ReviewAn overview of sustainability assessment methodologies
Introduction
The concept of sustainable development (SD) has become an important objective of policy makers in the industry. The Brundtland report defines the sustainable development as development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs (WCED, 1987). There are number of frameworks of sustainability assessment that evaluate the performance of companies. The World Business Council for Sustainable Development (WBCSD, 1997), the Global Reporting Initiative (GRI, 2002a, GRI, 2002b) and development of standards (OECD, 2002a, OECD, 2002b) were the foundation for sustainability reporting. Azapagic (2004) developed a framework for sustainability indicators for the mining and minerals industry, which is also compatible to GRI. Krajnc and Glavic (2005) collected and developed a standardised set of sustainability indicators for companies covering all main aspects of sustainable development.
Indicators and composite indicators are increasingly recognised as a useful tool for policy making and public communication in conveying information on countries’ performance in fields such as environment, economy, society, or technological development.
‘Indicators arise from values (we measure what we care about), and they create values (we care about what we measure)’ (Meadows, 1998). The main feature of indicators is their ability to summarise, focus and condense the enormous complexity of our dynamic environment to a manageable amount of meaningful information (Godfrey and Todd, 2001). By visualizing phenomena and highlighting trends, indicators simplify, quantify, analyse and communicate otherwise complex and complicated information (Warhurst, 2002).
There is a widely recognised need for individuals, organisations and societies to find models, metrics and tools for articulating the extent to which, and the ways in which, current activities are unsustainable. This need arises on multiple layers ranging from supra-national (e.g. the negotiation of protocols for environmental protection), national (e.g. via some version of “greening” GDP) and sub-national levels (e.g. in regional development forums) (Ramachandran, 2000).
In an effort to introduce and define sustainability science, Kates et al. (2001) provide seven core questions for research. Two of them are particularly connected to the issue of assessing sustainability:
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“How can today's operational systems for monitoring and reporting on environmental and social conditions be integrated or extended to provide more useful guidance for efforts to navigate a transition toward sustainability?
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How can today's relatively independent activities of research planning, monitoring, assessment, and decision support be better integrated into systems for adaptive management and societal learning?”
According to Kates et al. (2001), the purpose of sustainability assessment is to provide decision-makers with an evaluation of global to local integrated nature–society systems in short- and long-term perspectives in order to assist them to determine which actions should or should not be taken in an attempt to make society sustainable.
The need for an integral systematic approach to indicators definition and measurement is recognised (Bossel, 1999) in order to give well-structured methodologies, easy to reproduce and to assure that all important aspects are included in the measurement. However, before developing the methodology and the indicators what is needed is the clear definition of the policy goals towards sustainability. This appears to be even more difficult since in most cases the development of indicators has started while there are still arguments over what constitutes sustainable development.
Section snippets
Sustainable development indicators
Warhurst (2002) considers measuring of sustainable development as a two-step approach. Firstly, the progress made in a number of selected individual fields is measured by SDIs and secondly, the overall progress made towards sustainable development is assessed by a combination of these individual fields with regard to their interlinking.
According to Lancker and Nijkamp (2000), ‘a given indicator does not say anything about sustainability, unless a reference value such as thresholds is given to
Classification and evaluation of sustainability assessment methodologies
There are two distinct methodologies that can be found for Sustainability Assessment. Mainstream economists use monetary aggregation method, whereas scientists and researchers in other disciplines prefer to use physical indicators. Economic approaches include greening the GDP, resource accounting based on their functions, sustainable growth modelling, and defining weak and strong sustainability conditions. Mainstream economists assume sustainable growth to be a part of sustainable development
Composite Indicators for Sustainability
The construction of (composite) indicators involves making choices. This introduces issues of uncertainty such as selection of data, imprecision of the data, data imputation methods, data normalisation, weighting schemes, weights’ values and aggregation methods.
Composite indicators are an innovative approach to evaluating sustainable development (defined as non-declining welfare over the long-term). Computing aggregate values is a common method used for constructing indices. An index can be
Overview of Sustainability Indices
The brief description of various indices and ratings are described below.
Conclusion
This paper covers an overview of various sustainability indices which are practically implemented to measure sustainable development. Attempts have been made to compile the information about how the index were formulated using the three central steps, viz.—normalisation, weighting, aggregation. It has been found that normalisation and weighting of indicators – which in general are associated with subjective judgments – reveal a high degree of arbitrariness without mentioning or systematically
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