cinnamonfot - professor mohan munasinghe

M I N D Munasinghe Institute for DevelopmentMunasinghe Institute for Development

Ayubowan

Vanakam

Good Morning

M I N D Munasinghe Institute for Development

How sustainable is our future – role of tourism

Professor Mohan MunasingheChairman, Munasinghe Institute for Development (MIND), Colombo

Shared the 2007 Nobel Prize for Peace (Vice Chair, IPCC-AR4)Honorary Senior Advisor to the Govt. of Sri Lanka

KIVA Guest Prof. of Sustainable Development, Darmstadt Univ. GermanyDistinguished Guest Professor, Peking University, China

Plenary keynote speech presented at theFuture of Tourism Summit 2015

Organised by Cinnamon Tourism and Resorts Colombo, 28 September 2015


Congratulations to Cinnamon Hotels and Resorts for organising this conference.

Expectations are high with the announcement of the Mega $770m Cinnamon Life project, in the emerging Colombo Megapolis! We hope that this conference will produce innovative and practical ideas about how the tourism

sector can contribute towards making development more sustainable in Sri Lanka

and the world. We will seek win-win outcomes for people, planet and prosperity

M I N D

Why Tourism is important: Key Statistics

Munasinghe Institute for Development

World wide International tourist

arrivals will increase by 3.3% a year (2010-2030) to reach 1.8 billion by 2030

Arrivals in emerging destinations will increase by 4.4% per year – faster than the global average

In 2014 Tourism earned $1.1 trillion

Sri LankaArrivals & income are growing. In 2014:Over 1.5 million arrivals & Rs.300 billion

Expect 2.5 million arrivals by end-2016Source- www.statistics.gov.lk


WHAT ? are the challenges facing humanity Multiple global threats undermine sustainable development efforts and poverty alleviation


- Poverty, inequality & other bad socioeconomic trends- Resource shortages (energy, water, food, etc.)- Financial sector weakness and wealth concentration- Conflict, insecurity & emerging polycentric world- Weak leadership & poor decisionmaking - Unsustainable values- Trade, multinationals and special interests- Unexpected shocks and disasters- Climate Change: the ultimate threat multiplier

Multiple threats are inter-related and synergisticStakeholder interests are divergent. Responses uncoordinated & piecemeal – lack of leadership

Robust integrated & comprehensive strategy needed

Multiple Heavy Shocks that can cause Global Breakdown

M I N D

% of Population Undernourished

Almost 1 billion hungry: 1 in every 7 persons, mainly in Africa and Asia!


Status of Global Resource Use & LimitsRed = exceeding limitGreen = within limit

Areas: climate change, biodiversity loss, nitrogen, freshwater use, ocean acidification, stratospheric ozone, land use, phosphorus, chemical pollution, atmospheric aerosols

SEI, 2009

M I N D

Banks bailed out by Govts – but still acting badly In the aftermath of 2008 financial meltdown (IMF data) industrialised countries bailed out private banks for 1.75 trillion dollars,

equal to 70 million people earning 25,000 euro per year. Bailouts created govt. debt, weakening especially Greece, Italy, Portugal,

Spain (GIPS not PIGS), imposing huge social & human costs.Over 100 million people lost their jobs, mainly in the developing world.

Post-2010 Bank FraudLargest banks have been fined hundreds of billions of dollars for fraud (Barclays, Deutsche Bank, Royal Bank of Scotland, Societe Generale, JP Morgan Chase, HSBC, PNB-Paribas, Credit Agricole, UBS, Credit Suisse, etc)!

M I N D

Growing inequality and wealth concentration “During past 300 years, the rich have got richer while the poor got poorer, Growth of

returns to capital is faster than general growth rate – Thomas Piketty, French Economist

“85 richest people in the world, who will fit into a single London double-decker, control as much wealth as the poorest half of global population (3.5 billion people).” – Christine Lagarde, IMF Head

“ 300 wealthiest individuals increased their wealth last year by $524 billion - more than the combined revenues of Denmark, Finland, Greece and Portugal” - Bloomberg Billionaires Index

Inequality in salaries Chipotle Mexican Grill: CEO salary $25 million/year - 1200 times wage of av.

worker $21000. Plus stock bonus >$100 million. Walmart US: CEO salary $13 million/year – almost 500 times wage of av.

worker $27000. 25 best paid hedge fund managers earned $21 billion in 2013.

M I N D

Unipolar to Multipolar World Order – Asia’s growing role

•Bipolar World (1950-90) : USSR-USA cold war with risk of nuclear conflict.•Unipolar World (post-1990) : Resource wars - US led effort to dominate, economically with G7, USD global reserve currency, militarily with NATO etc.•Multipolar World (post-2015)? : Based on “soft” economic power, driven by multiple poles BRICS, EU, G77+China, Non-Aligned Movement, G20, Shanghai Cooperation Agreement, etc., with multiple global currencies (EUR, CNY, USD, etc.), BRICS Bank, AIIB (each $100 billion capital).


M I N D

Climate Change – IPCC Findings• Global warming in unequivocal. Total radiative forcing of the climate

now is unprecedented in several thousand years, due to rising concentrations of GHG (CO2, CH4 & NO2).

• Humans activities since the 18th century are very likely to have caused net warming of Earth’s climate, dominating over the last 50 years. More temp. and sea level rise is inevitable, even with existing GHG concentrations.

• Long term unmitigated climate change would likely exceed the capacity to adapt, of natural managed and human systems.

• Adaptation measures are available, but must be systematically developed • Mitigation technologies are also available, but better policies and

measures (PAM) are needed to realize their potential. • Poor countries & poor groups are most vulnerable to warming, sea level rise, precipitation changes and extreme events. Most socio-economic sectors, ecological systems and human health will suffer.

• Making development more sustainable (MDMS) is the most effective solution - by integrating climate change policy into sustainable development strategy.

M I N D

Financial MarketsProductive Economic Assets

Bio-geo-physical Resources

Econ. Growth

Three Levels of RealitySound financial markets and economic growth should be based on the true value of the productive economic asset base. In turn the value and use of economic assets should closely reflect the state of natural (bio-geo-physical) resources

Head in the clouds?

Feet firmly on the ground?

WHAT ARE OUR VALUES AND HOW WELL DO WE ESTABLISH PRIORITIES ?

M I N D

Financial Markets

Productive Economic AssetsAsset Bubbles

Triple crisis bubbles driven by greed – enjoy now & pay later 2A few get rich quickly, many innocents pay a heavy price afterwards

2008 crisis

M I N D

Financial Markets



Econ. Growth2008 crisis Poverty-Inequity

M I N D

Financial Markets




Econ. Growth2008 crisis Poverty-Inequity

ExternalitiesClimate change

M I N D

Financial Markets




Hum

an V

alue

s/C

hoic

es

Econ. GrowthGovt. Bailout >$6 trillion Aid/yr ~$100 billion

2008 crisis Poverty-Inequity

Asset bubble >$100 trillion (1012), Global GDP >$60 trillion

World Military Expenditures: over $2 trillion in 2014

ExternalitiesClimate changeFew billion $

M I N D

Asset crisis: have we learnt from experience? Are we not returning to business as usual?

2008-10

Financial Sector

Jobless Poor (~100 million)

2011-15


WHAT ?

HOW ?

are the challenges facing humanity Multiple global threats undermine sustainable development efforts & need integrated solutions

can we move forward to transform risky current trends into a safer and better futureApply the SUSTAINOMICS framework to start making development more sustainable (MDMS)


HOW DO WE GET THERE ?Addressing Complex, Multiple,

Interlinked Sustainable Development issues within the Integrated

SUSTAINOMICS Framework

First presented at 1992 Earth Summit in Rio de Janeiro, and subsequently

taught & practically applied worldwide.

M I N D

Core Concept 1: Make Development More Sustainable with EMPOWERMENT, ACTION & FORESIGHT

There are many definitions of sustainable development starting with Bruntland (1987), and its precise meaning still remains elusive. Parallel track strategy: 1. Short to medium term – make development more sustainable (apply best practice).2. Long term - aim for ideal goal of sustainable development (identify next practice). Making development more sustainable (MDMS) is a less ambitious incremental strategy that is more practical to implement because many unsustainable activities are easier to recognize and eliminate.

PRACTICAL TEST FOR PUBLIC POLICIES:Does a specific policy make development more (or less) sustainable?


Lets move forward NOW!! If we climb uphill, we will reach

the peak eventually

We cannot see the peak!! Let’s stop to discuss &

analyze how to reach it.

Sustainable Development Peak – including climate change (covered by clouds)

Many obviously unsustainable practices exist today. MDMS encourages us to eliminate them NOW! Examples include energy wastage and deforestation.

EMPOWERED to Make Development More Sustainable (MDMS) – BEST PRACTICE

ANALYSING SD and CC – NEXT PRACTICE


Making Development More Sustainable: Personal Lifestyle Changes


MDMS for the Tourism Industry: CSR Plus, Create Shared Value, Sustainability Accounting & Reporting • Corporate Social Responsibility (CSR) - considering wider social interests by being accountable for operational impacts on customers, suppliers, employees, shareholders, communities and environment. • Integrated External Engagement goes beyond CSR to push concern for stakeholders deeply into business decision making at every level.• Shared Value - making profits, with benefits to environment & to society through shared sources of value common to firm & society.•Sustainability Accounting & Reporting includes the generation, analysis, use and reporting of economic, environmental and social information (monetised wherever possible) to improve corporate management and performance in those areas. This approach uses the Triple Bottom Line, which recognizes that the environmental & social consequences of corporate actions are as important as monetary profits, and seeks to measure and report on the outcomes.•Impact Investment – investing to benefit society & environment


Development- Sectors (Agriculture, Energy, Industry,

Transport, Health, etc.)- Systems (Environmental, ecological, etc.)

- Communities (Poor, Vulnerable, etc.)

Sustainable Dev.

(Social, Economic,

Environmental)

Environment

Tourism

Sust. Tourism

MDMS: National Level SD IntegrationMake decision makers see Sustainable Tourism as key element of integrated national development strategy

M I N DMunasinghe Institute for Development

Economic

Social•

empowerment/governance

• inclusion/consultation• institutions/values

Environmental• resilience/biodiversity• natural resources• pollution

Sustainable Development Triangle – harmonising key elements and interconnections (corners, sides and centre) Source: Munasinghe [1992], Rio Earth Summit

• growth• efficienc

y• stability

Core Concept 2: Harmonise the SD Triangle forBALANCE & INTEGRATION - 1


Economic

Social•

empowerment/governance

• inclusion/consultation• institutions/values

Environmental• resilience/biodiversity• natural resources• pollution

• in

tra-g

ener

atio

nal

equi

ty

• b

asic

nee

ds/li

velih

oods

• inter-generational equity

• values/culture

• valuation/internalisation

• incidence of im

pactsTOURISM

Poverty-EquityClimate Change

Sustainable Development


• growth• efficienc

y• stability

Core Concept 2: Harmonise the SD Triangle forBALANCE & INTEGRATION - 2


Building Assets for Sustainable Development

SocialCapital

BuiltCapital

Natural Capital

Social Capital• Human• Cultural

Source: Munasinghe (1992), Rio Earth Summit

Tourism Sector

Key role played by Social Capital embedded in Civil Society: ignored, undervalued, invisible

• At individual level, it is built on personal networks that help us enormously in our private and professional lives.

• At community and national levels, it: is the invisible glue that binds society together – involving values- ethics, culture, behaviour, and social linkages.


Core Concept 3: Transcend Boundaries of SD with INNOVATION & FRESH IDEAS

• Values – replace unsustainable, unethical values • Disciplinary – complex issues need all disciplines • Space – spans local to global scales• Time – spans days to centuries • Stakeholder – need to include all stakeholders• Operational – full cycle from data to application

•Greed, selfishness and violence are unsustainable•Selflessness, altruism, enlightened self-interest, and respect for other humans and nature will make development more sustainable

Transcend Unsustainable Values - Build essential ethical and moral values especially among YOUTH

Examples: Ethical Dimensions of Climate Change 2006Interfaith Declaration on Climate Change 2009


Wrong Values Drive Unsustainable Development: 1

SocialCapital

EnvironmentalDebt

Unsustainable cons. & prod.depleting NR

UnethicalSocial Values

Greed, Selfishness, Corruption, Inequity,

Violence, Injustice, Elitism

Source: Adapted from Munasinghe (1992), Rio Earth Summit



SocialCapital

Economic Mal-development

growth based on unsustainable debt, waste & inequitable

consumption by the elites

EnvironmentalDebt




Violence, Injustice , Elitism




SocialCapital

Economic Mal-development

growth based on unsustainable debt, waste & inequitable

consumption by the e lites

EnvironmentalDebt




Violence, Injustice, Elitism


EnvironmentalDebt

Unsustainable Pollution &

Depleting NaturalResources

Drivers of Unsustainable Development

(with feedback)


Transcending Stakeholder Boundaries to Ensure Cooperation for Sustainable Development

SocialCapital

Business

Govern-ment

CivilSociety

We can catalyse interactions among government, civil society and business to strengthen local, national and global governance


Cinnamon Resorts &

Hotels


Many practical analytical tools and policy options to build integrated SD strategy (global to local levels)Many available case studies and best practice examples involving sustainomics applications

Core Concept 4: Full cycle application of integrative tools, from data gathering to practical policy IMPLEMENTATION

Choosing Appropriate SD Indicators

- Social - Environmental - Economic- Institutional

many indicators are available; thus correct choice is critical for specific task at

hand


WHAT ?

HOW ?


can we move forward to transform risky current trends into a safer and better futureApply the SUSTAINOMICS framework to start making development more sustainable (MDMS)must respond and how Tourism sector & civil society can act to promote sustainable consumption & production.

WHO ?

M I N D

Economic

Social• fairness/

empowerment• inclusion/consultation• institutions/

governance

Environmental• natural resources• resilience/

biodiversity• pollution

• in

tra-g

ener

atio

nal

equi

ty

• b

asic

need

s/live

lihoo

ds• inter-generational

equity• values/culture

• valuation/internalisati

on

• incidence of im

pacts

SD based on Happiness &

Well-Being (GNH)

• efficiency

• growth• stabilit

y

21st Century Global Eco-Civilization

VISION: Global Eco-Civilization of the 21st Century focusing on Happiness & Well-Being (GNH) -

depending not only on material consumption (GNP)

“Happiness” is a state of mind like “Business Confidence”


Vision for 2030-50: Key Global GoalsSocial: meet basic needs of all human beings especially the poor & vulnerable, ensuring peace, harmony, social justice & security.Environmental: respect nature & reduce humanity’s global resource use to less the sustainable capacity of one planet earth. Economic: build a sustainable economy that is prosperous and resource-efficient, but respects critical environmental and social sustainability constraints.

M I N D

Num

ber o

f Ear

ths

Sustainable

BAU

1.Ecol. Footprint of HumanityIn 2012 we needed 1.5 earths; and by 2030 almost 2 Earths

Unsustainable

oneearth 2012 2030

Munasinhe Institute for Development

3. Millennium Development Goals (MDG) & 17 SDGUnited Nations Millennium Declaration, 2000 and Post-2015 Agenda

1. Eradicate extreme poverty and hunger 2. Achieve universal primary education3. Promote gender equality & empowerment 4. Reduce child mortality5. Combat HIV/AIDS, malaria & other diseases 6. Improve maternal health 7. Ensure environmental sustainability 8. Global partnership for developmentWorthy targets, but if the rich consume more than one planet worth, where are the resources to feed the poor, esp. after CC.

Unfair World Consumption Pattern 2010

Champagne Glass


Clim

ate

Ris

k(e

.g. p

er c

apita

GH

G e

mis

sion

s)

Development Level (e.g. per capita income)

Poor

Middle Income

Rich Today

Source: M. Munasinghe (1995) "Making Growth More Sustainable," Ecological Economics, 15:121-4.

MDMS: Resource Use Reduction by Making Consumption and Production More Sustainable: 1


Clim

ate

Ris

k(e

.g. p

er c

apita

GH

G e

mis

sion

s)



Poor

Middle Income

Rich TransformDematerialise


Incentives/resources for developing countries1. Safety net (vulnerability reduction) for poorest.


Clim

ate

Ris

k(e

.g. p

er c

apita

GH

G e

mis

sion

s)


Poor

Middle Income

Rich

Leapfrog (SRI LANKA)

TransformDematerialise


Business & Social Innovation vital to find SD tunnel


Incentives/resources for developing countries1. Safety net (vulnerability reduction) for poorest.2. Technology cooperation/support to tunnel


Food for a Week: Affluent FamilyUnsustainable – must transform/dematerialise towards sustainablity: SDG - sustainable consumption & production

Source: Menzel, 2005

Food for a Week: Poor FamilyUnsustainable/Unethical – must leapfrog/tunnel to prosperity:SDG - poverty & inequality

Example: 1/3rd World food production lost/wasted. In homes: USA - 50% & Europe - 30%. Yet about 1 billion are starving.

M I N D

The consumption of the rich is crowding out the development prospects of the poor.

As resources (like energy, water and food) become scarce, the “market” solution is for

prices to rise – but this will simply ration those resources in favour of the rich and

deprive the poor of even their basic needs. Recent events in many countries show that

deprivation leads to violenceWe can enhance poverty eradication and protect nature by persuading the rich to

consume more sustainably

M I N D

United Nations Post-2015 Agenda endorsed by all Nations: Sep.-Oct. 2015

• Key Principle:Integrated and comprehensive approach to promoting all the dimensions of sustainable development in a balanced manner

• Outcome Document: “Transforming our world - the 2030 agenda for global action”

• 17 Sustainable development goals (SDG):Universal goals proposed for all countries

M I N D

1. End poverty in all its forms everywhere2. End hunger, achieve food security & improved nutrition and promote sustainable agriculture3. Ensure healthy lives and promote well-being for all at all ages4. Ensure inclusive & equitable quality educ. & promote lifelong learning opportunities for all5. Achieve gender equality and empower all women and girls6. Ensure availability and sustainable management of water and sanitation for all7. Ensure access to affordable, reliable, sustainable and modern energy for all8. Promote sustained, inclusive and sustainable economic growth, full and productive

employment and decent work for all9. Build resilient infrastructure, promote inclusive & sust. industrialization & foster innovation10. Reduce inequality within and among countries11. Make cities and human settlements inclusive, safe, resilient and sustainable12. Ensure sustainable consumption and production patterns13. Take urgent action to combat climate change and its impacts14. Conserve & sustainably use oceans, seas and marine resources for sustainable development15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage

forests, combat desertification, & halt and reverse land degradation & halt biodiversity loss16. Promote peaceful and inclusive societies for sustainable development, provide access to

justice for all and build effective, accountable and inclusive institutions at all levels17. Strengthen means of implementation and revitalize the global partnership for sust. dev.

UN Post-2015 Agenda: Sustainable Development Goals


The Government of Sri Lanka fully supports the Post-2015 Sustainable Development Agenda and the Sustainable Development Goals and targets that have been adopted by this Assembly.Accordingly, I declare that the Government of Sri Lanka will act with determination as a pioneer of eco-sensitive civilization that is emerging in the 21st century.Sustainable development encapsulates the equilibrium between social and economic development and environmental protection. The Government of Sri Lanka anticipates achieving these goals fully by 2030.In that respect, we will work towards the provision of basic needs of the people, progressive alleviation of poverty, elimination of all forms of discrimination and inequalities, and establish a society based on social justice and human security. Parallel to this, while emphasizing on the protection of natural resources, we will also formulate a state policy on resource consumption based on the sustainable capacity of the environment. We will strive to ensure that the relevant policy framework would be implemented within an institutional structure based on the principles of good governance espoused by my Government. Special attention will also be given to the concept of environmental good governance, as an integrated part of the good governance policies.

HE President Maithripala Sirisena’s Speech at the UN General Assembly on 27 September 2015 – Selected Excerpts

M I N D

SDG and the Tourism Industry • Developing future business opportunities: SDG is new market that

needs innovative solutions and related products and services. • Strengthening the license to operate: companies should align their

priorities with the SDGs to reduce risk from growing compliance, regulatory, legal, social and reputational pressures.

• Investing in a sound business environment: Tourism industry cannot succeed in societies that fail. Investing in the achievement of the SDG supports business success in the society they operate in.

• Improving performance and productivity: economic incentives for tourism companies to use resources more efficiently or to switch to more sustainable alternatives

• Creating a common language and shared purpose: Tourism industry can communicate better with stakeholders about SD trends and impact on performance. It will bring together partners, globally.


Improved business attitudes to SD: 1960s to Now“Few trends could so thoroughly undermine the very foundations of our free society than the acceptance by corporate officials of a social responsibility other than to make as much money as possible for stockholders.” Milton Friedman (1962), Capitalism and History

“Over the past decade, sustainability has moved from the fringes of the business world to the top of the shareholders' agenda….” PriceWaterHouseCooper (2009)

Sri Lanka Business Sector should develop similar vision

M I N D

Key Role for Sri Lanka: Leading the way to a More Sustainable World

1. Growing economy finding new SD pathEconomic: technology, resources and skillsSocial: social & human capital, committed to peace, unity Environmental: ancient culture that respects nature

2. Mobilizing civil society & business to work with government, nationally and globally

Caution: SL is doing well on economic growth but lagging on environmental and social dimensions of sustainable development

M I N D

BestSri Lanka

Maldives Pakistan

India Bangladesh

Nepal Bhutan

HDI 0.743 0.741 0.551 0.619 0.547 0.534 0.579

HDI Rank 99 100 136 128 140 142 133

Gini Index 40.2 - 30.6 36.8 33.4 47.2 -

Health Expenses per capita (PPP$)

163 494 48 91 64 71 93

Infant Mortality (per 1000 births)

12 33 79 56 54 56 65

Population without electricity (Mn)

6.7 - 71.1 487.2 96.2 18.1 -

Sanitation (% popn with access)

91 59 59 33 39 35 70

Adult literacy rate (%) 96 90 49.9 61 47.5 48.6 47

CO Emissions per capita (tonnes)

0.6 2.5 0.8 1.2 0.3 0.1 0.2

HDI Data: SL ranks high in SAARC

M I N D

Growth of Per Capita GNP in Sri Lanka (US dollars)

0

5000

10000

15000

20000

25000

30000

35000

40000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Years

4% growth6% growth8% growth

Thailand (2021)

Malaysia (2028)

Korea (2044)

Singapore (2047)

Need decades to catch up E. Asian countries

M I N D

•Sustainomics requires balance within SD triangle - Social and environmental issues could threaten economic growth

•How can high growth be maintained? Debt, budget/trade deficits, FX imbalance, low public sector efficiency, poor returns to public investment (ICOR), etc. are growing issues.

• Inequality has worsened - Gap between rich and poor and between rural and urban population is rising.

•Environmental & domestic resource costs are high due to rapidly expanding GDP.

•Dependence on critical imports (like oil and coal) is rising at rates that cannot be sustained for long – drain on FX.

Key SD Challenges for Sri Lanka

M I N D

Sri Lanka, Share of household income by income

quintiles - 2012

The richest 20% have 54% of the total household income or twelve-fold more than the poorest 20% who have only 4.4%

Department of Census and Statistics, 2012; Central Bank 2013

1953

1963

1973

1978

/79

1981

/82

1986

/87(a)

1996

/97(a)

2003

/04(b)

0

0.1

0.2

0.3

0.4

0.5

0.6

Spending UnitIncome receivers

Gini Coeff. (Monthly Income): 1953-2010(Higher value is WORSE)

(a) Excluding Northern and Eastern Provinces.(b) Excluding Killinochchi, Mannar and Mullaitivu

Districts.

* 2010/2012

M I N D

Environ-mentalSustainability Index (ESI)

Country commitment to environmental sustainability under 21 categories with importance and effort given to environ. protection, & impact on policy areas.

Sri Lanka Ranked 79th among 146 countries with a score of 48.5. Finland is 1st with a core of 75.1.

Environ-mental Performance Index (EPI)

General ranking of performance under: Environment, Health, Air Quality, Water Resources, Productive Natural Resources, Biodiversity and Habitat, & Sustainable Energy using 16 indicators

Sri Lanka 58th out of 163 countries (score 63.8). Average EPI score for income peer group: 56.2Average EPI score for Asia and Pacific: 57.4

Ecological Footprint (EF)

Tracks demand of human populations on planet’s ecosystems relative to biologically productive land and available water

Sri Lanka ranked 126th out of 157 nations: ecological footprint is 0.45. UAE has largest footprint of 10.68 and Puerto Rico lowest with 0.04

Sri Lanka: Poor Environmental Indicators - 2010

Perceived Levels of Public Sector Corruption

SL is 91st out of 177 countries: Score = 37 (100 is most clean) Source: Transparency International 2013

% GDP spent on educ. & health is quite low.

M I N D

Train future leaders in govt. business & civil soc.Top universities worldwide are starting to integrate sustainability and SD concepts into their core curricula. Emerging economies are leading in this area Ethical and moral principles are emerging, which include sustainability concepts.

Educate sustainable consumers & producersEducating business and public through awareness building about sustainable development is key, especially for youth

Human Capital is greatest asset

mobilize and empower business & civil society to synergise with govt., to make built environment more sustainable

Business and civil society to work with Govt.

M I N D

Key Role for business & civil soc. in Good Governance• Governance is not the sole preserve of the state• Show greater activism in business, government, and civil

society, and participate more in decision making • Set high standards, especially for youth (effectiveness, rule of

law, accountability, honesty/integrity, transparency, equity, participation, etc.)

• Speak out for good governance & demand higher standards• Reduce paternalism, micro-management, and excessive

interference of the state• Provide leadership in building the social consensus


WHAT ?

WHICH?

HOW ?



practical analytical tools and policies are availableMany best practice examples exist, in Sri Lanka and worldwide.

must respond and how Tourism sector & civil society can act to promote sustainable consumption & production.

WHO ?


Global Influences, National SD strategy

(NSDS) & plans

Action Impact Matrix (AIM)

applied to Tourism

Macro- and Sectoral Models and Analyses

Implement Tourism Policies & Projects

Tourism links with national SD strategy and stakeholders{Identify Links,

Screen, Prioritize Issues, Select

Remedies

Linking Tourism to SD (Macro to Micro Levels) Action Impact Matrix (AIM)

National Policy

Impact on People & Local Environment

Tourism Activities


Benefits: decent jobs; economic activity through value chains; goods and services that meet the needs of individuals, other businesses, governments and othersResult: economic growth & sustainable development of society they operate in

Sustainable Business

Macro level (Big Picture)

Integrates principles of CSR+, CSV & sustainability into operations, relationships, and governance Result: transparent, accountable, and

inclusive systems helps to address adverse impacts

of business activities

Promotes: accountable institutions; just and peaceful societies; respect & support for rule of law; model good business practices; upholding norms and standards of

human rights, labor, environment; anti-corruption.

Micro level (Details)

Sustainable Business: Key Features

Need for new branding concepts: Goodness, Beauty, etc.


Economic• Improved profits & value added• More employment and income• Increased resource efficiency• Higher worker productivity

Social• Better conditions for workers• Improved services to customers• Better social services (health, educ.)

Environmental• Less pollution• Lower resource use• Ecosystem & biodiv. protection

• in

tra-g

ener

atio

nal

equi

ty

• b

asic

nee

ds/li

velih

oods

• inter-generational equity

• values/culture

• valuation/internalisation

• incidence of im

pactsSustainable Tourism



Investment Imbalance: Blind focus on materialistic growth, unrestrained market forces, corruption and inequality destroy vital Social and Natural Capital

SocialCapital

NaturalCapital

Govern-ment

Social Capital


Built CapitalMaterialistic growth, Unrestrained market forces, Corruption,

Inequality

M I N D

Economic Impacts of Tourism

• Positive Impacts– Increased Forex earnings – Direct contribution to government revenue: taxes, duties– Employment generation– Stimulation of infrastructure development: water, electricity,

transport– Contribution to local economy

• Negative Impacts– Leakage: Major transfer of tourism revenues out of host country– Exclusion of local businesses and products– Infrastructure costs: Public subsidies or tax breaks may reduce

government investment in key areas like education and health– Increase in prices: price hikes due to increase in demand for

basic goods and services affects local population

transport


M I N D

Impact of tourism on Sri Lanka economy Rapid growth of arrivals, income & jobs: 2010-2016

Source: SLTDA


M I N D

Environmental Impacts of TourismHigh environmental quality, both natural and human-made, is essential for tourism. • Positive Impacts

– Contributes to environmental protection and conservation.– Can raise awareness of environmental values and serve as a

tool to finance protection of natural areas and increase their economic importance.

• Negative impacts– Construction can harm environment: eg., roads and airports,

tourism facilities, including resorts, hotels, restaurants, shops, golf courses and marinas.

– Depletion of natural resources – water, land degradation– Pollution: air, noise, solid waste, littering, sewerage, oil &

chemicals, visual pollution


M I N D

Social Impacts of Tourism• Positive Impacts

– Generation of incomes and jobs; higher living standards– Increased community pride– Construction of new and improved infrastructure facilities– Modernisation of the family via new gender roles – Broader social horizons & reduced prejudice among tourists– Global understanding and international peace

• Negative Impacts– Polarisation of social structure & increased income inequality:

benefits not evenly distributed – Disintegration of the family and traditional value structures– Tourists fail to respect local norms or behaviour, customs and

moral values– Social pathology, including prostitution, drugs, crime.



MACROECONOMY (Multisectoral CGE)

TRANSPORT

ENERGY

TOURISMINDUSTRY

ROAD RAIL

OTHER

FOSSIL FUELS

HDRO-ELEC.

OTHER

REGION 1 REGION 2

REGION 3

Linking up with Sri Lanka Economy: Big PictureMulti-sector Computable General Equilibrium Model

WATER


BasicInput-Output

Table (with Tourism)

Distribution of Income

SatelliteEnvironmental

Accounts

Envir.-Social LinksDistribution of Environmental

Impacts

Economic Links

(inter-industrial)Environmental- Economic Links

Economic-Social Links(households)

Expanded Green National Accounts for Sust. TourismSo

cial

Acc

o un t

i ng

Ma t

r ix

(SA

M)

Source: Munasinghe (2001), Macroeconomics and Environment


Tourism Sector Project Analysis: DetailsSustainable Development Assessment Tools 1. Economic/Financial Assessment (CBA)2. Environmental Assessment (EA)3. Social Assessment (SA)4. Multi-Criteria Analysis (MCA) 5. Poverty Assessment (PA)6. Technical Assessment (TA)Choice of appropriate indicators is vital for SDA

Examples of Tourism Projects1. Constructing new hotel2. Ancient cities tour package3. Nature tour package

M I N D

Sustainable Production: Insights from Workshops & Seminars on Business & Sustainability for Senior Managers of Leading Multinationals

Recent Examples:• KUONI, Swiss (Travel & Tourism)• BASF, Germany (Chemicals)• TESCO, UK (Supermarkets)• Unilever, Coca Cola, Reckit-Benkeiser, Johnson SC, Danone,

Nestle (Retail)• Petrobras, Brazil (Energy, Oil and Gas)• OPEC (energy, oil and gas)• Sime Darby, Malaysia (Plantations Conglomerate)• Novozymes, Denmark (Biotechnology)• Vale, Brazil (Mining)• Siemens, Shanghai Electric Group (Heavy Industry) • WCW, Denmark (300 CEOs in Europe)• Amorim, Portugal (Cork)

M I N D

Corporate Social Responsibility

(CSR) Vs. Creating Shared Value (CSV)


•Covers the three dimensions of SD triangle: People (society), Planet (environment) & Profit (economy). Firms must widen performance reporting framework to include ecological & social issues

•The TBL concept demands that a company's responsibility lies with stakeholders much as with shareholders. Stakeholder means anyone who is affected (directly or indirectly) by the firm’s actions.

Sustainability or Triple Bottom Line (TBL) Accounting

M I N DSource: Adapted from Munasinghe et al. (2009)

Raw material production

Manufacture & processing

Logistics distribution transport

Retail Consumer use

Recycling &

disposal

Light bulb (UK 11W)2% 1% 1% 95% 1%

Sustainable Production - life cycle analysis of CO2 emission hot spots along the supply/value chain: 1





Retail Consumer use

Recycling &

disposal

Light bulb (UK 11W)2% 1% 1% 95% 1%

Orange Juice (Brazil freshly squeezed 1L)28% 19% 47% 5% 1% 0%






Retail Consumer use

Recycling &

disposal

Light bulb (UK 11W)2% 1% 1% 95% 1%

Orange Juice (Brazil freshly squeezed 1L)28% 19% 47% 5% 1% 0%

Milk (UK, National Tesco)76% 5% 4% 10% 3% 1%


M I N D

Case study: Life Cycle Value/Supply Chain Analysis of Garment Industry in

Sri Lanka (Focus on CO2/Energy/Labour)

The product – Bra manufactured at MAS Intimates, Thurulie factory Sri Lanka.

• Identification of HOT SPOTS• Trade-offs among economic-social- environmental indicators

M I N D

Detailed Life Cycle Process Map of Product

Wing mesh

Galloon lace

Mechanical stretch mesh

Narrow stretch lace

Embroidered Fabric

Denier

Bow

Wires

Stretch satin

Strapping

Hook and eye

Fortitube

Binding

Seam tape

Rings

Slides

Mesh elastic

Plain elastic

Autograph tab

MAS

RM STORE

CUTTING

MOULDING

SEWING

PACKING

WAREHOUSE

Electricity

Energy

Material Waste

COLOMBO PORT

COLOMBO PORT

Warehouse

Retail store

CUSTOMER

USE PHASE

WASHING

DRYING

UK PORT

Disposal

Packaging Waste

Electricity

Packaging waste

Energy

Raw materials

Packing material

Manufacturing process

Retail operation

Consumer phase

Energy/Electricity

Waste

Disposal

Land Transport

Sea transport

Electricity

Packaging Waste

Packaging Waste

Packaging Waste

Hanger

Hanger Sticker

UPC

Collar Card

Price sticker

Care Label

Bell Sticker

Raw Material Manufacture Transport Retail End Use & Disposal

M I N D

Life cycle analysis of CO2/Energy hot spots along the supply/value chain for garments

Raw Material

Incoming Transport

Manufacturing

Distribution

Storage/ retail

Use Disp-osal

56% 3.1% 19.5% 1.9% 5.0% 10.1% 4.7%

16.8%* 5.7% 22.6% 25.8%

0.42%

28.5% Lack of

Data

Carbon reduction: Raw Materials - sustainable procurement is keyEnergy reduction: Manuf., Distrib. & Use stages are all critical

Carbon

Energy

M I N D

Sustainable Procurement: Detailed C-footprint of Raw Materials – Elastics, Laces & Packing are key

Fabrics, 13%

Laces; 17%

Elastics; 28%Strip cuts; 4%

Trims & Ac-cessories; 9%

Cup; 11%

Packing material, 17%

M I N D

Energy efficiency gainsThe product is manufactured in an eco-friendly plant (MAS-

Thurilie) that uses less energy than a standard plant.Energy savings: Thurulie vs. standard factory (also MAS owned)

0

0.5

1

1.5

2

2.5

Thurulie Plant A

Remaining Components

Manufacturing Footprint

M I N D

Social Aspects: Labour Input at the Manufacturing Plant

Gender Balance

Job Type Female Male TotalManager 2 (13%) 14 16Executive 21 (31%) 47 68Staff 55 (42%) 76 131Worker (indirect) 52 (35%) 97 149Machine Operators 829 (87%) 121 950

Total959

(73%) 355 131473% of work force female, but males dominate high levels

M I N D

• An effective sustainability approach for hotels is based on monitoring and managing several indicators:– Energy Measurement and Management – Carbon Footprinting and Mitigation – Water Footprinting and Mitigation– Waste Management – Resource Efficient Cleaner Production

• All these aspects are combined within an integrated sustainability approach, rather than applying piecemeal methods.

Integrated Approach to Sustainability in Tourism Industry: Case Study of Hotel Chain

M I N D

Energy Flow Analysis

Input

Oil

Elect-ricity

Gas

Renew-ables

Waste Output

CO2

SOX, NOX etc

Heat

Kitchen

Rooms

Laundry

Usage Point

M I N D

Water Flow Analysis

Input

Water Source

Ground

Piped

Harvested Rain

Recycled

Waste Output

Waste Water

- Drain- Recycle

Heat

Kitchen

Rooms

Laundry

Usage Point

M I N D

Waste Flow Analysis

Input

Water

Energy

Raw Mate-rial

Waste Output

WastewaterEnergy & Heat loss

Solid WasteNoiseGHGParticulate Matter

Heat

Kitchen

Rooms

Laundry

Usage Point

M I N D

Key findings – Energy • Potential energy savings: 15-18%• Converting Energy Waste to steam through Heat Recovery Systems• Harvesting waste energy, mobilizing clean energy based on gas & wind power• Improving and implementing Solar Energy • Viability of implementing a Bio Gas Plant

Key findings – Water • Potential to reduce water consumption by 10% in year 1 • Lack of waste water harvesting in many instances• Potential to re-cycle water use from the swimming pool filtering system • Additional rainwater harvesting potential

Key findings – Carbon• Setting up systems to measure waste and carbon emission on a regular basis• Greening the supply chain & the vehicle fleet• Integrating sustainability software into daily operation to track carbon output• Setting reduction targets for carbon emissions• Calculating the carbon footprint of a guest night to offer guest the option to offset their own

footprint


Caution: Jevons Paradox & Resource Efficiency LimitsEconomic BehaviourStanley Jevons (1865) first noted the “Jevons’ paradox” - any technological advance that increases efficiency of resource use eventually increases the consumption of that resource.Efficient resource use Savings Greater resource useBiological Behaviour (instinct)Species tend to live near the short-term carrying capacity of their habitats. Until limited by negative feedback (scarcity, disease, war, etc.), they will: (1) occupy all accessible habitat; & (2) use up all available resources (humans extend availability with technology). Consumerist culture, greed & focus on material consumption reinforce these behavioursImproved technology and increased resource efficiency alone cannot solve our problems. Human beings must use rational analysis based on long term thinking to adopt more sustainable values and lifestyles that will over-ride instinctive, short term, consumerist behaviour.

M I N D

Sustainable Consumption empowers householdsInfluence people’s behaviour to promote sustainable change

• Empower and motivate – using prices, labels information, psychology and advertising.

• Change values, habits and socio-cultural contexts to shift to low-carbon products and behaviour. Eg., public attitude to smoking

• Adapt material and physical elements of production - goods and infrastructures are inter-connectedSocial capital embedded within individuals and communities, can

be better mobilized, organized, and empowered to synergise with business and influence government, for MDMS.!

Individual

Community

Producer

Example: 1/3rd World food production lost/wasted. In homes: USA - 50% & Europe - 30%. Yet about 1 billion are starving.


Focus on Innovative Branding Concepts: Goodness, Beauty

Shift marketing focus from luxury and material consumption to higher level concepts like “goodness” and “beauty”.Meeting basic needs is essential, especially for poor. But reducing high material consumption can also increase satisfaction. Clinging to material things increases fear of losing them, but valuing harmony and beauty, which we can share with others, increases joy and reduces stress. Sustainability is not “gloom and doom”. Life should be beautiful. We persuade visitors to redefine their mental parameters, to value harmony with nature and people, instead of material consumption. Satisfaction can arise from the perception and enjoyment of beauty instead of through material goods. Beauty can become an intrinsic aspect which is very much part of tourists value system. The rich don't have to give up their good life in order to be more sustainable. They just have to move away from a quantity based approach to a quality based approach that gives them the same joy while potecting the environment.

Country Goodness Index

M I N D

Launched at Rio+20SustainoMusica is an international consortium of musicians and music lovers who believe that music and song constitute an universal language that can be used effectively to communicate the message of sustainability to everyone on the planet. We are confident that our new music of sustainability will appeal to the heart, especially to empower and motivate young people. We feel that this complementary approach will have greater appeal than the messages of science and policy, which are aimed mainly at the mind. Music and song will help to make sustainability a practical and living reality, by harmonising people and planet, to achieve prosperity, peace and happiness - that is what our logo shows.


Sustainable Consumers

Sustainable Producers

Civil Society

Busi-ness

Bringing Sustainable Consumers & Producers Together: 1 Sustainability Culture - Making Development More Sustainable (MDMS)Sustainability leadership by a few consumers and producers


Other Sustainable Consumers

Sustainable Consumers

Sustainable Producers

Other Sustainable Producers

Cinn-amon Group

Govt.

Civil Society

Busi-ness

Bringing Sustainable Consumers & Producers Together: 2 Sustainability Culture - Making Development More Sustainable (MDMS)

Sustainable behaviour spreads throughout the country


Key Role of Communications & Responsible Media in Making Developmenty More Sustainable

SocialCapital

Business

Govern-ment

CivilSociety

Responsible Media for

Responsible Tourism

Media must play greater role in disseminating correct information to strengthen civil society and business in supporting and influencing

government to move towerds a more sustainable development path.Source: Munasinghe (1992), Rio Earth Summit


Maintain and rebuild the Resilience of Socio-economic and Ecological Systems on which Humanity and TOURISM INDUSTRY depend

So Watch Out for Potential Surprises• Economic Crises (like 2008)• Environmental Crises & Resource Shortages• Social Unrest and Conflicts• Climate Change (Risk Multiplier)• Disruptive Technologies


FUTURE: Potentially Disruptive Technologies!1. Mobile internet2. Automation of knowledge work3. Internet of things4. Cloud technology5. Advanced robotics6. Autonomous and near-autonomous vehicles7. Next generation genomics8. 3-D printing9. Energy storage10. Advanced materials11. Advanced oil and gas technology12. Renewable energy


WHAT ?

WHICH?

HOW ?



practical analytical tools and policies are availableMany best practice examples exist, in Sri Lanka and worldwide.

must respond and how Tourism sector & civil society can act to promote sustainable consumption & production (SCP)

WHO ?

M I N D

Mildly optimistic final message for Sri Lanka & WorldMultiple global problems pose a serious challenge to us all – poverty, hunger, water, energy, climate change, economic crisis, resource scarcities, ecosystem harm, etc. are interlinked. Although the issues are complex and serious, these problems can be solved together, provided we begin now. We know enough already to take the first steps towards making development more sustainable (MDMS) by using the Sustainomics framework, that will transform the risky “business-as-usual” scenario into a safer & better future.Governance systems (at all levels) must be transformed to deal with multiple crises in an integrated way. Tourism industry and civil society can help government in identifying issues, changing values and implementing solutions.Sustainable tourism could become major thrust area in Sri Lanka and help us build the new sustainable development model of the 21st century


“DEVO VASSATU KALENA SASSA SAMPATTI HETU CA PHITO BHAVATU LOKO CA RAJA BHAVATU DHAMMIKO”

“May the rains come in time, May the harvests be bountiful May the people be happy & contended May the king be righteous”

Even in ancient times, a favourable environment, economic prosperity, social stability (and good governance), were clearly identified as key pre-requisites for making development more sustainable.

Environmental:Economic:

Social:

Ancient Pali Blessing (Sri Lanka)

M I N D

Munasinghe Institute for Development "making development more sustainable - MDMS“

10/1 De Fonseka Place, Colombo 5, Sri LankaPhone/Fax: +9411-259-0131; E-mail: [email protected] ; Web: www.mindlanka.org

• Awards, Scholarships & Training• Applied Research on Sustainability• Engagement in Public Policy

M I N D

MIND SD Training Course, Beijing, July-Aug. 2006: 270 Senior Chinese Officials

Other examples MIND Govt.-SD Training Course, Delhi, Feb. 2007: Senior Indian Civil ServantsMIND Business-SD Training Course, Cape Town, Oct. 2007, Senior Co. CEOsPhD Course in Universities – Brazil: Federal Univ. of Para, China: Peking Univ., Denmark: Copenhagen Univ., India: TERI Univ., Sri Lanka: Colombo Univ., UK: Manchester Univ., USA: Yale Univ., Germany: Darmstadt Univ.


MIND Press Book: 650 pages

Third Edition Published in 2015 -Translated into Chinese & Portuguese

Further reading: Visit website: <www.mindlanka.org>


SthuthiNandri

Thank You