Where has Goodhart’s law turned your well-intentioned metric into a liability? If you lead a sustainability program, a reporting function, or an executive team that sets targets, the honest answer is probably: somewhere on your board slide already. You just haven’t found it yet.

The law

In 1975, Charles Goodhart, an economist advising the Bank of England, observed that any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes. The anthropologist Marilyn Strathern later sharpened his point into the sentence everyone quotes: “When a measure becomes a target, it ceases to be a good measure.”

Goodhart was writing about monetary policy. He could have been writing about sustainability, a field that runs on measures turned into targets: percentages, intensities, scores, and claims. And in sustainability, the collapse of the measure is no longer just an embarrassment. Since September 27, 2026, in the European Union it can be an illegal claim.

The percentage fell; the pile grew

Consider a company that reduces the virgin plastic in each unit it makes by 30% over ten years, and reports the reduction as a triumph. The report is accurate. The conclusion is not.

Do the multiplication nobody did. At 5% annual growth, ten years compounds to 1.63 times as many units. Per-unit plastic fell to 0.70 of its starting point. Multiply the two: total virgin plastic is up roughly 14%. The percentage fell. The pile grew.

Notice that nobody lied, and nobody gamed anything. The team hit its target honestly. The target was per unit, and the denominator moved. The denominator is the count underneath the percentage, the number of units the per-unit figure divides by, and at 5% growth it does not sit still. This is the form of Goodhart’s law that should worry executives most: not the cynical kind, where people cheat the number, but the innocent kind, where the number is accurate, audited, and faithfully reported, while the thing it was meant to describe goes the other way.

The target was per unit. The planet counts units.

The measure was never the point

A recycled-content target asks how much recycled polyester is in the jacket. A better question asks what the jacket is for. A designer who did the arithmetic on cost per wear, a €30 jacket worn five times costs €6 per wear; a €300 jacket worn three hundred times costs €1, reframed the problem entirely: this jacket needs to survive 300 wears. One question optimizes an input. The other examines the assumption underneath it.

Or take offset-based “carbon neutral” claims. The metric performed beautifully for a decade: targets set, offsets purchased, claims printed. The assumption underneath, that paying for reductions elsewhere is the same as reducing your own emissions, was never examined. The EU has now banned the claim outright. A target can be met, reported, and audited for years, and still end as a liability, because the belief it rested on was never true.

And there is no final, incorruptible metric waiting at the end of this search. Cost-per-wear can be gamed the moment it becomes a target, just as recycled content was. That is the law’s real lesson. The answer is not a better measure. The answer is examining what your measures assume.

Goodhart is the symptom; the belief is the disease

The standard telling of Goodhart’s law blames gaming, people optimizing the number instead of the work. In nearly fifty years inside this field, I have found the gaming to be the least of it. The measure usually fails earlier, at the moment it is chosen, because it is chosen inside a belief nobody has examined.

The per-unit target assumed the denominator would sit still. The recycled-content target assumed the material was the problem. The offset claim assumed someone else’s reductions were interchangeable with your own. Every metric on your dashboard is a belief wearing a number, and the belief, not the number, is where the risk lives.

This is also why the problem is about to get faster. The AI systems now drafting strategies, disclosures, and sustainability reports were trained on our reporting, decades of it, built on the same unexamined assumptions. Ask a model to help you hit the target and it will optimize against the gamed measure fluently, confidently, and at machine speed. Goodhart’s law used to operate at the speed of an annual report. It now operates at the speed of generation.

Audit your own metrics: five steps

1. List the headline metrics. The handful of numbers on the board slide, the ones your sustainability performance is judged by.
2. Name the denominator. For every percentage, ratio, and intensity figure, ask what it assumes will hold still: unit volumes, product mix, revenue, headcount. Denominators move. That movement is where the gap hides.
3. Ask what the target rewards. Every target rewards some behavior and quietly punishes some other. If your people are rewarded for the number, what are they being punished for noticing?
4. Follow the material. Compare each metric with the physical quantity it claims to describe: units, tons, wears, years of use. When the metric and the material disagree, believe the material.
5. Ask the belief question. For each metric: what had to be assumed for this to be the right measure? Who examined that assumption, and when?

Steps one through four find discrepancies. Step five finds the cause. It is the step almost everyone skips, and the only one that prevents the next metric from failing the same way.

The diagnostic

Step five, done properly, is a discipline rather than a checklist. It is the work of the Belief Gap Diagnostic: a structured examination of the beliefs underneath an organization’s claims, targets, and AI-supported decisions, the distance between what the organization believes and what it can actually substantiate. That distance is the belief gap, and it is where regulators, journalists, and competitors will eventually look.

Your metrics are not lying to you on purpose. They are answering, faithfully, the questions they were built from. The question worth asking, before someone else asks it for you, is the one this post began with: what had to be assumed for that answer to be true?

*Ken Alston has spent nearly fifty years inside sustainability: twenty years at SC Johnson, seventeen alongside William McDonough and Michael Braungart, and nine years in independent practice. He keynotes on the assumptions hiding inside executive decisions, and runs the diagnostic that finds them before a regulator, a journalist, or a model does. Book an exploratory conversation →

If your leadership team had to write, from memory and with nothing in front of them, what your company stands for on sustainability, and those pages were then set beside what your company publishes, how wide would the distance be? That distance has a name. It is the belief gap, and it can be measured.

Two accounts of the same company

Every organization keeps two accounts of itself. The first is published: the sustainability page, the annual report, the target set, the claims made to customers, investors, and regulators. It is written, reviewed, approved, and audited, and it represents what the organization is prepared to say it stands for. The second account is operative: the beliefs the people inside the organization actually run on, the ones that govern decisions in the room where the decision is taken, whether or not those beliefs have ever been written anywhere. Organizational theorists have a name for this second account: theory-in-use, as distinct from espoused theory (Argyris and Schön). What an organization says it does, and what its decisions show it believes, are two different records.

Most of the time the two accounts are never set beside each other. The published account is maintained by a reporting function; the operative account is maintained by nobody, because nobody believes it needs maintaining. The result is that an organization can be entirely sincere in its published account and entirely governed by its operative one, and notice neither.

The belief gap is the distance between the two accounts. Stated precisely, it is the distance between what an organization believes and what it can actually substantiate. The definition matters because of where it locates the problem. The gap is not hypocrisy, and it is rarely dishonesty. It is the ordinary distance between conviction and evidence, between what a leadership team holds to be true and what it could demonstrate, in public, under questioning, if it had to. Pressure is what closes the distance by force: a regulator’s inquiry, a journalist’s comparison, a bad quarter in which the cost drive reveals which commitments were load-bearing and which were decorative. The only question is whether the comparison happens first in private, on the organization’s own timetable, or later in public, on somebody else’s.

Seen from inside

I have watched the distance appear in a single morning. The morning after a keynote, I ask the executives in the workshop to write, from memory and with nothing in front of them, what their company stands for on sustainability. They write quickly; everyone believes they know. Then we set their pages beside the company’s own published page, the one its customers and regulators read. The room goes quiet in a particular way. The two accounts are recognizably related and plainly not the same. Nobody in that room is dishonest, and nobody is incompetent. They are simply running on beliefs that were never set beside the claims. I have run that exercise for years, and the distance has never failed to appear. That quiet is the belief gap, seen from inside.

The twelve beliefs that set the ceiling

The operative account is not a fog. It has a structure, and the structure can be read. In Chapter 10 of my book Our Common Future – Now, “The Twelve Beliefs That Set the Ceiling,” I set out the twelve places where the belief a business runs on, usually unexamined, sets the limit on what it can achieve. Each pair states the belief that creates the ceiling first, and the belief that produces a different logic second.

1. Humans are the problem → Humans are participants in living systems. Whether people are cast as the burden on the system or as members of it governs everything designed afterwards.
2. Nature is fragile → Nature is the benchmark for design intelligence. Nature treated as a victim to be protected, or as the standard against which designs are judged.
3. Sustainability means doing less harm → Sustainability means aligning with the conditions that support life. A program of doing less damage, or a discipline of aligning with the conditions life requires.
4. Growth and sustainability are opposites → Misaligned growth is the problem — not growth itself. Whether growth itself is the enemy decides whether the strategy is retreat or redesign.
5. Efficiency equals progress → Efficiency without redesign creates fragility. Doing the same thing with less, or asking whether the thing itself is the right design.
6. Circularity fixes sustainability → Circularity without life alignment can still be destructive. Flows can circulate beautifully through a system that is still pointed at the wrong destination.
7. ESG is transformation → ESG creates visibility — redesign creates transformation. Disclosure shows you the organization. It does not change it.
8. Sustainability is a cost → Sustainability is the foundation of future value. Treated as overhead, it is the first line cut in a hard year. Treated as foundation, it is built on.
9. Abundance means more stuff → Abundance means more life. Whether plenty is counted in units produced or in living capacity decides what success is allowed to mean.
10. Problems must be fixed → Systems must be redesigned. Repairing the symptom inside the existing design, or redesigning the system that produces the symptom.
11. Sustainability is a department → Abundance is an organizational operating principle. A function with a budget line and a headcount, or a principle the whole organization runs on.
12. Business extracts value → Business is a steward of future capacity. The foundational pair, on which the other eleven rest: whether the business exists to take value out, or to hold future capacity in trust.

A reading against the pairs does not ask whether an organization has the right slogans. It asks which side of each pair is governing its decisions, and whether the published account says the same.

The Thirteenth Finding

Alongside the twelve pairs sits a thirteenth finding, and it concerns the practitioners rather than the organization. In good faith, and with the best intentions, experienced sustainability practitioners learn to translate what they believe into what an organization can currently receive. They shorten the distance, soften the claim, and build a bridge the room can cross. There is nothing wrong with a bridge, provided its destination is named. The finding is what happens when it is not: the bridge, built but never acknowledged as a bridge, slowly becomes the destination itself. In the book’s phrase, the practitioner ends up bridging toward the wrong shore, and translation replaces conviction without anyone deciding that it should.

The Thirteenth Finding is why the instrument described below is applied to its reader first. Before a conversation is read for anyone else’s beliefs, it is read for the practitioner’s own: where did I translate, where did I soften, which question was available and not taken to its destination? A measurement taken by someone who has not examined their own position is just another published account.

Why the gap matters more now

The distance between the accounts used to travel slowly. It surfaced in an annual report cycle, in a campaign, in the occasional investigation. Two things have changed its speed. The first is scrutiny: claims that were once marketing are now regulated statements in a growing number of jurisdictions, and the comparison between the published account and the evidence is increasingly made by people with the power to act on the difference. The second is generation. The claims a company makes are now drafted, at scale and at speed, by AI systems trained on everything the company and its field have already published. Those systems learned from the published account, with the operative account’s assumptions baked in underneath it, and they reproduce both, fluently and confidently, in every answer they give. A belief gap no longer sits quietly in a drawer between reporting cycles. It is restated, in polished language, everywhere the organization speaks in and out of the building. Measuring it yourself, first, in private, has stopped being a refinement. It is becoming a control.

How the distance is measured

The measurement begins with two questions, the same two that run through all of my work:

What had to be assumed for that answer to be true?
What can’t we see today because of what we already believe?

The instrument built on them is deliberately simple in form. It opens with a conversation of forty-five minutes with a decision-holder. There is no questionnaire and no intake form; the conversation is led by the two questions and follows what the speaker actually says. The findings are not produced in the room. Afterwards, in private, the transcript of the conversation is read against the twelve pairs and the Thirteenth Finding, pair by pair. Where a pair does not register in what was actually said, it is recorded as not reached, never scored on silence. Two further checks run through the reading: the denominator check, which tests whether the numbers relied on survive their own arithmetic, and the sorting, which separates what the organization can actually govern from what it never could, because exposure lives in confusing the two. The reading is then written as a report, and a closing discussion walks the findings through with the client. The report stands on its own after that. What happens next is the client’s decision, not the instrument’s assumption.

The discipline of reading afterwards, rather than diagnosing live, is the heart of the method. In a room, answers are presented and defended. In a conversation, answers are simply given, and the operative beliefs surface in the word choices, the trade-offs treated as obvious, and the things a speaker reaches for without noticing. They surface because nobody present is diagnosing them. The transcript, read in the cold light of the following day, reveals what the effort of being present in the conversation concealed.

Medicine keeps a useful distinction, one this method borrows in structure rather than authority. A screening is light, indicative, and allowed to be inconclusive; a diagnosis is the fuller examination of the evidence. A clinician takes the history during the encounter, then forms the reading afterwards from the chart, away from the social pressure of the room. The lighter forms serve as screening; the full instrument is diagnostic. Either way, the response must match the evidence. Prescription without diagnosis is malpractice.

Run the first measurement yourself

A rough version of the measurement costs an afternoon and nothing else, and every leadership team should run it once.

1. Gather the team without documents. No sustainability page, no report, no strategy deck in the room.
2. Write from memory. Each person writes, in their own words, what the company stands for on sustainability, and what it is committed to.
3. Set the accounts side by side. Place the written pages next to the company’s own published page and its current claims.
4. Mark the three kinds of difference. Where the accounts agree; where they differ in emphasis; and where the published account commits the company to things nobody in the room wrote.
5. Ask the two questions of every difference. What had to be assumed for this claim to be true? What can we not see because of what we already believe?

The exercise will not give you the measured distance. It will show you that there is one, which is the finding most teams have never had.

Three forms of the same instrument

That sequence is not three products arranged at three prices. It is one instrument used at three apertures, the same pattern recurring at a widening scale with its base intact. The two questions govern each form, the twelve pairs supply the reading, and the discipline remains constant: evidence comes first, and silence is never scored. First a conversation is read, then one artefact, then the organisation. The pattern also turns inward. Before the instrument examines a speaker, it is applied to its own reader, whose translations and softened questions form the practitioner’s bridge. The scale changes; the structure does not.

The two questions work at different depths, on different objects, and the forms are distinguished by what each one examines.

Diagnostic Light examines a conversation. When I talk with a guest on my podcast, the conversation is afterwards read in miniature against the pairs and the Thirteenth Finding, and the reading is written and given to the guest as a gift for their time. It is never sold. Its purpose is familiarity at no risk to the guest: one conversation, read carefully.

One artefact is examined as the diagnostic applied to that artefact. A document the client brings, a strategy, a claims set, a target structure, is read against its own assumptions, its denominators, and its sorting. The deliverable is a written reading of what the document stands on. It is the same diagnostic, aimed at one artefact. It does not read a company’s beliefs, and it does not pretend to.

The Belief Gap Diagnostic examines the organization. The full instrument described in this post: the conversation, the private reading, the written report, the closing discussion, set out in full on the Executive Diagnostic page. It is the form for a leadership team that wants the distance itself measured, in private, carefully enough to act on.

Whichever form fits, the beginning is the same: a conversation about what your organization believes, and what it can substantiate. Book an exploratory conversation →

The published account of your company is already written, and it is already being read, by regulators, by competitors, and now by machines. The operative account is being read too, in every decision it governs. The belief gap is the distance between them, and the distance does not close because it is ignored. It closes because somebody measured it.

Ken Alston has spent nearly fifty years inside sustainability: twenty years at SC Johnson, seventeen alongside William McDonough and Michael Braungart, and nine years in independent practice. He keynotes on the assumptions hiding inside executive decisions, and runs the diagnostic that finds them before a regulator, a journalist, or a model does.

On September 27th, 2026 — the European Union’s Empowering Consumers for the Green Transition Directive, (EU) 2024/825, starts applying. From that day, a set of sustainability claims that have sat unchallenged in marketing copy, on packaging, and across corporate websites become, in plain terms, illegal.

This is not a communications problem. It is a legal and governance exposure sitting inside language your organization wrote years ago and stopped thinking about.

What gets banned

Three categories matter most:

Generic environmental claims. Words like “green,” “eco-friendly,” “climate friendly,” or “sustainable” — made without recognized, substantiated backing — will be prohibited. Vagueness is no longer a shield; it is the offense.

Self-made sustainability labels. Private labels and certifications your organization invented, that no independent body verifies, will be banned. If the label is yours and the verification is yours, the label goes.

Offset-based greenhouse-gas claims. This is the one that will sting. Claims like “carbon neutral” or “climate neutral” founded on offsetting — paying for emissions reductions elsewhere rather than reducing your own — will be prohibited. A decade of net-zero marketing, built on purchased absolutes, loses its legal footing.

The penalties are real

Member states are required to set effective, proportionate, and dissuasive penalties. For cross-border infringements, the directive requires maximum fines of no less than 4% of the trader’s annual turnover in the member state or states concerned — or at least €2 million where turnover figures are unavailable — alongside possible exclusion from public procurement. Treat those numbers as the shape of the risk, not the final word: exact enforcement sits with each member state’s transposition. The direction is unambiguous — Brussels intends these rules to bite.

This was never just a European story

If your organization does not operate in the EU, read this as an early warning, not someone else’s problem. Regulatory standards migrate. What Brussels prohibits this year becomes the benchmark your investors, your insurers, your litigation opponents, and eventually your own regulators measure you against. The companies that treat September 27th as a European administrative event will be the ones explaining themselves in other jurisdictions later.

The deeper truth: these were belief gaps made illegal

Here is what interests me, after nearly fifty years inside this work.

“Carbon neutral through offsetting” was never a strategy. It was a belief — unexamined, inherited, repeated across an industry until it felt like fact. Nobody asked what had to be assumed for the claim to be true. The assumption was that paying for reductions elsewhere was the same as reducing your own emissions. It was not. It never was.

The directive does not fix that thinking. It prices the symptom. The disease — the unexamined assumption underneath the claim — is still sitting in your strategy documents, your disclosures, and increasingly, in the AI systems now drafting them at machine speed.

Every banned claim on that list began as a belief gap: the distance between what an organization believed and what it could substantiate. Brussels has now made a subset of those gaps illegal. The rest are still yours to find.

What to do this week

Three steps, in order:

1. Inventory every claim. Every “green,” “sustainable,” “carbon neutral,” every private label, every offset-based statement — on your website, your packaging, your investor materials. All of it, in one list.

2. Strike what you cannot substantiate. Not what you believe. What you can prove, to the standard the directive demands. If in doubt, it goes.

3. Examine the beliefs that produced them. This is the step almost everyone skips, and it is the only one that prevents recurrence. For each struck claim, ask: what had to be assumed for us to publish that? Who examined the assumption? When? The claims are the surface. The assumptions are the system that made them.

The organizations that do all three will come out of this stronger — not just compliant, but clearer about what they actually stand on. The ones that do only the first two will be back here with the next directive.

Ken Alston has spent nearly fifty years inside sustainability — twenty years at SC Johnson, seventeen alongside William McDonough and Michael Braungart and a decade of independent Inquiry/private practice. He keynotes on the assumptions hiding inside executive decisions, and the morning-after workshop that exposes them. Bring Ken to your stage →

/

In the early days of business sustainability, I had the good fortune to work at a major multinational fast-moving consumer goods company for two decades.

I worked in a variety of technical and business roles, zig-zagging my way through quality control, packaging and process design, regional R&D management, and product marketing management. I test-marketed one of the earliest “green-positioned” cleaning products in the UK market.

I could contribute my thoughts on sustainability and environmental matters even before sustainability became a corporate buzzword. The company’s Chairman was an early supporter of business sustainability, and I was asked to move from the UK to the USA to help start one of the first corporate sustainability departments.

The company has a Credo, “This We Believe”. Everyone knew the Chairman sincerely believed business sustainability was an important consideration. It removed the first obstacle that typically stops business sustainability conversations before they begin.

But importantly, it does not guarantee a more sustainable outcome. That always has to be earned.

We were discussing a new product concept one time. I had inserted myself in the ideation stage of some product development teams to help get the sustainability perspective on the table.

Around the table were the usual suspects. Intelligent, experienced people represented R&D, marketing, purchasing, manufacturing, and communications. We had expertise, resources, and executive expectations for a successful new product introduction.

As I participated in the dialogue and planning for ideation, I could sense that the range of outcomes was narrowing right from the start. Not a deliberate attempt to undermine the process, but simply a natural result of each participant bringing the assumptions and beliefs of their specialism to the table.

Purchasing insisted on trusted suppliers that delivered on cost. Finance expected a sustainable product to cost more. Manufacturing wanted to optimize around existing manufacturing assets. Marketing needed a proposition that customers would value and select over a competitor’s product. Communications wanted to tell a greener story, and legal wanted to defend any claims made.

All reasonable, natural expectations based on their roles. That’s when I realized we had a sustainability strategy layered on top of an existing operating system.

The silent operating system determined what sustainability could mean, not the sustainability strategy.

The hidden decision-making logic for each function connects, incentivizes, defines, and assumes things before the strategy even becomes an outcome.

Our new product development team implemented the sustainability strategy. They faithfully implemented the beliefs and assumptions already present in the business.

The tensions that exist when innovating and changing like this can be resisted by the existing business organization as a defensive, protective routine.

The difficulty sustainability professionals face isn’t simply making a new innovation more profitable and meeting the company’s financial goals. It is more structural, hidden inside the operating system whose assumptions and beliefs are rarely challenged.

And now AI enters the scene. A language model can absorb yesterday’s assumptions, present them as today’s knowledge, and return them in a form that is authoritative enough to shape tomorrow’s decision.

The risk is not simply that AI occasionally invents a fact. It is that it can reproduce an unexamined belief perfectly. As my book title says, Perfectly Wrong.

So now we have two connected issues to deal with.

First, getting sustainability and circularity correctly understood and embedded in the company’s operating system, and second, mitigating the business risk that AI brings with it when we assume AI knows everything and we blindly confirm nothing.

If an important strategy, investment, or AI-supported decision is producing confident answers but persistent uncertainty, the missing work may not be another analysis. It may be an examination of what the organization has already assumed and believes.

That is the diagnostic work I now do with executives. I just opened up five confidential, 30-minute Assumption-Risk Conversations on my calendar.

I am opening up five confidential, 30-minute Assumption-Risk Conversations after the Real Circularity Summit in London on September 17th. Book a date and time if you want one of the conversations: BOOK HERE.