Sustainable Global Economic Development 101: The Indicators of Sustainable Development

Foreword

This series of articles provides a detailed explanation of sustainable global economic development, issues that arise, ways of addressing these complex problems, and benefits for nature, humanity, and the world economy. The series of articles aims to emphasize the essence of making global finance and the economy more sustainable and reveal the steps to achieve these goals. The importance of the series is that the aspects of the topic described in the articles concern everyone, and each reader can understand what factors, decisions, technologies, and ideas affect sustainable global economic development.

The Sustainable Global Economic Development 101 series consists of six articles:

1. Sustainable Global Economic Development 101: Definition and Principles

2. Sustainable Global Economic Development 101: Challenges and Issues

3. Sustainable Global Economic Development 101: The Indicators of Sustainable Development

4. Sustainable Global Economic Development 101: Sustainable Global Finance Methods

5. Sustainable Global Economic Development 101: The Influence of Science and Technology

6. Sustainable Global Economic Development 101: Enhancement for Sustainable Globalism

Transition to sustainability goals needs to be measured and assessed. This necessity has challenged the scientific community in providing efficient and reliable methods to achieve that goal. Sustainability assessment is essential to the environment, economy, industry, and society because it improves the decision-making process, gives precise information for analysis and monitoring, and increases awareness of sustainability issues. Indicators have evolved as a very useful tool for implementing sustainable development, evaluating the progress made, and illustrating concepts and parameters included. The article covers the sustainability indicators which help measure the progress toward reaching The United Nations Sustainable Development Goals. Also, discuss the advantages and disadvantages of indicators, the criteria for their selection, connection with the policy, and conceptual framework.

Figure 1: Forest Whitaker is giving a speech at the Sustainable Development Goal meeting (UN Sustainable Development, 2017).

Theoretical Background

The aim of sustainable development is not just to save the environment, but to establish a prosperous, wealthy, and inclusive society. That means taking into consideration the various needs of people from different countries to provide them with equal opportunities. A universal call to end poverty, protect the planet, and secure wealth and peace for all has been launched by the United Nations as the Sustainable Development Goals (SDGs), also known as the Global Goals (UNDP, n.d.). The 17 SDGs are: "zero hunger", "no poverty", "good health and well-being", "quality education", “gender equality”, “clean water and sanitation”, “affordable and clean energy”, "decent work and economic growth", "industry, innovation and infrastructure", “reduced inequality”, "sustainable cities and communities", "responsible consumption and production", "climate action", “life on land”, “life below water”, "justice and strong institutions", "partnership for the goals". They have stated in the UN’s Agenda for Sustainable Development that these goals were adopted in 2015 (Sustainable Development Commission, 2022).

The conception of global objective supplemented by specific indicators was suggested by the governments of Colombia and Guatemala and presented at The United Nations Conference on Sustainable Development in Rio de Janeiro on June 2012. The above-mentioned targets follow and expand in the Conference resolution “The Future We Want” (Custodio et al, 2023).

The idea of sustainability assessment should follow determined principles. The weakness of the concept is a poor alignment of global goals with actual international agreements and political processes, and insufficient implementation. United Nations Statistic Division (UNSD, 2015) which is committed to the advancement of the global statistical system and supports the functioning of the United Nations Statistical Commission, issued the discussion paper sets several selection criteria for the indicators, they out to be relevant, result-focused, methodologically correct, computable, accessible, and reliable. Reliability has many forms, but especially important for the sustainable development indicator because it will be used for a very long period. Apart from these specialized requirements, indicators of sustainability should also comply with the general demands, in particular, be relevant. The criteria of indicators relevance include three issues: “link to the goals”, which means the indicator has to be directly connected to the sustainable development goals and enable to measure of the progress toward the goal; “policy relevance” - which should be corresponding with the police formulation; “applicability at the appropriate level” - relevancy to all the countries and national priorities. “Policy relevance” and “applicability” criteria belong to the policy framework as long as the “link to the goals” is connected to the conceptual framework (Verbruggen, Kuik 1991).

Figure 2: UN volunteer Ratha Pathmanathan (in the middle) and colleagues accompanying displaced people to their homes and relatives in Akobo (UNMISS, 2019).

Indicators are needed to analyze current advancing in policy in different fields: economic, social, and environmental. Also, to see the speed of movement toward the goals and carry out operational planning, control the goals set, and adopt the necessary legislative acts. Company managers also need data on the basis on which to make key business decisions. Sustainability indicators can assist to bring order to interacting developments and to determine the trade-offs between the side effects of policy options, and strategies, they also, can come to be a planning tool. Except for being a decision-support instrument, indicators can play a communicative role, informing society about specific environmental issues. That may serve as motivation to take appropriate measures or to ask for action from the governments. Even though the United Nations Sustainable Development Goals in the framework of the 2030 Agenda for Sustainable Development emphasize many issues of the socioeconomic extent, acknowledged by many as not being far-reaching. More late indicators have extended the assessment of socioeconomic sustainability by adding aspects such as the connection between the quality of life and health, residency, and life satisfaction. They have been applied to research the well-being of homeless people, and the relationship between happiness and the duration of life (Custodio et al, 2023).

Advantages, Disadvantages, and Types of Indicators

Indicators differ from the other data: ratios, and percentages. They give the meaning directly associated with them, and provide a direct connection between data and explained information. This means that indicators arrange meaning and deep information that otherwise would demand a detailed amount of information. Consequently, assessment along with communication of important variables become immediately simple to understand. Another advantage arising from the usage of indicators is the duplicability and compatibility of the results. Nonetheless, some disadvantages may occur during using and choosing different indicators. The major problem is subjectivity, which enters into two matters: selection and evaluation of the indicators. Another difficulty is a lack of data or absence of vital information or over-aggregation of information and consequently bad communication and analysis. If indicators are chosen careless, it will lead to an incorrect conclusion (Custodio et al, 2023).

Researchers use three types of indicators: economic, ecological, and social. The economic area is probably, easier to assess. Since money measure is simple to understand. Profitability is an essential indicator for investment theory. The relevance of economic indicators may alter on an enterprise and national level. Examples of economic indicators are gross domestic product (GDP), gross value added (GVA) and local value added LVA. Ecological indicators are connected to impacts and changes in the environment (land, water, soil conditions, and biodiversity) as a consequence of human interference. For instance: greenhouse gases, fossil fuel use, fine particle emissions, water contamination, land use, and land use change (LULUC), and indirect land use change (ILUC). Social sustainability is harder to assess because this issue has been studied less than ecological or economic sustainability. Also, social sustainability is less applicative and most consequential at national and regional levels. It is measured by the following indicators: employment, accidents, work-related diseases, human health and well-being, equity, rural-urban development, and others (Farsari et al, 2002).

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Figure 3: Angela Tovar (Colombia), UN Volunteer Child Protection Officer with the United Nations Mission in South Sudan (UNMISS), raising awareness of violations of children's rights (UNV, 2018).

Practical Implementation

The Interfederal Statistical Institute (Belgium), which was established to ensure the quality of public statistics in support of public policy, selected 82 indicators, applying three of them per one sustainable development goal. And later, The Federal Planning Bureau, the independent public agency for studies and projections on economic, social, and environmental policy issues in the context of sustainable development, assessed trends of indicators toward the goals across Europe. The annual evaluation has continued since 2005 in the Federal Sustainable Development Reports. A certain target has been set for 25 of these indicators to be reached by 2030. For the rest of the indicators, only a proper direction was identified (The Interfederal Statistical Institute, 2022).

Key characteristics of sustainability that express fundamental changes needed are: (1) equity (stands for fairness on the way to bring out and include intra-generational equity (the uncompromising ability of current and future generations to address their needs and aspirations equally); interspecific equity (eco-management that applies to the survival of all other species on the same basis as human survival), geographical equity (universal responsibility based on shared but differentiated responsibility), procedural equity (democratic leadership and governance); (2) dynamics (sustainability is a dynamic process science the nature and society always changing, involving unpredictability and risks that need preventive actions), (3) integration of the various principles in a concordant manner to conform development goals with the environment necessities); (4) normativity (normative decisions taken should be based on common norms, values that we develop nowadays and in the time to come) (Waas et al., 2014).

Despite public commitments and acceptance of the sustainability discussion among various stakeholders, its practical execution is insufficient. (Quental et al., 2011). Concerning practical implementation, the omission between words and deeds should be considered a strategy science at the core of every action is a decision. The sustainability results assessment and sustainability indicators are technical support tools that can participate in the strategy by managing the challenges: influence, information structuring, and interpretation. Despite that, the essential and complex nature of sustainable development with its instability and risks makes its assessment a very difficult task. And it is no wonder, that researchers, in this case, speak of “measuring the immeasurable” (Babcicky, 2012). The discussion in scientific literature exposes that, principally, since the 1990s, a lot of considerable and auspicious efforts in that direction have been initiated (Waas et al., 2014).

Figure 4: Illustration of profitability modeling (transitiontogreen, 2015).

Sustainability Assessment

"Sustainability assessment (SA) is a complex appraisal method. It is conducted for supporting decision-making and policy in a broad environmental, economic, and social context, and transcends a purely technical/scientific evaluation. Not only this does entail multidisciplinary aspects (environmental, economic, and social), but also cultural and value-based elements" ( Sala et al, 2015).

Sustainability assessment is a new discipline in science, still in its early stages, but is rapidly being transformed to deal with new challenges and get associated with the wide field of affect assessment (Ness et al., 2007). The process of determining the forthcoming consequences of the current action is called the impact assessment (IA) according to The International Association for Impact Assessment (IAIA). There are two points of view, correspondingly considering IA as the overall field. Firstly, impact assessment could be categorized as a generic field that encircles different approaches and processes, some of that is renowned and broadly used (for instance, strategic environmental assessment, environmental impact assessment, and risk assessment). At the same time, others - more lately appeared (like sustainability assessment) and are less indisputably defined. Correspondingly, Bond, et al., (2013) contemplate it as a late framing of impact assessment, occasionally called its “third generation” succeeding environmental impact assessment and strategic environmental assessment. Secondly, Ness et al. (2007) and Hacking et al. (2008) believe that SA is not an impact assessment (like a life cycle analysis) and not an integrated assessment (such as an environmental impact assessment). This diversity of judgment can be clarified by the different areas that are taking place in sustainable assessment practices. There is a broad diversity of practices and there are different definitions. Presumably, the best one is formulated by Bond et al., 2013. Their explanation embraces a wide perspective and characterizes it as “any process that directs decision-making towards sustainability”. Taking into account the importance of understanding sustainable development as a decision-making strategy it needed to be explained the main challenges of this strategy where SA is a key point (Bond et al., 2013).

Sustainability assessment is a process that seeks to: contribute to clarifying the definition of sustainability and its background interpretation (interpretation challenge); incorporate sustainability issues into the decision-making process and evaluate its impact (information-structuring challenge); strengthen sustainability objectives (influence challenge). Consider that, in comparison with IATA’s appropriate point of view on impact assessment, it is frequently recognized as an “ex-ante” process targeted to predict future events, or to evaluate the effects of the decisions previously to approve the choice between different options (Ness et al., 2007). The assessment of the consequences caused by interposition (past events) is widely used at the last of the policy or management cycle and is named “evaluation”. Nonetheless, the difference between the assessment (ex-ante) and evaluation (ex-post) is not consistently clear. The two are considered the same (Pinter et al., 2012).

Figure 5: Principal Secretary for the Ministry of Environment and Forestry in Kenya hosting the 2022 United Nations Environment Assembly (lubaofm.co.ke, 2022).

Purposes of Sustainable Assessment

The purposes that assist in the realization of the main sustainability challenges are as follows: generation of information (information-structuring challenge); practical realization and forum, debate and discussion (interpretation challenge); social education (interpretation and influence challenge); structuring complication (information-structuring challenge). SA provides information for decision-makers and assures that decisions are made with the analysis of relevant and sufficient information. Preferably, it will lead to choosing the most appropriate alternative concerning sustainable development. Since SA creates a selection of alternatives and displays ways to action(Bond et al., 2013).

Additionally, SA realizes sustainability principles by assigning meaning to the idea in a specified socio-economical context and as it may be a forum for debate and discussion between various implicated stakeholders (Waas et al., 2014). It also acts as a channel to organize and structure shareholder participation. Also, SA is an educational process that leads to a transition in attitude, knowledge, and point of view of key decision makers. Development of knowledge and scientific debates can bring forth new ideas and perspectives, and generate opportunities for changes. Finally, SA structures complex information. The inherent integrative complexity of sustainable development constructs an ever-expanding need for information and instruments to structure it. SA gives a systematic and gradual approach to structuring information that permits decision-makers to address the difficulty of sustainable development (Waas et al., 2014).

The acknowledgment of the effectiveness of SA could be affected by the prime goals distributed to the SA initiative by various stakeholders in different individual circumstances. Generally, all categories of SA can be categorized: substantive (the acquirement of the purposes of the SA), normative (reaching of the normative goals), procedural ( contemplation of SA process and the set up of SA procedures and policy), and transactive ( the gaining of purposes with a minimum investment of time and money, that is effective) (Bond et al., 2013).

Figure 6: Indicators of sustainability action (The Green Dandelion, 2022).

The definitions of SA and sustainable indicators (SI) display that SA deal with the evaluation process and SI with the technical side of sustainable development. The comparative value of SA and SI consists of the contribution to the interpretation, influence, and information-structuring challenge. Even though, as a logical outcome of common concerns, both areas deal with all three challenges concurrently. Of course, even though SA and SI have different definitions, they are fundamentally linked. SI is a part of any SA implicitly or explicitly. There is a need to simplify and streamline conceptions of SA and SI to some extent as long as they are essential decision-supporting instruments on the way to a more sustainable society. To manage real-world complexity with plenty of risks and uncertainties, there is an urgent need for a holistic approach, which considers a more unplanned decision-making process as an addition to prevailing consciously designed methods of operating (Waas et al., 2014).

Conclusion

Regarding an environmental crisis and huge social inequalities in global development, an international community adopted the sustainability concept as an appropriate development model with clear result-oriented goals. Despite the fact, that it is accepted among businessmen and politicians worldwide, there is still a lot of work regarding popularizing, implementing, and measuring the progress on a way to reaching the United Nations Sustainable Development Goals.

In monitoring an advancement toward sustainability there is a need for indicators that meet specialized requirements such as the link to the goals, policy relevance, and applicability at the appropriate level. Also, they must be relevant, result-focused, methodologically correct, computable, accessible, and reliable. The indicator-based approach is a powerful decision-supporting instrument that accelerates sustainable development by facing its three main challenges: information-structuring, influence, and interpretation. Nonetheless, a wider shared understanding and better practices are still needed.

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