management. Four to six points are awarded for systematic measures, for example if such a supplier management system has been introduced. And from seven points upwards, exemplary behavior is demonstrated if measures are not only part of the company's core, but are not limited to individual factors.

CCB Magazine:And the scores are awarded by whom and how?

Christoph Harrach:In the first step, you give yourself the points. Only then are they checked by a GWÖ assessor through an audit process and corrected if necessary. You can therefore also be downgraded or upgraded in individual fields. You can even receive minus points if your behavior is contrary to the goals of the ECG. A total of 1,000 points can be awarded. The balance sheet is audited every two years. 

CCB Magazine:One point of criticism of the common good balance sheet is that the auditors are from the ECG itself. It is also criticized for standing in the way of competition, which is essential for a market economy. In addition, property rights and freedoms would be restricted if the common good and not the ownership shares in the company were given top priority.

Christoph Harrach:On the first point of criticism: That's right, the auditors come from the ECG movement itself. So it's not like CSRD reporting, which is finally approved by external auditors - although this is another point of criticism, as the assessment is carried out by auditors rather than environmental verifiers. I cannot agree with the other points of criticism. Today's economic system, which is based on maximizing profits and exploiting our ecological basis of life, is not sustainable. We currently consume 2.5 times as many resources as the earth can provide. This is not only unfair to future generations. It destroys solidarity in a society. And the ECG is critical of growth. But it is not against profits per se. The aim is for profits to be reinvested in the company. This is the only way to guarantee the long-term future of companies in terms of sustainability. Ultimately, everyone decides for themselves what and how much they want to and can contribute in the spirit of the ECG.

Today's economic system, which is based on maximizing profits and exploiting our ecological basis of life, is not sustainable. The ECG is not against profits per se. But the aim is for profits to be reinvested. This is the only way to guarantee the long-term future of companies in terms of sustainability

CCB Magazine:But isn't there a danger that the ECG will degenerate into a marketing tool if everyone can draw up an ECG balance sheet and decide what they are capable of achieving?

Christoph Harrach:I would see it the other way around: The ECG offers concrete transformation tools. You don't have to do them. In contrast to CSRD reporting, which has been mandatory for large capital market-oriented companies since this year, an ECG balance sheet is voluntary. And the companies that prepare such a balance sheet generally have a high awareness of values and want to highlight their commitment. You first have to have the time to do this. Preparing a balance sheet can sometimes take months. As a rule, it takes around 200 working hours per company to prepare a balance sheet, and the reports are on average 60 to 80 pages long - at the end, everything can be viewed and checked. So far, I'm not aware of any cases where companies or municipalities have used a common good balance sheet to adorn themselves. It's more the other way around: the ECG balance sheet raises awareness. For many, this is the first step towards action. So far, I know of no better management system that is suitable for accounting in this area. 

CCB Magazine:Which companies or organizations have drawn up such an ECG balance sheet to date? Do they tend to be small or medium-sized companies? Do certain sectors dominate?

Christoph Harrach:Small and medium-sized companies are included, but mainly medium-sized and owner-managed companies. Companies that have drawn up a common good balance sheet include the outdoor company Vaude, eco-pioneers such as Ökofrost, Bioland and Voelkel, as well as Sparda-Bank München, which was the first German bank to draw up an ECG balance sheet in the banking sector - sports clubs, cooperatives, associations are among the ECG balance sheet preparers, but also cities and municipalities. Even 15 large companies subject to CSRD with more than 500 employees and an annual turnover of over 50 million euros are now included. This also means that the ECG is not bound to any legal form. Only the activities differ depending on the legal form. Cooperatives, for example, are likely to focus more on co-determination rights and transparency, but this does not mean that they treat their employees equally fairly. Others, on the other hand, prioritize ecological factors. No one sector dominates either: whether trade, consumption, medicine or the energy industry - it's all there.

Cultural institutions and creative companies in particular are often driven by values. I think the ECG is a good way for them to position themselves

CCB Magazine:To what extent is the ECG also suitable for cultural and creative professionals?

Christoph Harrach:I would say very much so. Cultural institutions and creative companies in particular are often driven by values. Ecological and/or social factors often dominate. The first organizations, such as the Beethoven-Haus Bonn, have already drawn up an ECG balance sheet. I think the ECG is a good way to position yourself in the relevant fields. But creative professionals are often solo self-employed and work a lot. The ECG recommends a 30-hour week. Here, the balance sheet can show how much or whether you are working too much when work and life become so delimited. At the same time, it can motivate people to continue or become even more involved in other fields.

CCB Magazine:Christoph, in conclusion: Where will the ECG be in a few years' time? 

Christoph Harrach:I am certain that the ECG will continue to grow. There is now an initial federal strategy “Social innovations and companies oriented towards the common good”, and there is also a funding pot that is set to run until 2028. The next important step will be to link tax consequences to the balance sheet total obtained from the ECG reports - comparable to CO2 pricing. Companies with a high balance sheet total would therefore have to be taxed more favorably than those with no or a low score. Of course, the ECG still needs to be better validated and scientifically investigated. But we are in the process. I am very positive about this and ultimately agree with Luther: if I knew that the world would end tomorrow, I would plant an apple tree today. 

Category: Innovation & Vision