APPENDIX 13
Memorandum from the Institute of Directors
(IoD)
INTRODUCTION
1. This is the IoD's response to the Committee's
invitation to comment on the issues raised in A Better Quality
of Life A Strategy for Sustainable Development for the UK [Cm
4345, Department of the Environment, Transport and the Regions
(DETR); The Stationery Office, London, May 1999]. We have addressed
the points listed in the Committee's Press Notice No. 19 dated
18 May 1999. In what follows, some references are made to sections
of the Strategy.
2. The IoD has been formally represented
on the Small and Medium Sized Enterprises (SMEs) Subgroup of the
UK Round Table on Sustainable Development. We also made a written
submission to DETR on its 1998 consultation document, Opportunities
for Change (DETR, February 1998).
SUMMARY OF
THE IOD'S
RESPONSE
3. (a) a strategy should not attempt to
include so much that it becomes too unwieldy nor should it be
expressed in vague concepts that can be somewhat unhelpful when
it comes to attempting to put it into practice (paragraphs 5-7
below).
(b) before trying to measure a host of factors
there should be more agreement about definitions, and how they
relate to aspects of a sustainable development agenda (see paras
13-14).
(c) in order to secure commitment by partners
such as businesses, it would be better to focus on some of the
more practical aspects of policy (see para 19).
(d) sound science, and public understanding
of science is needed in order to properly assess many of the areas
covered in the Strategy (see para 22).
(e) it may be somewhat ambitious to expect
a Strategy covering many aspects of public policy to be taken
forward mainly by the department (environment) either at United
Kingdom or European Union (EU) level (para 23).
BALANCE BETWEEN
STRANDS OF
SUSTAINABLE DEVELOPMENT
4. Many of the matters set out in A Better
Quality of Life are indeed important and worthy of attention.
Difficulties seem to arise when trying to reconcile some aspects
of the four main themes of social progress, effective protection
of the environment, prudent use of natural resources and maintenance
of high and stable levels of economic growth and employment (A
Better Quality of Life, page 4).
5. The document seems to convey an impression
that the reconciliation of different and potentially conflicting
aims is somehow unique to the pursuit of a sustainable development
agenda. Doubtless it is not; Governments, businesses and other
organisations have to balance different aims, objectives and aspirations
in the course of their daily operation.
6. Most of the 10 guiding principles that
the Government intends to adopt (page 4) are ones that many, including
the IoD, would want to support as general principles to be applied
in any rational decision-making. For example, "taking account
of costs and benefits", and "using scientific knowledge".
7. The general impression around the issue
of sustainable development seems on occasion to be both utopian
and difficult to distil into meaningful concepts. That in itself
could tend to militate against useful auditing. We were interested
to note that, when the Are You Doing Your Bit? campaign
was launched by DETR on 17 May 1999 at the IoD, it was stated
that some market research had indicated that the very use of the
term "sustainable development" was rather off-putting
to some people. We would also submit that sustainable development,
per se, and programmes such as Local Agenda 21 are hardly
topics of daily discussion for most people. Even the internationally
agreed definition quoted in paragraph 1.1 of the Strategy ("development
which meets the needs of the present without compromising the
ability of future generations to meet their own needs") is
subject to a deal of interpretation. For one thing many forecasts
of the future turn out to be wildly inaccurate. The truth is that
we simply cannot predict the ultimate outcomes of many aspects
of collective human behaviour. Attempting too prescriptive policy
formulation on such a basis probably has the potential in itself
to waste resources. That is not to state that there are not very
worthy issues within the Strategy. In attempting to produce
an all-encompassing strategy there is a real risk of losing sight
of many of the practicalities.
8. A few more illustrative examples from
the Strategy:
(a) "Attempts have been made to calculate
the scale of improvement in resource efficiency that will be needed
to achieve sustainable development" (paragraph 3.28,
our emphasis). This seems to imply that there is such an agreed
state of existence that will somehow become manifest once reached.
(b) The "Welfare to Work" box on
page 37 refers to young people having moved into "sustainable
jobs", which are defined as ones where the new employees
did not claim Jobseeker's Allowance within three months. By contrast
with the previous example, this seems rather specific. Why not
four months, or five, or a year?
(c) Paragraph 7.35 refers to the difficulty
of developing an indicator of sustainable development that would
reflect ease of access by means other than by car. The public
feelings generated before a decision was taken to site a new district
hospital in Swindon on a greenfield site rather than in-town brought
to the fore many of the issues as between town centre location,
access for people who do not have access to a motor vehicle, and
whether or not greenfield sites should be built upon. No doubt
these sorts of conflicting concern will continue to crop up.
All of these instances from the Strategy
seem to beg the question as to whether sustainable development
might more usefully be promoted as a way of thinking. Attempting
to pin some of it down into quantifiable (or auditable) terms
can lead to absurdities.
9. Even considered as a way of thinking,
we would recommend focusing on specific aspects of the Strategy.
For example, in business, we know that many directors are concerned
about aspect of the natural environment, and have shown interest
in reporting by large companies on environmental aspects of business
performance (Stakeholders, Sustainable Development and Shareholders,
IoD Business Comment, Geraint Day, January 1999). It may be
significant that the Government's own committee to co-ordinate
policies on sustainable development is actually called the Cabinet
Committee on the Environment (Strategy, paragraph 5.2).
According to various public opinion surveys, concern for the environment
is an important matter. As a further example, we think that the
issue of energy efficiency is more likely to be taken up by SMEs
when there is authoritative advice on such things as payback time
for new equipment (Sustainable Development SMEs: Energy Efficiency,
IoD Business Comment, Geraint Day, July 1999). Referring to
paragraph 6.47 of the Strategy, we do welcome the work
of the Environmental Technology Best Practice Programme and the
Energy Saving Trust in spreading knowledge about best practices.
10. As to environmental reporting (page
43 of the Strategy), we would support the idea of voluntary reporting
by large firms.
IDENTIFICATION OF
BASELINES, PRIORITIES
AND TARGETS
FOR ACTION
11. In several submissions to DETR and to
the UK Round Table on Sustainable Development, we have made the
point that in order to provide meaningful measures, usable definitions
should first be agreed.
12. In paragraph 5.10 of the Strategy it
is stated that regulation should be targeted at the problem in
hand. We suggest that the issue of a proposed energy tax illustrates
some of the difficulties and possible inconsistencies that may
arise. If there is to be such a tax it would be more economically
efficient to achieve the Government's stated environmental objectives
by taxing at the point of generation of electricity."It would
then be possible to take acount of each particular power station's
polluting effect and unnecessary to know who would receive the
electricity generated". (Climate Change—The Carbon
Question, IoD Environment Comment, Richard Baron and Natasha
Howard, November 1998). It might also have been a way of tackling
some of the Government's plans for more use of renewable energy
sources, one of the key areas in the ambit of sustainable development
considerations.
LINKS BETWEEN
TARGETS AND
INDICATORS
13. We are also aware of cautionary remarks
by some. In order to have meaningful indicators of sustainable
development, there has to be both understanding and agreement
about just what must be done in order to achieve sustainability
("Magic numbers", editorial in New Scientist, 4
April 1998, p 3). First define, then measure, not the other way
round. See also paragraph 8a, above.
14. In many areas of human activity relating
to sustainable development there must be large amounts of uncertainty
or even complete ignorance about what actually will be the long-term
effects of present or even past actions, whether at individual,
corporate, national or global level. Thus to attempt to quantify
sustainability in many areas would turn out to be somewhat of
a spurious exercise on the basis of current knowledge. In that
respect we would rather that thorough research and policy consensus
underlie the use of indicators of sustainable development.
15. Businesses would certainly not welcome,
for example, a bureaucratic form-filling exercise if it led to
no practical use or outcomes. If businesses were required to provide
information towards sustainable development indicators they would
want to see real results from the use of scarce resources in this
way.
16. We note—from paragraph 3.5 of
the Strategy—that the Government's consultation on
13 indicators of sustainable development showed that there was
little consensus of views about new indicators. We are pleased
that the Government resisted calls to produce an aggregate index
of progress (para 3.9), which, as stated would be highly subjective
and even more difficult to interpret in practical terms.
DEGREE OF
COMMITMENT BY
NECESSARY PARTNERS
17. We know that businesses, and IoD members
specifically, are interested in many of the issues referred to
in the Strategy. For example, businesses need to take account
of a range of factors, both internal and external, in conducting
their activities. Indeed, if they do not adapt to issues that
are of concern to prospective customers, say, then they are likely
to perform less successfully than are their competitors. Very
many firms are involved in local, regional and national community
activities.
18. Taking the examples of the environment,
resource use and ethical business, from the Strategy, and
quoting from one of the IoD's research papers (Public Perceptions
of Business, Geraint Day and Ruth Lea, May 1998):
"Businesses, in seeking to ensure long-term
owner value, may quite routinely be concerned about issues such
as energy efficiency, because considerations of such factors of
production may well affect profitability in themselves. They will
also be concerned about the desires and expectations of their
present and their potential customers, including their concerns
about the state of the local and global environment. That would
naturally be good business practice. `Successful companies' values
are in tune with those of their key audiences, or they are either
in decline or in the wrong business" (Tomorrow's Company
is the Company You Keep, MORI [Market Opinion & Research
International] (1996)).
"As John Drummond of Integrity Works has
implied, a fall in trust of business (or certain types of `non
ethical' business) could mean that there exist significant commercial
advantages for firms that can demonstrate their `ethical' credentials
. . . Even if their were some quibbling over the interpretation
of what ethical means, it is clear that there may be opportunities
for improved business performance in appropriate circumstances.
The same . . . consultant has warned, however, that merely putting
out a written code of conduct or ethics is no guarantee in itself;
it needs to be backed with action . . ."
19. Concern for sustainability can actually
coincide with concern about business efficiency. Thus in some
cases reducing waste may lead to both reductions in costs to business
at the same time as improving environmental standards ("Green
at the margins", Leyla Boulton, Financial Times, 21
April 1998, p 19). "Minimising waste and the use of inputs
. . . are an essential part of any efficient process. Its reduction
increases profitability and benefits the environment at the same
time. This . . . is nothing new" (Sir Anthony Cleaver, chairman,
AEA Technology plc, "Reducing pollution through cleaner technologies",
in Sustainable Technologies for a Cleaner World, papers
for a conference held by the Office of Science and Technology,
Department of Trade and Industry, 19 May 1998). Such efficiencies
may lead to reductions in prices, and greater willingness to buy
on the part of consumers.
20. We think that these examples show that
it is quite possible for business—considered as "partners"
in the Strategy—are quite able to combine concerns
about the external world with successful business outcomes. Using
more energy-efficient practices may lead to reduced costs as well
as conserving certain resources. Sourcing of certain goods may
or may not lead to changes in behaviour as to working conditions
in developing countries, via the use of market forces. But note
also that the 1996 British Social Attitudes Survey (BSAS) found
that levels of actual practical public support for measures considered
to meet criteria of sustainability are generally lower than levels
of expressed concern about such matters ("Green in word .
. .", Bridget Taylor, in British Social Attitudes the
14th Report, edited by Roger Jowell, John Curtice, Alison
Park, Lindsay Brook, Katarina Thomson & Caroline Bryson, Ashgate
Publishing, Aldershot, 1997, pp 111-136).
21. An earlier BSAS (1993) had found only
20 per cent of consumers that they would make a special effort
to buy fruits and vegetables grown without pesticides or "chemicals",
and 15 per cent said that they would refuse to buy a product if
it had too much packaging. MORI has identified in recent years
an increase in the proportion of the British public who have undertaken
various green activities, but also revealed a decline between
1990 and 1994 in the proportion who had chosen one product over
another for one of several possible environmental reasons, from
50 per cent to 42 per cent (Today's Opinions—Tomorrow's
Markets: Business & The Environment, Robert M Worcester,
MORI Research Papers, 15 September 1994, London). Given that businesses
need to survive and prosper in the market, there has to be a recognition
that it may be unrealistic for business alone to take action on
sustainability or environmental matters, if there is not reciprocal
action by customers—demand for products designed with sustainable
development in mind. We know that the majority of customers are
not willing to pay out of their pocket a premium for sustainable
development, so although business should quite rightly take account
of environmental concerns, they have to move along with reality,
albeit recognising that things may well change over time.
RESEARCH BASE
FOR SUSTAINABLE
DEVELOPMENT
22. We concur with the Government's intentions
to improve the public understanding of science (para 5.23). So
many aspects of public policy are dependent on sound science,
and on it being understood. The examples of concerns about food
safety, some of the assertions about health effects of electromagnetic
fields, and even uncertainties associated with climate change
forecasts, also hint at the need for better understanding of risk
and relative risk. Extraordinary claims require extraordinary
evidence. Thus Government plans to allow full ecological evaluation
of field-scale plantings of genetically modified crops prior to
any commercial development (para 6.64) are wise and an example
of the need to permit proper scientific evaluation, contrary to
the claims of some self-appointed guardians of the environment
who have obstructed research by physically destroying some plantings
of late.
LINKS TO
EU AND OTHER
INTERNATIONAL POLICIES
23. Recent failures of corporate governance
within the European Commission have no doubt slowed down policy
formulation at EU level. We are aware that responsibility for
sustainable development policy is within the remit of Directorate
General XI (Environment, Nuclear Safety and Civil Protection).
As with the situation in the UK, putting the responsibility for
such wide-ranging policy under the aegis of a single department
(once again, the one responsible for environmental policies; cf.
DETR in the UK) may well lead to difficulties when it comes
to taking action across the body as a whole, especially when it
comes to the unavoidable issue of reconciling conflicting interests
and concerns.
COMPARISON OF
UK WITH OTHER
STRATEGIES
24. No comment.
ARRANGEMENTS FOR
MONITORING, REPORTING
AND REVIEW
25. Many of the concerns expressed in paragraphs
16-18 above apply here. We do not accept that the case is proven
for the establishment of a Sustainable Development Commission
(para 5.25). Clearly such bodies may advise, but it is still up
to the Government, and no doubt the EU, to take the difficult
decisions. Quoting from paragraph 7.77 of the Strategy:
". . . we need institutions and policies which can take a
cross-cutting approach to sustainable development objectives".
Agreed, but will a quango be able to deliver when it comes to
the thorny business of decision-making across government?
26. We welcome the intention by the Government
to seek further views on some of the practicalities of the sustainable
development strategy (para 10.14, for instance).
July 1999
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