ACCA Research Report No. 65

Executive summary

Businesses are essential partners in delivering both the social and environmental dimensions of sustainable development. As organisations, they both meet the demand for goods and services required to enhance quality of life and, in the process, impact on the environment either directly or indirectly through their use of natural resources and their production of wastes.

One problem for businesses wishing to benefit from improved environmental and social performance is the lack of reliable and credible methodologies to measure, monitor and communicate progress. This report focuses on the assessment of one candidate indicator of environmental performance – the Ecological Footprint.

Recent years have seen an increase in companies using Environmental Management Systems but few of these take a life cycle approach and account for flow of materials and energy. Most focus on emissions and pollution and, whilst this is necessary for compliance with regulations, the potential financial and environmental benefits of reduced resource use (or eco-efficiency) cannot easily be ascertained from this approach.

A number of approaches are available to businesses wishing to assess the environmental impact of their products or services. Methods reviewed include Life Cycle Analysis (LCA), Energy and Material Flow Analyses (EMFA) or Mass Balance Analysis (MBA) and Material Intensity per Unit Service (MIPS). Ecological Footprint Analysis (EFA) is a system of accounting and expressing environmental impact which draws on all these approaches.

The issue of ‘how much’ consumption is sustainable is also one that needs to be addressed. Various attempts have been made to quantify resource targets. Those discussed include the Dutch RIVM estimates, and those from the German Wuppertal Institute and Friends of the Earth Europe.

Ecological Footprint Analysis uniquely approaches the issue of sustainability by reference to the overall ‘carrying capacity’ of the planet. Thus it is able to link individual behaviour to organisational, regional and global targets using concepts such as the ‘earthshare’ – the average, sustainable, bioproductive capacity available per person.

The footprint indicator is shown to have several advantages: the single index provides for ease of communication and understanding; a variety of goods, activities and services can readily be assessed and compared; a link can easily be made between local and global consumption; an assessment of sustainability is possible; the relationship between different impacts can be explored; and values are based on ecological realities rather than arbitrary weightings. Footprinting also provides a useful measurement system that can complement frameworks such as the Natural Step.

The footprint is also shown to have a number of disadvantages: aggregation can oversimplify impacts; the assumptions and proxies used to derive the footprint result are not always apparent, and calculations are often hampered by poor data availability and philosophical boundary issues. The footprint also focuses on resource consumption more than on pollution – though there is some ongoing work in this area.

The fact that EFA is a ‘pure’ environmental indicator and does not directly address social or economic issues, can be seen as both a strength and weakness depending on the intended use.

The steps necessary to perform an EFA are detailed using sample data from two case studies: Anglian Water Services (AWS) and Best Foot Forward (BFF).

1. Data scoping.
2. Data collection.
3. Assembling your footprint table.
4. Calculating your Ecological Footprint.
5. Normalisation, scenarios and global sustainability assessments.
6. Refining the footprint – sensitivity analysis.
7. Environmental management systems – using the footprint .

The two case studies (AWS and BFF) are then presented in full.

Five scenarios are developed for AWS based on ‘business as usual’ and resource reduction alternatives using energy, transport, materials and waste data. Scenarios are projected from 1998/99 to 2010 based on historical data and predicted consumption.

Analysis shows that 1.3% of AWS customers’ average per capita ‘earthshare’ is appropriated by the provision of water purification services.

The footprint methodology was also applied to BFF for the year 1999/2000 using energy, transport, land, materials and waste data. A component breakdown showed transport to be the most significant element in the first year followed by direct energy use.

Changing to a renewable energy supplier and reductions in the need to travel reduced the company footprint from 1.72 to 0.61 hectares. Working at BFF initially accounted for 33% of the individual’s average earthshare – a figure which was reduced to 12% following energy and travel changes.

It can be concluded that the Ecological Footprint can be applied to good effect at the corporate level as an aggregated eco-efficiency indicator that links in with global carrying capacity and hence global sustainability. Although in itself, EFA does not integrate all aspects of sustainable development, it can be used with other indicators to drive integrated sustainability indicators. As with many sustainability measurements, Ecological Footprinting will benefit from lessons learned in wider usage and from further research into the methodology, supporting data and practical application.