SYSTEMS APPROACH TO CORPORATE SUSTAINABILITY A …...An important initial step in setting up a sustainability management system is identi”cation of threats from unsus-tainable practices

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www.ingentaselect.com=titles=09575820.htm Trans IChemE, Vol 81, Part B, September 2003

SYSTEMS APPROACH TO CORPORATE SUSTAINABILITY

A General Management Framework

A. AZAPAGICChemical and Process Engineering, University of Surrey, Guildford, UK

C orporate sustainability is not just a buzzword—for many industry leaders and cor-porations, it has become an invaluable tool for exploring ways to reduce costs, managerisks, create new products, and drive fundamental internal changes in culture and

structure. However, integrating sustainability thinking and practice into organizational structureis not a trivial task and it requires a vision, commitment and leadership. It also requires asystems approach with an appropriate management framework that enables design, manage-ment and communication of corporate sustainability policies.

This paper proposes a general framework for a Corporate SustainabilityManagement System(CSMS) which enables translation of the general principles of sustainable development intocorporate practice by providing a systematic, step-by-step guidance towards a more sustainablebusiness. Developed in collaboration with industry, it is designed to help improve the triplebottom line through sustainable economic development and environmental protection, whileencouraging socially responsible business values. To facilitate an easier integration into theorganizational structure, the CSMS follows the familiar models of Total Quality and Environ-mental Management Systems. While in principle applicable to industry in general, the system is� exible enough to be adapted to the speci� c needs of individual companies and the contexts inwhich they operate. Application of the CSMS is illustrated on suitable examples throughout.

Keywords: sustainable development; corporate sustainability; corporate social responsibility;management systems; sustainability indicators; sustainability reporting.

INTRODUCTION

Industrial systems cause and determine � ows of materialand energy in society and are therefore an important part ofthe human economy. Although industry is sometimes seenas a source of environmental degradation and socialconcerns, it is widely recognized that it is an essential partof development and wealth creation. Therefore, as animportant social actor, industry must play a prominent rolein creating a sustainable future (Azapagic and Perdan,2000).

The challenge of sustainable development for any busi-ness is to ensure that it contributes to a better quality of lifetoday without compromising the quality of life of futuregenerations. If industry is to respond to this challenge, itneeds to demonstrate a continuous improvement of its triplebottom line, i.e. economic, social, and environmental perfor-mance, within new and evolving governance systems. Thisgeneral concept, known as corporate sustainabilityor corpo-rate social responsibility, is shown in Figure 1.

Many companies and sectoral organizations are activelyinvolved in the sustainability debate, trying to identify waysin which they could improve their triple bottom line andcontribute to sustainable development. One of the maindriving forces for this interest in corporate sustainability

has been legislation, which is increasingly being tailoredtowards promoting sustainable development. At the EUlevel, for example, the European Commission (EC) is activelyinvolved in drawing up policies and legislation to encouragecorporate social responsibility (CSR). These range from‘polluter pays’ legislation through ‘producer responsibility’policies to ‘core labour standards’ and ‘social governance’and span all industrial sectors, from primary extraction toconsumer products. Following its Green paper on Promotinga European Framework for Corporate Social Responsibility(EC, 2001a), the Commission has more recently issued acommunication (EC, 2002) to further encourage the adoptionof the CSR concept.

However, increasingly, a second major reason for incor-porating sustainability into business practice is starting toemerge: it makes business sense to be more sustainable. Intheir recent report, the World Business Council for Sustain-able Development (WBCSD) and the International Institutefor Sustainable Development (IISD) identify a number ofbusiness bene� ts of addressing sustainable developmentconcerns (IISD and WBCSD, 2002):

Cost savings due to cleaner production methods andinnovation—innovation and technology can improvematerial, energy and product ef� ciencies;

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Lower health and safety costs—a safe and healthy envir-onment for workers and the community improves well-being, which translates into higher productivity, reducedcompensation and damage suits, and reduced costs forsocial services and medication;Lower labour costs and innovative solutions—providinggood working conditions can improve motivation andproductivity, lower labour absenteeism or turnover andresult in fewer union disputes;Easy access to lenders, insurers, preferential loans andinsurance rates—lower risks achieved through implemen-tation of a sustainable development strategy may lead tolower loan rates or insurance costs;Best practice in� uence on regulation—companies thatfollow best practice are much better placed than theircompetitors to in� uence how standards are set and thedirection of regulatory change;Company’s reputation—a commitment to sustainabledevelopment may enhance a company’s reputation andsecure its social licence to operate, also helping to attractthe best people to join the company;Market advantage—a move towards integrated sup-ply chain management may allow building deeperrelationships with customers and capturing morevalue by providing service rather than selling productsonly;Ethical investors—the rapid expansion of the ethical andsocially responsible investment movement poses a newchallenge for companies as investors screen out thoseassociated with unacceptable social and environmentalperformance.

However, achieving corporate sustainability is not atrivial task and is accompanied by a number of challenges.One of these is moving away from the notion that ‘allbottom lines are equal, but some are more equal’ and fromtrying to translate the bene� ts of sustainability into theusual � nancial measures. It is not always easy or possibleto quantify direct � nancial bene� ts of corporate sustain-ability; and often, even if they are obvious, they may havelonger-than-usual pay-back times. This calls for a paradigmshift in the way business is conducted and only forward-looking companies will be able to respond to thischallenge.

Nevertheless, even such companies face a key challenge:how to translate the general principles of sustainable deve-lopment into business practice. Addressing this problemrequires a systems approach whereby corporate sustain-ability is not considered as a mere ‘add on’ but is system-atically integrated into all business activities. This, on the

other hand, requires a robust sustainability managementframework which enables:

understanding of the key sustainability issues and actionsneeded to address them;measuring of performance and evaluation of progress toensure continuous improvements; andcommunication of sustainability policies and progresstowards sustainability to relevant stakeholders.

As yet, there are no generic ‘off-the-shelf’ managementframeworks that enable a systematic and structured app-roach to managing corporate sustainability. Instead, indivi-dual, usually large, companies or sectoral organizations aredeveloping their own, tailor-made systems, based on theirneeds. While it is important that a sustainability manage-ment system re� ects the speci� c characteristics of eachbusiness and the context in which it operates, proliferationof different approaches to corporate sustainability that aredif� cult to compare is confusing for business, consumers,investors and the public and could lead to market distortion(EC, 2002). Therefore, there is a need to facilitate conver-gence and standardization of corporate sustainability mana-gement approaches. A framework which would be generallyapplicable and yet allow for speci� c characteristics ofdifferent businesses would help further awareness raising,adoption and dissemination of corporate sustainabilitypractices.

In an attempt to facilitate this process and help corpora-tions to contribute to a further understanding and applicationof sustainability on the practical level, this paper presents aframework for a Corporate Sustainability ManagementSystem (CSMS) that is potentially applicable across indus-try. Based on a systems approach and developed in colla-boration with industry, it is designed to provide a structuredstep-by-step guide to organizations in de� ning a sustain-ability strategy and designing a practical course of actionthat will help them become more sustainable. To illustratehow the CSMS could be applied in practice, suitableexamples are considered throughout.

CORPORATE SUSTAINABILITYMANAGEMENT SYSTEM

The general framework for the CSMS proposed here isoutlined in Figure 2. As shown in the � gure, if a corporatesustainability strategy is to be successful, it must emergefrom and be embedded into the business vision and strategy.Corporate sustainability is not an ‘add-on’ as often assumedby some; rather, it should be viewed as an ‘umbrella’ toolwhich helpsbusiness identify and manageeconomic,environ-mental and social risks in an integrated way. For companiesinterested in long-term sustainable development, seeking topenetrate new markets and provide value-added solutions,an integrated approach to sustainability can unlock numer-ous opportunities to improve competitiveness and enhancereputation.

To facilitate an easier integration into the organizationalstructure, the CSMS has deliberately been modelled to becompatible with the familiar structure of the generalmanagement system standards (ISO, 2003), such as TotalQuality Management (TQM) (ISO, 2000) and Environmen-tal Management Systems (EMS) (ISO, 1996). This is also inline with the EC approach, which wishes to promotes the

Figure 1. Corporate sustainability (CS) and the triple bottom line.

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uptake of EMS and, in particular, the EU Eco-Managementand Audit Scheme (EMAS) (EC, 2001b) as a corporatesustainability instrument (EC, 2002). Similar to the TQMand EMS, the management system proposed here consists of� ve stages:

(1) Policy development;(2) Planning;(3) Implementation;(4) Communication; and(5) Review and corrective action.

Each stage is broken down into a number of further steps, asdescribed in the following sections.

Sustainable Development Policy

De� nition of a sustainable development policy is the � rststage in setting up the CSMS. The policy should encapsulatethe set of core business values agreed by the company andshould contain statements of principles or policies on social,economic and environmental responsibilities and stake-holder relationships. However, before a sustainabilitypolicy can be formulated and put into practice, the followinghas to be carried out:

demonstration of leadership and commitment tosustainability;identi� cation of threats and opportunities;identi� cation of stakeholders; andidenti� cation of sustainability issues.

Demonstrating leadership and commitmentto sustainability

The CEO, management board and senior managementteam have a critical role to play in setting up and imple-menting the CSMS by demonstrating leadership and strate-gic commitment to sustainability (DTI, 2001). Seniormanagement are responsible for building successful,sustainable and competitive business and for projecting along-term vision. Showing commitment to sustainability andhow the vision integrates economic, environmental andsocial performance is part of that process. Directors are alsoresponsible for the company’s reputation—demonstratingleadership in sustainability helps manage and build reputa-tion as well as trust by employees and external stakeholders.

As with other activities which are not directly linked withpro� t or product output, little will happen to move thesustainability agenda forward without the board’s commit-ment. This commitment should be explicitly stated in thesustainable development policy as well as shown by directactions in a manner consistent with the policy and sustain-ability strategy. However, by itself, the board’s commitmentwill not guarantee that the policy and strategy will beimplemented effectively. Nevertheless, the absence of thatcommitment will certainly make their implementationdif� cult.

One of the ways to demonstrate this commitment wouldbe to appoint a ‘sustainability champion’ who would ideallybe a senior person in the company, perhaps one of thedirectors. The ‘champion’ would be responsible to the boardof directors for the management and implementation of the

Figure 2. Corporate Sustainability Management System (CSMS).


SYSTEMS APPROACH TO CORPORATE SUSTAINABILITY 305

CSMS. This would send a clear message about sustain-ability commitment to employees and external stakeholdersbut would also ensure that the high-level promises aretranslated into everyday practice. Further suggestions onthis can be found below, under identifying key personneland assigning responsibilities.

Identi� cation of threats and opportunitiesAn important initial step in setting up a sustainability

management system is identi� cation of threats from unsus-tainable practices and opportunities for the company tobene� t from the more sustainable ways of working. Oncethe main sustainability issues have been identi� ed and thebaseline established (in the next, Planning stage), this initialidenti� cation of threats and opportunities should befollowed up by a more detailed sustainability SWOTanalysis (see below) to enable prioritizing and setting ofrealistic targets and objectives. Strategic opportunities andthreats may include technical, legislative, environmental,social, and other factors, all potentially leading to � nancialthreats or opportunities. An effective external monitoringsystem is necessary in order to ensure that sustainabledevelopment policies, objectives and management systemsare appropriate for the complex and rapidly changing worldin which the business operates. Information should begathered on key subjects, including:

new and proposed legislation;industry practices, standards and future trends;technical developments (e.g. clean technologies and greenchemistry);competitors’ strategies; andcommunity interests and pressure-group activities.

Opportunities for working with other companies within asector should be assessed. Sometimes a company workingalone can achieve only a limited amount, but there may begreater opportunities if companies within sectors worktogether. For example, several business, professional andtrade associations have already initiated work on identifyingsustainability issues and developing sustainability indicatorsfor different sectors, including the UK Department of Tradeand Industry (DTI, 2001), World Business Council for Sus-tainable Development (WBCSD, 2002), Global ReportingInitiative (GRI, 2002), and Institution of Chemical Engi-neers (IChemE, 2002).

As an example, Table 1 lists some of the potentialbusiness threats and opportunities that could be relevant toa number of different businesses. More examples are givenlater in the sustainability SWOT analysis, which is carriedout in the Planning stage.

Identi� cation of stakeholdersEngaging stakeholders is an important part of a corporate

sustainability strategy. Understanding the interests andconcerns of different stakeholders and the time-scales overwhich these interests are important are the prerequisites for asuccessful and sustainable business. Companies that under-stand what their stakeholders want will be able to capitalizeon the opportunities presented, including a better-motivatedworkforce and a better relationship with external stake-holders.

Table 2 shows an example of a stakeholder analysis. Itlists different stakeholders, the possible importance theyplace on sustainability concerns and time-scales overwhich these concerns may be important to them. Forinstance, customers would be expected to have a strongeconomic concern normally related to the price of a product.They would also have some environmental (e.g. whether theproduct can be recycled) and social (e.g. the use of childlabour) concerns. It is to be expected that their primary time-scale would be short-to-medium, i.e. several months toaround � ve years. Other stakeholders, such as creditors,would, in addition to their primary, short-to-medium terminterests, be concerned about the company’s performanceover a longer period, i.e. longer than � ve years. This analysismay be helpful in deciding which aspects of sustainability acompany should target in engaging the appropriate stake-holders and how to reconcile the different time-scales overwhich these issues appear to be important to differentstakeholders.

For a better understanding of the needs and expectationsof the stakeholders, a detailed company-speci� c stakeholderanalysis should be carried out. This should set out bothcurrent and future needs, in order to capture the sustainabledevelopment priorities. The key is to analyse how thecompany’s activities affect each group of stakeholders,either positively or negatively. A stakeholder analysis canbe a useful way to identify areas of potential con� ict amongthe stakeholder groups before they materialize.

Developing these statements of needs and expectationsrequires dialogue with each stakeholder group. Manycompanies have already established communication withcertain stakeholder groups (e.g. local communities, NGOsand government bodies). This practice should be maintainedand extended to engage the remaining stakeholders identi-� ed in the stakeholder analysis.

Identi� cation of sustainability issuesThe next step in setting up and implementing the CSMS

is identi� cation of sustainability issues (economic, environ-mental and social) relevant for the company’s activities.These can be identi� ed in a number of ways, includingconsultationswith stakeholders and using any � ndings at thesectoral level. It is important to note that many sustainabilityissues will be common to different businesses and sectorswhich reduces the individual effort in this respect. Carryingout a pilot-case study based on a representative businessactivity or a part of business can also help in identifying thekey sustainability issues. Some examples of sustainabilityissues that are pertinent to many types of industrial activitiesare given in Table 3.

Economic issuesEconomic viability of business is at the heart of sustain-

able development because it generates pro� t and providesemployment and through that contributes to general socialwelfare. Therefore, two types of economic issues are rele-vant for business: micro- and macro-level concerns. Micro-level issues are related directly to the economic performanceof a company and include the usual � nancial measures suchas sales, turnover, cash � ow, pro� t and shareholder value.Macro-economic issues link corporate performance withconsiderations at the national and international levels; they


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Table 1. Examples of opportunities to bene� t from sustainability and threats from unsustainable practices.

Aspect Opportunities and bene� ts Potential threats and possible effects

Technical Increased production ef� ciency and product qualitythrough the use of clean technologies, increasingpro� ts and reducing costs

Continued use of old and inef� cient technologiesleading to � nancial and environmentalinef� ciencies

Increased material and energy ef� ciency throughprocess optimization and clean technology, leadingto direct � nancial bene� ts

Lack of understanding of the role of science andtechnology in helping the company to become moresustainable

Unawareness of the external R&D efforts anddevelopment of sustainable technologies

Legislative Improved ability to respond to and in� uencelegislative changes through forecasting and betterplanning

Continued increased costs due to ‘green’ taxes(e.g. carbon tax)

Improved relationships with government andregulatory bodies through proven environmentaland social accountability

Lack of awareness of the forthcoming legislation andinability to participate in its shaping (e.g. ECinitiatives and directives related to sustainability,carbon trading etc.)

Ability to provide guidance to the regulatory bodies tomake informed decisions through self-assessmentand monitoring

Environmental Reduced environmental risks (including reduced riskof pollution incidents) leading to possiblereductions in insurance premiums

Poor environmental performance overall attracting� nes and negative publicity and possibly leading tolong-term liabilities

Identi� cation of inef� ciencies in production throughenvironmental monitoring leading to a bettercontrol of processes, conservation of resources andimproved � nancial performance

Increased environmental incidents through poorplanning and management

Enhanced EMS (ISO14001=EMAS)

Lack of data on own environmental performancemaking the company more open to criticism andless able to refute various claims

Lack of understanding of key sustainability issues andareas of business which impact on sustainabilityleading to a worsening of environmentalperformance

Social Increased motivation of staff who are able to see andmeasure real achievements

Disputes and con� icts with communities and pressuregroups resulting in a lengthy planning process anddelays in permit approvals or rejection of planningpermissions leading to major � nancial losses

Ability to attract and retain good quality people in thecompany through commitment to staff developmentand through proven social responsibility Poor external image and distrust by communities,

NGOs and other stakeholdersImproved health and safety leading to lower costsInability to attract or retain good quality people due to

poor imageTrust building with NGOs and local communities

through openness, transparency and partnershipleading to reduced complaints and increasedlikelihood of securing licence to operate

Consistent socially responsible practices in bothdeveloped and developing countries

Communicating improvements and commitment tosustainability to external stakeholders (throughsustainability reporting)

Other Raised pro� le and improved reputation Short-term thinking and planning oriented onlytowards quick pay-backs without a long-term visionLeadership in sustainability in the corporate group or

sector Loss of customers who screen their suppliers onsustainability performanceImproved relationship with investors and customers

through sound environmental, social and ethicalrecord leading to � nancial bene� ts

Inability to penetrate new markets due to poorenvironmental and social image

Table 2. Examples of stakeholders and their possible sustainability concerns.

Concerns Time-scales

Stakeholders Economic Environmental Social Short to medium Long term

Competitors 3 3 3Creditors 3 3 3Customers 3 3 3Employees 3 3 3Local authorities 3 3 3Local communities 3 3 3NGOs 3 3 3Policy-makers 3 3 3Shareholders 3 3 3Suppliers 3 7 7

(3 ) Strong concern; (3) some concern; (7) no concern; ( ) primary time-scales; ( ) secondary time-scales. Time-scales: short to medium several months to 5 years; long term 5 years and longer.



are usually related to the company’s contribution to employ-ment and GDP.

Environmental issuesMost companies are already aware of the main environ-

mental impacts associated with their activities, mainlythrough compliance or perhaps as a result of implementingan EMS. For a better understanding of key environmentalissues and more effective solutions, it may be helpful toidentify sources of environmental problems by business area(e.g. production, transport, procurement, products etc.). Theimpacts along the whole supply chain should be considered,using the appropriate life cycle approaches (Azapagic,2002).

Social issuesSocial accountability is related to wider responsibilities

that business has to communities in which it operates and tosociety in general, including both present and future genera-tions. They can be grouped into the following broadcategories (Azapagic and Perdan, 2000):

human development and welfare (e.g. education andtraining, health and safety; management competence);equity (e.g. wages and bene� ts; equal opportunity andnon-discrimination); andethical considerations (e.g. human rights, cultural values,intergenerational justice).

These categories take into account both the interests ofemployees and those of the wider communities and aim tomake business more equitable and ethical. In addressingthese issues, business recognizes the value of human capitalby providing a healthy and safe working and living environ-ment, an opportunity for personal and community develop-ment and by engaging in a social partnership.

Policy de� nition and alignment with businessstrategy and vision

Sustainable development policy sets out the company’smission with respect to sustainable development. It shouldincorporate stakeholder expectations and contain statementsof principles or policies on social, economic and environ-mental responsibilities (GRI, 2002). It should also indicatehow sustainability strategy is aligned with the businessstrategy.

A number of companies have already developed theirsustainability policy and are actively working towards it;

see GRI (2002) for speci� c examples. The following is anexample of a possible sustainable development policystatement:

The Company and its Board of Directors are committedto contributing to sustainable development by workingtogether as a leading provider of our products and servicesfor customers. We aim to achieve this through:

long-term sustainable growth;development of value-added and environmentally benignsolutions;responsible supply of our products and increased custo-mer base;establishment of high performance and socially-respon-sible culture;active engagement with our stakeholders and commit-ment to addressing their concerns.

This, more general, sustainable development policy canbe developed further to incorporate other relevant companypolicies such as those on environmental issues, health andsafety, procurement and community relations. It shouldenable the growing number of policies that companies areexpected to adopt to be brought together in a single coherentmanagement system, which could be more effective and lesscostly.

To facilitate a company-wide implementation, the sustain-able development policy should be adopted by the board andits adoption communicated to all employees through theusual channels of communication used in the company.

Planning

Establishing the baselineWhile statements of broad policy on sustainability strategy

are important, the policy statement should be supplementedwith a series of speci� c objectives and targets1 for improve-ments. However, before a business can set sustainabilityobjectivesand targets, it must � rst � nd out where it is startingfrom. This means measuring a baseline economic, environ-mental and social performance, based on the key sustain-ability issues identi� ed in the previous stage of the CSMS.For these purposes, a set of sustainability indicators has to bedeveloped to enable measurement of the baseline as well asfuture performance monitoring. To ensure that they are a true

Table 3. Examples of corporate sustainability issues.

Economic issues Environmental issues Social issues

Cost of non-compliance Air emissions Customer satisfactionContribution to GDP Biodiversity Child labourEmployment contribution Energy use Employee training and educationInvestments (capital,employees, communities)

Global warming potentialNoise

Equal opportunities andnon-discrimination

Pro� tSales

Resource depletionSolid waste

Health and safety (employeesand citizens)

Shareholder valueTurnover

TransportWater use and emissions

Management quality (e.g. labourturnover, work satisfaction)

Value added Stakeholder involvement and liaisonSocial partnership and sponsorshipWages and bene� ts

1Objectives are statements of intents; targets set a level of performance thatis sought within a certain timeframe and expressed, for example, as apercentage improvement relative to a baseline.


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measure of the level of sustainability, the indicators shouldenable consideration of the whole supply chain relevant forthe business (Azapagic and Perdan, 2000). The indicatorsshould be quantitativewhenever possible; however, for someaspects of sustainabilityqualitativedescriptions may be moreappropriate (e.g. for ethical concerns).

Table 4 gives examples of indicators, linked to thesustainability issues identi� ed in Table 3. As shown in thetable, in many cases an issue translates directly into anassociated indicator; e.g. pro� t is both a sustainabilityissue and an indicator of performance. In some cases anissue will be expressed by several indicators, for example,

Table 4. Examples of sustainability issues, associated indicators and the units.

Issues Indicators Units

EconomicCost of non-compliance Fines for economic, social and

environmental non-complianceMonetary units

Contribution to GDP Ratio of value-added to GDP %Employment contribution Number of employees relative to the

total number of people employedin a certain region or a country

%

Investments Capital investmentHuman capital investmentR&D investment

Monetary unitsMonetary unitsMonetary units

Pro� t Annual pro� t Monetary units=yrSales Tonnes or number of products sold t=yr or numberShareholder value Share value or annual returns Monetary unitsTurnover Annual turnover Monetary units=yrValue added Value added Monetary units

EnvironmentalAir emissions Emissions of: SOx, NOx,

particles etc.t=yr or kg=yr

Biodiversity Loss of biodiversity (e.g. rate of lossof a certain species in a certainregion or globally)

% or number

Energy use Amount of energy used MJ=yrGlobal warming potential Contribution to global warming kg=yr or t=yr CO2 eqv.Noise Noise db or number of complaintsResource depletion Rate of non-renewable and renewable

resource depletion relative to thetotal world=regional reserves

%

Solid waste Amount of solid waste (hazardousand non-hazardous)

kg=yr or t=yr

Transport Number of kilometres travelledAmount of fossil fuel used

km=yrt=yr

Water use and discharges Amount of water usedEmissions to water

m3=yrg=l or kg=m3

SocialCustomer satisfaction Number of complaints NumberEmployee training and education Percentage of hours of training

relative to the total hours workedPercentage of employees that are

sponsored by the company forfurther education

%

%

Equal opportunities andnon-discrimination

Percentage of women=ethnic minoritiesin middle=senior positions

%

Health and safety Lost-time accidents (H&S of employees)Number of external H&S complaints

(H&S of citizens)

hours=yrNumber

Management quality Employee retention ratesRanking of the organization as

an employer in internal surveys

%—

Stakeholder involvement andliaison

Number of consultative meetings withstakeholders

Number

Social partnership and sponsorship Involvement in community projects Number or type or valueWages and bene� ts Ratio of lowest wage to national legal minimum

Health and pension bene� ts relative to thetotal employment costs

%%

IntegratedSales and resource depletion Mass of product sold per total amount of

materials usedt=t

Turnover and energy consumption Total turnover per amount of energy used Monetary unit=MJWealth and employment Wealth created per employee Monetary unit=employeeHuman capital investment and pro� t Human capital investment as percentge of pro� t %



air emissions can include discharges of NOx, SOx andparticles.

Whilst it is important to identify and quantify all relevantindicators, it may sometimes be dif� cult to make businessdecisions based on a large number of performance criteria.To help the decision makers in this respect, it may beuseful to use integrated indicators, which link two or moretypes of sustainability issues and so reduce the numberof decision-making criteria that need to be considered.Some examples of the integrated indicators are given inTable 4.

There is a lively ongoing activity in the development ofindicators for different industrial sectors by different orga-nizations and associations, including GRI (2002), IChemE(2002) and Industrial Minerals Association Europe (IMA-Europe, 2002). Further discussion on sustainability indica-tors for industry can be found in, for example, Azapagic(2003) and Azapagic and Perdan (2000).

An example of the baseline analysis for two indicators—amount of energy used and contribution to global warming(here equivalent to the total CO2 emissions)—is shown inTable 5. The total energy used in the baseline year by fourdifferent sites in a company was found to be equivalent to3.6 million GJ. The table also shows the split of energy usebetween two major business activities: in this case produc-tion and transport. For example, the majority (74%) of theenergy used at site 1 is for production while at site 3 themajor energy consumer (68%) is product transport. Thisinformation may be useful for identifying and targeting the‘hot spots’ for improvements. The analysis also shows thatthe total energy use generates over 250,000 tonnes of CO2.In theory, it is possible to offset the CO2 emissions bysequestration of CO2 by trees. In this example, the numberof trees planted by the company in the baseline year has apotential to offset 46% of the total CO2 emissions.2 Thelargest sequestration potential is at site 4, which has anegative CO2 balance achieved by planting more treesthan theoretically required for the amount of CO2 emit-ted. A similar analysis can be carried out for other sustain-ability issues to give the company an idea of where it isstarting from and how to set more realistic targets andobjectives.

Sustainability SWOT analysisBased on the initial analysis of the threats and opportu-

nities, as discussed above, a more detailed sustainabilitySWOT analysis should be carried out to identify thecompany’s main strengths and weaknesses as well as thespeci� c threats and opportunities. Table 6 gives an exampleof a sustainability SWOT analysis that could be applicable toa number of different companies.

Setting objectives and targetsAs in any other business proposition, a corporate sustain-

ability strategy requires setting objectives and targets so it isclear where the company wants to go, how it is getting thereand how soon. Targets and objectives should be relevant to

the key sustainability issues and indicators identi� ed in theprevious stages of the CSMS. For example, performanceobjectives and targets may be set in terms of emission levels,waste generation and energy usage per tonne of output, orperhaps number of working hours lost due to accidents orillness. To ensure credibility of the sustainability policy andstrategy, the targets should go beyond minimum legislativerequirements. A number of factors will determine howambitious the company is in setting the objectives andtargets, including the current level of the company’s perfor-mance, the costs of improvements and whether the companywishes to take a lead in sustainability or merely follow theactivities of others in the sector. Benchmarking of the per-formance of other companies within the sector may helpin this respect.

It is important that sustainable development objectives areclear, concise and, wherever possible, expressed as measur-able targets. Establishing measurable targets is essential ifmanagement and others are to be able to assess whether theobjectives have been met. Targets also need to be realisticbut challenging and related to certain time-scales. Possibleobstacles to meeting the objectives and opportunities forexceeding targets should be considered.

It is also important to ensure that the sustainabilityobjectives complement the company’s existing businessstrategy. In some areas, the objectives will be consistentwith the strategy; in others, they may be in con� ict with it.Consequently, the objectives (and in some cases the businessstrategy) may have to be modi� ed.

Table 7 shows some examples of sustainability objectivesand related targets.

Developing action plansDevelopment of action plans is a further step in prepara-

tion for the practical implementation of the sustainabilitystrategy. These plans should be based on the set objectivesand targets, taking into account the identi� ed key sustain-ability issues and the related business areas as well as theresults of the SWOT analysis. The action list should alsoinclude the responsibilities and the time-scale for eachactivity.

Identifying key personnel and assigning responsibilitiesDifferent accountability structures for sustainability can

be established in an organization. For example, the boardcould charge a director with line responsibility for thecompany’s sustainability policy and strategy. The board asa whole would then monitor the implementation of theCSMS. Alternatively, the responsibility could rest with thewhole board, reporting to the CEO or MD, who wouldbe overseeing the implementation of the CSMS. This‘umbrella’ role of the board could enable an easier integra-tion of the CSMS and bridging of the existing functions andstaff roles. In that way, directors would be responsible forensuring that their portfolio of activities is managed in asustainable way. For a more ef� cient implementation ofCSMS, a Sustainability Management Team could also beformed. The Team would help co-ordinate and monitor theimplementation of the CSMS as well as act as a sustain-ability think-tank. Figure 3 illustrates an example of theresponsibility and reporting structure that could be adoptedfor the CSMS.

2There are different methods for calculating the potential for offsetting CO2

emissions; the methodology used in this example is that developed by theEdinburgh Centre for Carbon Management (http://www.ecom.uk.com/carbon.htm).


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The responsibility for sustainability also needs to belinked to the company’s recognition and promotion systems.This should include ensuring that responsibilities areassigned in a manner that holds key executives accountable.It also means ensuring that the reward and promotionsystems recognize those people who achieve, or help toachieve, sustainable development objectives.

Identifying and allocating resourcesAlthough the implementation of a sustainability strategy

should by de� nition reap economic bene� ts (if it is noteconomically viable, then it is not sustainable), some � nan-cial resources will be required to set up and implement theCSMS. This would mainly be indirect costs, through stafftime contributed in the various stages of CSMS. In addition

Table 6. An example of sustainability SWOT analysis.

Strengths WeaknessesRelatively strong � nancial position with a steady

increase in pro� tsEmphasis on short-term returns and lack of long-term

vision (10 years and beyond)Ability to produce higher value-added products Emphasis on quantity (of production) rather than

provision of value-added products and servicesPossibility to penetrate new developing marketsLimited understanding of the corporate sustainability

concept and potential bene� tsGood reputation and a possibility to improve that image

Relatively high energy consumption and CO2 emissionsGood relationships with local communities

Relatively low awareness of the current developmentsregarding climate change and carbon trading resultingin a loss of income and a potentially negative image

Good relationship with the government and enforcingbodies

Relatively high number of fatalities and lost-timeaccidents

Demonstrated environmental responsibility

No formal environmental policy

Possibility to offset CO2 emissions through forestrymanagement

Lack of formalized environmental management systems

Bold emphasis on Health and Safety

Company car policy does not encourage the use of moresustainable transport modes

Well established Quality Control procedures

Relatively large workforce turnover resulting in loss ofexpertize and continuity

Relatively high interest of employees in the environmentand sustainability

Insuf� cient internal communicationDif� culties in attracting and retaining good quality

peopleLow percentage of women and ethnic minorities in

senior positions

Opportunities ThreatsBuilding on the existing image and taking the lead in

sustainability in the group and=or in the sectorIncreasingly stringent legislation

Further improvement of the relationship with localcommunities through commitment to sustainability

Increasingly dif� cult ‘social permitting’ process

Ability to provide guidance to the regulatory bodies tomake informed decisions through self-assessment andmonitoring

Increased public awareness of sustainability andpressure-group activities

Improving relationships with the government andregulatory bodies through proven track-record

Disputes and con� icts with communities and pressuregroups

Reducing environmental risks and incidents and futureliabilities

Continued lack of understanding of key sustainabilityissues and areas of business which impact onsustainability and inability to respond to governmentand other initiatives on sustainability

Identifying inef� ciencies and improving � nancial andenvironmental performance through self-assessmentand environmental monitoring

Further loss of income due to increasing costs of ‘green’taxes

Improving internal and external communication

Lack of own data on environmental and socialperformance making the company more open tocriticism and less able to refute various claims

Improving public relations Increased environmental and health and safety incidentsand occupational diseases leading to litigation andnegative publicity

Increasing motivation of staff and opportunity to attractand retain good quality people

Loss of customers due to the adoption of thesustainability principles further up in the supply chainand inability of the company to respond adequately

Improving relationships with investors and customersthrough sound environmental, social and ethicalrecord leading to � nancial bene� ts

Inability to penetrate new markets in the longer termthrough poor environmental and social image

Table 5. An example of establishing a baseline: energy consumption and contribution to global warming.

Indicator Unit Site 1 Site 2 Site 3 Site 4 Total

Amount of energy used MJ=year 2.1E 09 6.06E 08 7.64E 08 9.66E 07 3.57E 09By production % 74 — 32 57 —By transport % 26 — 68 41 —Contribution to global warming t CO2 eq=year 148,392 42,767 54,433 6901 252,493Trees planted Number=year 13,775 125 7225 11,300 32,425Potential to offset CO2 emissions t=yr 48,993 445 26,068 40,190 115,695Percentage CO2 reduction % 33 1 48 582 46



to the indirect costs, some direct costs will also be incurredfor some of the sustainability projects (which are de� ned inthe next, Implementation, stage). It is important that thesecosts are identi� ed and budgeted for, so that the implemen-tation of the CSMS is not hampered by the lack of � nancialresources.

Implementation

The Implementation stage involves identifying sustain-ability priorities and aligning them with business priorities.Appropriate projects and tools will have to be identi� ed tohelp business become more sustainable. A monitoring andreporting system is also established in this stage.

However, more fundamentally, the Implementation stagealso involves changing the corporate culture and employees’attitudes. These changes cannot be achieved overnight andnormally a three-to-� ve-year plan with one-year milestoneswill be needed, including detailed plans on overcoming thebarriers (DTI, 2001). The implementation of a sustainability

strategy must have a full ‘buy-in’ if it is to be effective. Thisin turn requires broad consultation, training, awarenessraising and motivating.

Priority actions and alignment of business andsustainability priorities

Key sustainability issues identi� ed in the � rst stage of theCSMS (Sustainable Development Policy) should be used toguide the identi� cation of priority actions for business. Forexample, if the cost of climate change levy is going to affectpro� ts, then an energy ef� ciency programme could beinitiated to identify possibilities for reducing energy use aswell as for using cleaner energy sources.

In this example, as in many other cases, sustainability andbusiness priorities would be naturally aligned. However, inreality, this may not always be the case and some reposition-ing may be required. De� ning business priorities is a highlydynamic process as the priorities can change quickly, some-times from month to month. Sustainability priorities, on theother hand, can remain unchanged for much longer, usuallyyears and decades. Furthermore, as illustrated in Table 2,different stakeholders will also ‘operate’ on different time-scales. Hence, a major challenge in developing and imple-menting a sustainability strategy is to reconcile these differ-ent time-scales. This requires refocusing from short-termthinking to a longer-term vision and clear identi� cation ofthe bene� ts as well as the threats should the business andsustainability priorities become unaligned.

Identifying projects for integration ofsustainability into business practice

Key sustainability issues identi� ed in the � rst stage of theCSMS (Sustainable Development Policy) should be used toguide the identi� cation of speci� c projects that would helpachieve the set objectives and targets. The projects shouldtarget the ‘hot spots’ identi� ed for each business area, e.g.production, transport, products, procurement, employees,

Figure 3. An example of the reporting and responsibility structure for CSMS.

Table 7. Examples of sustainability objectives and related targets.

Objective Target

To optimize social andeconomic contribution tosociety

To improve employmentopportunities by securing aminimum of 50 new jobsannually

To protect the safety and healthof employees and otherstakeholders

To reduce the number of injuriesby 50 per cent by the end of2003

To maximize ef� cient utilizationof resources at minimumenvironmental impact

To reduce emissions ofgreenhouse gases per unit ofproduction by ten per cent by2005 based on the 2000levels

To enhance the human potentialand welfare of employees andcommunities

To increase human capitalinvestment by one per cent ofthe pro� t annually


312 AZAPAGIC

etc. Detailed action plans should be developed, specifyingstaff responsibilities and target dates for completion.

For example, projects that are aimed at increasing produc-tion ef� ciency through better use of materials and energywill lead to a simultaneous improvement of the triple bottomlines: improved energy ef� ciency results in cost savings andincreased pro� ts, while at the same time reducing the use offossil fuels, local pollution and contribution to globalwarming. From a social point of view, this helps to improvethe relationships with stakeholders at it demonstrates that acompany uses resources in a responsible way, improvesquality of the local and global environment and hence,quality of life. Similarly, projects for sustainable productdesign with emphasis on quality rather than quantity, help toprolong the life-time of both the products and primaryresources, enhance � nancial returns through increasedvalue-added and usually lead to waste minimization andlower environmental impact overall.

Good procurement practices can also assist companies inbecoming more sustainable. This includes replacing fossil-fuel based electricity by a ‘green’ energy supply, purchasingrecycled packaging and re-using ‘wastes’ from other compa-nies as raw materials. More sophisticated purchasing poli-cies also include sustainability assessments of suppliers.

Further examples of speci� c actions that could be effectedare related to the work-force. Companies which can demon-strate their commitment to people and their values willraise staff morale and attract and retain the best talent whoare more likely to help secure the long-term viability of thebusiness. This commitment could be demonstrated through:

fair remuneration packages, including pension and healthbene� ts;equal opportunities and non-discrimination;good health and safety conditions;reward schemes for innovative ideas for improvements inthe triple bottom line;capacity building through training and transferable skillsdevelopment;succession planning and clear career progression; andethical corporate behaviour.

A useful compilation of the case studies that des-cribe speci� c projects used by different companies tointegrate sustainability into business practice is providedby the WBCSD (2002).

Identifying the appropriate toolsA number of tools can be used to help implement a

sustainability strategy. Two types of tool are distinguishedhere:

tools for achieving cultural change; andtools for measuring and improving the level ofsustainability.

Several tools are commonly used to achieve culturalchange and embed sustainability into business practice. Ina recent survey by the PWC (2002), the three most usefultools for managing change are corporate strategy, changemanagement programmes and formal risk managementprocedures.

Sustainability indicators can be used as one of the toolsfor measuring the overall level of sustainability and formonitoring progress. The indicators could also be combined

with the balanced business scorecard, a tool often used bycompanies for measuring different aspects of business (andsocial) performance. Other tools used routinely by manycompanies that could also be used for measuring andimproving the level of sustainability include:

mass and energy balances—for identi� cation of materialand energy inef� ciencies in the system;system optimization—mathematical modelling and opti-mization approaches for identi� cation of options foroptimal improvements;environmental audits and environmental managementsystems (e.g. ISO 14000 and EU EMAS)—for identi� ca-tion of environmental inef� ciencies and impacts from aprocess or system;environmental, health and safety risk assessment—foridenti� cation of major risks associated with products,processes or business activities;environmental and social impact assessment (EIA andSIA)—for assessment of potential impacts of proposedinstallations;life cycle assessment (LCA)—for identi� cation of ‘hotspots’ in the life cycle and for comparison of equivalentproducts, processes or business activities from ‘cradle tograve’.

Measuring and monitoringMeasuring and monitoring is one way to ensure

that sustainability objectives and targets are being met.Establishing a sustainability baseline and then monitoringthe performance over the years will give a good indicationof the direction in which the company is going - eithertowards or away from sustainability. It will also providedata for internal and external communication, particularlyfor sustainability reports (see External communication:sustainability reporting, below).

Sustainability indicators are used for these purposes.Some examples of the indicators are given above; furtherdetail can be found in, for example, Azapagic and Perdan(2000), GRI (2002) and IChemE (2002).

Data availability and collectionAn important issue in the implementation of the CSMS is

data availability and collection. It is therefore necessary toestablish which data are already available and where in thecompany they can be obtained. For example, � nancial andsome social data are normally available centrally from thecompany’s head of� ce while environmental data may beavailable from the individual sites and operations. It is alsoimportant to have an idea of the effort that will be requiredin collecting the data and carrying out sustainability assess-ments. To minimize the amount of effort for data collection,it may be advantageous to develop a centralized datacollection system with a uni� ed database format that iscompatible with the existing databases so that the data caneasily be imported and manipulated.

Awareness raising, training and motivatingUnderstanding the meaning of sustainability generally

and how it relates to the company’s activities is critical tothe evolution and implementation of the CSMS. This under-standing should be evident throughout the company and



among all employees. However, this is not an easily achiev-able task as the level of knowledge and understanding of theconcept of sustainability and what it involves on thepractical level is often limited. Awareness raising andtraining are therefore essential if sustainability is going tobe taken seriously and integrated into the business practice.These activities will also facilitate the necessary culturalchange, without which little will be achieved in makingbusiness more sustainable. Awareness raising can beachieved in a number of ways, including bulletin boards,posters and newsletters which give simple, easy to under-stand facts about sustainability and explain what eachindividual can do to contribute towards making the companymore sustainable. Internal reporting on corporate sustain-ability is another powerful tool for awareness raising.Furthermore, the usual training activities (e.g. for healthand safety) could be expanded to include a short introduc-tion to sustainability and its relevance to a particular trainingactivity. Similar could be done in leadership training coursesto encourage management to be innovative and to take alead in corporate sustainability (DTI, 2001).

Employees should be encouraged to put forward innova-tive ideas that could lead to an improved level of sustain-ability. This could be linked to a � nancial and non-� nancialincentive scheme for best ideas, thus further motivatingemployees to participate. The increased awareness andparticipation of employees will not only generate practicalideas, but will also increase enthusiasm for the sustainabilityprogramme itself. Most employees enjoy being part of andcontributing actively in an organization that is committed tooperating in a socially and environmentally responsiblemanner.

Overcoming barriersSuccessful implementation of the CSMS also requires

identifying and overcoming the barriers. As already noted,one of the major challenges in this respect is culturalchange. This requires the management to develop a corpo-rate culture that encourages responsible behaviour withrespect to all aspects of sustainable development. Theactive and visible involvement of directors and seniormanagement can be a powerful force in creating a suppor-tive culture in which sustainable business practices can� ourish. However, if the senior management is notconvinced of the bene� ts or prepared to take on thechallenge of sustainable development, this cultural changewill not occur and will continue to act as one of the majorbarriers to making business more sustainable (DTI, 2001).

Other potential barriers include:

available staff time and resources;� nancial priorities, rendering everything else lessimportant;dif� culties in expressing the bene� ts of sustainability inmonetary terms;pay-back times longer than usual;lack of awareness and understanding of the principles ofsustainable development and what can be done on thepractical level.

It is important that management is aware of these andother barriers early in the implementation of the CSMS, sothat they can be tackled in an appropriate way, or so that the

sustainability action plans and priorities can be re-examinedaccordingly.

Communication

Effective communication is essential for promoting theconcept of sustainable development as well as for promotingthe company’s achievements. Therefore, the next stage ofthe CSMS process is the development of meaningful inter-nal and external reporting procedures, outlining thecompany’s sustainable development objectives and compar-ing performance against them.

Internal communicationInternal reporting on the company’s achievements with

respect to sustainability and the related bene� ts can have asigni� cant effect on corporate culture. For example, thecompany could ask the line managers to include in theirregular reporting procedures a statement on whether theyhave achieved the sustainable development targets. Simi-larly, the board could request periodic reports from seniormanagement on whether these objectives have beenachieved.

A summary of progress should be communicated to allemployees at regular intervals. They should also be madeaware of and have access to the annual sustainability reportsproduced for external stakeholders.

External communication: sustainability reportingCompanies are increasingly expected to communicate

their performance to external stakeholders. A largenumber of companies already produce corporate sustain-ability reports and there is a lively activity by variousbusiness organizations in trying to standardize the reportingstructure to enable easier cross-comparisons. GRI, which isemerging as the most widely followed reporting standard,recommends the following elements to be included in asustainability report (GRI, 2002):

vision and strategy with a statement from the CEO;overview of the company’s structure and operations andof the scope of the report;governance structure and management systems includingstakeholder engagement;sustainability indicators: economic, environmental, socialand integrated.

Sustainability reporting can be used to provide informa-tion about challenges and achievements to the stakeholdersas well as a marketing tool, associating the company withsound environmental management and sustainable activities.It also helps to maintain transparency and to respond toemerging issues and pressures.

Review and Corrective Action

The � nal stage of the CSMS involves progress review toestablish whether the objectives and targets set in thesustainability policy have been met. The review periodscan vary and normally range from 3 months to one year. Ifthe review shows that the targets have not been met,the reasons should clearly be identi� ed and an appropriatecorrective action followed to ensure that the targets are


314 AZAPAGIC

achieved in the next planning period. Alternatively, theobjectives should be reviewed and more realistic targets set.

However, if the targets have been met and the achieve-ments clearly communicated, the process starts again withthe policy review and re-alignment with the business strat-egy as appropriate. In this way the company will be fullyaware of its performance and the direction of its progress—either towards or away from sustainability.

After a � rst pass through the CSMS cycle, the companymay also wish to assess how good its sustainability strategyis, by using the questionnaire developed by the UK Govern-ment Sustainable Development Commission (SDC, 2002)and given in the Appendix.

The review process should ensure continuous improve-ment and progress towards sustainability. It should also helpthe company to answer the practical questions on whatexactly and how much it needs to do to improve its per-formance in a particular area to become more sustainable.

Answering this question is indeed one of the mostimportant aims of developing and implementing theCSMS proposed here. An initial, pilot testing of the frame-work in a company has indicated that it provides a powerfulapproach to sustainability management and that it canprovide guidance to companies on what they need to do tobecome more sustainable. However, longer-term testing ofthe methodology is necessary to support these preliminary� ndings; this work is under way and its results will be thesubject of a future paper.

CONCLUSIONS

Building a sustainable business is a long-term and multi-level challenge which requires strategic thinking and asystems approach. Corporate sustainability is not an ‘addon’ but must be an integral part of business and, like allother business activities, it must be managed in an appro-priate way.

A corporate sustainability management system (CSMS)proposed in this paper offers a framework for a systematicand structured incorporation of sustainability thinking intocorporate practice. Following a systems approach andmodelled to be compatible with other management systems,including TQM and EMS, the CSMS provides a practicalstep-by-step guidance on:

identi� cation of stakeholders and sustainability issues;development of a sustainable development policy;sustainability SWOT analysis;measuring the level of sustainability by using sustain-ability indicators; andcommunication of sustainability policies and progress,including sustainability reporting.

Rather than being prescriptive, the CSMS enables compa-nies to design, manage and communicate corporate socialsustainability in the way that is tailored to their speci� cneeds and the contexts in which they operate. It alsoprovides a transparent audit trail of the sustainabilitymanagement process enabling evaluation and continuousimprovement of corporate sustainability performance.

However, it must be made clear that a sustainabilitymanagement system on its own will not make a businesssustainable. Whilst it can facilitate this process, it is only aninstrument and a tool which will have a limited success

without a full commitment to making business more sustain-able. This requires a paradigm shift in the way traditionalbusiness is conducted—only proactive and forward-thinkingcompanies will be able to respond to this challenge.

APPENDIX: HOW GOOD IS YOUR SUSTAINABILITYSTRATEGY? A GUIDE FOR SELF-ASSESSMENT

The following questionnaire is based on the question-naire developed by the UK Sustainable DevelopmentCommission (2002). The questionnaire should help compa-nies to assess how effective their sustainability strategy isonce it has been put in place and implemented. Thequestionnaire is in four parts and examines how well thesustainability strategy follows the general principles ofsustainability; how sustainable is the current performanceof the company; how good are the targets and objectives forimprovement and how the information is disseminated.

The Questionnaire

1. General principlesTo what extent does the strategy:

1. Show a recognition and understanding of the meaningand objectives of sustainable development in generaland as they relate to the company?

2. Acknowledge the costs and limits of unsustainableactivity generally and the bene� ts of action to achievesustainability?

3. Acknowledge the need for adopting the precautionaryprinciple?

4. Place people at the centre of the strategy and involvestakeholders including supply chain partners, customersand waste disposers?

5. Demonstrate a high level of commitment to the imple-mentation of the strategy within the company?

2. Assessment of current performance of thecompany and recent change

To what extent does the strategy:

6. Identify clearly and openly the general economic, socialand environmental impacts both good and bad, of thecompany and take responsibility for those impacts?Does this include:– consideration of the supply chain,– source of raw materials and energy,– impacts from manufacture and processing,– impacts from transport,– impacts on communities and employees,– use of products and � nal destination,– world-wide impacts as appropriate?

7. Identify threats to the company from unsustainablepractices and identify opportunities for the companyto bene� t from more sustainable practices in general?

8. Assess the past performance of the company (clearlyde� ned) against appropriate indicators and assess themove towards (or away from) sustainable developmentover time. Does this assessment re� ect the concerns ofstakeholders and the wider public? Can additionalor more appropriate indicators be added? Can these



indicators be applied to future performance for consis-tent reporting?

3. Speci�c company performance, indicators and targetsTo what extent does the strategy:

9. Identify opportunities for the company to contribute toimprovements and breakthroughs (such as technologicalinnovations) which might help achieve sustainabledevelopment? Does the strategy include proposals fortheir implementation (including the costs of suchwork)?

10. Identify opportunities for the company to work togetherwith other companies in the sector to achieve greaterprogress?

11. On the basis of 6–10 above, establish indicators andtargets for the company to achieve improvements interms of tangible bene� ts and measurable criteria forsuccess?– Are these indicators realistic and challenging?– Are time-scales established?– Are the data to be used transparent and veri� able?– Is it clear what factors may in� uence the ability of the

company to deliver these targets?– Are costs and bene� ts identi� ed?– Does it also identify action which may be necessary

to alleviate any limiting factors?12. Assess whether the impact of implementing the strategy

as a whole is likely to be positive=neutral=negative interms of the relevant indicators. Are there ways inwhich the strategy could be re� ned to make the effectmore positive or less negative?

13. Require annual reporting against indicators forimprovement? Identify a process by which the strategycan be reviewed and enhanced as lessons are learnt?

14. Take a long-term perspective in addition to short-termindicators (at least 10 years)?

4. Exempli�cation, application and disseminationTo what extent does the strategy:

15. Relate its assessment of performance and future targetsand indicators to practical and actual examples?

16. Establish and seek to disseminate and encourage bestpractice and bench-marking?

17. Raise awareness of sustainability issues among theemployees and a wider audience?

REFERENCES

Azapagic, A., 2003, Developing a framework for sustainable developmentindicators for the mining and minerals industry, J Cleaner Prod, in press.

Azapagic, A., 2002, Life cycle assessment: a tool for identi� cation of moresustainable products and processes, in Handbookof Green Chemistry andTechnology, Clark, J. and Macquarrie, D. (eds) (Blackwell Science,Oxford, UK), pp 62–85.

Azapagic, A. and Perdan, S., 2000, Indicators of sustainable development forindustry: a general framework, Trans IChemE, Part B, Proc Safe Env Prot,78(4): 243–261.

DTI, 2001, Sustainable Development: Improving Competitiveness throughCorporate Social Responsibility, A Directors Guide. Department of Tradeand Industry, London, May 2001.

EC, 2001a, Communication on Promoting a European Framework forCorporate Social Responsibility. COM 2001, 366, Brussels, July 2001.

EC, 2001b, Regulation (EC) No. 761=2001 of the European Parliament andof the Council of 19 March 2001 Allowing Voluntary Participation byOrganisations in a Community Eco-Management and Audit Scheme(EMAS), Of� cial J of the EC, L114, 24 April 2001.

EC, 2002, Communication from the Commission Concerning CorporateSocial Responsibility: A Business Contribution to Sustainable Devel-opment. Com 2002, 347 Final, Brussels, 2.7.2002. http://europa.eu.int/comm/enterprise/services/social_policies/csr_communication_en.pdf (3 Oct 2002).

GRI, 2002, Sustainability Reporting Guidelines. Global Reporting Initiative,http://www.globalreporting.org/GRIGuidelines/2002/gri_2002_guidelines.pdf (3 Oct 2002).

IChemE, 2002, The Sustainability Metrics (The Institution of ChemicalEngineers, Rugby, UK).

IISD & WBCSD, 2002, Mining, Minerals and Sustainable DevelopmentProject. http://www.iied.org/mmsd (4 March 2002).

ISO, 2000, ISO 9000:2000. Quality Management Systems—Fundamentalsand Vocabulary. International Organisation for Standardisation, Geneva.

ISO, 1996, ISO 14001:1996.Environmental Management Systems—Speci-� cation with Guidance for Use. International Organisation for Standardi-zation, Geneva.

ISO, 2003, Generic Management System Standards. http://www.iso.ch/iso/en/iso9000-14000/tour/generic.html (2 May 2003).

IMA-Europe, 2002, Sustainability Indicators for the Industrial MineralsSector. IMA-Europe, Brussels http://www.ima-eu.org. (Jan 2002).

PWC, 2002, Mining and Minerals Sustainability Survey, Data Report. http://www.pwcglobal.com (8 Oct 2002).

SDC, 2002, Sectoral Sustainable Development Strategies: Self AssessmentGuide. The UK Sustainable Development Commission. http://www.sd-commission.gov.uk/pubs/sag/index.htm (8 Oct 2002).

WBCSD, 2002, Projects. World Business Council for Sustainable Develop-ment, http://www.wbcsd.org/projects/index.htm (3 Oct 2002).

ACKNOWLEDGEMENTS

I am grateful to the Royal Academy of Engineering which supported thiswork � nancially through the Industrial Secondment and Global ResearchAward schemes. Financial support by the Leverhulme Trust is also grate-fully acknowledged. My thanks are also due to the following people andorganizations: Graham Lawson, Jim Petrie, WBB Minerals and the Depart-ment of Chemical Engineering at the University of Sydney.

ADDRESS

Correspondence concerning this paper should be addressed toDr A. Azapagic, Chemical and Process Engineering, School of Engineer-ing, University of Survey, Guildford, Survey GU2 7XH, UK.E-mail: [email protected]

The manuscript was received 16 October 2002 and accepted forpublication after revision 9 June 2003.


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