APPENDIX 4
Memorandum from the Confederation of British
Industry
CBI RESPONSE TO SUSTAINABILITY COUNTS: CONSULTATION
PAPER ON A SET OF "HEADLINE" INDICATORS OF SUSTAINABLE
DEVELOPMENT
INTRODUCTION
1. The Confederation of British Industry
(CBI) represents 250,000 businesses, embracing all sectors from
manufacturing and services, including the utilities and retail.
Its membership ranges from large multinational organisations with
many subsidiaries, to small and medium enterprises with fewer
than 200 people. All are affected by the concept of sustainable
development.
2. The CBI appreciates the opportunity to
respond to "Sustainability Counts" the Government's
consultation paper on a set of "headline" indicators
of sustainable development. The publication of the consultation
paper "Opportunities for Change" and the supplementary
documents, including "Sustainability Counts", have acted
as further evidence that protecting and improving the environment
is high on the nation's agenda.
3. The CBI's submission provides general
comments regarding the establishment of the indicators and those
indicators proposed, as well as providing more specific comments
relating to the individual indicators.
THE BUSINESS
APPROACH
4. The CBI welcomes and strongly supports
the Government's definition of sustainable development: "ensuring
a better quality of life for everyone, now and for generations
to come", recognising that the provision of goods, services
and jobs are an essential element of this.
5. The CBI also supports the recognition
that three levels of action (Government, business and consumers)
are required to achieve sustainable development. Business supports
sustainable development by providing economic development that
supports social and environmental improvements by generating the
wealth required to underpin them. In return, Government must provide
stability and consistent integration of sustainable development
into policy decisions. Finally, consumers need to make appropriate
choices, because their attitudes and actions will influence government
policy and drive business strategy.
6. It is essential that these three sectors
work together to provide the balance between the economic, social
and environmental factors which create sustainable development.
7. However, we are concerned that in practice
many commentators place undue emphasis in pursuing environmental
aims, at the expense of the other two, when they talk about sustainable
development.The CBI believes that this imbalance is reflected
in the range of indicators proposed in the consultation paper.
8. To improve understanding of what business
needs to do to make an effective contribution, the CBI has developed
and now just revised a Statement of Principles for Business and
Sustainable Development (Annex 1). These Principles, intended
for policy makers and opinion formers, set out business' views
on the development of a framework of law, regulation and policy
to ensure a concept of sustainable development consistent with
maintaining the right balance between economic, environmental
and social factors.
9. The CBI wishes to see its ten principles
applied to all environmental issues affecting business in order
for policy makers to be able to identify clear goals, the most
relevant actors and effective instruments to stimulate actions.
10. Promoting sustainable development is
a long-term challenge for the whole of society; and the business
community has a vital contribution to make. The CBI looks forward
to continuing partnerships and dialogue in taking the UK Strategy
further.
INDICATORS OF
SUSTAINABLE DEVELOPMENT
11. The CBI believes it is important to
have indicators, which monitor the progress of stakeholders in
pursuing sustainable development aims. However, we have some serious
reservations about the proposals in the consultation paper.
12. Firstly, the indicators proposed are
lightweight on the economy and misguided on some parts of the
environment. Given that sustainable development has three "legs",
the set of indicators proposed is weak on economic and social
issues. The set of indicators must be extended to preserve a balance
between the three pillars of sustainability: economic growth,
preserving the environment and social inclusion. It is vital that
the Government achieves this balance in the indicators ultimately
chosen.
13. Secondly, the indicators as they stand
are somewhat confusing, as it is unclear how the Government has
prioritised the indicators they have chosen. Greater transparency
regarding the criteria used for indicator selection and prioritisation
would be helpful.
14. Thirdly, they lack consistency—why
air pollution, but water quality? The indicators should be comparable,
for example water quality and air quality, or water pollution
and air pollution.
15. Moreover, they focus too heavily on
mechanisms, rather than outcomes, eg traffic levels, as opposed
to the consequences of traffic levels, such as congestion and
pollution.
16. In addition, there is no indication
of how success or failure will be judged.
17. Finally, whilst the indicators are intended
to track UK performance over time, it would be useful if consideration
was given to comparability with other European Member States,
in the longer term.
18. Ultimately, the indicators selected
must be seen by all stakeholders as meaningful, reliable and transparent,
and not as vehicles merely for political messages or the justification
for ill-conceived policy measures. As such, the indicators should
not be used too selectively, or discarded in the event of politically
undesirable outcomes.
ECONOMIC GROWTH
19. Gross domestic product (GDP) is an acceptable
indicator, although it does not really give a feel for the UK's
place in the world, specifically in terms of its level of competitiveness.
An additional indicator concerning the UK's world ranking (over
time) by per capita GDP, or an indicator relating to the UK's
international record on value-added, should be incorporated. These
are long-term sustainable issues; if we do not deliver on these
areas of concern then we will lose on market share and in due
course that is likely to affect our GDP in absolute, never mind
comparative, terms.
20. The growth of GDP per head is a better
indicator of material wealth. If the rate of population growth
exceeds that of the GDP, then over time living standards will
fall. This is not likely to occur in the UK where the population
is stable or advances slowly, but that is no reason to choose
an inferior measure.
21. The CBI is surprised that competiveness
does not form part of the economic indicators, as employment and
material standards of living depend on it. Various indicators
relating to competiveness are already published, including interest
rates and cost of living, etc, and could be related to sustainable
development objectives. CBI proposes also that the UK's share
of world exports of goods and services be utilised as an indicator.
22. In addition, it is worth noting that
there are some limitations to GDP as a measure. It does not measure
non-remunerated activity, such as housework, and has some perversions
regarding quality of life. For example, more road accidents are
clearly socially undesirable, but can have positive impacts on
GDP, due to more spending on accident recovery and repair services,
health services, insurance, etc.
SOCIAL INVESTMENT
23. Investment in "public assets"
is a relatively good concept, but needs developing further. There
appear to be some strange omissions, such as the exclusion of
airports and ports. Investment in "public assets" should
not simply include those mainly held by the public sector. Investment
in the telecoms, water and energy infrastructure are equally important
parts of the social infrastructure.
24. Commitment to provide figures on net
investments is vital. For example, there is a huge investment
backlog in maintenance and new development in transport and schools:
gross figures hide the true effort to redress this. More generally,
a significant weakness with this indicator is that it does not
show how efficiently we are using the asset base. A more sustainable
future may mean not simply investing more, but also finding better
ways of using the capital stock. This will be returned to later
in terms of transport.
25. The CBI is surprised that there is no
indicator of crime under the social heading. Crime is indirectly
used (via insurance premiums) as an indicator in the Index of
Local Deprivation, which is used to establish which parts of the
country are most in need of regeneration/assistance.
EMPLOYMENT
26. The CBI is concerned that whilst the
measure chosen, "percentage of those in work" is acceptable,
this appears to be bolted onto the environmental indicators. More
prominence needs to be given to social and economic indicators.
EDUCATION AND
TRAINING
27. The CBI is concerned that whilst the
measure chosen, "education and training based on qualifications
at age 19" is adequate, as with the employment indicator,
this appears to be bolted onto the environmental measures. The
CBI therefore reiterates the need for better integration of economic,
environmental and social indicators.
CLIMATE CHANGE
28. The CBI supports the inclusion of an
indicator on greenhouse gases, recognising as it does, the importance
of measuring greenhouse gas emissions, particularly in relation
to Kyoto targets. It is also important that climate change is
seen as an every day issue for everyone, not just business.
29. However, further clarification is sought
regarding what exactly will be reported. Will it simply be total
greenhouse gas emissions for the year? Perhaps it would be more
helpful if this also indicated how the UK is doing in relation
to our Kyoto target, eg the current status (decrease/increase)
compared to 1990 levels.
30. The availability of supporting data
on the trends of the individual gases eg CO2, CH4, Nox, etc, and
a breakdown by end user and sector, would be useful. Particularly
if this data could be made available at the same time that the
headline greenhouse gas indicator is reported. Such indicators
must provide information about the sectors of society responsible.
AIR POLLUTION
31. The CBI supports the inclusion of air
pollution as an indicator, as it has a direct and mainly measurable
impact on human health. However, we have some concern regarding
the use of PM10 as the primary basis for arriving at the figures
used. Whilst we do not argue that it is a major contributor to
air pollution, it will be extremely difficult to distinguish between
the UK's own emissions of PM10's and inputs to our atmosphere
from transboundary pollution. The Government's own review of the
National Air Quality Strategy found that the problem of particulate
matter cannot be resolved by the UK alone. If the Government's
aim is to find out just how sustainable the UK is being in its
air quality emissions, it will not be easy if PM10's are being
used as the main air pollution contributor.
TRANSPORT
32. The transport indicator proposed in
the consultation document tells us very little. We know from supporting
text elsewhere that there is no straightforward relationship between
road traffic levels and toxic emissions, nor even with safety
(eg, deaths are at an all-time low); and CO2 emissions are dealt
with in the climate change section. It also says very little about
the extent to which the transport network (not just roads) is
suffering as it approaches gridlock. Some measure of congestion
is vital—even if it is a simple one at first (eg, proportion
of the trunk road network where traffic exceeds capacity on a
regular basis—this could be extended in due course to say
the local road network). This relates to the CBI's recommendations
to the Highways Agency about indicators to show how efficiently
the network is being used. Such a measure would be highly appropriate
for the measurement of sustainable development: congestion is
both a drain on the economy and increases emissions.
WATER QUALITY
33. "Rivers of good or fair quality"
appears to be a fairly good general indicator of overall water
quality. However, the period of time used to derive the figures
seems very short—only going back to 1990, whereas the period
of time used to as a basis for the other indicators is much longer.
We would be interested to know what the reasoning behind this
was.
34. There are several issues that need to
be addressed in assessing the water quality of rivers. The sampling
bias towards the high quality Scottish rivers needs to be rectified
and monitoring needs to be harmonised. The chemical quality of
rivers should not be at the expense of existing work to take greater
account of the biological quality of rivers. The indicator should
also include the quality of lake waters as well as ground water.
WASTE
35. Notwithstanding the importance of solid
waste management it is unfortunate that this is the only indicator
to fall under the "prudent use of resources" objective
on which the Government's vision of sustainable development is
based. Water and energy use for example, are two key resources
used by all.
36. Indicators must highlight the greatest
threats to sustainable activity—too much aggregation of
data could hide the main problems. Similarly, specific waste streams
could be chosen, but only those which represent the biggest problems
(and hence opportunities for improvement).
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