The ISA framework - engineersaustralia.org.au · • Dematerialisation • Eco-efficiency • Industrial ecology ... Microsoft PowerPoint - Inst Chem Eng_Sydney_4 Aug 2005-Dey.ppt

Balancing Act- a triple bottom line analysis of 135 sectors of the Australian economy

Barney Foran - CSIRO Resource Futures

Manfred Lenzen & Christopher Dey - ISA @ USyd

We undertake research, applications development and consulting on broad sustainability issues.

Our aim is to develop scientifically rigorous, quantitative, consistent and comprehensive approaches for Integrated Sustainability Analysis.

Our research framework has applications including:• quantitative triple bottom line (TBL) reporting• ecological footprint analysis• life-cycle assessment (LCA)• environmental impact assessment (EIA)• industry and population studies, and • supply chain analysis

The University of Sydney http://www.isa.org.usyd.edu.au

The ISA framework

Sustainability Analysis?

• concepts for environmental sustainability

• Life cycle assessment

• Life cycle management/thinking

• Carrying capacity

• Design for the environment (Eco-design)

• Cleaner technology

• Total quality environmental management

• Dematerialisation

• Eco-efficiency

• Industrial ecology

• Extended producer responsibility

Sustainability Analysis?• environmental analysis & procedural tools

Udo de Haes et al (2000)

The Triple Bottom Line – what is it?

A powerful metaphor for considering economic, social and environmental concerns

A reporting framework

Indicators - qualitative v. quantitative

Consistency, comparability, completeness

Information for decision making

A stimulus for organisational change –governance (#4)

http://www.globalreporting.org/guidelines/2002/gri_companion_lite.pdf

Economic:

• wages & pensions

• monies received & paid

• taxes paid and subsidies received

Environmental:

• energy & greenhouse

• materials & effluents

• water & biodiversity

Social:

• labour practices

• human rights

• bribery & corruption

The boundary problem

“It is critical [that] the boundaries adopted for the

purposes of reporting are clearly defined and

obvious to readers of reports. Careful boundary

definition also ensures a report can be verified and

meaningful comparisons can be made between

information from different reporting periods.”

Environment Australia (2003), Triple bottom line reporting in Australia: a guide to reporting against environmental indicators, June 2003.

GRI Boundary Protocol (2005)

The boundary problem 2

Organisation

Mining Legal SteelTrans. BankingElect.

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M L E T S B M L E T S B M L E T S B M L E T S B M L E T S B M L E T S B

Supplier level:

∞....

2

1

On-siteBoundary

UpstreamDownstream

Product 2Product 1

Consumer Industry

Interdependencies in economies

Integration

National Input-Output Tables

Structure and function and knock-on effects

Nationaldata

Background to Input-Output Analysis

Wassily Leontief (from 1930s) – Nobel prize

Elements found in many economic models:

“neutral from both an analytical and ideological point of view” (Nobel Laureate Richard Stone)

Static, “snap-shot” of the complex linkages in an economy

Appropriate for reporting and linkage analysis

“Generalised IOA” means that other production factors (eg. labour, imports, energy, etc) are incorporated

Result is a common framework for different indicators

Average TBL sectoral multipliers

(per $ of final demand)ECONOMIC

Operating Surplus 38¢/$

Export Propensity 16¢/$

Import Penetration 19¢/$

SOCIAL

Employment Generation 1.75 min/$

Income 34¢/$

Government Revenue 21¢/$

ENVIRONMENTAL

Greenhouse Emissions 1.02 kg CO2/$

Water Use 41 litres/$

Land Disturbance 3.2 metres2/$

Key aspects of the report

10 macro indicators of TBL performance

135 “economic” sectors (industries/commodities)

comparable since related to the same $ of final demand

full chain analysis (no boundaries - all upstream)

standard data sources (ABS, ABARE, AGO …)

quantitative and repeatable benchmarks

descriptions of sectors, future trends and opportunities

Commercial fishing

0.99

0.52

2.32

1.12

0.70

1.28

0.53

0.13

1.46

1.19

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

Eg. Sectoral spider diagram

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

Sector: Banking

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

Sector: Dairy products

Wheat and other grains (Wh)

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

0.0

0.5

1.0

1.5

2.0

2.5

Employment (min)

Wheat & other grains

rem

3

2

1

dir

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

Income ($)

Wheat & other grains

rem

3

2

1

dir

0.0

0.2

0.4

0.6

0.8

1.0

1.2

GHG emissions (kg CO2-e)

Wheat & other grains

rem

3

2

1

dir

Wh 0.687 (0; 67.%)El Wh 0.0234 (1; 2.3%)Ch Wh 0.0173 (1; 1.7%)Fo Wh 0.0114 (1; 1.1%)Sc Cg Wh 0.00936 (2; 0.91%)Fe Wh 0.00925 (1; 0.9%)Wt Wh 0.00874 (1; 0.85%)Rd Wh 0.00853 (1; 0.83%)El Rf Wh 0.00487 (2; 0.47%)Rf Wh 0.00485 (1; 0.47%)Oi Fo Wh 0.00343 (2; 0.33%)El Wt Wh 0.00263 (2; 0.25%)El Ch Wh 0.00261 (2; 0.25%)El St Wh 0.00259 (2; 0.25%)Fr Sc Cg Wh 0.0022 (3; 0.21%)Ap Wh 0.00165 (1; 0.16%)Bc Mp Ho Wh 0.00162 (3; 0.16%)

GHG emissions (kg CO2-e/$)

Structural path analysisWheat and other grains (Wh)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Water use (L)

rem

3

2

1

dir

Dc Dp Cn 32.4 (2; 35.%)Ri Fc Cn 12.4 (2; 13.%)Su Fd Cn 8.68 (2; 9.4%)Ws Cn 2.56 (1; 2.8%)Vf Cn 1.8 (1; 1.9%)Ri Fc Bp Cn 1.28 (3; 1.4%)Cn 1.23 (0; 1.3%)Wa Cn 0.888 (1; 0.96%)Wh Fc Cn 0.738 (2; 0.8%)Vf Fd Cn 0.689 (2; 0.75%)El Cn 0.602 (1; 0.65%)Ri Ws Cn 0.572 (2; 0.62%)Bc Mp Fd Cn 0.565 (3; 0.61%)Wh Cn 0.54 (1; 0.59%)Vf Ws Cn 0.519 (2; 0.56%)Wh Fd Cn 0.467 (2; 0.51%)Vf Fp Cn 0.466 (2; 0.51%)

Water use (L/$)

Know your full production chain

Confectionary (Cn) Water: 90 litres per $

Sector: Basic chemicals

0.35% of GDP (55th)

Sector: Basic iron & steel

0.86% of GDP (29th)

Sector: Aluminium

0.17% of GDP (82nd)

Sector Contribution to GDP

0.00

2.00

4.00

6.00

8.00

10.00

1 10 19 28 37 46 55 64 73 82 91 100 109 118 127 136

Sector Number

% o

f T

ota

l G

DP

Aggregation

primary tertiary

Ag, For & Fish

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

Food

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

3% GDP 2.5% GDP

Farming and Food

Mining

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

Manufacturing

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

4.4% GDP 10.7% GDP

Mining and Manufacturing

Construction

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

Transp & comm

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

Construction and Transport-Communications

5.6% GDP 8.7% GDP

Private services

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

Public services

0.1

1.

10.Employment

Income

Land disturbance

Water use

Primary energy

GHG emissions

Gross operating surplus

Imports

Exports

Government revenue

26.1% GDP 16.7% GDP

Private Services and Public Services

Macro issues• What constitutes ‘below average’performance in an interdependent economy?

• Price and value of food

• Service industries are below average exporters

• Emissions embodied in exports

• ‘Buy Australian’ …

Greenhouse Intensity/$: Communications Sector

0.E+00

1.E-04

2.E-04

3.E-04

4.E-04

1969

1975

1978

1979

1980

1981

1982

1983

1984

1987

1990

1993

1994

1995

1997

CO

2e

pe

r c

on

sta

nt

$

indirect

direct

Greenhouse Intensity/$: Iron and Steel Sector

0.E+00

2.E-03

4.E-03

6.E-03

1969

1975

1978

1979

1980

1981

1982

1983

1984

1987

1990

1993

1994

1995

1997

CO

2e

pe

r c

on

sta

nt

$

indirect

direct

Greenhouse intensities over time

Communications

Basic iron and steel

The next generation model

• Time series

• More focused sectors

• More indicators

• Spatial analysis (states)

• Corporate TBL calculator

Reaction

• National launch (May 24th)

• Complex messages (shopping)

• Farming and food

• Problems (rice and forestry)

• Policy and ‘big business’

• Citizens