A SYSTEM FOR SUSTAINABILITY MANAGEMENT IN ENTERPRISES

Jurgis Staniškis, Valdas Arbačiauskas, Loreta KinderytėInstitute of Environmental Engineering, Kaunas University of TechnologyK. Donelaicio str. 20, LT-44239, Kaunas, LithuaniaValdas.Arbaciauskas@ktu.lt, Jurgis.Staniskis@ktu.lt, oloretaloreta@yahoo.com

Corresponding author: Valdas Arbačiauskas, Institute of Environmental Engineering, Kaunas University of Technology, K. Donelaicio str. 20, LT-44239, Kaunas, Lithuania. Tel: +370 37 300768, Fax: +370 37 209372., E-mail: Valdas.Arbaciauskas@ktu.lt

Abstract

The concept of sustainable development is often considered by industrial enterprises as vague and hardly operational. Moreover, the word “sustainability” in relation to industrial activities has been so heavily overused, with too many different meanings applied to it. To make it operational, sustainable industrial development may be considered as a process of continuous improvement of environmental, economic and social performance in industry. Such a process approach allows specialists to identify particular process performance parameters that could be controlled and managed. In this context, sustainability performance can be interpreted as a result of management of sustainability aspects in enterprises.

Experience shows that sustainable industrial development tools such as cleaner production, eco-design and sustainability reporting are seldom sufficiently integrated in enterprise management systems. Integration of sustainability performance management into the overall business planning is another important aspect to be tackled because efficiency of management systems largely depends on connections between the management systems and strategic/ financial decision making. Enterprises often lack explicit information about their activities, particularly reliable quantitative information on technological processes and various sustainability aspects. Moreover, the existing data information is seldom systemized and made available to decision makers in a form suitable for effective decision making.

The objective of this article is threefold: (i) to select key industrial development tools; (ii) to present a structural model for integration of sustainable industrial development tools; and (iii) to present hierarchical procedure for sustainability management and to provide recommendations related to the selection of performance indicators.

The structural model presents the key elements of environmental management system and other sustainable industrial development tools in a sequence of integration. Distinctive features of the proposed model are integration of sustainability aspects and criteria at operational level, and shift of conventional management system to sustainability management system as. Hierarchical procedure for sustainability management covers process, activity and strategic decision making with legal and other requirements as well as a new scientific knowledge and stakeholder expectations constituting the system input information. Decision makers at different hierarchical levels are provided with the feedback information based on the indicators of enterprise’s sustainability performance.

The material presented in this paper is based on the analysis of relevant literature and on practical experience of the authors gained from a number of national and international projects focused on improvement of environment/ sustainability performance and implemented jointly by industrial enterprises and the Institute of Environmental Engineering (APINI), Kaunas University of Technology (KTU).

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Keywords: cleaner production, continuous improvement, corporate environmental management, decision support, performance indicator, sustainable development.

1. Introduction

Sustainable development at an organizational level is usually described to use a triple bottom line that divides performance into economic, environmental and social dimensions (Topfer, 2000, Elkington, 1998). Hence, sustainable industrial development may be defined as a strategy for adopting activities to meet the needs of enterprises and other stakeholders today, while protecting, sustaining and enhancing the human and natural resources that will be needed in the future. However, the concept of sustainable development is often considered by industrial enterprises as vague and hardly operational. Moreover, the word “sustainability” in relation to industrial activities has been so heavily overused, with so many different meanings applied to it, that it has become quite meaningless (Aras and Crowther, 2009).

To ensure contribution of industry to the process of sustainable development, there is a need to explain in operational terms what the concept of sustainable development means to industry and, more specifically, to an industrial enterprise. To make it operational, sustainable industrial development may be considered as a process of continuous improvement of environmental, economic and social performance in industry. Such a process approach allows industrial specialists to identify particular process performance parameters that could be controlled and managed. In this context, sustainability performance can be interpreted as a result of management of sustainability aspects in enterprises. Thus, sustainability management can be defined as “a profit-driven corporate response to environmental and social issues that are caused through the organization’s activities” (Salzmann et al., 2005).

One of the key approaches to increase sustainability performance of enterprises is cleaner production and environmental management system. However, cleaner production is (in general) diffusing comparatively slowly despite good results achieved (Bonila et al., 2010). It could be also stressed that management systems are often implemented with a “certificate-oriented” approach whose efficiency in terms of sustainability performance improvement is low (Iraldo et al., 2009). Even if management systems are implemented with a “performance-oriented” approach, enterprises might not be able to realize their full potential for performance improvement. One of the reasons is lack of motivation to maintain the system after certification (Pedersen and Nielsen, 2000).

It is generally accepted that preventive approaches, e.g. cleaner production methodology, in some cases make it possible to eliminate the need for pollution control (end-of–pipe) technologies or to reduce the capacity of the pollution control equipment. This may lead to significant financial savings in addition to a reduced impact on the environment, possibly, to improved work conditions and improved product quality (Laurinkeviciute and Stasiskiene, 2011). However, decision-makers are often “too quick” in finding solutions to particular problems. Real causes of a problem are seldom analysed because the solution often seems to be “obvious”, e.g. when a new legal requirement for the emission of a particular pollutant is introduced, decision makers are tempted to go along the easiest, but not the most efficient and economically viable way – to look for pollution control technology that would enable them to capture pollution. Additional data collection and analysis could help identify more alternatives for material substitution, production process modification or better control of the process as a result of additional training of employees. Moreover, enterprises often underestimate the

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performance improvement potential lying in good house-keeping measures that are easy to implement and frequently do not require financial resources.

It should be also stressed that one of the difficulties in measuring the company’s level of sustainability is to determine which directions of change are leading towards sustainability (Krajnc and Glavic, 2004). “When properly done, a sustainability analysis of a system of interest, which can either be products, or processes, or corporations, or even ecosystems, should include indicators used to quantitatively represent the system from the viewpoint of environmental, economic, and societal impacts, in accordance with the basic principles of sustainability“ (Sikdar et al, 2012).

There are several internationally acknowledged sustainability/ environmental performance evaluation/ reporting initiatives and methodologies. The first comprehensive list of environmental performance indicators was developed and recommended by the German Environment Ministry (BMU) and Federal Environmental Agency (UBA) in 1997 (Federal Environmental Ministry, 1997). Soon after that, in 1999, international standard ISO 14031 for environmental performance evaluation was introduced by the International Standard Organization followed by sector-specific initiatives, for example, a sustainability performance evaluation initiative of the Britain’s Institution of Chemical Engineers (IChemE, 2003). Eco-Efficiency Assessment was developed by the World Business Council for Sustainable Development in 2000 (WBCSD, 2000). Global Reporting Initiative (GRI, 2006) is intended to assist enterprises to assess performance and to improve communication with stakeholders (Dalal-Clayton and Bass, 2002). For selection of initial environmental indicators, the specific indicator systems for particular industrial branches could also be used (Envirovise, 2004; Pohjola, 2005; Enroth, 2006; Viluksela, 2009).

One of the main strengths of the above mentioned methodologies in the context of sustainability performance management is a possibility to use benchmarking, because a standard format is used for reporting of sustainability performance. At the same time, a significant shortcoming of existing sustainability performance evaluation systems is their focus on external reporting and underestimation of the internal information needs for decision-making, i.e. for increased management efficiency and for actual performance improvement. Furthermore, a concern is sometimes expressed that sustainability reports published by enterprises are only “green-wash” intended to improve the company‘s public image. For example, a review of the frameworks of business sustainability indicators has shown that they present simple lists of indicators with little or no guidance as to how to apply them over time to become more sustainable (Veleva and Ellenbecker, 2001).

These shortcomings can be partly explained by the fact that one of the main driving forces for sustainability performance evaluation is often a pressure on an industrial enterprise from external stakeholders to publish sustainability performance information. It could also be related to establishment of “socially responsible” investment funds and investment rating systems, e.g. “Dow Jones Sustainability Index” (Ballou et al., 2006). It could be stressed that efficiency and the value added of the performance evaluation system for an enterprise depends mainly on the strength of internal motivating factors and ability of enterprises to apply sustainability performance indicators properly. They are to be focused more on the information needs for decision making at an enterprise level (Staniskis and Arbaciauskas, 2009). Generally, main drivers for enterprises to act in sustainable ways are market place demands, changes in business procurement, government legislation and regulation, the rise of socially responsible investment, competitors’ actions and the changing expectations of employees (Epstein, 2008, Pryce, 2002).

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Integration of sustainability performance management into the overall business planning is another important aspect to be tackled because efficiency of management systems largely depends on connections between the management systems and strategic/ financial decision making. Enterprises often lack explicit information about their activities, particularly reliable quantitative information on technological processes and various sustainability aspects. Moreover, the existing data information is seldom systemized and made available to decision makers in a form suitable for effective decision making. Sustainability performance evaluation based on performance indicators is likely to be the most appropriate tool to solve this problem.

To achieve a wide participation of industrial enterprises in the process of sustainable development and to facilitate effective decision making in the sustainability management process at an enterprise level, key approaches and tools of sustainable industrial development have to be identified. It is evident that industry can not rely on the pollution control technologies because of their limitations and excessive cost, moreover, application of preventive environmental approaches is an important factor of business competitiveness (Dvarioniene et al, 2012). The sustainability approaches used in enterprises include cleaner production, eco-design, corporate social responsibility, stakeholder management, etc. The tools for implementation of these approaches are cleaner production assessment, life cycle assessment, Eco-indicator 99, environmental accounting, etc. The question is which of tools are essential and most effective in moving enterprises towards sustainable development.

Enterprise’s system consists of operations and processes, management and strategy, organisational systems, procurement and marketing, assessment and communication (Lozano, 2012). Taking into account that there is no particular standard for sustainability management, researchers and practitioners try to fill this gap.

The objective of this article is threefold: (i) to select key industrial development tools; (ii) to present a structural model for integration of sustainable industrial development tools; and (iii) to present hierarchical procedure for sustainability management and to provide recommendations related to the selection of performance indicators.

The material presented in this paper is based on the analysis of relevant literature and on practical experience of the authors gained from a number of national and international projects focused on improvement of environment/ sustainability performance and implemented jointly by industrial enterprises and the Institute of Environmental Engineering (APINI), Kaunas University of Technology (KTU).

2. Integration of key tools of sustainable industrial development

Sustainable industrial development tools generally address different elements of an enterprise system: operations and processes, management, communication, etc. At the same time, these tools contribute to different dimensions of sustainability (environmental, economic and social). Lozano (2012) proposed a framework for selection of tools (Corporate Integration of Voluntary Initiatives for Sustainability (CIVIS) framework). Main criteria include full coverage of the enterprise’s elements and all dimensions of sustainability (including the time dimension).

Analysis of different approaches/ tools suggests that application of the following approaches/ tools covering all key elements of an enterprise system (production, products, management,

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and communication with internal and external stakeholders) could be used to ensure sustainability performance improvement in enterprises:

Cleaner production approach to improve production processes. This approach is based on rational use of energy and natural resources and minimization of pollution/ waste at the source where it is generated. Cleaner production assessment can be used as a tool.

Eco-design approach to improve product characteristics. Checklists and eco-indicator 99 are perhaps the most suitable tools for SME’s to implement this approach.

Integrated management systems to keep continually applied and incorporated into enterprise system above mentioned approaches and to improve management practices. The basis of management systems is development of a cycle for continuous performance improvement.

Sustainability reporting based on sustainability performance evaluation to improve communication with internal and external stakeholders.

Nowadays, most of the companies integrate their management systems. However, cleaner production, eco-design and sustainability reporting is seldom sufficiently integrated in management systems, despite the fact that efficiency of these tools depends largely on their integration level in the overall strategy of enterprises and everyday activities (Staniskis and Arbaciauskas, 2003).

Experience of the authors suggests that one of the ways to increase motivation of maintaining management system and ensuring its efficiency is systematic/ integrated use of cleaner production and other sustainable industrial development tools listed above. Sustainable industrial development measures may be integrated using a classical “plan – do – check – act” management cycle used in management system standards. Systematic and integrated application of these measures may enable an increase in their efficiency and may lead to cost savings associated with more efficient use of human and natural resources, improved product characteristics, more effective operational procedures, reduced waste generation and harmful emissions to the environment, etc.

Integration of different environmental and other management tools is not particularly novel but practical models for enterprises to meet sustainable development requirements are lacking. In a given case, environmental management system is taken as a basis for integration of sustainable industrial measures (Fig. 1). The structural model presents the key elements of environmental management system and other sustainable industrial development tools in a sequence of integration. The level of improvement of environmental performance depends largely on the planning phase, when the potential for performance improvement is systematically analysed and preventive measures are developed. To identify preventive performance improvement options, cleaner production methodology could be used, when a set of alternatives is developed for each significant aspect. Environmental, technical and economic feasibility analysis leads to development of action programmes for implementation. In the given case, both process and product improvement options are considered. A set of sustainability performance indicators has also to be developed in a planning stage to ensure effective decision making.

Distinctive features of the proposed model are integration of sustainability aspects and criteria at operational level, and shift of conventional management system to sustainable management system and introduction of systematic hierarchical system for sustainability performance management based on sustainability indicators (described in the section 3).

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Fig. 1. Structural model for integration of key tools of sustainable industrial development

New knowledge

Sustainability policy

Sustainability review

Performance indicators anddata collection

Sustainability aspect evaluation

Significant aspects

Other aspects

Analysis of problem causes

Performance improvement alternatives

Preventive measures that require investments

Good house-keeping

measures

End-of-pipe measures

Feasibility analysis

Action programmes

ImprovementManagement review-Sustainability report

CheckingMonitoring and measurementsAnalysis of performance improvement/ effectiveness of implemented measuresData recordsCorrective and Preventive actionsIntegrated management audit

ImplementationImplementation of the action programmesStructure and responsibilitiesCompetence and trainingInformation exchangeDocumentation systemOperation controlEmergency preparedness and response

Planning

Objectives and targets

Hierarchical decision making

Operational performance management

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3. Hierarchical system for sustainability performance management and sustainability indicators

To ensure effective and systematic application of the key tools of sustainable industrial development and to support their integration, enterprises are recommended to use hierarchical system for sustainability management in Fig. 2. Such a system may help to increase effectiveness of the decision making process and to facilitate reorientation of a problem solving approach from reactive to proactive/ preventive.

Fig 2. Hierarchical system for sustainability management at an enterprise level

The proposed system of sustainability performance management is based on a hierarchical approach to decision making. The system covers process, activity and strategic decision making with legal and other requirements as well as a new scientific knowledge (stakeholder expectations and scientific knowledge) constituting the system input information. The control system also relies on feed back information from several process stages. Decision makers at different hierarchical levels are also provided with the feedback information based on sustainability performance indicators of the enterprise. Such approach enables to increase participation of employees in problem solving at different levels of enterprises.

Process indicators (level I) provide information to the enterprise personnel on the process efficiency and help identify both the deviations from technological specifications and the

New knowledge

Strategic decision making -Level III

Activity decision making- Level II

Processes, products and services

Activity assessment

Compliance assessment

Life quality monitoringActivity

performance indicators

Compliance indicators

Life quality indicators

Legal and other requirements

Operational performance management system

Process decision making –Level I

Process performance indicators

Sustainability performance

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measures for improving the process efficiency. In the context of management systems, process indicators facilitate operational control.

Activity performance indicators (level II) are used at process, product, department and enterprise levels and present the “digested” information obtained from a detailed analysis of processes, products and services. These indicators are particularly useful for decision making in terms of identifying the priority areas for sustainability performance improvement and generating particular improvement measures. It is very important to monitor performance indicators to make the right decisions on time.

Compliance and life quality indicators are used in the level III. Compliance indicators cover the following areas: legal compliance, compliance with the other requirements as defined in the management system standards (e.g. requirements specified in the contracts with other organizations), and achievement of objectives and targets specified in the management system documentation or other documents. The information contained in life quality indicators is a result of monitoring or statistical activities performed by the enterprise or other organisations. These indicators cover the natural environment, the work environment, social and economic spheres. Such indicators may reflect air quality in the vicinity, biodiversity in nearby water bodies, quality of the work environment and other health & safety issues, an employment rate in the local community, etc. Life quality indicators may be used in identification of strategic directions to the enterprise’s efforts to reduce an environmental impact and, more generally, to improve sustainability performance.

Generally, an indicator provides useful information about the system; it can be used to describe the state of the system, to detect its changes and to show the cause and result relationships (Mille, 2001). Indicators may be quantifiable (quantitative) and non-quantifiable (qualitative). The best approach is the combination of both methods (Diakaki et al., 2006). It terms of the expression, there are four types of quantifiable indicators: absolute indicators, relative indicators, aggregate indicators and indexed indicators. Aggregate and indexed indicators integrate the data into particular categories or into one number presenting the level of performance. Such indicators may be useful in the overall assessment of the enterprise’s performance, but they lack detailed information and it limits their practical use in terms of improvement opportunity identification for performance optimization. In this respect, the use of absolute and relative indicators is recommended. Nevertheless, indexed and aggregated indicators can be useful in sustainability reporting. Finally, performance indicators can be expressed in natural and monetary units.

Taking into account the nature of decision making (e.g. strategy development, innovation generation), performance indicators can be defined at enterprise, department or process levels. Moreover, to ensure legal compliance and adequate response to negative changes in the environment in relation to enterprise’s activities, a set of compliance and environmental condition indicators has to be selected. In addition to traditional sustainability indicators, such as economic, environmental and social ones, communication indicators may be considered, too. Hower, it should be stressed that although the number and nature of the indicators chosen s may differ from the system type to system type, the alternatives to be compared must use the same set of indicators (Sikdar et al, 2012). A matrix of recommended sustainability performance indicators and their applicability to decision making is presented in Fig. 3.

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Fig. 3. Matrix of different sustainability performance indicators and decision making levels

The matrix provides an overview of what types of indicators should preferably be used for particular purpose (level of decision making). For example, absolute process indicators (technological parameters) are best suited for process decision making as they enable efficient process control. Relative compliance and life quality indicators are effective in strategic decision making but are not useful for decision making at process level. Generally, indicators at higher hierarchical levels (from process to quality of life indicators) are more useful in strategic decision making. In development of a set of sustainability performance indicators, application of a hierarchical approach that corresponds to the level of the enterprise‘s ambition in its performance evaluation may be useful as it helps industrialist to keep a clear and relevant structure/ composition of the performance evaluation system. The enterprise can start from the evaluation of compliance/ resource use efficiency and with a gradual development of experience it continues with a more sophisticated performance evaluation. The following hierarchy that has five levels in relation to the basic principles of sustainability may be used: (i) facility compliance/ performance (e.g. a number of notices of violations); (ii) facility material use and performance( e.g. heavy metal emissions to water in tons per year); (iii) facility effects (e.g. carbon dioxide emissions from energy use in million tons); (iv) supply chain and product life-cycle (e.g. post-consumer recycled material used); and (v) sustainable systems (e.g. percent of the total energy used from renewable sources harvested in a sustainable way) (Veleva et al., 2003). A particularly important aspect in selecting sustainability performance indicators is a product life cycle approach. Frequently, enterprises limit their performance analyses to the production and other internal processes, sales and general economic indicators. Finally, to develop an operational system to bring value to the enterprise, the key requirements for sustainability performance indicators should be fulfilled. The requirements for good indicator are following: target orientation, comparability, measurability (access to data), meaningfulness (scientific reliability or analytical soundness), integrity (capability to relate to other indicators), continuity, clarity, efficiency (Toth and Arbaciauskas, 2005, Federal Environment Ministry, 1997). For each indicator should be defined key attributes like unit of measurement, type of measurement (absolute or adjusted), period of measurement and boundaries (Veleva and Ellenbecker, 2001). In practice, enterprises seek to have a manageable number of indicators, that are clear and easy to measure/ monitor, that provide possibility to compare with best practices.

Process indicators

Activity indicators

Compliance indicators

Life quality indicators

Absolute indicators

Relative indicators

Indexed and aggregated indicators

Environmental/ social/ economic/ communication indicators

Process decision making

Not applicable Operational decision making

Strategic decision making

Operational and process decision making

Process decision making to a limited extent

Operational and process decision making

Strategic and operational decision making

Strategic decision making

Strategic decision making

Strategic decision making

Strategic decision making

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The internationally acknowledged sustainability performance evaluation systems, e.g. Global Reporting Initiative, should be preferably used as reference materials. This will help any enterprise develop a functional and effective performance evaluation system that fully reflects its values and needs. This recommendation may be supported by the findings of other researchers (Keeble et al., 2003; Searcy et al., 2005).

To support strategic decision making and reporting to stakeholders, aggregated indicators (sustainability index) could be used. In this case, the scale of assessment should be defined (Kinderyte, 2010). It is suggested to build assessment on a three level scale: worst evaluation – 0, medium evaluation – 0.5 and best evaluation – 1. Min-Max method could be used to normalise quantitative indicators to have an identical range (0, 1) by subtracting the minimum value and dividing by the range of the indicator values. Quantitative indicators can be normalized according formulas:

(OECD 2008, Krajnc and Glavič 2005)

where – indicator whose increasing value has a positive impact in the perspective of sustainability, – indicator with minimum value and positive impact on sustainability, – indicator with maximum value and positive impact on sustainability, – normalized indicator whose increasing value has positive impact on sustainability, i – sustainable development indicator, j – group of sustainable development indicators: economical, social and environmental, t – time in years.

(OECD, 2008)

where – indicator whose increasing value has negative impact in the perspective of sustainability, – indicator with minimum value and negative impact on sustainability, – indicator with maximum value and negative impact on sustainability, – normalized indicator whose increasing value has negative impact on sustainability.

In order to minimize sensitivity of the min-max normalization method the following normalization conditions could be used:

1. If an indicator (whose increasing value has negative impact) has constant minimum values (for example, no safety accidents), then it is assumed as the best possible value and by normalization 1 is assigned:

if = = const then =12. If an indicator (whose increasing value has positive impact) has constant maximum

values (for example, recyclability of a product is 100%), then it is assumed as the best possible value and by normalization 1 is assigned:

if = = const then =13. If an indicator (whose increasing value has positive impact) is expressed in persent,

then by normalization: = .4. If an indicator has constant but not possible maximum or minimum value, then by

normalization 0.5 is assigned:

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if = const then =0,55. If values of indicators are not constant, but the difference is very small, then by

normalization 0.5 is assigned:

if ≥0,99 then =0,5

The next step is weighting and aggregation into index. Weights (wij) could be defined using a ranging method. Aggregation of indicators into sustainability subindices (economical, social, and environmental) is performed using linear aggregagtion – Simple Additive Weighting method. Subindices are calculated according formula (Krajnc and Glavič 2005):

IB,jt = * + * ,

, .

Enterprise sustainability index ( ) is calculated using Simple Additive Weighting and equal weights for subindices.

The level of sustainability is defined according to the value of enterprise sustainability index calculated: 0 ≤ ≤0.33 – unsustainable enterprise, 0.33 < ≤ 0.66 – sustainable enterprise at the basic level, 0.66< ≤ 1 – sustainably progressive enterprise.

Generally speaking, indicators should inform decision-makers of what they need to know i.e. they should be informed of the quantities of factors related to environmental impacts, and these should be related to environmental and operational aspects (Upham and Mills, 2006). Analysis of qualitative and quantitative information will result in a package of data for sustainability reports.

5. Discussion and conclusions

To ensure the progress of sustainable industrial development, enterprises have to address the sustainability aspects related to production processes, management practices, products, and communication with internal and external stakeholders by applying cleaner production, product oriented tools (e.g. eco-design), integrated management systems and sustainability reporting based on sustainability performance evaluation.

Experience shows that management systems are often implemented using a “certificate-oriented” approach and their efficiency in terms of sustainability performance improvement is rather vague. Moreover, a lot of enterprises still rely on the end-of-pipe approach when dealing with environmental issues. Integration of sustainability performance management into the overall business planning and integrated application of sustainable industrial development tools discussed in this article leads to environmental, economic and social benefits. One of the side-effects observed is a positive change of employee thinking and improvement of the work culture. Moreover, integrated application of sustainable industrial development tools ensures continuous improvement of sustainability performance.

The proposed system requires features relative simplicity and takes life cycle perspective into account.

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Conclusions:1. To be operational from a perspective of industrial enterprises, sustainable industrial

development may be considered as a process of continuous improvement of environmental, economic and social performance in industry. A number of tools are available to industrial enterprises to be applied, but the best results are achieved by applying the key tools in an integrated way, because particular sustainable industrial development tools are mutually supportive, e.g. environmental management systems are more effective when based on cleaner production and cleaner production is applied more systematically when environmental management system is in place. A classical management cycle used in all ISO management system standards is recommended for such integration.

2. To ensure effective decision making aimed at improvement of sustainability performance, a sustainability performance management system based on three hierarchical levels (process, activity and strategic decision making) is recommended for use in enterprises, because it ensures involvement of decision makers at different levels and enables collection of information needed for effective decision making at different managerial and operational levels.

3. To ensure effective information flows for decision making, appropriate performance indicators should be selected. No standard set of performance indicators could be prescribed to an enterprise. To make sustainability performance evaluation meaningful in terms of the better enterprise management, enterprises have to develop their own sets of indicators that reflect their profile and needs. Standard performance evaluation systems could be used as a reference.

4. To satisfy the needs of decision making in enterprises aimed at continuous improvement of sustainability performance, four categories of performance indicators should be used: (i) process performance indicators, (ii) operational performance indicators, (iii) compliance indicators, and (iv) life quality indicators. Relative indicators are particularly useful in decision-making as they enable specialists to observe the changes of particular values (e.g. pollution) in relation to a common denominator (e.g. raw material or production unit). Aggregated indicators may also prove to be valuable in assessing sustainability of an enterprise.

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37. WBCSD, 2000. Eco-efficiency indicators and reporting. Status Report. WBCSD EEM WG, Geneva.

Address correspondence to:Valdas ArbaciauskasInstitute of Environmental Engineering, Kaunas University of TechnologyK.Donelaičio str. 20, LT- 44239 Kaunas, LithuaniaE-mail: Valdas.Arbaciauska@ktu.ltTel: +370 37 300768; Fax: +370 37 209372

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