BMSE 02

Business Management for a Sustainable Environment Unit 2 Sustainability and the Triple Bottom Line 15-May-08 2 Unit 2 Sustainability and the Triple Bottom Line Contents Introduction ........................................................................................ 5 Learning outcomes ............................................................................ 6 Sustainable development – many definitions ................................... 7 Sustainable development – difficulty in interpretation................... 9 Tripartite nature of sustainable development .................................. 11 Emerging concept of quadruple bottom line ................................... 13 Sustainable development and sustainability.................................... 15 Sustainability – what should be sustained?.................................... 16 Sustainability and environmental ideology .................................... 18 Environmental ideology – spectrum of modern environmentalism 18 Principles of sustainable development ............................................ 21 Common principles of sustainable development............................. 23 Natural Step principles .................................................................... 34 Western Australia: Sustainability strategy ...................................... 36 Why the urgent search for sustainability? ..................................... 38 Achieving sustainable transition – the business response............. 40 Conclusion ......................................................................................... 43 Useful websites for sustainability .................................................... 44 References and further reading....................................................... 48 Readings ............................................................................................ 53 Unit 2 Sustainability and the Triple Bottom Line 3 4 Unit 2 Sustainability and the Triple Bottom Line Introduction In Unit 1, we provided a broad introduction to the emergence of modern environmental concern over the past 40 years, its continuing evolution leading to the emergence of the concept of sustainable development, and some consequent current trends in environmental management thinking and practice. The trends outlined were those of particular relevance to business and industry. We also noted that the discourse within which we now explore environment-related concerns and the means to address these has changed from a discourse about environmental management to one that is much more broadly conceived – management for sustainability. In Unit 1, we employed a very general dictionary definition of sustainability. A key reason for doing this is that there have been many statements about sustainability, but no real consensus on its meaning. It is worth stressing that the concept of sustainability still remains poorly understood, not only by the general public, but also by those charged with its application. Accordingly, we delayed a more detailed discussion about this topic until this Unit. Although sustainability is a contested concept, it has now been institutionalised within international agreements (conventions, treaties and so on) and has also moved on to be included within domestic (national) law and policy (see Unit 5). So, whether we like it or not – and no matter how difficult we find its implementation – we are currently faced with the challenge of responding to legislation and policy by carrying out our actions in keeping with sustainability. Our purpose in Unit 2 is to explore the concepts of sustainable development and sustainability in some detail, to examine reasons for our concern over sustainability, and to examine what the ‘sustainability challenge’ might involve for industry and business. Unit 2 Sustainability and the Triple Bottom Line 5 Learning outcomes When you have completed this Unit you should be able to: • • • • • • • • outline some of the many definitions and interpretations of sustainable development and sustainability and discuss their underpinning rationale and relative merits explain why there is concern about the need to move towards sustainability discuss how sustainability is both informed by science and social science, but is also importantly based on values outline the principles of sustainability as listed in key Australian and international documents discuss the meaning of these principles and provide examples of their application explain the precautionary principle identify community attitudes towards sustainability and sustainable development outline business response to the sustainability challenge 6 Unit 2 Sustainability and the Triple Bottom Line Sustainable development – many definitions The best known definition of sustainable development is that from Our Common Future (World Commission on Environment and Development (WCED, Brundtland report) 1987, p. 8): Humanity has the ability to make development sustainable – to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs. The WCED goes on to say (p. 8): The concept of sustainable development does imply limits – not absolute limits but limitations imposed by the present state of technology and social organization on environmental resources and by the ability of the biosphere to absorb the effects of human activities. But technology and social organization can both be managed and improved to make way for a new era of economic growth. And (p. 46): In essence, sustainable development is a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are all in harmony and enhance both the current and future potential to meet human needs and aspirations. This statement of sustainable development is one that most would probably all endorse. However, you will see that it is very open-ended and provides no specific help for the decision maker who is judging a development application for, say, a motorway, or an engineer drafting the details of a dam development. There are now many (hundreds?) of definitions of sustainable development coming from a wide range of perspectives. See, for example, [Accessed 24 April 2008]. Unit 2 Sustainability and the Triple Bottom Line 7 Exercise 2.1 Consider the WCED (Brundtland) definition of sustainable development and those at the website given above. Which definition/s do you find most useful, and why? ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ This exercise is meant to demonstrate that given the enormous problems in communicating meaning about the concept of sustainable development, it is useful to explore which definitions have resonance with people, and why. Lack of a common, meaningful understanding has been an important barrier in the application of sustainability actions. 8 Unit 2 Sustainability and the Triple Bottom Line Sustainable development – difficulty in interpretation Even a cursory glance at the WCED (Brundtland) definition is sufficient to appreciate the problems in interpreting and implementing sustainable development by following that particular definition. Suppose you are an engineer planning a road development and are required to do so in accordance with ‘sustainable development’. How will the WCED definition (given above) help you to go about your task? Most likely it will provide more questions than answers! For example, what exactly are the ‘needs’ of the present (as against ‘wants’ or ‘desires’)? Whose needs? Who should determine these needs? Is society at large likely to agree on what the needs of the present are? How can we know future generations’ needs – this will surely depend on technological change as well as socially derived change into the future. Change in both these areas has been moving very fast in recent years. Can we confidently predict what will be the environmental impacts of the development and how these can be judged in relation to sustainability? And so on. It is clear that the answers to these and the many other relevant questions rest not only on scientific knowledge (which may be incomplete or even non-existent for the questions posed) but also on value judgements on issues such as quality of life. It is therefore not surprising that the concept of sustainable development has led to numerous interpretations. The very open-ended nature of the Brundtland definition of sustainable development has brought both strength and weakness to the concept. An indication of this was given in Unit 1 through the quote from Tony Brenton that the genius of book Our Common Future lay in its promulgation of sustainable development as a concept that: … bridged the intellectual and political gap … between those (particularly in the developing world) arguing for economic growth, and those (particularly in the developed world) arguing for environmental protection. • • (Brenton 1994, p. 129) Strength comes from the ability of people and groups with quite different value systems to provide variable interpretations to meet their own needs. On the other hand, weakness comes from this same lack of precision, since people lacking precise guidelines may place the concept and its application in the ‘too-hard basket’ and opt for ‘business as usual’. Unit 2 Sustainability and the Triple Bottom Line 9 This is a key reason why the ‘deeper green’ environmentalists are unhappy with the concept of sustainable development; they see the business world as continuing its operations with little change, but still claiming to be operating within the principles of sustainable development. Doppelt (2003, pp. 39-40) provides a tangible example of what sustainability – and unsustainability – means for the Pacific salmon and, by analogy, for humans: Salmon and steelhead are remarkable mysteries of nature. The fish have evolved through thousands of years of struggle to survive in rivers, streams and oceans from northern California to Alaska’s Aleutian Islands. Salmon are born in freshwater streams. When they reach juvenile status, the fish migrate, sometimes hundreds of miles, to the sea, where they spend from one to four years, depending on the species, feeding on the abundant food that the oceans provide. Adult salmon and steelhead then somehow miraculously return to the very same freshwater streams where they were born, to lay their eggs before they die. The circle of life begins again, as it has for aeons. Salmon and steelhead were abundant in the Pacific Northwest through roughly the mid-1880s. They were a prime source of food and had religious and cultural significance for indigenous peoples. Indeed, salmon were the backbone of human society in the Northwest for thousands of years. The salmon’s home – their habitat – is rarely static. The physical makeup of the streams in which they live changes constantly. Landslides occasionally bury a spawning or rearing area with silt and debris, rendering it useless for a time. Fires or drought alter the water levels and modify the basic chemistry of the aquatic habitat in which the salmon depend for survival. Floods sometimes rapidly and dramatically rearrange the size and shape of streams while sweeping young salmon smolts away to their death. Ocean conditions also continually change. Despite these constant trials and tribulations, the Pacific salmon have survived for thousands of years. Why? Because whenever one stream or watershed was destroyed, salmon would quickly migrate to another nearby intact waterway. They found refuge in these aquatic safe havens and began their cycle of life once again. The salmon had options, lifesustaining options that allowed them to withstand the inevitable hardships of life. In the past 120 years or so, Pacific salmon have lost many of their options. As overfishing occurs and more and more watersheds have been degraded by human activities such as logging, urban development, dams, water pollution and stream-side farming, fewer and fewer aquatic safe havens have remained for the salmon to migrate to when times get tough. As their survival options have shrunk, so have salmon populations. Researchers believe that more than 16 million anadromous salmon returned to the Columbia River Basin of the Pacific Northwest through 10 Unit 2 Sustainability and the Triple Bottom Line the mid-1880s. By the 1990s only 2 or 3 million salmon returned. By 1999 over 90% of all wild native sea-run Pacific salmon were extinct or listed in the Endangered Species Act as near extinction. The story of the salmon is the story of sustainability. Sustainability is about protecting our options. This requires a new economic paradigm that allows humans to live and work in ways that can be maintained for decades and generations without depleting or causing harm to our environmental, social and economic resources. … Just as the survival of the Pacific salmon depends on the existence of a diverse array of healthy watersheds and streams, to protect our options we must place as much (or more) emphasis on maintaining and restoring ample, healthy ‘stocks’ and ‘flows’ of ‘natural capital’ as we do on protecting our financial capital. Natural capital includes all of the environmental resources and ecological processes that sustain life on earth. Tripartite nature of sustainable development Regardless of the range of definitions of sustainable development and the lack of agreement over the interpretation of the concept, there seems to be general agreement that it involves simultaneous satisfaction of economic, environmental and social factors. Meeting environmental criteria in a society that fails to meet economic and social goals concerning justice and equity does not make for sustainability. Society, economy and ecology are often also referred to as the three pillars of sustainability. Figure 2.1 (a) illustrates the interface of the social, economic and environmental domains, with the shaded interface representing sustainability. Social Economic Ecological Figure 2.1(a): Representations of the Domain of Sustainability Some have argued that the model in Figure 2.1 (a) inevitably results in an over-emphasis on social and economic factors (Lowe, cited in Harding 1996, p. 72). Unit 2 Sustainability and the Triple Bottom Line 11 In response to this, an alternative model has been put forward in which the social and economic factors are encompassed within, and hence are constrained by, the ecological concerns (Figure 2.1 (b)). In this model, the domain of sustainability is depicted by the overlap of the social and economic spheres. Ecological Social Ecological Social Economic Economic Figure 2.1(b) Figure 2.1(c) A further model (Figure 2.1 (c)) also assumes that our social framework is constructed within the ecological reality, but identifies economic factors as a sub-section of overall human activities, and fully located within this social framework. The domain of sustainability is again the overlap of all three sectors and represents this economic sphere. Ian Lowe (1996, p. 182) says that this is: … a visual way of stating the Brundtland Commission’s codicil to its definition of sustainable development, that unless our economic and social decisions are ecologically rational, we will be unable to maintain living standards, let alone improve them. Importance of language As indicated above where we explored various statements of sustainability, the language used is key to engaging people. In turn, people’s engagement with the concept is vital if we are to successfully embrace sustainability goals and the actions necessary to achieve them. Holliday, Schmidheiny & Watts (2002) explore the dissatisfaction of various groups in society with the concept of sustainable development. In relation to the general public, they suggest the following: After all, its [sustainable development] main message is that in thinking about environment and development issues, as in thinking about one’s own life, one must figure out how to live off interest and not capital. One must not eat one’s seed corn, burn down one’s house to keep warm or use one’s drinking water to wash the car. The public is not excited by such thinking. Thus it is unlikely to read about sustainable development in its newspapers or hear about it on radio or television. Surveys in the USA found that few had heard the expression, but, on hearing it, they took sustainable to mean static – requiring that one always drive the same car, 12 Unit 2 Sustainability and the Triple Bottom Line have the same amount in the bank, and live in the same house. So the term sustainable development is unlikely to rally millions to the cause of sustainable development. (Holliday, Schmidheiny & Watts 2002, p. 14) Clearly, in the view of these authors the term and concept ‘sustainable development’ is not engaging the general public! On the other hand, the corporate world has cleverly coined the phrase triple bottom line to describe this tripartite nature of sustainability in familiar business language. The term was developed by the UK firm SustainAbility run by John Elkington, an internationally renowned adviser to corporations on sustainability and business. The triple bottom line refers to satisfaction of not just the long-recognised bottom line of meeting economic goals (profits), but also the need to now simultaneously meet environmental and social goals (or ‘bottom lines’) in carrying out their business. Elkington refers to sustainable value creation as the key contribution of corporations to sustainability; that is, to create long-term value on an economically, socially and environmentally sustainable basis (Elkington 1998). Emerging concept of quadruple bottom line More recently, the importance of a fourth pillar of sustainability has emerged – governance. This concept has gained increasing popularity in the context of local government. More recently, a “Quadruple Bottom Line” (QBL) approach has emerged which takes into account the growing focus on “Corporate Governance”. (http://www.localgovernment.qld.gov.au/?id=4346#strategic_1) [Accessed 22 April 2008] Another definition of the quadruple bottom line states (Lumsden 2003, p. 3): The Quadruple Bottom Line adds the dimension of culture to the other three dimensions above. This concept encapsulates all aspects of the culture of an organisation e.g. ethics, governance, etc. It has been most readily been (sic) adopted by Non Government Organisations (NGOs) and Local Governments. An example of how this approach has been used to inform corporate planning for a Queensland council is presented in Figure 2.2. Unit 2 Sustainability and the Triple Bottom Line 13 (http://www.localgovernment.qld.gov.au/docs/corporate/publications/local_govt/ plan_and_deliver/cs_09_qbl_approach_gold_coast.pdf) [Accessed 24 April 2008] Figure 2.2: Quadruple Bottom Line The topics of governance and the changing nature of stakeholders were introduced in Unit 1. With an increasing demand by stakeholders for transparency, participation and ethical practice, the issue of governance will undoubtedly become paramount for governments and corporations. 14 Unit 2 Sustainability and the Triple Bottom Line Good corporate governance is critical for developing sound strategies for achieving sustainability. Hargroves & Smith (2005, pp. 164-165) explain that corporate governance will “guide management in framing and implementing best practice in management systems to achieve the goals of a sustainability strategy” and: … practitioners will be able to integrate sustainability into existing and emerging management systems, develop sustainability analyses for new projects, account for the benefits and costs of sustainability measures and make transparent public commitments for sustainability performance. (Hargroves & Smith 2005, pp. 164-165) Sustainable development and sustainability These two terms have been used interchangeably so far in this Unit – but is this appropriate? It does seem that for many commentators on sustainability, a distinction between these terms is emerging. The following distinction is made by Harding (1998, p. 18): The term ‘sustainability’ refers to the state at which something (ie, the economy or human way of life) is able to continue and be sustained undiminished over time (environmentally, socially etc). . . Sustainability is the ultimate goal or destination. Exactly what defines the state of being, of what is sustainable (whether it be a society, logging, fishing etc), is informed by science but ultimately depends on personal values and world views. To achieve a state of environmental sustainability, a framework or process is needed. Certain conditions have to be met and steps in the process toward ‘sustainability’ have to be made. The framework of sustainable development is the means for achieving sustainability. So, in brief, ‘sustainability’ refers to the goal and ‘sustainable development’ is the path or framework to achieve it. As with the term ‘sustainability’, what is considered as a necessary path and time frame will vary amongst individuals. Unit 2 Sustainability and the Triple Bottom Line 15 Sustainability – what should be sustained? Attempts to identify key conditions for sustainability have come from many sources involving different disciplines (eg, ecology, economics, philosophy, etc) and various professions (eg, engineering). One key concern involves the issue of capital and the idea that sustainability requires keeping capital resources intact – that is, passing on to succeeding generations an equivalent stock of capital that we inherited from our forebears. This leads to the question of what type of capital is important, and what should be sustained for our future generations. Capital may include natural capital (natural resources both living and non-living), human-made capital (machines, buildings and infrastructure) and human capital (knowledge and skills). As part of the latter (some may list it separately) is social capital – concerning our relationships with one another and the structures of societies. A key question concerns the substitutability of capital. Is it in keeping with sustainability if natural capital (say, a forest) is lost but the income from the sale of the wood is used to build a road (human-made capital)? This question is discussed in Reading 2.1. Reading 2.1 Pearce DW, Turner RK, O’Riordan T, Adger WN, Brown K, Jordan AJ & Powell JC, 1993, Blueprint 3: Measuring Sustainable Development, Earthscan, London, pp. 15-21. 16 Unit 2 Sustainability and the Triple Bottom Line Exercise 2.2 In Reading 2.1 what are the main points made about the key conditions required for sustainability? ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ What is the main difference between a ‘strong’ and a ‘weak’ sustainability view on these key conditions? ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ 3. What key conditions are common to both forms of sustainability? ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ 2. 1. Unit 2 Sustainability and the Triple Bottom Line 17 Sustainability and environmental ideology Discussion of maintenance of capital and ‘substitutability’ provides a useful illustration of the ideological basis of the interpretation of sustainability. We noted earlier that value judgements on issues such as quality of life inform our interpretation of sustainability. In Reading 2.1, Pearce and colleagues link the issue of ideology to the question of maintenance of capital and substitutability. They distinguish weak and strong sustainability on the basis of the substitutability questions: weak means that we are indifferent to the form in which we pass on the capital stock; while strong places high importance on maintenance of natural capital. These authors link the weak and strong sustainability positions to a spectrum of modern environmental world views. Before continuing with our exploration of sustainability, we will pause to consider environmental ideologies and the importance of understanding the range of value positions or world views that inform environmental management. Environmental ideologies are introduced at this point because an awareness of the ideological bases that make up the spectrum of modern environmentalism is crucial for an understanding of the various interpretations of sustainability. Environmental ideology – spectrum of modern environmentalism In Unit 1 we examined the emergence of modern environmentalism and its continuing institutionalisation and evolution from the late 1960s to the present time. It is important to add to that discussion by noting that environmentalism is not a monolithic entity, but rather is composed of many differentiated strands based on a range of ideologies, world views or value positions (or discourses, see Reading 1.1). Clearly, as modern environmentalism has evolved over the past 40 years, so too have its component strands. There have been many attempts to provide typologies or classifications of these strands that make up the spectrum of modern environmentalism. Table 2.1 on pp. 18-19 in Reading 2.1, is one such example. 18 Unit 2 Sustainability and the Triple Bottom Line In Reading 2.2, David Pepper (1996) provides an excellent introduction to this spectrum of values within modern environmentalism in his book Modern Environmentalism: An introduction. His model is a simplification of that seen in Reading 2.1, in that it simply compares what he calls conventional values (the technocentric side of the table in Reading 2.1) with green values (the ecocentric side of that table) to provide a broad account of what the ‘greens’ are for and against. Reading 2.2 Pepper D, 1996, Modern Environmentalism: An Introduction, Routledge, London, pp. 10-17. Exercise 2.3 Consider Readings 2.1 and 2.2 and explain why (a) the technocentrics would support a weak sustainability position in regard to substitutability of human-made and human capital for natural capital; while (b) the ecocentrics would support a strong or very strong sustainability position in this regard. ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ Unit 2 Sustainability and the Triple Bottom Line 19 Exercise 2.4 Consider the emergence of modern environmentalism as discussed in Unit 1, in this Unit so far, and Readings 2.1 and 2.2. What changes can you identify in the way our society has evolved in terms of environmental world views expressed through the ‘way we do things’ – demonstrated by legislation, policy or community attitudes/behaviour? Consider examples in your local community, your views, your workplace, or society more broadly. Note the timeframe over which you think these changes have taken place. ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ 20 Unit 2 Sustainability and the Triple Bottom Line Principles of sustainable development We have considered the difficulty in interpreting and implementing the broad, open-ended definition of sustainable development given in the Brundtland Report, Our Common Future (WCED 1987). To assist interpretation and implementation, some principles have generally been included in documents that advocate sustainable development. For example, in launching the Brundtland report, the WCED issued the Tokyo Declaration at the close of its final meeting. This document (provided as Reading 2.3) includes a set of principles to guide policy actions by nations for integrating sustainable development into their goals. Reading 2.3 World Commission on Environment and Development, 1987, ‘The Tokyo declaration’, Our Common Future, Oxford University Press, Oxford, pp. 363-366. Within Australia, two key documents set the scene for the incorporation of principles of sustainable development in legislation and policy throughout the country. These are the National Strategy for Ecologically Sustainable Development (1992) and the Intergovernmental Agreement on the Environment (1992). National Strategy for Ecologically Sustainable Development, Commonwealth of Australia (1992) This national strategy was the product of an extensive discussion process on sustainable development set up by the Australian Government, which took place in the early 1990s. Reading 2.4 includes the goal, objectives and principles of the strategy. It is worth noting some terminology that was used in this document: ecologically sustainable development (ESD) rather than just sustainable development. This term is peculiarly Australian, and arose in the early stages of discussion of sustainable development in 1990. It seems that environment groups were concerned that discussion process might be ‘hijacked’ by business and industry and interpreted as just economically sustainable development. They successfully fought for inclusion of the word ‘ecologically’ in the official terminology: it has been used ever since and is included in legislation and policy in Australia. Unit 2 Sustainability and the Triple Bottom Line 21 Reading 2.4 Commonwealth of Australia, 1992, ‘Australia’s goal, core objectives and guiding principles for the strategy’, National Strategy for Ecologically Sustainable Development, Australian Government Publishing Service, Canberra, December, pp. 8-9. Intergovernmental Agreement on the Environment, May 1992, Australia The Intergovernmental Agreement on the Environment (IGAE) was signed in May 1992 by the Heads of the Commonwealth and all State and Territory Governments in Australia, and the President of the Australian Local Government Association. The aim of this agreement was to facilitate a cooperative national approach to better management of the environment and better definition of the roles of the various levels of government. This is a long-term problem in Australia with its three different levels of government: national, state and local. Section 3 of the IGAE listed principles to guide development and implementation of environmental policy and programs by all levels of government as a basis for ESD. It is these principles of ESD that have typically been cited in policy and legislation from this time. In particular, the definition of the precautionary principle given in the IGAE has been the one used in Australian legislation and policy – see Reading 2.5. Reading 2.5 Commonwealth of Australia, 1992, ‘Principles of environmental policy’, Intergovernmental Agreement on the Environment, May, Section 3, (3 pages). 22 Unit 2 Sustainability and the Triple Bottom Line Common principles of sustainable development As shown in Reading 2.5, there are four principles of ESD that are commonly used in Australian legislation and policy: 1. 2. 3. 4. Intergenerational equity Precautionary principle Conservation of biological diversity and ecological integrity Improved valuation, pricing and incentive mechanisms Australia’s National Strategy for Ecologically Sustainable Development can be accessed at: [Accessed 24 April 2008] The principle of intra-generational equity will often also be included in Australian policy. Following are explanations of these (Harding, Young & Fisher 1996). Intergenerational equity • • The present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations (IGAE 1992). Each generation is both a trustee (or custodian) of the planet for future generations and a beneficiary of previous generations’ stewardship. This circumstance imposes certain obligations upon us to care for our legacy just as it gives us certain rights to use that legacy (Weiss 1989). Intergenerational equity is about equity between generations, but there can be no single view on what constitutes intergenerational equity – it is a concept we give value to according to our world view. Nevertheless, there is broad general agreement about some elements: • • The human community is a partnership among all generations and it extends worldwide. We should not impose the externalities 1 of development by this, or past generations on to future generations. 1 Externalities refer to those impacts not accounted for or costed into our decision to carry out an activity; eg, in driving a car we do not ‘pay anything’ to compensate those that may suffer as a result of ensuing global warming and climate change. Those costs remain external to our decision to drive a car. 23 Unit 2 Sustainability and the Triple Bottom Line • • • • Instead, each generation inherits a resource endowment and quality of habitation and should pass these on to its successors in a state that offers at least as many physical, ecological, social and economic opportunities as were available to previous generations. We cannot pass onto future generations the same stock of nonrenewable resources, nor can we know what the needs of future generations will be. This has led to much debate about the exact nature of our obligations to future generations and the extent to which built (human-made) capital can be regarded as an appropriate substitute for natural capital. It is generally accepted that we need to: Maintain ecosystems and natural resources with special attention to those that have no known substitutes and that provide essential services to human communities; avoid ecologically irreversible actions and place great importance on the maintenance of biological diversity. Enhance the stock of human knowledge since it may assist future generations in solving problems. Develop and maintain an efficient, diversified and ecologically sustainable economy. The richer the current generation in terms of both natural and human-created capital, the greater the possibility of generosity to future generations; the more diversified, the greater the chance of responding to change – and we live in a rapidly changing world. Note that knowledge and wealth need to be accompanied by wisdom in order to contribute to intergenerational equity. Merely building a stock of knowledge or wealth is insufficient for assisting future generations to solve their problems. Wisely using this knowledge and wealth, and passing on a culture of wisdom instead of a culture of abuse, is also required. This is one of the main thrusts of the precautionary principle. Remember that precaution aids the maintenance of biodiversity, and ecological integrity and efficiency requires the internalisation of costs, but this may occur at the expense of equity. Achievement of intergenerational equity will require us to integrate all five principles of ESD. 24 Unit 2 Sustainability and the Triple Bottom Line Exercise 2.5 In the context of your organisation, think about what actions it needs to take to apply the intergenerational equity principle to its activities. Make a dot point list of these, with a brief rationale for each. ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ Unit 2 Sustainability and the Triple Bottom Line 25 Intra-generational equity Intra-generational equity is about equity within a single generation. Equity need not necessarily mean equality. It may mean ‘unequal treatment of unequals to produce less inequality’ – to ensure that the worst-off members of society receive an adequate minimum standard of economic support and environmental quality. Inequity within a generation may involve (Rawls, cited in Young 1993): • • failure to meet basic environmental or social needs large disparities between environmental or social quality of life of individuals or groups Intra-generational equity is related to environmental issues and sustainability as follows: • • • • The burdens of environmental problems are disproportionately borne by the poorer or weaker members of society. Poverty may lead to environmental degradation. People who are struggling to meet basic needs will not have the luxury of environmental concern. Measures to protect the environment may impact on particular sectors of society whilst benefiting another sector. All members of society do not have equal access to influencing environmental decision making. Knowledge, skills, power and decision-making structures differentially benefit or disadvantage individuals and groups in society. Unsustainable production or development practices by individuals or groups may lead to degradation of natural resources or public goods – for example, widespread land degradation (in some cases irreversible) resulting from land clearance and other pastoral production activities. • To reiterate, intragenerational equity concerns both equity between and within nations. Inequity between nations of the North and the South (developed and developing countries) is a matter of considerable concern for some groups, and they see developed countries such as Australia as having an important role to play in assisting countries of the South to achieve a more equitable share of the earth’s resources, and thus, the ability to develop. 26 Unit 2 Sustainability and the Triple Bottom Line Exercise 2.6 In the context of your organisation, think about what actions it needs to take to apply the intra-generational equity principle to its activities. Make a dot point list of these, with a brief rationale for each. ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ Unit 2 Sustainability and the Triple Bottom Line 27 Precautionary principle Where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation. In the application of the precautionary principle, public and private decisions should be guided by: (i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment; (ii) an assessment of the risk-weighted consequences of various options. (Intergovernmental Agreement on the Environment 1992) The precautionary principle is concerned with decision making under scientific uncertainty. But beyond that, the IGAE definition does not provide clear guidelines on what we should do. Some examples of situations that deserved (but did not immediately receive) a precautionary approach may help understanding. Non-precautionary actions Pesticides Within Australia numerous groups have lobbied for many years against the widespread use of a range of pesticides in agriculture and property protection, on the grounds that these were harming the health of humans and other species. Until relatively recently, the onus has been on the complainants to demonstrate direct cause-effect links. Of course this is very difficult when dealing with organisms which are part of a complex web of relationships within an ecosystem and which are exposed to many substances. It is especially difficult when the effects may be delayed, as for example with human carcinogens where there may be 30 years or more between exposure to the carcinogenic substance and manifestation of the cancerous effect. Today we need to feel confident that there will be no harmful long-term effects, before allowing use of such substances, rather than the other way around. In other words the ‘burden of proof’ has been shifted. As a result a number of pesticides in use for many years for activities such as termite protection in buildings, have been banned for this use. Asbestos It is now well accepted that asbestos causes the potentially fatal diseases of mesothelioma, lung cancer and asbestosis. The time between exposure and effect is delayed in some cases by up to 30 years or more, making cause-effect links difficult to prove conclusively. There were however, clear signs from the 1930s of the harmful effects of asbestos and a North American insurance company back in 1917 had the commercial ‘wisdom’ not to insure asbestos workers. Nevertheless, it took until the early 1980s before asbestos was banned for most uses in Australia. Authorities waited for strong epidemiological evidence before responding, rather than taking precautionary action following the much earlier, suspicious but not conclusive, evidence available as early as the 1930s. A consequence of the lack of precautionary action is that many people have died from asbestos-related disease, there have been large claims against corporations involved with asbestos mining and manufacture, and Australia has the highest rate of mesothelioma in the world. (Deville & Harding 1997, p. 19) 28 Unit 2 Sustainability and the Triple Bottom Line The enhanced greenhouse effect is perhaps the best-known current example of a situation where we have made at least an ‘in principle’ decision that we should take action to reduce emissions of potentially harmful agents (greenhouse gases). Keep in mind, however, that this decision took place before the current level of evidence was available, and agreement by the world’s scientists advising the Intergovernmental Panel on Climate Change (IPCC) that in fact the climate is changing. The release of genetically modified organisms into the environment is another area attracting a lot of precautionary attention at present. Precautionary actions Some examples of precautionary actions • The Australian Fisheries Management Authority limits access to new areas for fishing and to development of new fisheries, pending scientific assessment of the long-term sustainability of the resources in question. • In 1991 a construction company in Denmark received approval to build the Great Belt bridge – the largest bridge in Europe – but under strict conditions. The area was already prone to eutrophication (too much nutrient) and there was concern that dredging may release nutrients. Chlorophyll (as an indicator of eutrophication) was to be monitored continuously at a number of sites by automatic recorders. A rise in chlorophyll over a given amount automatically triggered a feedback mechanism in the management system. This involved initiation of a wide scale survey by consultants, without the need to obtain permission of the construction company. If the algal bloom was localised to the construction area dredging had to stop until the bloom subsided. This meant halting the activity of the world’s largest dredger costing tens of thousands of dollars a day. Numerous other feedback loops, all triggering responses, were also in place. These involved oxygen depletion and impacts on duck populations and herring spawning. • In a 1993 decision in the Land and Environment Court (NSW), planning permission for a road through native forest was set aside on the grounds that by destroying habitat for an endangered species it might have brought it closer to extinction. (Deville & Harding 1997, p. 10) We can see from the IGAE definition and the above examples that the precautionary principle aims to guide action in situations of scientific uncertainty regarding environmental impacts. It requires that when there is a reasonable possibility of serious or irreversible harm to the environment, protective action should be taken in advance of clear evidence of harm. The precautionary principle therefore goes beyond the aim of conventional environmental risk management that seeks to prevent damage once the risk is known or proved (better called prevention than precaution). Rather, it suggests that we should take action to protect the environment in advance of conclusive proof that such damage will occur. Unit 2 Sustainability and the Triple Bottom Line 29 In defining the precautionary principle, three terms are important in determining the circumstances in which caution should be applied and the extent of that caution: 1. Threats of serious or irreversible damage – particular care is required where one or more outcomes could have extremely adverse implications for present or future generations and/or where no known substitutes exist for the resource being used. There needs to be a reasonable possibility of such harm. Scientific uncertainty – where the range of possible outcomes associated with the activity cannot be predicted with confidence. This uncertainty may exist over the nature of the problem, its cause or its potential impact. But note, it is about scientific uncertainty, not economic, political or social uncertainty. The measures to prevent environmental degradation – considerations range from not carrying out an action that has the potential to cause serious or irreversible harm, through a range of measures to take protective action, to cost-effectiveness. 2. 3. Like so many of the definitions associated with sustainability, applying the precautionary principle in practical terms (understanding precisely what we need to do) is difficult. In large part this is because the definition is very open to interpretation. For example (Harding & Fisher 1999, p. 3): What is the threshold of evidence of harm for precautionary action? What constitutes a ‘threat’ to the environment? How serious does the possible damage need to be to warrant precautionary actions? Serious in whose judgment? How precautionary do we need to be? That is, what types of ‘measures’ are required? To address this difficulty in interpretation, Deville & Harding (1997) suggest a framework for working through decisions that may require the application of precaution. The framework uses a sequence of steps that move the decision maker through the key terms (identified above) in the IGAE definition of the principle: 1. 2. 3. Are precautionary measures needed? (are threats serious or irreversible; how certain are we about these threats) How precautionary should we be? (based on an assessment of what is at stake and the level of uncertainty) What precautionary measures can be applied? (eg, further research to improve understanding; rigorous monitoring for early detection of impacts; use of compensatory mechanisms; shifting the burden of proof; ‘reverse listing’; administrative arrangements favouring a precautionary stance. In a hierarchy of decision making from operations through admin procedures to planning and strategy, application of precaution is likely to be more effective at the higher levels) What precautionary measures should be applied? (based on availability of suitable measures and assessment of the desirable level of precaution) 4. 30 Unit 2 Sustainability and the Triple Bottom Line Because of this difficulty in interpreting the precautionary principle, it has attracted much criticism. Beder (2006, p. 52) provides an insightful summary of some of these criticisms and provides rebuttals for them. Below is a summary from her discussion. • Criticism: The precautionary principle is unscientific In fact, “sound scientific information and its evaluation must be the basis” for applying the precautionary principle (Privy Council Office, Government of Canada 2003). • Criticism: The precautionary principle has the unrealistic goal of zero risk In fact, the precautionary principle is not about zero risk, as some groups fear. Nor does it mean that decisions that may lead to irreversible damage should not be taken. Rather, it requires that we give prominence to considerations of possible but uncertain impacts in conjunction with a range of other matters (social and economic benefit) in making decisions on resource use. The precautionary principle is also about avoidance and mitigation of likely harm. • Criticism: The precautionary principle conflicts with technological innovation In fact, the precautionary principle requires a new imaginative approach that stimulates thinking and innovation in the development of safer and cleaner technology. Exercise 2.7 In the context of your organisation or your local region, think about situations where you consider the precautionary principle applies. Has the principle been applied? If so, how? If not, what do you think should be done to apply the principle? ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ Unit 2 Sustainability and the Triple Bottom Line 31 Conservation of biodiversity and maintenance of ecological integrity Biological diversity refers to the variety of all life forms – the different plants, animals and micro-organisms, the genes they contain and the ecosystems of which they form part. Conservation of Biological Diversity is a core objective of Ecologically Sustainable Development. Biological resources provide us with all of our food and many medicines and industrial products. The conservation of biological diversity underpins human well-being through provision of ecological services, such as the maintenance of soil fertility and the supply of clean, fresh water. Biological diversity also provides recreational opportunities and acts as a source of inspiration and cultural identity. (Biological Diversity Advisory Committee 1995 ) [Accessed 29 April 2008] Biodiversity is part of the earth’s renewable natural capital. It is classified as ‘critical’ natural capital since it is believed to be irreplaceable and nonsubstitutable. The conservation of biodiversity, including the maintenance of ecological integrity, is a survival imperative for humanity, quite apart from the ethical and moral issues involved. Pressures from population growth and development make conservation of the entire current stock of biodiversity an impossible task. Hence, a key question is how we can best meet our obligations to succeeding generations. A minimal level of intergenerational equity may be just maintenance of enough renewable natural capital to provide life support functions, but there are strong reasons to suggest that we should aim to do better than this. There are compelling reasons to place a very high priority on conservation of biological diversity, and for the precautionary principle to be applied to all decisions that may have a detrimental impact on this. In decisions impacting on biodiversity in Australia, we may be further guided by the fact that Australia is classed as one of 12 megadiversity regions in the world (the sole developed country among that 12). Our biota is not only diverse, but is unique, with a high proportion occurring naturally here but not elsewhere. As such, Australia has a heavy planetary responsibility in relation to biological diversity. The Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) is the Australian Government’s principal piece of environment legislation with respect to biodiversity conservation. 32 Unit 2 Sustainability and the Triple Bottom Line The EPBC Act protects Australia’s native species and ecological communities by providing for: • • • • • identification and listing of species and ecological communities as threatened development of conservation advice and recovery plans for listed species and ecological communities development of a register of critical habitat recognition of key threatening processes where appropriate, reducing the impacts of these processes through threat abatement plans (http://www.environment.gov.au/biodiversity/threatened/) [Accessed 29 April 2008] Internalisation of environmental costs taking into account improved valuation and incentive mechanisms Internalisation of environmental costs . . involves the creation of economic environments so that social and private views of economic efficiency coincide. It is concerned with structures, reporting mechanisms and tools to achieve this end. (Harding, Young & Fisher 1996, p. 47) To a large extent, resource use occurs in response to market opportunities and pressures. As a result, the interests of those not represented in the marketplace tend to be ignored, and adverse impacts on these people may result. These impacts are called ‘externalities’ because the interests of these groups are external to those that affect market prices and costs. The affected people have no mechanisms to compel the party causing the problem to pay for any damage. There is consensus that the environmental and social costs of resource use must be integrated into decision making relating to the use of those resources. One facet of this is to ‘internalise’ the externalities so that external considerations become a key part of decision making on resource use. In other words, we need to pay the ‘right’ price for activities that impact on the environment, one that accurately accounts for such impacts. Were we to do this, many less damaging alternatives (such as renewable energy sources) would become much more competitive in the marketplace. There are many instruments that can be used to internalise externalities, including regulations, charges, levies, leasing, licensing, permits and use of institutional mechanisms that change community attitudes, values and behaviour. Economic instruments are further discussed in Unit 6. The use of market mechanisms that enable flexible responses to changing information and circumstances is seen as leading to the most efficient use of resources. However, efficiency may come at the expense of equity. For example, increasing the cost of petrol may take us some way to internalising the externalities caused by use of fuel for transport; but it would also be likely to hit the poorest members of society hardest. Unit 2 Sustainability and the Triple Bottom Line 33 It is important to note here that Australia’s national strategy stresses that the principles of ESD are to be applied as a ‘package’; no one principle should be applied at the exclusion of others. This forces us to carefully consider how to proceed in situations when a principle such as internalisation may be in conflict with intragenerational equity. Natural Step principles The Natural Step (TNS) organisation was founded by Dr Karl-Henrik Robèrt, one of Sweden’s foremost cancer physicians and scientists. Robèrt initiated the development of principles for sustainability based on scientific understanding. The following extract is included as TNS has now spread to a number of countries around the world and ‘approved’ organisations are working with corporations to implement TNS principles into their organisational practice. FOUR SIMPLE PRINCIPLES OF SUSTAINABILITY Sustainability is fundamentally about maintaining human life on the planet and, thus, addressing human needs is an essential element of creating a sustainable society. Therefore, one of The Natural Step’s principles of sustainability is to meet human needs worldwide. The other three principles focus on interactions between humans and the planet. They are rooted in an understanding that contemporary life is fundamentally supported by natural processes, such as the capturing of energy from the sun by photosynthetic organisms and the purification of air and water. These processes are essential to maintaining human life. However, as a society we are systematically altering the ecosystem structures and functions that provide life-supporting services and resources that we need to survive. Based on this understanding, The Natural Step sustainability principles are based on science and supported by the analyses that ecosystem functions and processes are altered when: 1. Society mines and disperses materials at a faster rate than they are redeposited back into the Earth's crust (examples of these materials are oil, coal and metals such as mercury and lead); 2. Society produces substances faster than they can be broken down by natural processes, if they can be broken down at all (examples of such substances include dioxins, DDT and PCBs); and, 3. Society depletes or degrades resources at a faster rate than they are replenished (for example, over-harvesting trees or fish), or by other forms of ecosystem manipulation (for example, paving over fertile land or causing soil erosion). By considering these three ways in which human life-supporting structures and functions are being altered, The Natural Step has defined three basic principles for maintaining essential ecological processes. 34 Unit 2 Sustainability and the Triple Bottom Line We also recognize that social and economic dynamics fundamentally drive the actions that lead to ecosystem changes. Therefore, the fourth principle focuses on the importance of meeting human needs worldwide as an integral and essential part of sustainability. From this assessment, The Natural Step’s sustainability principles, also known as ‘conditions’ that must be met in order to have a sustainable society, are as follows: In a sustainable society, nature is not subject to systematically increasing: 1. concentrations of substances extracted from the earth's crust; 2. concentrations of substances produced by society; 3. degradation by physical means and, in that society. . . 4. human needs are met worldwide. How can we – company, organization, individual, family, government, school – employ the principles? 1. Eliminate our contribution to systematic increases in concentrations of substances from the Earth's crust. This means substituting certain minerals that are scarce in nature with others that are more abundant, using all mined materials efficiently, and systematically reducing dependence on fossil fuels. 2. Eliminate our contribution to systematic increases in concentrations of substances produced by society. This means systematically substituting certain persistent and unnatural compounds with ones that are normally abundant or break down more easily in nature, and using all substances produced by society efficiently. 3. Eliminate our contribution to systematic physical degradation of nature through over-harvesting, depletion, foreign introductions and other forms of modification. This means drawing resources only from well-managed eco-systems, systematically pursuing the most productive and efficient use both of those resources and land, and exercising caution in all kinds of modification of nature. 4. Contribute as much as we can to the goal of meeting human needs in our society and worldwide, going over and above all the substitution and dematerialization measures taken in meeting the first three objectives. This means using all of our resources efficiently, fairly and responsibly so that the needs of all people on whom we have an impact, and the future needs of people who are not yet born, stand the best chance of being met. (http://www.interfacesustainability.com/step.html) [Accessed 29 April 2008] Unit 2 Sustainability and the Triple Bottom Line 35 Western Australia: Sustainability strategy We have considered two alternative sets of sustainability principles above. As we have highlighted, sustainability is a complex concept with many different interpretations based on the context within which it is used and applied. Different institutions, organisations and businesses may interpret the principles of sustainability in a variety of ways. Table 2.1 presents the sustainability principles that have been developed for Western Australia and the criteria for sustainability assessment that have been derived. 36 Unit 2 Sustainability and the Triple Bottom Line (Pope, Morrison-Saunders & Annandale 2005, p. 301) Exercise 2.8 Compare The Natural Step principles with the common principles of sustainable development described earlier that are typically included in Australian legislation and policy. • • • What difficulties do you see in applying the common set of principles? What difficulties do you see in applying TNS principles? What are the key differences between the two sets? ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ Unit 2 Sustainability and the Triple Bottom Line 37 Why the urgent search for sustainability? In Unit 1, we examined the emergence of the concept of sustainability and saw that a notion of ‘limits to growth’ was a key discussion point throughout the emergence of modern environmentalism – it had polarised the debate and alienated the industrial/business world. We also argued that, in contrast, the concept of sustainability could be embraced by both business and some environmentalists. We now see that sustainability has been institutionalised in policy and legislation around the world, with numerous government and private sector groups struggling to give it practical meaning. It is clear that there is currently widespread concern regarding the need to move towards sustainability, and at a fast pace. What is it that is fuelling this concern? Some reasons are evident in the following quote from the 2003 World Development Report: Some problems of sustainability are already urgent and require immediate action; another category of issues unfolds over a longer time horizon. These problems may not be urgent, but the direction of change is unmistakable. For these it is essential to get ahead of the curve and prevent a worsening crisis before it becomes too costly. Biodiversity loss and climate change are in this category …what is clear is that almost all of the challenges of sustainable development require that action be initiated in the near term. (Hargroves & Smith 2005, p. 34) With respect to climate change, both the 2006 Stern Review: The Economics of Climate Change and the interim 2008 Garnaut Climate Change Review Interim Report highlight the importance of strong and timely action to avoid the worst impacts of climate change: “There is still time to avoid the worst impacts of climate change, if we take strong action now” (Stern 2006, Executive Summary, p. vi). Recognition of the extent of growth in materials/energy throughput in our industrialised societies is at the core of our concern over sustainability (refer to comments by James Speth in Unit 1). There is broad acceptance that the world could not sustain all its inhabitants living at the high resource use level of most Western nations. Indeed, most people accept that the current situation where only a small proportion of the world’s inhabitants live at this level is also unsustainable. Yet, sustainability is about equity between generations and within the current generation – hence there is a moral imperative that we achieve greater equity between the developed (North) and developing (South) countries in terms of access to resources for development. 38 Unit 2 Sustainability and the Triple Bottom Line This must mean much greater access to and use of the world’s resources for countries of the South and, of course providing for the expected growth in world population from 6 to possibly 10 billion by the middle of the 21st century. But, how is this to be done without destroying the planet? This is a key issue driving the sustainability discussions at present with respect to business and industry. Pragmatically, the political reality is that countries of the North are not likely to substantially reduce their current standard of living, so how can we maintain living standards in the North with much reduced throughput of materials and energy and much reduced impact on the environment? Similarly, how can we ensure that development in the South occurs in a manner that avoids the damaging impacts on the environment that have been a partner to development in the North? This North-South debate is also evident in discussions on cutting back carbon emissions. The Kyoto protocol does not require developing countries to have binding targets for carbon emissions. The Garnaut interim report points out the difficulty in reaching effective international agreement on this issue: [This is] because there are no comprehensive commitments for major developing countries (and thus only patchy carbon price signals in large and rapidly growing countries), and because it will be difficult in these circumstances to agree ambitious reduction targets among all developed countries. There is no prospect within this framework of holding the risk of dangerous climate change to moderate levels. (Garnaut 2007, p. 35) Unit 2 Sustainability and the Triple Bottom Line 39 Achieving sustainable transition – the business response In the previous section, we painted a stark picture of the challenges facing business and industry in playing their role in the move towards sustainability. The challenges are significant and it will require much more than just tinkering around the edges. The World Business Council for Sustainable Development (WBCSD) is a key source of information for the response of business to the triple bottom line sustainability challenge. Formed in 1995, the WBCSD is a coalition of more than 120 companies and other business entities around the world that claim a shared commitment to the environment and to the principles of economic growth and sustainable development. This key international body shapes the responses of business to the challenges of sustainable development. A variety of useful information relevant to business and the environment and sustainability, including reports on meeting corporate social responsibility, is available on its website: [Accessed 29April 2008]. In an address to the Business Council of Australia in July 1999, the President of the WBCSD Bjorn Stigson noted that corporate social responsibility had been institutionalised in the northern hemisphere debate about the expectations that civil society has of corporations. Communities now expect organisations to strive for sustainability by adding economic, social and environmental value through their activities. He stressed the need for Australian corporations to also recognise this expectation. SustainAbility is a firm based in London and New York. It was founded by John Elkington and has had a profound influence on implementation of the principles of sustainability in major corporations (http://www.sustainability.com/philosophy/who-we-are/default.asp) [Accessed 29 April 2008]. Former controversial executive director of Greenpeace International, and a player in the green campaign that helped Sydney win the Olympics, Paul Gilding suggests that: Sustainability has become a competitive issue. Gone are the old models about social change. It is no longer the case that change is advocated by activists, resisted by business and arbitrated by government. The mainstreaming of sustainability is about its integration into our society and therefore the arrival of real competition among companies who see the world in transition to a new economy. Those that work this out and develop the tools needed to succeed in this transition will be rewarded the 40 Unit 2 Sustainability and the Triple Bottom Line old way – increased shareholder value – and in a new way – a more satisfied and motivated workforce and a more sustainable and robust corporation. So sustainability is a key challenge for business – but it also offers enormous opportunities for innovative responses and business success as a result. However, sustainability will not be achieved simply within the walls of corporate boardrooms. It requires a far more integrated and holistic approach involving many stakeholders in partnership. (Gilding 2000, p. 52) Reading 2.6 highlights the phases that businesses may go through in moving towards sustainability in their operations. It looks at this in terms of both ‘human sustainability’ and ‘ecological sustainability’. Consider the reading in the light of your own organisation and then answer Exercise 2.9. Reading 2.6 Dunphy D, Griffiths A & Benn S, 2003, Organizational Change for Corporate Sustainability, Routledge, pp. 13-18 & 22-26. Exercise 2.9 Where do you think your organisation currently sits in the phases towards sustainability? Is there any difference in where you think it is placed with respect to human and ecological sustainability? ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ Unit 2 Sustainability and the Triple Bottom Line 41 Reading 2.7 provides four short case studies of aspects of sustainability put in place by some organisations. Reading 2.7 Holliday CO, Schmidheiny S & Watts P, 2002, Walking the Talk: The Business Case for Sustainable Development, Greenleaf Publishing, pp. 32-37. Case studies of some NSW businesses that have cut back on greenhouse emissions can be accessed on the following websites: • NSW Department of Energy, Utilities and Sustainability: [Accessed 29 April 2008] • • Queensland Government Environmental Protection Agency: [Accessed 29 April 2008] WBCSD (case about Du Pont in Florida, US): [Accessed 29 April 2008] Exercise 2.10 From Reading 2.7, make a dot point list of the key lessons that you might take from these case studies in terms of developing corporate sustainability in an organisation. ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ 42 Unit 2 Sustainability and the Triple Bottom Line Conclusion In this Unit, we have explored the concepts of sustainability and sustainable development, and examined the difficulties in interpreting the meaning of sustainability. Sustainability is a concept that, although importantly informed by science and social science, is also values-based. Consequently, deriving clear ‘rules’ for implementation is fraught with difficulty. Identification of a set of principles of sustainability provides some help in implementation. We examined the four principles typically included in Australian policy and legislation, as well as The Natural Step principles. Finally, we examined the basis for concern about implementing sustainable development – namely, the very clearly unsustainable nature of much of our present activity. The need to provide for greater equity between countries of the North and South was stressed as a key part of the sustainability agenda, and the potential challenges to business arising from this were explored. To help you keep track of attempts to put sustainability into practice, a list of further references and a table of websites that address sustainability issues are provided at the end of this Unit. Unit 2 Sustainability and the Triple Bottom Line 43 Useful websites for sustainability [All websites accessed 29 April 2008] Name The Australian Collaboration Address http://www.australiancollabor ation.com.au/ Description Collaboration of eight leading national community organisations with an overall objective to help achieve a new and sustainable balance between social, cultural, environmental and economic policies and activities in Australia. Series of discussion papers that explore the relationship between the environment, the economy and society. They consider the changes required to achieve ecological sustainability during the 21st century. Independent public policy research centre funded by grants from philanthropic trusts, memberships and commissioned research. Its work is very relevant to sustainability issues. Partnership of grant-making foundations active in advancing the goals of sustainable development. Statement of ethical principles similar to the UN Declaration on Human Rights that will guide the conduct of people and nations towards each other and the earth to ensure peace, equity and a sustainable future. Promotes sustainable development through partnerships with the private sector to produce projects and special events across a wide range of fields. Provides media products and services to promote community, business, and personal decisions. Comprehensive resource of environmental information available on the Internet. Australian Conservation Foundation TELA series http://www.acfonline.org.au/d efault.asp?section_id=124 The Australia Institute http://www.tai.org.au/ Bellagio Forum http://bfsd.server.enovum.co m/en/component/option,com_ frontpage/Itemid,1/ http://www.earthcharter.org The Earth Charter Earth Pledge Foundation http://www.earthpledge.org/ EcoIQ http://www.ecoiq.com Envirolink Library http://library.envirolink.org/ 44 Unit 2 Sustainability and the Triple Bottom Line Name Five E’s Unlimited Address http://www.eeeee.net/ Description To share new and emerging ideas on sustainable development issues of global concern and to promote the consultative services of Five E's in doing sustainable development projects. Global Knowledge Partnership http://www.globalknowledge.o Informal partnership of public, private rg/ and not-for-profit organisations committed to sharing information, experiences and resources to promote broad access to and effective use of knowledge and information as tools of sustainable, equitable development. http://www.greencrossinternat Founded to help create a sustainable ional.net/index.htm future by cultivating harmonious relationships between humans and the environment. http://www.greeninnovations.asn.au/ Australian organisation that explores sustainability and business responses; provides links to sustainable business issues through its website. Created by the Canadian government to help communities in the developing world find solutions to social, economic, and environmental problems through research. Promotes sustainable patterns of world development through collaborative research, policy studies, consensus building and public information. Helps decision makers in Canadian governments and businesses to understand the principles of sustainable development and how to put them into practice. Green Cross International Green Innovations International Development Research Centre http://www.idrc.ca/index.html International Institute for Environment and Development International Institute for Sustainable Development Jamaica Sustainable Development Network http://www.iied.org/ http://www.iisd.org/ http://www.jsdnp.org.jm/JSDN Facilitates communication between users PdotORGdotJM/home.htm and suppliers of sustainable development information in developing countries. Unit 2 Sustainability and the Triple Bottom Line 45 Name The Natural Step Address http://www.naturalstep.org/ Description Provides a visionary blueprint for a sustainable world; science-based approach addresses problems at the source and turns them into opportunities for innovation. An international advisory and research organisation that works with some of the largest resource users on the planet to create solutions, models and tools designed to accelerate global sustainability. New Economics Foundation http://www.neweconomics.org An independent think tank combining /gen/ research, advocacy, training and practical action to construct a new economy centred on people and the environment. http://www.rmi.org/ Entrepreneurial non-profit organisation that fosters the efficient and restorative use of natural, human and other capital to make the world more secure, just, prosperous, and life-sustaining by inspiring business, civil society, and government to design integrative solutions that create true wealth. Firm based in London and New York; has had considerable influence in advising firms on implementing sustainability principles into their corporate endeavours. Reports on businesses and business activities making progress towards sustainability. Promotes Internet networking in developing countries and shares information and expertise about sustainable development. Bibliography of works emphasising economics and sustainable development, summaries of case studies of attempts to pursue sustainable strategies, and links to other sustainable development sites. Rocky Mountains Institute SustainAbility http://www.sustainability.com/ philosophy/who-weare/default.asp SustainableBusine http://www.sustainablebusine ss.com ss.com/ UN Sustainable Development Program http://www.sdnp.undp.org/ Sustainable http://www.colby.edu/persona Development Web l/thtieten/sustain.html page Sustainable Ecosystems Institute Sustainable Living Network http://www.sei.org/homepage. A scientific resource for individuals, html organisations, and governments seeking solutions to natural resource issues. http://sln.sustainablelivingboo ks.com/ Informal affiliation of people around the world who seek to deepen understanding and practice of sustainable living. 46 Unit 2 Sustainability and the Triple Bottom Line Name Sustainable Production and Consumption Sustainable Sources Address http://www.iisd.ca/consume/o verview.html http://www.greenbuilder.com/ Description Collection of documentation and links to relevant material on the issue of sustainable production and consumption. Resource for sustainable building and development. List of websites relevant to sustainable development. Sydney- based environment group with information on sustainability issues including ‘greening business’. UNEP has numerous sustainability related programmes – do a search under sustainability on the website. Entry point to UNSD resources and links. Sustainability Web http://n.webring.com/hub?ring Ring =sustainability Total Environment Centre United Nations Environment Programme UN Division for Sustainable Development World Business Council for Sustainable Development Worldwatch Institute http://www.tec.org.au/ http://www.unep.org/ http://www.un.org/esa/sustde v/ http://www.wbcsd.ch/ Sponsored by a coalition of 125 global entities united by shared commitment to the environment and principles of economic growth and sustainable development. Offers a unique blend of interdisciplinary research, global focus and accessible writing that has made it a leading source of information on interactions among key environmental, social and economic trends. Its work revolves around the transition to an environmentally sustainable and socially just society, and how to achieve it. Comprehensive list of Internet sites dealing with sustainable development, including organisations, projects and activities, electronic journals, libraries, references and documents, databases, directories or metadatabases. http://www.worldwatch.org/ WWW Virtual Library on Sustainable Development http://www.ulb.ac.be/ceese/m eta/sustvl.html Unit 2 Sustainability and the Triple Bottom Line 47 References and further reading Beder S, 1996, The Nature of Sustainable Development, 2nd edn, Scribe, Newham, Victoria. Biological Diversity Advisory Committee, 1992, A National Strategy for the Conservation of Australia’s Biological Diversity, Department of Environment, Water, Heritage and the Arts, Australian Government, Canberra. Biological Diversity Advisory Committee, 1995, Newsletter on Biological Diversity Conservation Actions, Department of Environment, Water, Heritage and the Arts, Australian Government, Canberra, Biolinks No. 8, March. [Accessed 29 April 2008] Bell S & Morse S, 1999, Sustainability Indicators. Measuring the Immeasurable, Earthscan, London. Brenton T, 1994, The Greening of Machiavelli: The Evolution of International Environmental Politics, The Royal Institute of International Affairs and Earthscan, London. Commonwealth of Australia, 1992, National Strategy for Ecologically Sustainable Development, Australian Government Publishing Service. Deville A & Harding R, 1997, Applying the Precautionary Principle, The Federation Press, Sydney. Diesendorf M & Hamilton C (eds), 1997, Human Ecology, Human Economy: Ideas for an Ecologically Sustainable Future, Allen & Unwin, St. Leonards NSW. Doppelt B, 2003, Leading Change Toward Sustainability: A Change Management Guide for Business, Government and Civil Society, Greenleaf Publishing, Sheffield UK. Dunphy D, Griffiths A & Benn S, 2003, Organizational Change for Corporate Sustainability, Routledge, London. Elkington J, 1998, The Triple Bottom Line in Action. [Accessed November 2006] 48 Unit 2 Sustainability and the Triple Bottom Line Garnaut R, 2007, Garnaut Climate Change Review Interim Report. [Accessed 15 April 2008] Gilding P, 2000, in Benveniste J, Dunphy D, Griffiths A & Sutton P (eds), 2000, Sustainability. The Corporate Challenge of the 21st Century, Allen & Unwin. Harding R, 1996, Sustainability: Principles to Practice, Outcomes from Fenner Conference on the Environment 1994, 13-16 November, Department of the Environment, Sport and Territories, Australian Government. Harding R (ed), 1998, Environmental Decision-making. The Roles of Scientists, Engineers and the Public, The Federation Press, Sydney. Harding R & Fisher E, 1999, ‘Introducing the precautionary principle’, in Harding R & Fisher E (eds), Perspectives on the Precautionary Principle, The Federation Press, Sydney, pp 2-25. Harding R, Young M & Fisher E, 1996, ‘Interpretation of the principles’, Part 1 of Sustainability: Principles to Practice. Background Papers, Fenner Conference on the Environment 1994, 13-16 November, Department of the Environment, Sport and Territories, Australian Government. Hargroves C & Smith MH (eds), 2005, The Natural Advantage of Nations: Business Opportunities, Innovation and Governance in the 21st Century, Earthscan, UK and US. Hawken P, Lovins AB & Lovins LH, 1999, Natural Capitalism. The Next Industrial Revolution, Earthscan Publications Ltd, London. Holliday CO, Schmidheiny S & Watts P, 2002, Walking the Talk. The Business Case for Sustainable Development, Greenleaf Publishing Limited Sheffield, UK. Institute of Environmental Studies, Jack Beale lecture series. [Accessed 29 April 2008] Intergovernmental Agreement on the Environment (IGAE), 1992, Heads of Government in Australia, May 1992. Jordan A & O’Riordan T, 2000, ‘Environmental politics and policy processes’, in O’Riordan T (ed), Environmental Science for Environmental Management, 2nd edn, Prentice Hall/Pearson Education, UK, ch. 3. Unit 2 Sustainability and the Triple Bottom Line 49 Lowe I, 1996, ‘Performance measurement’ in Sustainability: Principles to Practice, Proceedings, Fenner Conference on the Environment 1994, Department of Environment, Sport and Territories. Lumsden RJ, 2003, Sustainability Assessment: The Way Ahead for Corporate Reporting. [Accessed 24 April 2008] O’Riordan T, 2000, ‘The sustainability debate’, in O’Riordan T (ed), Environmental Science for Environmental Management, 2nd edn, Prentice Hall/Pearson Education Limited, UK, ch. 2 & ch. 3, pp. 29-62. Pepper D, 1996, Modern Environmentalism: An Introduction, Routledge, London. Pope J, Morrison-Saunders A & Annandale D, 2005, ‘Sustainability assessment: Applying sustainability assessment models’, Impact Assessment and Project Appraisal, vol. 23, no. 4, pp. 293-302. Privy Council, 2003, A Framework for the Application of Precaution in Science-based Decision Making About Risk, Government of Canada. [Accessed 5 May 2008] Schaltegger S, Burritt R & Petersen H, 2003, An Introduction to Corporate Environmental Management. Striving for Sustainability, Greenleaf Publishing, Sheffield UK. Stern N, 2006, Stern Review: The Economics of Climate Change, HM Treasury UK. [Accessed 9 February 2008] Weizsäcker E von, Lovins AB & Lovins LH, 1997, Factor 4. Doubling Wealth – Halving Resource Use, Allen & Unwin Sydney. Weiss BE, 1989, In Fairness to Future Generations: International Law, Common Patrimony, and Intergenerational Equity, Transnational Publishers, Ardsley-on-Hudson, New York. World Business Council for Sustainable Development. [Accessed 9 February 2008] World Commission on Environment and Development, 1987, Our Common Future, Oxford University Press (see also Australian Edition 1990). 50 Unit 2 Sustainability and the Triple Bottom Line Yencken D & Porter L, 2001, A Just and Sustainable Australia, The Australian Collaboration/The Australian Council of Social Service, Redfern NSW. Yencken D & Wilkinson D, 2000, Resetting the Compass: Australia’s Journey Toward Sustainability, CSIRO Publishing, Collingwood, Victoria. Young M, 1993, For Our Children’s Children: Some Practical Implications of Inter-Generational Equity and the Precautionary Principle, Occasional Publication No. 6, Resource Assessment Commission, Canberra. Unit 2 Sustainability and the Triple Bottom Line 51 52 Unit 2 Sustainability and the Triple Bottom Line Readings Contents Reading 2.1 Pearce DW, Turner RK, O’Riordan T, Adger WN, Brown K, Jordan AJ & Powell JC, 1993, Blueprint 3: Measuring Sustainable Development, Earthscan, London, pp. 15-21. Pepper D, 1996, Modern Environmentalism: An Introduction, Routledge, London, pp. 10-17. World Commission on Environment and Development, 1987, ‘The Tokyo declaration’, Our Common Future, Oxford University Press, Oxford, pp. 363-366. Commonwealth of Australia, 1992, ‘Australia’s goal, core objectives and guiding principles for the strategy’, National Strategy for Ecologically Sustainable Development, Australian Government Publishing Service, Canberra, December, pp. 8-9. Commonwealth of Australia, 1992, ‘Principles of environmental policy’, Intergovernmental Agreement on the Environment, May, Section 3, (3 pages). Dunphy D, Griffiths A & Benn S, 2003, Organizational Change for Corporate Sustainability, Routledge, pp. 13-18 & 22-26. Holliday CO, Schmidheiny S & Watts P, 2002, Walking the Talk: The Business Case for Sustainable Development, Greenleaf Publishing, pp. 32-37. Reading 2.2 Reading 2.3 Reading 2.4 Reading 2.5 Reading 2.6 Reading 2.7 Unit 2 Sustainability and the Triple Bottom Line 53 54 Unit 2 Sustainability and the Triple Bottom Line Reading 2.1 Pearce DW, Turner RK, O’Riordan T, Adger WN, Brown K, Jordan AJ & Powell JC, 1993, Blueprint 3: Measuring Sustainable Development, Earthscan, London, pp. 15-21. Commonwealth of Australia Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by and on behalf of the University of New South Wales pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under this Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice. 15 18 Reading 2.2 Pepper D, 1996, Modern Environmentalism: An Introduction, Routledge, London, pp. 10-17. Commonwealth of Australia Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by and on behalf of the University of New South Wales pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under this Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice. 17 Reading 2.3 World Commission on Environment and Development, 1987, ‘The Tokyo declaration’, Our Common Future, Oxford University Press, Oxford, pp. 363-366. Commonwealth of Australia Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by and on behalf of the University of New South Wales pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under this Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice. Reading 2.4 Commonwealth of Australia, 1992, ‘Australia’s goal, core objectives and guiding principles for the strategy’, National Strategy for Ecologically Sustainable Development, Australian Government Publishing Service, Canberra, December, pp. 8-9. Commonwealth of Australia Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by and on behalf of the University of New South Wales pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under this Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice. 8 9 Reading 2.5 Commonwealth of Australia, 1992, ‘Principles of environmental policy’, Intergovernmental Agreement on the Environment, May, Section 3, (3 pages). Commonwealth of Australia Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by and on behalf of the University of New South Wales pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under this Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice. ECOLOGICALLY SUSTAINABLE DEVELOPMENT Sustainability Publications Extract from: Go back to: DEH Home > ESD > Publications Intergovernmental Agreement on the Environment AN AGREEMENT made the 1st day of May one thousand nine hundred and ninety two BETWEEN THE COMMONWEALTH OF AUSTRALIA of the first part, THE STATE OF NEW SOUTH WALES of the second part, THE STATE OF VICTORIA of the third part, THE STATE OF QUEENSLAND of the fourth part, THE STATE OF WESTERN AUSTRALIA of the fifth part, THE STATE OF SOUTH AUSTRALIA of the sixth part, THE STATE OF TASMANIA of the seventh part, THE AUSTRALIAN CAPITAL TERRITORY of the eighth part, THE NORTHERN TERRITORY OF AUSTRALIA of the ninth part, THE AUSTRALIAN LOCAL GOVERNMENT ASSOCIATION of the tenth part. WHEREAS On 31 October 1990, Heads of Government of the Commonwealth, States and Territories of Australia, and representatives of Local Government in Australia, meeting at a Special Premiers' Conference held in Brisbane, agreed to develop and conclude an Intergovernmental Agreement on the Environment to provide a mechanism by which to facilitate: o o o o o a cooperative national approach to the environment; a better definition of the roles of the respective governments; a reduction in the number of disputes between the Commonwealth and the States and Territories on environment issues; greater certainty of Government and business decision making; and better environment protection; AND WHEREAS the Parties to this Agreement ACKNOWLEDGE the important role of the Commonwealth and the States in relation to the environment and the contribution the States can make in the development of national and international policies for which the Commonwealth has responsibilities; RECOGNISE that environmental concerns and impacts respect neither physical nor political boundaries and are increasingly taking on interjurisdictional, international and global significance in a way that was not contemplated by those who framed the Australian Constitution; RECOGNISE that the concept of ecologically sustainable development including proper resource accounting provides potential for the integration of environmental and economic considerations in decision making and for balancing the interests of current and future generations; accessed from http://www.deh.gov.au/esd/national/igae/ MBT p. 1 RECOGNISE that it is vital to develop and continue land use programs and co-operative arrangements to achieve sustainable land use and to conserve and improve Australia's biota, and soil and water resources which are basic to the maintenance of essential ecological processes and the production of food, fibre and shelter; ACKNOWLEDGE that the efficiency and effectiveness of administrative and political processes and systems for the development and implementation of environmental policy in a Federal system will be a direct function of:(i) the extent to which roles and responsibilities of the different levels of Government can be clearly and unambiguously defined; (ii) the extent to which duplication of functions between different levels of Government can be avoided; (iii) the extent to which the total benefits and costs of decisions to the community are explicit and transparent; (iv) the extent to which effective processes are established for co-operation between governments on environmental issues; and (v) the extent to which responsible Governments are clearly accountable to the electorate for the development and implementation of policy; and ACKNOWLEDGE that in the development and implementation of environmental policy it is necessary to accommodate the regional environmental differences which occur within Australia; THE PARTIES AGREE AS FOLLOWS: ….. SECTION 3 - PRINCIPLES OF ENVIRONMENTAL POLICY 3.1 The parties agree that the development and implementation of environmental policy and programs by all levels of Government should be guided by the following considerations and principles. 3.2 The parties consider that the adoption of sound environmental practices and procedures, as a basis for ecologically sustainable development, will benefit both the Australian people and environment, and the international community and environment. This requires the effective integration of economic and environmental considerations in decision-making processes, in order to improve community well-being and to benefit future generations. 3.3 The parties consider that strong, growing and diversified economies (committed to the principles of ecologically sustainable development) can enhance the capacity for environmental protection. In order to achieve sustainable economic development, there is a need for a country's international competitiveness to be maintained and enhanced in an environmentally sound manner. accessed from http://www.deh.gov.au/esd/national/igae/ MBT p. 2 3.4 Accordingly, the parties agree that environmental considerations will be integrated into Government decision-making processes at all levels by, among other things: (i) ensuring that environmental issues associated with a proposed project, program or policy will be taken into consideration in the decision making process; (ii) ensuring that there is a proper examination of matters which significantly affect the environment; and (iii) ensuring that measures adopted should be cost-effective and not be disproportionate to the significance of the environmental problems being addressed. 3.5 The parties further agree that, in order to promote the above approach, the principles set out below should inform policy making and program implementation. 3.5.1 precautionary principle Where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation. In the application of the precautionary principle, public and private decisions should be guided by: (i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment; and (ii) an assessment of the risk-weighted consequences of various options. 3.5.2 intergenerational equity the present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations. 3.5.3 conservation of biological diversity and ecological integrity conservation of biological diversity and ecological integrity should be a fundamental consideration. 3.5.4 improved valuation, pricing and incentive mechanisms environmental factors should be included in the valuation of assets and services polluter pays i.e. those who generate pollution and waste should bear the cost of containment, avoidance, or abatement the users of goods and services should pay prices based on the full life cycle costs of providing goods and services, including the use of natural resources and assets and the ultimate disposal of any wastes environmental goals, having been established, should be pursued in the most cost effective way, by establishing incentive structures, including market mechanisms, which enable those best placed to maximise benefits and/or minimise costs to develop their own solutions and responses to environmental problems. accessed from http://www.deh.gov.au/esd/national/igae/ MBT p. 3 Reading 2.6 Dunphy D, Griffiths A & Benn S, 2003, Organizational Change for Corporate Sustainability, Routledge, pp. 13-18 & 22-26. Commonwealth of Australia Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by and on behalf of the University of New South Wales pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under this Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice. 22 Reading 2.7 Holliday CO, Schmidheiny S & Watts P, 2002, Walking the Talk: The Business Case for Sustainable Development, Greenleaf Publishing, pp. 32-37. Commonwealth of Australia Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by and on behalf of the University of New South Wales pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under this Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice. Business Management for a Sustainable Environment Unit 3 Environmental Management Systems 15-May-08