BEST PRACTICE Incorporating Sustainability in Public Finance Practices (2002) (BUDGET) Background. Sustainability is the notion that current economic and consumption patterns should not reduce opportunities for future generations by depleting or impairing resources. The driving force behind sustainability is the recognition that the earth’s—and by extension, our communities’—natural capital is limited and that pollution and waste are a drain on the economy. Sustainability demands balance among economy, environment, and community. Emphasizing any one of these factors over the others causes an imbalance in intergenerational equity and undermines the ability to support current business practices over the long term. In contrast, a “triple bottom line” approach aspires to a strong and growing economy, while simultaneously maintaining the quality of the environment and working to achieve social fairness. Programs to reduce air pollution and clean up our rivers, harbors, and landfills are all very real and immediate examples of the high cost of sidestepping sustainable practices. Both the public and private sectors have experienced the complexity and costs of rectifying mistakes caused by an imbalance between economic and environmental goals. At the same time, many businesses worldwide have demonstrated that they can operate profitably while employing sustainable practices. Similarly, many governments have adopted and implemented sustainable policies and business practices. Through the power of example, the public sector must continue to lead the way toward a sustainable future. Standing at the vortex of the policymaking process, government finance officers have an important role to play in this critical effort. Recommendation. The Government Finance Officers Association (GFOA) recommends that the issue of sustainability be considered a core value in setting organizational policy and establishing business practices in all areas of public finance. Accordingly, GFOA encourages governments to consider the following actions: Public Policy: • Incorporate a commitment to sustainability into mission and value statements. • Develop organizational goals that reflect sustainability principles both at the jurisdiction wide and departmental levels. • Encourage policy development that supports the environmental sustainability of the jurisdiction. • Implement policies encouraging or requiring the use of products certified as sustainable and/or environmentally friendly. • Evaluate how the jurisdiction’s tax structure affects its goals for a healthy economy, a healthy environment, and social fairness. • Form partnerships with other government agencies and with the private and not-for-profit sectors that promote sustainability. Budget and Management: • Develop budget processes that reflect sustainability goals and objectives, measure government performance in realizing those goals and objectives, and benchmark such performance against comparable jurisdictions and/or accepted standards. • Consider financing and capital planning processes that systematically identify future costs and allocate those costs equitably across generations. The use of life-cycle costing and similar analytical tools is advised. Sustainable Business Practices: • Implement purchasing practices that support the procurement of sustainable and recycled goods and services consistent with the jurisdictions’ financial plans and resources. Promote the use of products certified by reputable third-party organizations. • Develop sustainability principles and guidelines for facility and infrastructure development. Adopt green building standards, such as LEED, for construction projects. • Adopt policies that promote sustainable business practices in governmental operations, such as fleet management, building maintenance, and parks and greenspaces. Consider adopting guidelines established by independent organizations. • Implement practices and procedures that reduce waste, carbon dioxide emissions, and reliance on non- renewable resources; promote recycling and reuse; and minimize employee exposure to hazardous materials. • Educate and inform employees of the importance of sustainable practices and offer suggestions they can employ in the workplace. • Report on sustainable business practices and goals in annual reports, budget documents, and other core communications. • Include sustainability in job descriptions and performance reviews. References • Caring for the Earth: A Strategy for Sustainable Living, World Conservation Union et. al.,1991. • The Ahwahnee Principles, Local Government Commission, 1994. • Our Ecological Footprint: Reducing Human Impact on the Earth, William Rees and Mathis Wackernagel, New Society Publishers, 1996. • Sustainable Communities: From Vision to Action, Lamont C. Hempel, Claremont Graduate University, 1998. • “Policy Guide on Planning for Sustainability,” American Planning Association, 2000 (www.planning.org/policyguides/sustainability.htm). • “Portland, Oregon: A Case Study in Sustainability,” Government Finance Review, GFOA, February 2002. • “Purchasing Power: The Massachusetts Environmental Procurement Program,” Government Finance Review, GFOA, February 2002. • “Economic Development and Environmental Protection: The Northampton County, Virginia, Experience,” Government Finance Review, February 2002. Approved by the GFOA’s Executive Board, June 17, 2002.
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