Integrated Sustainability Analysis
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A TRIPLE BOTTOM LINE ANALYSIS
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Corporations, non-governmental organisations, governments at all levels, and the general public are all engaging with the concept of sustainability. The environmental movement brought the tensions between economic development and environmental quality to public attention over 30 years ago. Recently, the developed world has struggled to expand the original concept of sustainable development - meeting environmental concerns whilst maintaining economic development - to a more holistic concept where environmental, social and economic considerations are identified and can be considered concurrently in decision making.
Balancing Act provides an overview of the Australian economy using a set of ten environmental, social, and financial indicators. The environmental indicators are water use, land disturbance, greenhouse emissions and energy use; the social indicators are employment, government revenue and income; and the financial indicators are operating surplus (or profits), exports and imports.
The indicators are referenced against one dollar of ‘final demand’, roughly the consumption dollar we spend in everyday life. Balancing Act therefore tells us how much energy, water, land, employment (and so on) is embodied in every dollar in the Australian economy. The report is a resource for government and corporate decision-makers, as well as individual consumers. Balancing Act reveals some of the social and environmental implications of financial flows in the economy, and provides an indication of the resource intensity of different goods and services. It facilitates more informed decision making, and could provide direction for further research. By identifying direct effects (within the farm or factory fence) as well as the indirect effects (in the full supply chain), the innovative methodology shows us where environmental, social and economic impacts occur across the full production chain. This can highlight opportunities to increase benefits and reduce adverse impacts through individual and collective action.
Balancing Act uses the Australian system of national physical, social and economic accounts to provide reliable, empirical and comparable data. The report is based on the national accounts from the mid 1990s – the most recent complete set of data available when the project commenced. The results therefore provide a snapshot of the economy’s performance for this point in time. The methodology is reproducible, and could be used to prepare annual accounts revealing changes in Australia’s TBL performance over time. Because it is based on the Australian national accounts, Balancing Act is limited to resources used and activities taking place within Australia. It does not quantify resources used overseas which are embodied in imported goods and services. This would require preparation of similar accounts for all our major trading partners.
Balancing Act should not be read in isolation. A ‘below average’ indicator (eg high water use or low employment) does not necessarily indicate a problem or inefficiency. Different sectors perform different functions in the economy and all sectors have a mix of above and below average results. For example, agricultural sectors tend to be physically intense, with ‘below average’ environmental indicators, yet they generate ‘above average’ employment and exports. In contrast, many services sectors are physically light, with ‘above average’ environmental indicators, yet they generate ‘below average’ employment and exports. Thus information on the state of Australia’s environment, society and economy must also be considered when interpreting these results.
To find out more, download and read a complete copy of the report.
Please check the Balancing Act FAQ for more information. If you have further questions or queries, please email your enquiry to Integrated Sustainability Analysis (firstname.lastname@example.org) at the University of Sydney.