2001 Environmental Sustainability Index Or, Can you really measure the unmeasurable? March 1, 2001 Columbia Engineering School

Partners World Economic Forum, Global Leaders for Tomorrow Environment Task Force Yale University Center for Environmental Law and Policy Columbia University Center for International Earth Science Information Network

Key Findings Measuring Environmental Sustainability is Possible  ESI Ranks 122 countries  Based on 67 empirical measurements Economic conditions are important, but not a fundamental policy constraint  Among countries at similar income levels, there is no correlation between GDP/capita and ESI. Data limitations present severe constraint on shift toward more analytically rigorous environmental decision-making

ESI’s Purpose: Benchmark environmental performance Identify comparatively environmental results that are above or below expectations Identify “best practices” Investigate interactions between environmental and economic performance

Part of broader movement to measure sustainability UN Commission on Sustainable Development OECD Rio + 10 initiatives Consultative Group on Sustainable Development Indicators Corporate-level efforts  Global Reporting Initiative  WBCSD National and Local efforts

2001 Rankings G:\Davos2001\Map_AV\esi 2001_map.jpg

Top Quintile 1Finland 2Norway 3Canada 4Sweden 5Switzerland 6New Zealand 7Australia 8Austria 9Iceland 10Denmark 11United States 12Netherlands 13France 14Uruguay 15Germany 16United Kingdom 17Ireland 18Slovak Republic 19Argentina 20Portugal 21Hungary 22Japan 23Lithuania 24Slovenia 25Spain

Bottom Quintile 98Kyrgyz Republic 99Bangladesh 100Macedonia 101Togo 102Algeria 103Benin 104Burkina Faso 105Iran 106Syria 107Sudan 108China 109Lebanon 110Ukraine 111Niger 112Philippines 113Madagascar 114Vietnam 115Rwanda 116Kuwait 117Nigeria 118Libya 119Ethiopia 120Burundi 121Saudi Arabia 122Haiti

Middle 3 Quintiles 26Costa Rica 27Estonia 28Brazil 29Czech Republic 30Bolivia 31Chile 32Latvia 33Russia 34Panama 35Cuba 36Colombia 37Italy 38Peru 39Croatia 40Botswana 41Greece 42Zimbabwe 43Nicaragua 44Ecuador 45South Africa 46Mauritius 47Venezuela 48Armenia 49Gabon 50Mongolia 51Sri Lanka 52Malaysia 53Israel 54Paraguay 55Fiji 56Central African Republic 57Belarus 58Poland 59Moldova 60Bulgaria 61Guatemala 62Papua New Guinea 63Ghana 64Honduras 65Singapore 66Nepal 67Egypt 68Trinidad and Tobago 69Azerbaijan 70Turkey 71Mali 72Dominican Republic 73Mexico 74Thailand 75Bhutan 76Cameroon 77Mozambique 78Albania 79Belgium 80Romania 81Uganda 82Kenya 83Tunisia 84El Salvador 85Pakistan 86Indonesia 87Senegal 88Jamaica 89Morocco 90Uzbekistan 91Kazakhstan 92Malawi 93India 94Tanzania 95South Korea 96Jordan 97Zambia

Methodology: Guiding Principles Create ESI in a systematic, transparent, and reproducible manner. Be faithful to scientific literature as well as relevant to the major policy debates. Be applicable to a wide range of situations and conditions. Make use of what can actually be measured today but leave room for movement tomorrow.

Environmental Systems Human Vulnerability Environmental Stresses Global Stewardship Social and Institutional Capacity 5 Core Components Air Quality Water Quantity Water Quality Biodiversity Terrestrial Systems Basic Sustenance Environmental Health Science/Technology Capacity for Debate Regulation and Management Environmental Information Eco-Efficiency Reducing Public Choice Failures Private Sector Responsiveness International Commitment Global-Scale Funding/Participation Protecting International Commons Reducing Air Pollution Reducing Water Stress Reducing Ecosystem Stress Reducing Waste and Consumption Pressures Reducing Population Stress 22 Indicators

Adding it all up For each of the 22 indicators, we identified 2-6 variables to serve as quantitative measures (67 total) We weighted the indicators equally in computing the Index 67 variables 22 indicators Index

Example: environmental health

Variable scores are averaged to get indicator scores

ESI 2001 Makes Country-Level Data Available ES 122 countries Across 22 indicators With reference to income-based peer groups

ESI Ranking

5 Core Components

22 indicators

Analysis Spot broad patterns Identify successful (and failing) policies Explore correlations between environment and other factors (corruption, income, population) Specify causal relationships and drivers of good environmental performance

Example: Analysis of Economy-Environment Relationship Does environmental sustainability rise or fall with growing income? Can poor countries afford good environmental performance? Does strong environmental performance harm national competitiveness?

Does environmental sustainability rise or fall with growing income? In general, higher levels of income are associated with higher ESI scores GDP per capita (PPP), ESI Canada Russia UK Italy France Germany India Japan China USA

But richer countries aren’t good at everything

Can poor countries afford good environmental performance?.

Does strong environmental performance harm national competitiveness?

Innovest rankings surprisingly highly correlated with ESI

Corruption also highly correlated Query: How many corporate sustainability reports document levels of corruption?

Conclusions

Next steps Support efforts at major improvement in data creation and collection Interactive version of ESI More work at integrating information at different scales Build capacity for consistent measures over time

Post-Davos fallout, banal Attack of the green meanies  ESI is “meaningless noise”  Related criticism from other “narrower is better” quarters Shallow Hurrah-ism  “We’re number 3!”  “We’re less horrible than we first thought!” Sulking bitterness  “The hell-hole that is Belgium”

Post-Davos Fallout- interesting Potential coordination with other indicator efforts in development  National  International (CSD, CSGDI, Rio+10)  City-based indicators  Regional (NAFTA, Mercosur, Asia, …) Discussion about intensive efforts at database creation  Global map of wilderness areas  Global water quality index  Firm-level indicators Discussion about potential applications of ESI  Linked to investment instruments (green bond fund, CDM)  Research tool (Kuznets curves; geographic influences)

Where do firms fit in?  Potential users of the Index Many aspects are relevant to business climate and risk analysis –Government subsidies –Transparency and consistency of environmental regulations –Corruption –Quality of life measures

Where do firms fit in? Potential suppliers of data to the Index  Often firms have access to high quality, relevant information  Effectiveness of regulations, local practices concerning waste disposal and treatment, water quality, etc.  Firms that wanted to could collect basic environmental information and provide it to a global clearinghouse

Where do firms fit in? Strong interest in including firm-level information in future ESI  Useful national indicator (do some countries do better than others at promoting firm-level environmental innovation?)  Useful global stewardship indicator (which firms are helping to strengthen national sustainability efforts, which are taking advantage of weak ones?)  Most frequently suggested addition to 2000 ESI was “private sector responsibility” measure  Often firm-level activity is the most scientifically relevant scale There is much more relevant firm-level information collected than will ever be reported publicly.  Are there creative strategies for liberating, filtering, and providing controlled access to some of that information?