The Sustainable Enterprise Paradigm Shift

1. The Sustainable Enterprise Paradigm Shift Report By: Committee on industrial environmental performance metrics. National Academy of Engineering and National Research Council Summary: Rafael Kaliski Critique: Chris Day

2. Changing for the future • Embracing “ecoefficiency” • Making more and better products from the same amount of raw materials with less waste • Assess activities as sustainable development • A paradigm shift from “greening to sustaining” • Sustainable industrial enterprise moves beyond • Cleaner production • Ecoefficency

3. Changing for the future • Movement toward sustainability is a continuation of the “greening” shift • Integration of environmental considerations • Shifting requires • Development of new problem-solving techniques • Innovation in information and communication

4. The Call for Sustainable Development • Driven by global environmental conditions/problems • Continued deterioration such as the decline of renewable resources, large-scale alterations of global biochemical cycles, and a threatened biological base • Environmental threats are both interactive and cumulative, often arising from many causes

5. Human Impacts on Natural Systems • Environmental deterioration is related to social trends

6. Top Ten Global Threats to Ecosystem Viability • The responding business community cite 10 threats to ecosystem viability

7. The movement toward sustainable business enterprise • The move toward sustainable business enterprise requires • Managing long-term uncertainties • Long-range analysis of trends in efficient use of energy, materials, and land

8. Sustainable Development and Enterprise-Level metrics • Sustainable development is “ development that meets the needs of the present without compromising future generations’ needs” • Metrics are emerging around three aspects • Economic • Environmental • Social • There are no sustainability performance evaluations that attempt to integrate the three metrics.

9. Economic performance metrics • Sophisticated internal accounting metrics help reveal underlying drivers of economic performance and share holder value • Economic performance metrics still need to go beyond profitability and cash flow, they need to quantify hidden costs associated with • Utilization of materials • Energy • Capital • Human resources • The metrics must also estimate uncertain future costs

10. Environmental performance metrics • Based in regulations • Requires companies to measure their output of wastes and emissions • Interest in standardizing environmental reporting is growing

11. Social performance metrics • Intended to track firm’s social accountability • Social accountability falls into two categories • Stakeholder response on specific categories of performance • Evaluation of social performance through community case studies • Current metrics still need substantial development

12. Life support service model • Sustainable development means protecting, maintaining, and the restoring the integrity, resilience, and productivity of natural and social life support services • Sustainability demands many social system services that support both citizen and industrial activity

13. Sustainability as life support maintenance and enhancement

14. The ecologically sustainable enterprise, as envisioned by Gladwin and Krause

15. The socially sustainable enterprise, as envisioned by Gladwin

16. Toward Metrics of Sustainable Industrial Performance • Moving beyond pollution prevention and ecoefficency requires a transformation in the measurements and analysis used to gauge industrial performance • The sustainability analyst would need to handle systemic interactions and aggregation, conditions for sustainability reside in properties of “wholes” • Impact assessments of a given product, process or facility would need to be done with more consideration for both the temporal and spatial scales

17. The five metrics for sustainable industrial performance

18. From Loads to Impacts and from direction to target zone • The environmental performance model advises industry to reduce loads/footprints on the environment • The sustainability framework would demand that all such behavior be judged according to their actual impacts on the environment (persistent and cumulative) and society. • Pollution prevention mandates • Product stewardship • Energy and material efficiency • Cleaner production • Sustainability suggests moving from “greening” to “zones” (absolute benchmarks) as determined by the eco-system and socio-system.

19. From chemical & Physical to Biological and from natural to social • Current metrics are concerned with material productivity, toxic emissions, and energy intensity • Our current social system precludes the environment as a main concern. • For sustainability we must be concerned about the impacts on natural systems and we must address our societal views about the environment

20. The Intellectual Journey Ahead • Moving from traditional notions of industrial environmental performance toward models/metrics of sustainable enterprise will involve scientific, governmental, corporate, and nongovernmental communities. • The responsibility for ensuring sustainability will fall largely on the world’s businesses

21. Critique • The call for sustainable development • An example of the life support service model • Towards Metrics of sustainable industrial performance

22. The call for Sustainable Development • States that we need to look at industry’s impact on the environment, not just pollution levels. • Stated by the World commission on the environment as: “development which meets the needs of the present without compromising the ability of future generations to meet their own needs”

23. The call for Sustainable Development • Limiting the impact on the environment should always be our end goal. • Example: Measuring the amount of mercury released into the environment through mining is useless if we don’t know how substantial the effect of mercury in the environment is.

24. The call for Sustainable Development • Challenges (are they feasible?) • Managing long term uncertainties. • Quantify hidden costs from utilization of materials, energy, capital, and human resources. • “Metrics to assess social performance are embryonic…”

25. An example of the life support service model of sustainable developmentThe enterprise would,

26. An example of the life support service model of sustainable developmentThe enterprise would,

27. Metrics of sustainable industrial performance • Pollution prevention and ecoefficency metrics  sustainability metrics • “About 50 initiatives are underway around the world to develop ‘sustainability rulers’ for business. All are struggling with the difficult challenges of complexity, comparability, credibility, and completeness.”

28. From loads to impacts • Traditional environmental performance model is to reduce loads on the environment. • Sustainability framework would also require behaviors to be judged by their impact on environment and society.

29. From direction to target zone • “pollution prevention mandates, product stewardship, energy and material efficiency, and cleaner production all contribute to lessening the environmental harms of industrial inputs and outputs. They fail, however, to provide guidance on how well industrial activities fit within the carrying capabilities of local, regional, and global environments.”

30. From chemical and physical to biological • Sustainability suggests that the primary threats are habitat destruction and exploitation of renewable resources beyond the rate of regeneration.

31. From discrete and static to systemic and dynamic • Indicators of corporate environmental performance are generally unconnected. • The sustainability approach would focus on patterns of change, not static snapshots. • Impacts should be estimated over longer terms and larger geographic scales.

32. From natural to social • “Social progress is commonly acknowledged as one of the three pillars of sustainable development (along with ecological balance and economic progress), but it is typically downplayed….” • Sustainability analysts will then have to consider social justice, various human interests, and societal development as well as non-human ecological impact.

33. Conclusion • Extensive environmental impact research still needs to be done. • Environmental impact needs to be the focus of sustainability, not just the type or quantity of pollutants. • The life support model needs to reflect a practical solution.