Localism Defined

This is a work-in-progress. Stay tuned as we build out the definitions.

Accountability
First used by Simon Zadek, founder of AccountAbility, an NGO established in 1996 to promote accountability and sustainability, to indicate transparency to stakeholders.

BALLE
BALLE is the fastest growing business alliance of values-aligned entrepreneurs, business networks and local economy funders in North America. Re>Think Local is a BALLE member network. Together we are building local economies, city by city, town by town, business by business. BALLE creates real prosperity by connecting leaders, spreading solutions that work and driving investment toward local economies.

Base/Bottom of Pyramid (BoP)
An economic term referring to the largest but poorest socio-economic group, which in global terms refers to the 2.5 billion people who live on less than $2.50 (U.S.) per day. One of the earliest popular uses of the phrase “bottom of the pyramid” was by U.S. president Franklin D. Roosevelt in his 1932 radio address, The Forgotten Man, which referred to the plight of the American farmer and the importance of building economic power from the bottom up rather than the top down.

Base of Pyramid Entrepreneur (BoPreneur)
A trendy term for a Social Entrepreneur or someone who creates a new for-profit business with the mission of addressing a social and/or environmental problem and stimulating the economy at the base of the pyramid.

Benefit Corporation
A class of corporation required by law to create general benefit for society, as well as for shareholders. The fiduciary responsibility of a benefit corporation includes creating value for employees, community and the environment in addition to generating a profit. Laws vary by state but generally allow owners to protect the social or environmental mission and all stakeholders of the company, taking into account factors other than highest purchase price at the time of sale. A benefit corporation must publicly report on non-financial performances using established third-party standards. A growing number of stateshave enacted (including New York) or introduced legislation to recognize benefit corporations.

Blended Value
Introduced in 2000 by impact investing thought leader Jed Emerson, blended value represents a broader way of thinking about the nature of value creation by organizations, whether for-profit, nonprofit or hybrid, and through the application of capital. Emerson coined the “blended value” term to transcend the previously bifurcated definitions of value as either economic or social/environmental so that the focus could shift to maximizing companies, communities and capital.

Building Blocks
As noted by BALLE co-founder and chair Judy Wicks, “In order to build a local living economy, we must first determine what one looks like – what are the components, or building blocks, which comprise this sustainable system? By identifying the building blocks, we create a holistic vision of a local living economy that we can work toward achieving.” These can include sustainable agriculture, independent retail, zero-waste manufacturing, green building and community capital.

Business Ethics
Refers to the manner in which a business makes a profit. Business ethics came into focus with the Enron and WorldCom scandals and the ensuing Sarbanes-Oxley Act of 2000. Issues of focus in relation to business ethics include compliance with accounting rules, anti-discrimination laws, trade laws (anti-competitive behavior, deceptive practices, price fixing), product safety laws, intellectual property laws, laws against bribery, standards against slave and child labor, et-cetera.

Carbon Footprint
Historically defined as “the total sets of greenhouse gas (GHG) emissions caused by an organization, event, product or person.” (Wikipedia)

Certified B Corporation (B Corp)
Certified B Corporations are philosophically the same as legally designated benefit corporations but have a few important differences. The B Corp certification is not conferred by a state but by B Lab, a nonprofit organization that promotes the power of business to solve social and environmental problems. B Lab certifies companies the same way TransFair certifies Fair Trade coffee or USGBC certifies LEED buildings. Certified B Corporations earn their designation by meeting a high standard of overall social and environmental performance. B Lab supports and encourages legislative efforts and many legally chartered benefit corporations also have a B-Corp certification.

Cleaner Production
Originated in the Kyoto Protocol and was further developed by the United Nations Environment Programme (UNEP) as a component of a Life Cycle Assessment.  A methodology to reduce waste and toxins to humans and the environment in production processes.

Co-creation
Wikipedia defines co-creation as a business strategy that emphasizes mutual firm-customer value. It views markets as forums for organizations and customers to share, combine and renew each other’s resources and capabilities to create value through new forms of interaction, service and learning mechanisms. It differs from the traditional active organization / passive consumer market construct of the past. For Re>Think Local, it means partnership with our members and the community. It’s more than a strategy, it’s part of our DNA.

Collaborative Consumption
Describes the rapid explosion in traditional sharing, bartering, lending, trading, renting, gifting and swapping reinvented through network technologies on a scale and in ways never possible before. This includes sites like Craigslist and eBay, car sharing services like Zipcar, coworking spaces like our partner BEAHIVE, peer-to-peer travel sites like Airbnb and CouchSurfing, crowdfunding (Kickstarter), and a range of similar ventures.

Community Capital
Quite simply, investing locally, in one’s own community. There are a growing number of new models to connect local businesses with local lenders, investors and donors to speed and scale impact of these businesses: crowdfunding, community supported enterprises, triple bottom line banking and credit unions, slow-money investing, cooperatives, local investment clubs, direct public offerings and more.

Corporate Citizenship
Term used by the legal field in 1990s in lieu of corporate social responsibility largely to encompass charitable and political activities.

Corporate Responsibility
Possibly initially used by accountants in place of Corporate Social Responsibly to indicate inclusion of environmental and economic performance.

Corporate Social Responsibility (CSR)
CSR is a form of corporate self-regulation that is integrated into the business model and takes into account not only shareholders but also stakeholders such as employees and customers. CSR efforts often include the entire value chain, including suppliers, buyers and the communities in which the company operates, when addressing issues of social and environmental impact. The term “corporate social responsibility” came into common use in the late 1960s and early 1970s after many multinational corporations formed the term to describe any group that is impacted by a company’s activities. Annual CSR reports are now published, using a framework such as GRI to increase awareness and transparency around CSR and sustainability progress.

Double Bottom Line
A business term used in socially responsible enterprise and investment to refer to both the conventional bottom line, a measure of fiscal performance, and the second bottom line, a measure of positive social impact.

Ecological footprint
A measurement of human consumption of natural resources and the resulting waste against nature’s regenerative ability.  Sometimes defined in terms of trees or acres of a grain that it would take to support a particular lifestyle over a specified amount of time.

Environmental Management Systems (EMS)
A set of processes and practices for managing environmental impacts. EMS systems vary based on areas of focus i.e., water, waste, purchasing, design. Most are based on the “Plan, Do, Check, Act” model. Planning includes identifying impacts and goals, doing includes implementation, checking includes monitoring and adjusting, and acting includes reviewing and changing the EMS.  Popular EMS systems are the ISO 14001 series, Design for the Environment Program (DfE) and others supported by the Environmental Protection Agency.

Environmental Social and Corporate Governance (ESG)
ESG is a general catch-all phrase that encompasses the major areas of concern for a business that strives to operate in a sustainable and ethical manner. In addition to financial factors, each of these areas is taken into consideration for anyone considering investment in a company. (See also SRI.)

Global Impact Investing Network (GIIN)
A not-for-profit organization dedicated to increasing the scale and effectiveness of impact investing, which aims to solve social or environmental challenges while generating financial returns.

Global Impact Investing Ratings System (GIIRS)
Provides independent, third party ratings and analytics for the impact investing industry. Both companies and funds can be rated by GIIRS to assess social and environmental impact. GIIRS ratings are analogous to Morningstar investment rankings or S&P credit risk ratings but don’t take into account financial performance.

Global Reporting Initiative (GRI)
A framework for reporting on economic, environmental and social sustainability, GRI is one of the most widely used standards around the world. GRI promotes transparency and accountability and provides companies with guidance and support for sustainability reporting efforts. GRI is a nonprofit that is continually evolving the standards through broad input and collaboration from civil society, business, mediating institutions, academia, labor, public agencies and intergovernmental agencies.

Green Business
Defines a business that exceeds compliance. Also used for a business that contributes toward sustainable development such as alternative energy, organics, fair labor goods, or products made from recycled materials.

ImpactBase
ImpactBase, a project of the Global Impact Investing Network, is a searchable online database of impact investment funds and products designed for investors.

Impact Reporting and Investment Standards (IRIS)
An initiative of the Global Impact Investing Network, IRIS provides a common language of indicators and metrics to define operational, social and environmental performance. IRIS is a set of standardized metrics that can be used to describe an organization’s social, environmental, and financial performance. IRIS’ independent and credible performance measures help organizations assess and report on their social performance. IRIS metrics span an array of performance objectives and include sector-specific metrics for areas such as financial services, agriculture, and energy, among others. Like financial accounting standards, IRIS provides a basis for performance reporting, and organizations need only use relevant metrics from the IRIS library.

ISO 14001 series
International Organization for Standardization (ISO) EMS.  ISO 14001 series comprises of over 10 standards, covering labeling, evaluation, communications, and greenhouse gasses. ISO 14001 series is based on the “plan, do, check, act” platform and allows for certification.

ISO 26000
International Organization for Standardization (ISO) emerging standard for social responsibility. Encompasses social, environmental and economic performance.

Low-profit Limited Liability Company (L3C)
L3C is a legal structure for businesses in the US that bridges the gap between nonprofit and for-profit investing. L3Cs use their for-profit efficiencies along with fewer regulations from the IRS to achieve socially beneficial goals. L3Cs are taxed and operate with a stated goal of achieving social improvement, with profit as a secondary goal.

The Natural Step
A non-profit founded in 1989 to accelerate sustainability. The Natural Step introduced “backcasting” whereby the desired outcomes guide short term decisions. The Natural Step Framework sets out four systems conditions for sustainability: (1) Substances from Earth’s crust cannot be systematically extracted at a faster rate than they are re-deposited.  (2) Substances produced by society cannot be systematically produced at a faster rate than they are broken down by nature. (3) Natural resources cannot be systematically deteriorated for production so that natural system’s ability to regenerate falls behind. (4) Human needs must be met world wide.

PULSE
data management tool by that provides a streamlined way for organizations or funds to track, benchmark and report on financial, operational, environmental, and social data across an investment portfolio. PULSE runs on the Salesforce platform and can be integrated with an organization’s customer relationship management (CRM) program and other front office solutions such as deal tracking and pipeline management software. In a nutshell, PULSE helps managers consolidate and centralize extensive data, making it easy to access, search and use.

Socially Responsible Investing (SRI)
Also known as sustainable, socially conscious, “green” or ethical investing, this term defines any investment strategy seeking both financial return and social good. In its broadest usage, SRI refers to proactive practices such as impact investing, shareholder advocacy and community investing. Socially responsible investments encourage corporate practices that promote environmental stewardship, consumer protection, human rights and diversity. They can also represent the avoidance of investing in industries or products that can be socially harmful, including alcohol, tobacco, gambling, pornography, weapons, and/or the military. The term dates back to 1758 when the Quakers prohibited members from participating in the slave trade.

Social Return on Investment (SROI)
The SROI concept, essentially a cost-benefit analysis, is used by charities, donors and nonprofit organizations to rate the results of their endeavors with firm evidence of impact and created value. The idea of social return on investment was pioneered in the 1990s by a U.S. venture fund called REDF.

Sustainable Development
The United Nation’s used the term when establishing the Brundtland Commission in 1983. Denotes interconnection of development activities across all systems: economic, social, environmental, political, technical, international, administrative, and production.

Triple Bottom Line (TBL)
Coined by John Elkington, founder and chairman of SustainAbility, in his 1997 book Cannibals with Forks: the Triple Bottom Line of 21st Century Business, the term refers to the three prongs of financial, social and environmental accountability. While businesses of the past only had to be accountable for their financial performance, today’s enterprises are increasingly pressed to demonstrate concern for three bottom lines: financial, people/communities, and the environment.

The Three Pillars, and “people, planet, profit”
Additional terms identical in meaning to “triple bottom line.”

Three-Legged Stool
A metaphor for environmental, social and economic responsibility. Brought into use by the social responsibility investment (SRI) community in the 1990s.

Some of these definitions have been adapted from “Defining a Conscious Economy: A Glossary of Sustainability Acronyms and Terms” on CSRwire, with sources from B Lab, Global Impact Investing Network, Global Reporting Initiative, Investopedia, Next Billion, The Wall Street Journal and Wikipedia.

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