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CSIRO Report into Sustainability in Australia released

By: Tobi Nagy, Fri Dec 9th, 2005 04:32:43 PM

A CSIRO triple bottom line (TBL) report on sustainability in the Australian economy was released The economy-wide, rather than company specific analysis is intended to be used as a tool for people in industry, government and the community, to move beyond decisions based merely on dollars and cents and enable them to make decisions based on a contribution to society, environment, and economy.

The 807 page report titled the Balancing Act was jointly published by the CSIRO and University of Sydney. It contains quite distinctive analysis and is a self described numerate TBL account of the Australian economy.

According to the authors, “the study provides a detailed scrutiny of the full production chain. It is able to show the full effects – both direct and indirect – of the production of an individual commodity or service”.

It also differs from other corporate social responsibility based indices and research because it is industry-wide and incorporates financial indicators in its 10 key sustainability indicators.

It examines 135 industry sectors of the Australian economy and quantifies their individual impacts and contributions across ten social, environmental, and financial indicators. These include:

Triple Bottom FactorsKey sustainability indicators 1SocialEmployment potential 2Income potential 3Government revenue 4EnvironmentalWater use 5Land degradation 6Greenhouse Gas emissions 7Energy use 8FinancialProfit potential 9Export potential 10Import potential

Three of major industries scrutinised are: 1.Banking 2.Mining 3.Food and Agriculture

Banking The report states that banking, like most private service sectors, “has little primary impact on the environment with low requirements for water, energy, land and low greenhouse gas emissions,” announced co-author Barney Foran who is the program leader of the CSIRO's Resource Futures Program. It also scored low on export potential.

But “banks also occupy a pivotal position in decision-making in business operations, national affairs and lifestyles of people.” Banks could use this central influence to the advantage of the environment if they assessed a broader set of risk issues when they lent money, for example, by giving concessional interest rates to businesses that perform well across the triple bottom line, or domestic houses that had ten star energy and water ratings according to the report. Mining “Generally mining is not really thought of as particularly sustainable by the community at large”, says Foran. “In terms of the TBL, mining actually has a more positive impact across environmental and financial indicators than we would have thought.”

For mining, the financial indicators are “well above the economy wide average, while the environmental indicators are better than average for each consumption dollar”.

“The main challenge for basic mining is that some social indicators are well below average, which poses the question of whether the wider Australian community obtains sufficient social returns for the increasing volumes of raw resource exports,” says Foran.

Food and agriculture Food and agriculture have high environmental costs which are not reflected in their price. They had a high water and energy cost, often leading to high land degradation.

Sustainability Reporting Sustainability reporting is not mandatory in Australia and lies far behind world leading countries like Japan and the UK. This can be a major problem for Australia in the future, if we don’t adopt the paradigm that the rest of the world is shifting to. In Australia an international standard for accounting practices is required that also reflects social and environmental factors, not just profit.

CountriesPercentage of industries conducting Sustainability reporting Australia23% Japan80% UK71%

Conclusion In conclusion, the report states that the way ahead is through fundamental change so that different industries work together coherently. Australia needs to add more value to raw materials by turning them into more complex goods and services. It also states that Australia faces major challenges to sustainability in the 21st century as it tries to catch-up with the rest of the world. A “big picture” approach was required to enhance sustainability in industries operating in Australia.

In the mean-time, “this report will help government, industries, and even individual consumers to look at the sustainability of different goods and services in a whole new light”, say the authors.

All sustainability related effects are referenced back to a consumption dollar – roughly the dollar spent by a consumer in everyday life. It also shows that each consumption dollar is quite different – some dollars are positive and create employment, or send out exports or generate government revenue. Other dollars are less positive through their high use of water or production of greenhouse gas emissions.

About the author: Tobi Nagy is a small business develoment consultant and a specialist on developing sustainable systems. His website can be found at http://www.sustainable-development.net

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