The 2001 Environmental Sustainability Index

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The 2001 Environmental Sustainability Index

• Implications for Environmental Performance
  Measurement

Marc Levy Center for International Earth Science
Information Network, Columbia University Canadian
Pollution Prevention Roundtable 7 June 2001
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Guiding questions

• Why the sudden increase in demand for measures of
  national environmental performance?
• Who is creating this demand, and who is helping
  meet it?
• How can environmental sustainability be measured?
• Where are the areas of especially good, and
  especially poor, performance?
• What is in store in the future?

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Why measure environmental sustainability?

• Environmental Sustainability has widespread
  appeal as an objective
• Measurement is very poor
• Hinders ability to
• Track performance against objectives
• Identify sources of effective innovation
• Set priorities
• Identify tradeoffs

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Why measure environmental sustainability?

• National Environmental Conditions have been
  linked to
• Political Instability
• Infectious Disease Epidemics
• Economic Solvency
• Interlocking synergies with
• Firm-level measurements
• Driven by investors, managers and regulators
• Local and regional measurements
• Driven by quality of life and public policy
  concerns (e.g. trade)

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Who is involved?

• Global network involving
• Corporations
• Scientists
• NGOs
• International Organizations
• Governments
• Coalitions
• World Economic Forum
• World Business Council on Sustainable Development

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Who is involved

• Environmental Sustainability Index (ESI) is a
  partnership involving
• World Economic Forum
• Yale University
• Columbia University
• Pilot ESI released at 2000 Davos meeting
• Full ESI released at January 2001 Davos meeting

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Top ten
How can environmental sustainability be measured?
Bottom ten
1 Finland 2 Norway 3 Canada 4 Sweden 5 Switzerland
6 New Zealand 7 Australia 8 Austria 9 Iceland 10
Denmark
113 Madagascar 114 Vietnam 115 Rwanda 116 Kuwait 1
17 Nigeria 118 Libya 119 Ethiopia 120 Burundi 121
Saudi Arabia 122 Haiti
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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.

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• 22 Indicators

• Air Quality
• Water Quantity
• Water Quality
• Biodiversity
• Terrestrial Systems

• Reducing Air Pollution
• Reducing Water Stress
• Reducing Ecosystem Stress
• Reducing Waste and Consumption Pressures
• Reducing Population Stress

• International Commitment
• Global-Scale Funding/Participation
• Protecting International Commons

• Science/Technology
• Capacity for Debate
• Regulation and Management
• Environmental Information
• Eco-Efficiency
• Reducing Public Choice Failures
• Private Sector Responsiveness

• Basic Sustenance
• Environmental Health

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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
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Example environmental health
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Variable scores are averaged to get indicator
scores
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ESI 2001 Makes Country-Level Data Available

• 122 countries
• Across 22 indicators
• With reference to income-based peer groups

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ESI Ranking
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5 Core Components
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ssssssssssssssssss
Malawi
Canada
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22 indicators
Malawi
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22 indicators
Canada
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Analysis of Economy-Environment Relationship

• Does environmental sustainability rise or fall
  with growing income?
• Can poor countries afford good environmental
  performance?

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Does environmental sustainability rise or fall
with growing income?

• In general, higher levels of income are
  associated with higher ESI scores

90
Canada
80
70
France
UK
USA
Russia
Japan
Germany
60
Italy
50
India
40
China
30
ESI
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40000
30000
20000
10000
0
GDP per capita (PPP), 1998
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But richer countries arent good at everything
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Can poor countries afford good environmental
performance?
.
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Corporate-level rankings surprisingly highly
correlated with ESI
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Corruption also highly correlated
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CONCLUSION Governance Matters!
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What is in store next?

• Widespread demand for ESI as measurement tool
• Translated into Spanish, Arabic, other languages
  summaries appeared in widespread foreign press
• Subject of high-level review within governments,
  international organizations, and corporations
• Now that concrete measures are available, wide
  range of uses under consideration
• Investment tool
• Political risk tool
• Research tool
• Planning tool

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2002 ESI

• Under preparation for January, 2002 release
• Major press will publish regularly as part of
  book on environmental performance measurements

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Why these trends will continue

• Investor demand
• Growing sense that environmental conditions are
  useful metrics for judging investments
• Public demand
• Growing sense of shared environmental
  responsibility
• Supply-side developments
• Easier to measure many environmental things today

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Why these trends will continue

• Legal/Regulatory changes
• Increased appearance of mandated sustainability
  objectives and reporting requirements across
  multiple sectors
• Changing coalitions
• World business leaders, NGOs, scientists, elected
  officials, administrative officials and others
  are helping to drive this process, in concert
  with broad range of social actors

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Summary

• Multiple constituencies care about the
  environmental sustainability of nations
• Environmental sustainability can now be measured
• The availability of new measurements has
  solidified new coalitions that make widespread
  use of such measures inescapable
• The future promises deeper integration of
  sustainability measures into corporate,
  government and consumer decisions