BEYOND THE TRIPLE BOTTOM LINE:
MEASURING AND REPORTING ON SUSTAINABILITY

Presentation to the
ACAG Conference, Brisbane 2005

By Wayne Cameron
Auditor-General of Victoria

WHAT IS SUSTAINABILITY?

Early definition

“Development seeking to meet the needs of the present generation without compromising the ability of future generations to meet their own needs.”

Meaning continues to evolve

From sustainable development to sustainability

Sustainability has a global focus, through a number of international conferences starting with the 1972 Stockholm Conference on the Human Environment.

The early definition is from the 1987 Our Common Future report by the World Commission and Environment and Development, often referred to as the “Brundtland” report from the Chair of the Commission.

As the concept evolves, arguably, it is moving from sustainable development, which is economic development that takes into account social and environmental concerns. The emerging concept of sustainability is broader, and considers the economic, social and environmental impact of any issue and seeks to balance these.

SIX PRINCIPLES OF SUSTAINABILITY

1. Comprises at least 3 pillars: Environmental, Social and Economic.

2. The 3 pillars are interrelated.

3. Sustainability strives for equity within generations.

4. Sustainability strives for equity between generations.

5. Sustainability uses the precautionary principle.

6. Sustainability conserves biological diversity.

Most recently, we have witnessed initiatives in the environmental, social and economic pillars of sustainability. However, a fourth and fifth dimension is emerging, referred to as the “governance” pillar, and the “cultural” or “community” pillar.

Principle 1 – Sustainability comprises at least 3 pillars (Growing Victoria together)

• To illustrate the 3 pillars, we have provided the goals of Growing Victoria Together, the whole-of-government “road map” for Victoria. Of course, depending on the policy the initiatives will be different, but it is usually possible to map them out as social, environmental and economic.

Principle 2 – The 3 pillars are interrelated

Sustainability is a holistic concept: the philosophical theory that wholes (which are more than the mere sums of their parts) are fundamental aspects of the real.

Principle 3 – Sustainability strives for equity within generations

Intragenerational equity is applied differently at the:

• domestic level

• global level.

At the domestic level, we consider (in Australia) inequity to be largely a social issue, and it emerged as “the gap between the rich and the poor”. The Henderson poverty line was developed as a measurement tool to monitor this. In recent years, equity has broadened to include gender issues, disability issues etc.

On the global level, equity is often treated as a strictly economic issue, regarding north and south. Developing countries should have a right to progress to a level that is comparable with that of the industrialised world.

Principle 4 - Sustainability strives for equity between generations

Intergenerational equity:

• The right of future generations to enjoy a quality of life as good as, or better than, the current generation

• Intragenerational equity must be maintained over time.

Essentially, intergenerational equity is trying to achieve the domestic and global equity (previously discussed) over time. This is a huge task, since we haven’t achieved intragenerational equity yet.

There is also a considerable amount of uncertainty in intergenerational equity – we don’t know what future generations will require to enjoy a good quality of life. The policy response to achieving equity over time is to conserve a pool of essential natural resources for future use, or simply to avoid long-term damage.

Principle 5 – Sustainability uses the precautionary principle

Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation
(Rio Declaration, 1992)

The precautionary principle follows neatly from the uncertainty surrounding intergenerational equity.

A lot is not known about the environment, or how a development may affect the environment, particularly as damage may accumulate over time. For example, there was considerable scientific debate over greenhouse and global warming, and this probably delayed global agreement to reach a policy response.

Early in its implementation, the precautionary principle reversed the onus of proof. Previously, those resisting a development, needed to prove that it would harm the environment, now the proponent had to prove that a development would not do environmental damage.

Today, the principle is often implemented through regulatory arrangements like requiring proponents to complete an environmental impact assessment and consider alternatives before having their project approved.

Principle 6 – Sustainability conserves biological diversity

• Linked to:

• precautionary principle

• intergenerational equity.

• Exampled through reserves or parks.

The conservation of biodiversity is not just an environmental issue. Biodiversity and healthy ecosystems are essential to our way of life since they provide clean water and air, regulate climate and control pests.

Biodiversity in Australia has declined dramatically during the last 200 years. The extinction of a species is irreversible, and this links this principle both to the precautionary principle and to the principle of achieving equity across generations.

Generally, biodiversity is conserved through parks or reserves

APPLYING THE SUSTAINABILITY PRINCIPLES TO MEASURING AND REPORTING

• Means going beyond traditional financial reporting to measure and report on at least the environmental, social and economic dimensions of performance

• Early models: TBL, 4 capitals

Reductionist approaches:

• break sustainability down into 3 or more pillars

• break each pillar down into a series of topics

• break each topic down to a series of performance indicators

• measure each indicator separately

• use “scientific approaches” to measure each indicator.

HOLISTIC APPROACHES

INTEGRATED INDICATORS

• Systemic indicators

• Cross-cutting indicators

SYSTEMS THINKING

“Relationships are … more fundamental than things, and that wholes are primordial to parts.”
(Senge)

SYSTEMS APPROACH

Means:

• attention to all parts of the relationships

• accepting and encouraging multiple views

• the observer is part of the system and not independent of it

• scientific view is one view and should not prevail over lay view.

PROGRAM LOGIC DIAGRAM PHASE 2 – ECONOMIC PILLAR

ENVIRONMENTAL PILLAR

SOCIAL PILLAR

GOVERNANCE PILLAR

SUMMARY

Sustainability calls for holistic approaches to measurement and reporting, for performance monitoring, policy formulation as well as operational management.

This is the link between producing outputs and delivering sustainable outcomes.