iisd’s signature · pdf fileour efforts to become a more “virtual”...

Chair’s Message 1

Board of Directors 1

President’s Report 2

Working in Partnerships Around the World 3

Creating Options for Change 4

Information for Sustainability 5

Fairer Trade 7

Green Budgets, Greener Business 9

Yardsticks of Sustainability 10

Livelihoods – the Key to Community Adaptation 11

The Prairies in Transition 13

IISD’s Sustainable Development Report 14

Financial Report 16

IISD is a not-for-profit corporation located in Winnipeg,Manitoba, Canada and directed by an independent, internationalBoard. It is registered as a charity in Canada, and has 501(c)(3)status in the USA.

Sustainable development means integrat-ing environmental integrity, economicefficiency, and peoples’ well-being.

IISD’s Signature Design

IISD’s signature design is Montreal artistStéphane Daigle’s visual interpretation of sus-tainable development. The circular theme rep-resents the planet Earth and the limits of thebiosphere; the forms within the circle conveythe interdependent nature of human develop-ment and the ecology of our small planet; theeyes symbolize our collective consciousness; thetrees – natural systems which sustain life onearth; the blue background and wavy lines –the air and water; the yellow triangles –points of energy from the sun. At the center ofthe design, open hands represent sharingresources, information and knowledge – theheart of sustainable development’s principle offairness and equity.

Marketing

A small but significant shift in our efforts todiversify our funding base and to market ourideas, products and services, occurred in 1995.We decided to strengthen our corporate identi-ty by featuring IISD’s signature design – ourcolorful and haunting “cosmic circle”. Thislogo, along with our wordmark in French andEnglish now appear on a new set of corporateand program brochures, press kits and othercommunications tools. We hope others will likeour new look as much as we do.

Printed on paper with recycled content

It is important to assess how far we have come as we approach 1997 and the 5th anniversary ofthe Earth Summit, at which the world’s leaders agreed to seek new development models that

respect the Earth and her peoples.The storms of change are upon us. This is only to be expected. The old UN is under siege: over-seas development assistance is in crisis, and “business as usual” thinking – devoid of environmental and social considerations – continues to be bankrupt. Change is necessary in orderto meet the new challenges, and the painful reforms that we are witnessing in institutions and ideologies are part and parcel of this shift.On the positive side, there is now widespread agreement that sustainability is the key to our collec-tive futures on this small planet. Everyone is speaking the language of sustainability. And it’s notjust development agencies, it’s corporations, governments, non-governmental organizations andordinary citizens. There has been a noticeable convergence of thinking across sectors. Formerlyentrenched interests, like industrialists and environmental activists are increasingly working togetherto bridge the gap between them. Demand has increased for the services of institutes like IISD.Despite the welcome buy-in to the sustainability imperative world-wide, there is also a sober real-ization that on many fronts we have been moving backwards since the heady days of Rio. ClimateChange and Biodiversity are but two of many examples where governments have retreated fromthe modest commitments their leaders made at the Earth Summit. The message is clear: despite a broad commitment to the new paradigm of sustainability, we must re-double our efforts.IISD has become more robust, as widespread recognition of its mandate has challenged the insti-tute to consolidate its work, undertake new projects, find new ways of financing its initiatives andto become markedly less dependent on government and other public funders. The past year begana significant change to the Board of IISD as several of the founding members completed their termsof office. We expressed our great appreciation to Pierre Marc Johnson, Shimwaayi Muntemba,and David Strangway for their leadership and dedication. Soon we will be saying good bye toDian Cohen, Clay Gilson, Mohamed Sahnoun, Emil Salim, Gloria Knight and one of our AdvisoryParticipants, Robert Sopuck. The founding IISD Board developed a fine sense of teamwork andrespect. I wish to take this opportunity to express our profound appreciation to them. Our stabilityand success as an Institute is a direct consequence of their vision. New Board members will be elected and welcomed early in the summer of 1996.

James MacNeillChair

Board of Directors

Jim MacNeillChair of the Board Canada

Arthur J. HansonPresident and CEO Canada

Edward S. Ayensu Ghana

Laurens Jan Brinkhorst Netherlands

Dian Cohen Canada

Clay Gilson, Vice-Chair Canada

David Johnston Canada

Aban Marker Kabraji Pakistan

Gloria Knight Jamaica

Ingrid Munro Sweden

Mohamed Sahnoun Algeria

Emil Salim Indonesia

Maurice Strong Canada

Advisory Participants

John A. Fraser, Ambassador for theEnvironment

Mel Cappe, Environment Canada

Robert Sopuck, Province of Manitoba

Donald Leitch, Province of Manitoba

Huguette Labelle, CIDA

Keith Bezanson, IDRC

Friends of the Institute

Professor José Goldemberg, Former Minister ofEducation and Secretary of Environment,Federal Government of Brazil

Madame Gro Harlem Brundtland, PrimeMinister of Norway and Former Chair of theWorld Commission on Environment andDevelopment

Sir Shridath Ramphal, Chair, Commission onGlobal Governance

1Annual Report 1995-96 IISD

This is a time of adjustment throughout our societies, and no organization dare restupon its past accomplishments, or expect to carry out “business as usual.” It is a time to

seek highly effective and complementary working relationships among organizations. IISDhas pursued this approach by forging several new and very exciting initiatives which aredescribed in this Annual Report. We are proud to be a Collaborating Centre with UNEPand to continue strengthening our ties with the Earth Council by hosting its Canadian affil-iate. Our efforts to become a more “virtual” Institute through electronic communications andindividual affiliations in various locations continue to expand. IISD’s growth in capacity inelectronic publishing and Internet use has matched the phenomenal rise of interest in ourapproaches. We have launched two new electronically-delivered journals (/linkages/jour-nal/ and Developing Ideas Digest) and continue to expand the user base of both theEarth Negotiations Bulletin and IISDnet.Internally, our program transition is still underway. Our Board approved a strategy paperin November 1995 covering three year plans for five programs: Trade and SustainableDevelopment; Community Adaptation and Sustainable Livelihoods; The Great Plains;Measurement and Indicators; and Information and Communications. In addition, we areplanning a second phase for Business Strategies and Sustainable Development and a newprogram on Common Security. Our programs are designed to produce practical results,and generally, to bridge views arising from both high income and low income regionsand countries.Our sixth year marked the start of a renewed funding relationship with IISD’s three initialcore (operating grant) supporters. We are very pleased to have the continuity of fundingarrangements to the turn of the century. The Government of Manitoba has committed$6.875 million over six years on a matching arrangement that provides a dollar for every three we raise. In the 1995-96 fiscal year revenue from non-core sources covered 43% of our expenditures. We expect this figure to rise as moreorganizations contribute to our work. In 1995-96 we received support from 60 different sources (see inside back cover).Our contributions to sustainable development continue to emphasize the principles, policytools and information needed to get-on with the job. But we are putting more and moreeffort into new approaches for measurement and indicators of progress. It is essential todemonstrate the worth of investment in sustainability, especially in this time of intensechange and competing global interests.

Arthur J. HansonPresident and CEO

Earth Negotiations Bulletin CoverageNew York, 39th Session of the Commission on theStatus of Women, 15 March – 7 April 1995New York, Fourth Substantive Session of the UNConference on Straddling Stocks and HighlyMigratory Fish Stocks, 27 March – 12 April 1995Berlin, First Conference of the Parties for theFramework Convention on Climate Change,28 March – 7 April 1995New York, Third Session of the UN Commission onSustainable Development, 11 – 28 April 1995Nairobi, PrepCom II for the Second UN Conferenceon Human Settlements, 24 April – 5 May 1995New York, Fifth Substantive Session of the UNConference on Straddling Stocks and HighlyMigratory Fish Stocks, 24 July – 4 August 1995Nairobi, Seventh Session of the INC for theConvention to Combat Desertification,7 – 17 August 1995Geneva, First Meeting of the Subsidiary Bodies ofthe UN Framework Convention on Climate Change,28 August – 1 September 1995Beijing, Fourth World Conference on Women,4 – 15 September 1995New York, First Session of the Commission onSustainable Development Intergovernmental Panelon Forests, 11 – 15 September 1995Geneva, Second Session of the Ad Hoc Group on theBerlin Mandate, 30 October – 3 November 1995Jakarta, Second Meeting of the Conference of theParties to the Convention on Biological Diversity,6 – 17 November 1995New York, UN General Assembly,November/December 1995Geneva, Eighth Session of the INC for theConvention to Combat Desertification,5 – 15 February 1996New York, PrepCom III for the Second UNConference on Human Settlements,5 – 16 February 1996New York, CSD Ad Hoc open-ended Working Groupon Sectoral Issues, 26 February – 1 March 1996Geneva, Second Meeting of the Subsidiary Bodies ofthe UN Framework Convention on Climate Change,27 February – 4 March 1996Geneva, Second Meeting of the CSD Intergovern-mental Panel on Forests, 11 – 22 March 1996

2 Promoting Sustainable Development Among Decision-Makers

Winnipeg, Canada, Head Office; partners – Province of Manitoba, City ofWinnipeg (CentrePlan), the Universities of Manitoba and Winnipeg, ManitobaRural Adaptation Coordinating Council, Canadian Council of Ministers of theEnvironment, Canadian Environmental Technology Advancement Corporation -West, Winnipeg Chamber of Commerce, Pan American Games Society(Winnipeg 1999)New York, USA, Office of Linkages and Earth Negotiations Bulletin, UN liai-son – (UNDP, UNEP, Habitat, CSD)Ottawa, Canada, Office of the Trade Program and of the Chair; partners –International Development Research Centre, Centre for Trade Policy and Law,North-South Institute, Association of Canadian Community Colleges, Projet desociété, CIDA, Environment Canada, Indian and Northern Affairs Canada,Industry Canada, CANARIE Inc., National Roundtable on Environment andEconomyGreat Plains Region, Canada and USA, partners – Northwest AreaFoundation, Office of the Attorney General of Minnesota, Red River TradeCorridor, Winnipeg 2000, Minnesota Environmental Quality Board,International Drought Information Center (University of Nebraska), Prairie FarmRehabilitation Administration, Agriculture & Agri-Food Canada, EnvironmentCanada, Manitoba Agriculture, Keystone Agricultural ProducersToronto, Canada, Office of Earth Council Institute CanadaVancouver, Canada, partners – University of British Colombia, SustainableDevelopment Research InstituteWashington, DC, USA, partners – Academy for Educational Development,World Resources Institute, World Wildlife Fund (US), Center for InternationalEnvironmental LawNew Haven, CT, USA, partner – Global Environmental and Trade Study

London, England, partners – International Institute for Environment andDevelopment, Foundation for International Environmental Law and DevelopmentGeneva, Switzerland, NGO Resource Centre for Trade and SustainableDevelopment; partners – IUCN, Swiss Coalition of Development Organizations,Fundación Futuro Latinamericano (Ecuador), Consumers Unity and Trust (India)Vienna, Austria, partners – SUSTAIN, the University of Vienna and theTechnical University of Graz San José, Costa Rica, partners – the Earth Council (projects with WorldEconomic Forum and with International Association of Universities)Mexico City, Mexico, partner – UNEP Budapest, Hungary, in cooperation with Regional Environmental Centreand Hungarian Academy of SciencesNorway, in cooperation with the Government of NorwaySouth Africa, partners – Wits Rural Facility, University of WitwatersrandKenya, partners – UNEP, KENGO (Kenya Energy and EnvironmentOrganization)Burkina Faso, partner – Grefco (Groupe de recherches de formation et deconseils)Ethiopia, partner – LEM (the Environment and Development Society ofEthiopia)Zimbabwe, partner – ENDA (Environment and Development Activities)China, partner – China Council for International Cooperation on Environmentand DevelopmentIrkutsk, Russia, partner – Canadian Council of Ministers of the EnvironmentEcuador, partner – Fundación Futuro Latinamericano

IISD is a UNEPCollaborating Centrefor InternationalEnvironmentalAssessment, Reportingand Forecasting


Toronto

OttawaChina

Winnipeg

New York

Geneva

South Africa

Ethiopia

KenyaBurkina Faso

Zimbabwe

Great Plains

Mexico

Vienna

San José

VancouverBudapest

Norway

Ecuador

Washington, DC

New Haven

London

Irkutsk

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■

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■ denotes ENB coverage


Convening Global Gatherings

One of the most significant waysin which IISD influences deci-sions is through our “conveningpower”, that is our ability tobring together people from widelydifferent backgrounds, disciplines,sectors and cultures – to shareideas and experiences relevant tothe issues of sustainable develop-ment. This is demonstrated by thegroup we brought together to formulate the Winnipeg TradePrinciples and the series of meetings which occurred over thepast two years in the GreatPlains Region.

Recently we have been asked toserve as the coordinator for twovery significant consultations: onefor the World Commission onForests and the other in prepara-tion for the Bolivia Summit of theAmericas on SustainableDevelopment. The Civil SocietyConsultation for Bolivia will beheld in May of 1996 and theNorth American Public Hearingsfor the World Commission areplanned for the Fall.

In addition to conveningsuch major meetings andevents, IISD is now routinelyincluded in the importantsustainable developmentmeetings convened by theUN agencies, the WorldBank, OECD, as well asnational meetings organizedby Foreign Affairs andIndustry Canada, variousparliamentary committeesand Environment Canada.Our Board, Fellows andstaff are frequent keynotespeakers at local, nationaland international meetingsand events.

Three processes are driving much of current globalchange. The first process, globalization, powered

most recently and dramatically by the communica-tions technology, actually has been affecting us withever increasing vigor since the 1950s. We feel itabove all in the economic sphere. With freer tradeand greater competitiveness, financial markets thatnever close, shifts in manufacturing from one countryto another, a steady rise in structural unemployment,jobless growth, and rising national debt, few countries are now truly sovereign or independent.The second process dates from the 1960s: a growingunderstanding that we may be nearing environmentallimits. Fisheries can, and have, collapsed. Soils havebeen degraded: many are now too depleted or saltyto grow crops. Forests can be exhausted: some coun-tries have destroyed theirs in the last two decades.And Earth’s atmospheric thermostat can be over-loaded: our climates have begun to alter. We are start-ing to run out of planet. The third process of change is more recent, datingfrom the collapse of communism at the end of the1980s. East-West geo-political confrontation whichdominated and in many ways regulated internationalpolitics for four decades, has given way to a new flu-idity. Freed from the Cold War straight-jacket, secondlevel regional powers are more nakedly pursuingnational interests. Environmental decline is addingfresh twists to these traditional power plays:

new flows of migrants and refugees, and new conflicts over diminishing natural resources. Power isflowing away from many nation states, down toregions and up to trade groupings such as theEuropean Union and NAFTA. And today barely discussed in international fora, there is a wideninggap between the rich and the poor nations, whichmay prove to be the most dangerous fault-line of all.The old certainties have gone, replaced by a confusing mix of geo-political trends.It may be too early to predict another trend. Weobserve a retreat on the part of governments and UNagencies faced with increasing pressures to cut costs,pay off deficits and do more with less. As they aban-don the field, they are replaced with an increasinglyactive, organized and robust, albeit poorly funded,civil sector. If this trend continues the mix of powerboth within and between nations will change substan-tially.Against these three long-term processes of globaliza-tion, planetary limits and shifting, fragmented interna-tional relations, and the potential emergence of a vitalcivil sector, the past decade has also seen what maywell prove an even more fundamental and positivetrend. This is a steadily increasing, if as yet extremelypatchy, recognition of a wholly new global gameplan: sustainable development.Although still widely regarded as concerned primarilywith the environment, sustainable developmentdemands equally basic changes to economics andsocial and political structures.The 1987 report of the Brundtland Commissionstressed that “sustainable development is not a fixedstate...but rather a process of change.”IISD is part of that process. The Institute is in manyways a child of the Commission: we were establishedin 1990 as a response to the Commission’s report,and like many others, in the coming year we will betaking stock. What has the global community achievedin the ten years since the challenge was articulated in Our Common Future, andin the five years since the promises made at the EarthSummit?IISD is working to achieve change: change towardeconomic, social and ecological sustainability. TheInstitute has deliberately chosen some of the most diffi-cult and intractable aspects of sustainability: trade,employment, government budgets, and finding ways

of objectively measuring sustainability. IISD is inter-ested in results. Through research, consensus build-ing and outreach, we are delivering realistic, feasi-ble and sustainable options to business, govern-ment and community decision makers.IISD is confident that our work will continue to con-tribute significantly to some crucial outcomes on theroad to sustainability.

Better trade agreements and practices, espe-cially in the new World Trade Organization.Improved business practices, with innovativeand efficient technologies and much betteraccountability.Government budgets and fiscal instrumentswhich genuinely and explicitly promote sustainable development.Community strategies which aim at sustainablelivelihoods and promote a wider concept of employment.Greater human and ecological security, local-ly and internationally.Accurate and comprehensible ways of mea-suring our progress towards sustainability, sothat experiences can be shared among com-munities and nations.

To help achieve these goals, IISD has during thepast year undertaken a Three Year Program ofactivities. The report which follows indicates someof the strategic directions which the Institute is nowfollowing.Some are already well developed: the enthusiasticadoption of the cost effective computer based com-munications technology, for example, affectingeverything IISD does, and helping make theInternet a primary tool for sharing ideas and prac-tices for sustainability. Other strategic reorienta-tions are still in progress: a rethink of the next stepsin our Business program, and plans for an entirelynew program area on common security, tacklingthe growing number of conflicts within communi-ties, regions and between nations whose roots arein non-sustainable forms of development.

Working at the crossroads of information andaction, IISD’s Information and

Communications Program’s goal is to deliver time-ly, authoritative, well-screened and relevant infor-mation on sustainable development concepts andpractices. Without abandoning print, IISD is pio-neering the use of the Internet and other computer-based technologies: interactive toolkits, electronicmagazines, on-line databases, and virtual policydialogues.The program is aimed at decision-makers andthose who influence them: government officialsand politicians, business and industry executives,academics, consultants, journalists, internationalorganizations, community leaders – plus the mush-rooming communities of Internet browsers, includ-ing many youth and students who will influencefuture as well as present decision-makers.In previous years, IISD has published a range ofbooks, papers, and diskettes arising from our ownwork; developed the walk-in Information Centre inWinnipeg; published the Sourcebook onSustainable Development; published the EarthNegotiations Bulletin (ENB), and developed twoaward winning, on-line Internet information services – Linkages (http://www.iisd.ca/linkages/)and IISDnet (http://iisd1.iisd.ca/). As well, IISDacts as an international clearing house on sustainable development. 1,500-2,000 peopledownload 25,000 files on IISDnet each week tofind the latest on sustainable development.IISD’s flagship publication, the Earth NegotiationsBulletin (ENB), continues to be the “Hansard” ofinternational debate, providing reliable dailyreports on key global meetings. ENB makes nego-tiations both more accessible and more transpar-ent, by analyzing and explaining the often com-plex issues involved. Linkages, ENB’s World WideWeb site for international meetings provides fulltext of ENB coverage, with links to conference doc-umentation, and identifies further electronic con-tacts. It has become one of the hot spots on theInternet: every minute a user somewhere in theworld starts downloading another Linkages file. Last year, ENB received increasing long-term fund-ing commitments from governments, UN agenciesand foundations, and was regularly invited tocover upcoming international conferences. In

Developing Ideas

“One of the three hottest new titles onthe magazine rack”, said theCanadian Broadcasting Corporation’spop culture program Definitely NotThe Opera in April, 1996. CBC alsocalled Developing Ideas sacrilegiousand unique, containing development“with attitude”, and commended it forits clean and simple language.

“A useful snapshot of the latest think-ing in sustainable development”

Mel Cappe, Deputy Minister,Environment, Canada.

“…enclosed is my subscription…”

Barbara Pyle CNN


September, 1995, ENB completed its largest opera-tion yet, at the World Conference on Women inBeijing, distributing 7,000 print copies to delegatesevery day. Internet coverage included audio inter-views and digital photographs. Linkages recordedover 400,000 accesses during the negotiation. The continuing success of the ENB and Linkages hasled to a new initiative: /linkages/ journal/ – a bi-monthly electronic multi-media subscription maga-zine, giving negotiators and others a more in-depthlook at the issues underlying many global negotia-tions.Also making its debut in 1996, Developing IdeasDigest reports on the hottest ideas in sustainabledevelopment. A bimonthly print and electronicnewsletter, DID features the latest influential thinking, the five hottest new issues, emerging buzz-words, Internet sources, reviews of press coverage. Available by subscription, DevelopingIdeas is becoming essential for those who want tokeep up-to-date with sustainable development. In early 1996 IISD launched a reporting service onthe sustainable forests debate, Countdown Forests97: briefings on issues cutting across the 1996-97international forest policy dialogue at the WorldCommission on Forests and Sustainable Developmentand the UN Intergovernmental Panel on Forests. IISD has developed a toolkit, “SustainableDevelopment on Campus”, in support of our partnership with the Earth Council and theInternational Association of Universities, and is nowavailable via IISDnet. Designed for administrators,students and faculty, it deals with everything frompolicy setting and evaluation to practices in wastemanagement and purchasing, as well as greeningthe curriculum. The toolkit encourages and enablesusers to discuss their experiences via the Internet. Thedesign of this prototype was supported by a grant from the Canadian Network forthe Advancement of Research, Industry andEducation (CANARIE).

Traditionally, international discussions, negotiationsand document-drafting have required participants tobe physically present around a table, an expensiveand time-consuming process. In collaboration withthe Norwegian government, IISD last year pioneeredthe use of the latest Internet technology to organize a“virtual policy dialogue” from personal computers athome or in the office. The topic – SustainableProduction and Consumption- is timely and the resultsare feeding into a Norwegian policy document onsustainable consumption.Our print publications continue to be in demand. Lastyear we published 30 new titles, of which 2 wereelectronic, and 28 were in print. We participated inthe Frankfurt and Zimbabwe Book Fairs and continueto establish relationships with others to co-publishbooks or to distribute our products. GLOBE 96 inVancouver proved to be an excellent venue for sellingour products and networking with others interested ineco-efficiency and sustainable development in theAsia-Pacific region.IISD’s Information and Communications programcontains an expanding R&D component. Our policyis to be innovative with cutting-edge technology,rather than attempting technological innovation by ourselves. We endeavor to harness thelatest techniques to serve sustainable development, byusing affordable systems which can be widely emu-lated, by helping transfer these technologies to others,by using open public networks rather than creatingprivate and centralized systems, and by working in partnership with others so that varied viewpoints are represented.IISD’s three-year plan foresees a continuing use ofemerging communications technology: more interac-tive products, more commercially-marketed services(including facilities for on-line policy discussion), anda more animated use of our websites throughimproved design, user dialogue and information fil-tering.

IISDnet: http://iisd1.iisd.ca/

Contents of SD on the Net

Definitions and PrinciplesWhat is SD?ChronologyPrinciples

New ThinkingBusinessGovernment BudgetsTradeAgricultureForestsCommon Security

In ActionIn CanadaOn CampusGreat PlainsChina50 CommunitiesWorld Commission on ForestsIn WinnipegWhat You Can Do?

Information SourcesHot TopicsKey OrganizationsWWW Links for SDInformation RequestGlossaryProducts CatalogueWomenYouthOceans

JournalsLinkages JournalDeveloping Ideas DigestChina Council NewsletterEarth Negotiations BulletinCountdown Forests 97


Awards for Linkages and IISDnet

Point Communications rated IISDnet as one of the top5% websites for content and presentation.Linkages received a three-star rating from the McKinleyGroup, and other awards from Activism Online andCornell University.

One of IISD’s continuing concerns is to extendcommunications technology and networks whichare feasible for our partners. Regrettably, there aretiers of access to information, within countries andregions as well as between industrialized anddeveloping countries. In an attempt to avoid cre-ation of information ghettos, we are working withIDRC and a number of organizations in develop-ing regions, to foster the emergence of a trulyglobal, sustainable development information net-work. A major project, “Spinning the Web”, willcommence in 1996 with four developing countrypartners.

List of Publications 1995-96Books:Empowerment – Towards Sustainable DevelopmentFrom Legacy to Vision – Sustainability, Povertyand Policy AdjustmentInternational Environmental Management, TradeRegimes and SustainabilityParticipatory Research for Sustainable Livelihoods – A Guidebook for Field ProjectsGreen Budget ReformThe Maastrict Treaty and the Winnipeg Principleson Trade and Sustainable DevelopmentTrade, Sustainable Development, and theEnvironment – A BibliographyGreening Campuses (diskette)

Periodicals:China Council NewsletterCountdown Forests 97Developing Ideas/linkages /journal/ (binary file attachment deliveredby electronic mail)

Program Working Papers:IISD’s Program Working Papers this past yearhave covered International Forest issues,Community Adaptation and SustainableLivelihood studies (in five African countries:Burkina Faso, Ethiopia, Kenya, South Africa andZimbabwe), and CO2 emissions on the CanadianPrairies. Consult our Products Catalogue for acomplete list.

The Earth Summit secretariat estimated in 1993that the cost of moving decisively towards sus-

tainable development would be $600 billion ayear. Investment on this scale will not come fromhard pressed northern parliaments. Nor will itcome from foreign direct investment.International trade is worth $5 trillion a year, andUNDP has estimated that Northern trade barrierscost the South some $200 billion a year. Increasedincome from trade liberalization, may therefore beone precondition for sustainable development,though not by itself a sufficient one.How can international trade contribute more tosustainability? The issue is much wider than tradeversus environment. Trade must indeed help to pro-tect and restore ecological systems (or at least notdestroy them), and improve economic efficiency. But, if it is to be sustainable itmust also enhance the well-being of people, partic-ularly the one billion living in poverty. Arguments between environmentalists and develop-ment experts, on one hand and advocates of freertrade on the other, have been as fractious andemotional as any public policy debates in recentmemory. But IISD’s Trade program believes that it is

The Winnipeg Principles

Efficiency and cost internalization:include all environmental costs in tradedprices.

Equity: between nations and betweengenerations.

Environmental integrity: minimize environmental impacts.

Subsidiarity: act at the lowest effectivelevel; act multilaterally; accept varyingnational standards.

International cooperation: respecthuman welfare in trade disputes; protectweaker countries; avoid trade sanctions.

Science and precaution: play safe, recog-nize ecological uncertainties.

Openness: public participation andaccountability.

Since their publication in 1994, theprinciples have achieved widespreadrecognition. They have been endorsed bythe Costa Rica-based Earth Council andthe UN Secretary-General’s High LevelAdvisory Board on SustainableDevelopment. The World EconomicForum has made them the basis of itspartnership with IISD.


“Deterioration of the environment willinflict widespread and long-standingdamage on the country....This willultimately threaten sound and sus-tainable economic development”.

Qiao Shi,Chairman of the National People’s Congress, China


possible to integrate the overlapping concerns ofthe trade, environment and development communi-ties so that their apparently conflicting concernsbecome mutually reinforcing. That is the startingpoint for the “Winnipeg Principles” for trade andsustainable development. Drafted in 1994 by nineeminent members of these sectors, the principlesprovide a framework for measuring trade policiesand agreements and understanding the underlyingissues in a way that can be accepted by those withvery different agendas.The principles have been widely endorsed interna-tionally, and in 1995/1996 IISD has been work-ing to make them operational, primarily by usingthem to assess trade and environmental agree-ments and institutions. This past year saw the pub-lishing of The Winnipeg Principles and TheMaastricht Treaty, which analyzed the agreementon European Union. It was followed in early 1996by International Environmental Management,Trade Regimes and Sustainability, an overview ofthe links and tensions between international envi-ronmental and trade regimes. Reports in progressapply the Winnipeg Principles to APEC, and applythe principle of openness to the World TradeOrganization (WTO).IISD has also been actively monitoring develop-ments at the fledgling WTO. Meaningful dialoguebetween WTO and NGOs has thus far been limit-ed, and although a 1994 decision to post publiclyavailable documents to the Internet is to be wel-comed, it falls far short of the mark. Most docu-ments are still restricted, all meetings are closedexcept to a few observers from inter-governmentalorganizations, and there is no organ within thesecretariat charged with relations with NGOs.Against this background, IISD last year undertooka feasibility study for an NGO liaison center in Geneva, to link the international NGOcommunity with both the WTO and UNCTAD. Asa result, IISD joined with IUCN, the SwissCoalition of Development Organizations, theFundación Futuro Latinoamericano (Ecuador) andConsumers Unity and Trust Society (India) toestablish the International Centre for Trade andSustainable Development, which will start work inmid-1996.The Centre’s main function will be to give NGOsstraight reporting on trade and sustainable devel-

opment issues from the insider’s perspective. It willalso convene policy dialogues among the trade,environment and development communities, andprovide a focal point for NGO networking.The China Council for International Cooperationon Environment and Development (CCICED) wasestablished by the Government of China in 1992,as a 50 member high-level non-governmentalconsultative group.IISD provides the secretariat for, and co-chairs, theCouncil’s working group on trade and environ-ment, whose mandate is to assist China in devel-oping and implementing integrated trade andenvironment policies which support sustainabledevelopment. This group is currently working infive areas: green protectionism, production anduse of ozone-depleting substances in China,impacts of the Climate Change Convention onChina, green food development in China; and therole of foreign investment in developing China’sgreen industries.The China Council work has great potential.China has become one of the world’s ten largesttrading nations. The Chinese Government is giv-ing high priority to trade-environment issues, part-ly because it eventually wants to join the WTO,and partly because its environmental situation isdeteriorating alarmingly. Few developing coun-tries yet place as much emphasis on this field asChina, and its example is likely to be watchedclosely.IISD’s role with respect to China was recognizedin 1996 when Qiao Shi, the Chairman of theStanding Committee of the National People’sCongress made a state visit to Canada. On hisofficial tour he stopped in Winnipeg and met withthe Institute and representatives of the CCICED todiscuss our work. His forthright analysis and par-ticular emphasis on strengthening the rule of lawin this area was of considerable interest to us.IISD’s three-year plan (1996-9) for the trade andsustainable development program has three maincomponents: monitoring the WTO; supporting theintegration of trade, environment and develop-ment policies; and building capacities in develop-ing countries and in economies in transition.The first component recognizes that the WTO iscurrently the key international forum for policy

reform on trade and sustainable development.IISD plans to produce regular reports on WTO’ssustainable development performance, the first tobe published in September 1996, in advance ofthe WTO Ministerial in December. The second strand involves working toward furtherimplementation and wider understanding of theWinnipeg Principles. IISD studies will apply theprinciples to NAFTA and MERCOSUR. IISD is alsopreparing the trade and environment section ofUNEP’s new Global Environmental Outlookreport, which makes a number of internationalpolicy recommendations based on the frameworkof the principles. We also plan to tackle intellectu-al property rights and biodiversity, focusing on thecomplex and contentious interface between twonew regimes: the WTO and the Convention onBiological Diversity.The third component in the three-year plan reflectsa concern that there is too little engagement in thetrade debate from developing countries and coun-tries in transition. Although development issuesunderlie the most intractable trade-environmentconflicts, discussions in the WTO and in industrial-ized countries pay scant attention to these con-cerns. So developing countries remain reluctant tocome to the table, suspecting that the North’strade and environment concerns are simply newobstacles to Southern development. Building on its work with China, IISD plans to iden-tify one or two additional countries where we canwork in partnership to strengthen their capacitiesto affect these debates. There are three main areasof need: developing research capacities in govern-ment, think-tanks or NGOs which can form thebasis of national negotiating positions; trainingnegotiators on trade and sustainable developmentinter-relationships; and strengthening coordinationmechanisms among ministries, between the publicand civil sectors, so that trade and sustainable developmentpolicies may be integrated.

Expenditure and investment decisions, both pub-lic and private are a key to sustainable develop-

ment. Since our inception, IISD has worked toencourage government and business to invest insustainability.In government, sustainable development is stillseen as more the concern of environment than offinance ministers, yet the annual budget remainsthe most important single action by which govern-ments influence sustainability. The US governmentalone spends over $1,000 billion a year.In September 1995, IISD published Green BudgetReform, a major study of 23 eco-tax reforms ineight North American and European countries.One of the report’s main insights was the effective-ness of budget neutral policies, which includedeposit-refund schemes and “fee-bates” such as redistributing funds from com-panies with a poor environmental record to thosewho perform better. Such policies do not requirean expensive regulatory system, and involve littleor no net government spending. Budget-neutral ini-tiatives are an increasingly popular fiscal methodof tackling environmental problems.IISD is currently studying the field of environmen-tally “perverse” subsidies: those which encouragepeople to undertake environmentally damaging

Eco-taxes really work

Sweden greened its tax system in1990. By 1992, a new tax on CO2emissions, a sulfur emissions tax andan energy use tax were raisingUS$3.2 billion a year, allowing amajor reduction in income and pay-roll taxes. Result: less pollution, morejobs.

Renewable energy in California hasbeen stimulated since the late 1970’s,by tax credits and by allowing smallrenewable producers to sell power toutilities. In 1992, 11.1% of the state’selectricity came from geo-thermal,biomass, wind and solar power,compared to under 0.4% nationally.Result: cleaner air, less vulnerabilityto fuel price increases, and commer-cially viable renewable technologies.

Saving Canada’s soils: Grain mono-cultures in much of the prairies cancause soil degradation and biodiversi-ty loss. The Permanent CoverProgram was developed to converthigh-risk crop land to permanent hay,pasture or trees. Result: 1.2 millionacres converted to more sustainableuse, at less cost than relevant commodity subsidies.

Refundable taxes: Since 1992,Sweden’s large fossil fuel energyplants pay a tax based on NOx(nitrogen oxides) emissions. Much ofthe money raised goes back to thepower plants – in proportion to theenergy they produce. The cleaner,more efficient power plants benefit.Result: NOx emissions down by athird.

Source – Green Budget Reform, IISD,1995


activities. For example, many governments havespent massively on road systems which effective-ly subsidize car travel, or on underwriting thecosts of nuclear power, leaving legacies of theheavy cost of photochemical smog and long-lived nuclear wastes.Last year IISD was engaged by the CanadianCouncil of Ministers of the Environment to reporton how Canada’s provincial and federal govern-ments achieve “inter-jurisdictional cooperation”on environmental protection, and presented it toa conference in Irkutsk, addressing similar prob-lems in Russia.The Institute continues to collaborate with theCanadian Institute of Chartered Accountants(CICA) and the Churches’ Task Force onCorporate Responsibility in the annual awardsfor corporate reporting, sponsored by CICA andthe Financial Post newspaper. We are workingin Canada and internationally to inject broaderconcepts of sustainability into ISO 14000, andthrough our Trade Program are helping Chinaadapt to the new system. IISD’s President sits onthe National Roundtable on the Environmentand the Economy’s “task force on economicinstruments.” During 1996/97, IISD’s BusinessAdvisory Group will help the Institute select keyactivities and identify strategic intervention pointsfor the program in the business community.

Making promises is easy, but how are we tojudge the success or failure of our policies?

Moving towards sustainable societies means thatchange must be measurable, and it must be mea-sured. These measurements must be comparable,from year to year and from place to place, so wecan assess our results. And the public must haveconfidence in the measurement system if communi-ties are to understand the progress they are mak-ing.So measurement of sustainable developmentmust combine grassroots and multi-stakeholderinvolvement in setting goals and agreeing onindicators, together with the measurementexperts who can design and operate a compre-hensive, scientifically-grounded system.IISD’s Measurements and Indicators program isresponding to the rapidly growing needs of com-munities, local and national governments; inter-national agencies; business; and the scientificcommunity, for specific tools by which targetscan be set and progress can be assessed. Thisrequires data base and indicator sets to providean empirical foundation.At home in Manitoba, IISD is helping the provin-cial government move from conventional state ofthe environment (SOE) reporting to real sustainability reporting, bypreparing a chapter on the prairie ecozone inthe 1997 SOE Report. This has involved apply-ing a coherent framework based on expertknowledge with a participatory multi-stakehold-er process to define the factors to be measured.Using focus groups to identify and prioritize keysustainability issues, IISD developed proposedindicators for each category and sought theadvice of a Technical Advisory Committee toverify that measured data was available for theselected indicators. The discussions have identified the practical andpressing methodological problems which muststill be tackled to make this on-going processoperational. Canadian government departments, includingthe Department of National Defense and Indianand Northern Affairs Canada, have soughtIISD’s advice to design their departmental sus-tainable development plans and assessmentframework.

Everything you ever wanted to know...

...about measuring sustainable develop-ment. Or, at least, the best starting point tofind out what’s known so far, and what isinnovative.

Read IISD’s Compendium, which lists 165relevant publications on the subject. Don’tmiss What is EXTASY? A short answer.(Published by the European Commission.)

The Compendium tells you about 167 organizations working on sustainabilityindicators. Who developed the Children’sStress Index? Ask ZPG in Washington D.C.What’s the Honey Bee Network? Go toSRISTI in Ahmedabad. Who knows whatlocal people see as indicators of healthymountains? FLASCO in Quito have someof the experts. What are barefoot statistics?Someone knows at the Protestant Institutefor Interdisciplinary Research inHeidelberg.

If you need to measure the quality of anarctic stream, check trace gases in a forest,monitor sustainability in wetlands, on anisland, in agricultural crops or among thegrassroots... Easy! The Compendium givesyou names, fax numbers complete withcountry codes, and e-mail addresses.

And, in case the electronic revolution haspassed you by, the Compendium lists streetaddresses too, so you can mail a postcard toBeijing or Budapest, Thunder Bay orNiamey. Get to it.

Data from PerformanceMeasurement for SustainableDevelopment: A Compendium ofExperts, Initiatives andPublications, IISD, 1995.


IISD is also working with the Austrian organizationSUSTAIN to develop “sustainable process indica-tors” based on in-put/out-put analyses of the tech-nological process in plants and large units of pro-duction. Extensive field tests are planned for differ-ent regions in Europe and in North America.The program is participating in all major interna-tional efforts to develop SD measurement tools. It isin regular contact with the UN Department onPolicy Coordination and Sustainable Developmentand with the World Bank Indicators andEnvironmental Evaluation Unit; it assists severalorganizations in countries in transition and pro-vides clearinghouse services.How will moves towards sustainability in individualcountries affect the international competitiveness ofindustry? IISD has started working jointly with theWorld Economic Forum and the Earth Council, toproduce a sustainability volume to go with the annual GlobalCompetitiveness Report.IISD strives to become an international center ofexcellence for sustainable development measure-ment, enabling experts around the world toexchange ideas. Last year, IISD published itsCompendium on performance measurement:worldwide lists of relevant experts, institutions, pro-jects and publications. Data are regularly updatedon IISDnet.In the next few years, the program will extend thiswork, producing training kits and “how-to-do-it”guides for various users. Although a relatively new program for the Institute,recognition of IISD’s leadership in this field is occur-ring. UNEP has designated IISD as a CollaboratingCenter for International Environmental Assessment,Reporting and Forecasting and the RockefellerFoundation has offered its prestigious BellagioCenter for an international meeting in November1996. The meeting will address three major issues:how to define appropriate conceptual frameworksfor measurement; how to ensure the sound scientificbasis of measurement methods and indicator selec-tion, and how to integrate the measurement processin decision making.

Despite decades of world-wide economicgrowth, both poverty and the gap between rich

and poor is increasing. A decade ago about 750million people survived on less than $1 a day;today over a billion must do so. And from 1960 to1990 there was an eightfold increase in theincome gap between the richest fifth and the poor-est fifth of the world’s citizens.Fast-changing global economic conditions areaffecting both rich and poor countries. Freer flowsof capital, new technology, liberalized trade, diffi-cult access to credit, the exhaustion of renewableand non-renewable resources, declining environ-mental quality – mean that cradle-to-grave jobsare becoming a thing of the past, even in countriessuch as Japan where this has been part of thesocio-economic culture. Young people and middle-aged professionals are often especially badlyaffected.Livelihoods is a broader concept than employment.It encompasses for example, farming, part-timework, job-sharing, home-offices, moonlighting,care-giving, self employment and a host of othermechanisms in addition to formal employmentwhere it exists. It also includes non-income activi-ties that contribute to the well being of households.In changing and sometimes worsening circum-stances, many communities adapt and succeed.IISD believes that one key to understanding sustain-able livelihoods is through community adaptation.


Turning poverty upside down:

Instead of focusing on what outsiderssee as their shortcomings, the sustain-able livelihoods approach builds onwhat local people see as theirstrengths.

“…while we (in South Africa) acceptthe bottom-up approach to policy-making we need the tools to do it. Thisproject has the potential to help uslearn how to do that…”

Mattheus Phosa,Premier of Eastern Transvaal

“It is an extremely useful document(Adaptive Strategies in Arid andSemi-Arid Lands in Africa)…we arecontinually looking for new approach-es to manage such issues in line withRDP (Reconstruction andDevelopment Program) and are partic-ularly interested in community drivenapproaches.”

Prof. K AsmalMinister of Water Affairs and Forestry, South Africa

IISD Supports 50th Anniversary of the UN

IISD provided in kind support for the “We the Peoples: 50 Communities Awards” andStudy Conference. A citizen’s initiative in honour of the 50th Anniversary of the UN,the project’s purpose was to identify, document and disseminate the lessons from 50communities which symbolized the theme “Creating Common Unity”. Sponsored byUNEP, UNDP, Habitat and the Sasakawa Peace Foundation, IISD gave leadershipand logistical support. Co-chaired by the late Dame Nita Barrow and Dr. Pierre MarcJohnson, the program succeeded in building networks that go far beyond the usualUN/NGO meetings. From eco-villages like Findhorn in Scotland, Sanikiluaq in theArctic, the hospital at Sarajevo and the pavements of Bombay, from Mondragon inSpain and the Seikatsu Club Consumers Cooperative in Japan, over a hundred repre-sentatives of rich and poor communities came to share their lessons with one another and the UN. A summary of their stories are available on IISDnet under “50 Communities”.

Sustainable livelihoods exist when households andcommunities find and maintain ways of life whichenable them to recover from stresses and shocks.As a policy objective, sustainable livelihoods makeequal sense in a Bombay squatter settlement or aNewfoundland fishing town, in the Amazon rain-forest or on Wall Street.What adaptive strategies are being successfullyused to achieve sustainable livelihoods in differentcommunities under stress? What factors do thesestrategies have in common? Can we use appropri-ate technologies, policies and resources to rein-force the indigenous knowledge and ingenuitywhich powers them? These are the questions beingasked by IISD’s Community Adaptation andSustainable Livelihoods Program.Over the past year, IISD has further developed thetheoretical basis of this integrated approach, testedit out in five countries of Africa, and published theresults. In a joint project with UNDP, ten Africancase studies were undertaken in two villages ineach of five dryland countries: Burkina Faso,Ethiopia, Kenya, South Africa and Zimbabwe. Theparticipatory research was carried out by localNGOs, and closely involved the community beingstudied.

Government policies often impact adverselyon the ways communities survive stress. In

much of Sub-Saharan Africa, for exam-ple, maize has been heavily promoted

at the expense of sorghum and mil-let, which are more drought-resis-

tant. The result has been higher

yields in good years, but hunger in times of lowrainfall. Multi-cropping, a sensible strategy forcoping with drought, has been undermined bythese policies.An alternative policy approach which tries tostrengthen peoples’ own coping strategies, turnstraditional approaches to poverty reduction upsidedown. Instead of focusing on what outsiders see astheir shortcomings, it builds on what they, the localpeople, see as their strengths.In the past year, the program has completed thecase studies, with a synthesis which links communi-ty and policy findings for each country. A com-bined volume of the synthesis reports is available.A detailed “field guide” on how to undertake par-ticipatory research into adaptive strategies hasbeen published. Popular versions of each casestudy are being prepared for the communitiesinvolved. IISD expects this integrated approach to have asubstantial impact on both development theoryand practice, by bringing the wealth of communityexperience into policy-making. Already, sustainable livelihoods is arousing serious interest inthe UNDP, World Bank and OECD; among a num-ber of donor and third world governments; andamong researchers, NGOs and communitygroups. Last year, we prepared a report onemployment and sustainable development for theCanadian government based on this concept.Over the next three years the program plans tofurther develop the sustainable livelihoodsapproach, testing it on drought mitigation inSouthern Africa, on biodiversity conservation andenhancement in dryland Ethiopia and India, andin rural areas of developed countries, starting on the Canada-US Great Plains.

Community Adaptation in Makaha,Zimbabwe

Using local (indigenous) knowledge,science and technology, and workingwithin a facilitative policy framework,some communities have shown aremarkable ability to adapt to changing social, economic, and ecological environments.This commu-nity adaptation is a source of sustain-able livelihoods.

Economic Adaptive Strategies

In response to the danger of crop failure due to the dry climate, the peo-ple of the Makaha community havedeveloped a diversified economic base,including crop production, livestockproduction, gold panning, beer brew-ing, vegetable and fruit production.Even in crop production, two or morestaple grain crops are grown as a riskaversion measure, and following goodyears, households commonly store atleast two years supply of grain as areserve.

Ecological Adaptive Strategies

Indigenous and contemporary knowl-edge systems combine to conserve pre-cious soil, water, and trees in Makaha.Contour ridges constructed acrossmountain slopes represent technologicalinnovations to conserve soil and water,while indigenous knowledge, workingthrough traditional community regula-tions and leadership, protects sacredand valuable trees.

Source: Makaha Community,Mudzi District, Zimbabwe, fromAdaptive Strategies andSustainable Livelihoods:Community Studies, IISD,1996.


ECO

NO

MY

ENVIRO

NM

ENT

SOCIAL WELL-BEING

LOCAL KNOWLEDGEPO

LICY

SCIE

NC

E

All the Institute’s activities come together in itsprogram for the Great Plains: a vast area of

North America stretching 5,000 km from Canadathrough the mid-western United States to northernMexico. Its economy is anchored in its soils,waters, flora and fauna. IISD chose to apply itswork in this area for two reasons. First, this eco-zone is our home. Second, it forms one of the keybreadbaskets for Earth’s growing population, andthe rest of the world has a massive impact on itseconomy, society and environment.The region is currently undergoing unprecedentedchanges, which may prove as profound as thoseof the 19th century, when it evolved from hunter-gathering and fur-trading to an economy basedon grain and cattle. Among the new pressures arefreer trade (through NAFTA and WTO), new gov-ernment policies bringing an end to traditionalsubsidies, biodiversity decline, soil degradationand efforts to stem it, rural depopulation, rail lineabandonment, and climate change which may inthe next century shift current production patterns.But if the Great Plains is one ecosystem, its frag-mented policies are set by a multiplicity of govern-ments, communities, businesses and individuals.Most decision-makers are unable to determinewhether their actions will enhance or inhibit sus-tainable development of the region’s natural andhuman resources because they lack adequateinformation and management tools. It is these gapswhich IISD’s program endeavors to fill.The Program’s aim is to address the region’s sus-tainability by: facilitating consultation and negotia-tion between stakeholders; identifying practicalsolutions, especially those involving linkagesbetween community adaptation mechanisms, pub-lic policy and investment strategies; and helpingachieve improvements in the region’s science andtechnology.The Program has held a series of conferences tobring together key stakeholders, to introduce newways of evaluating actions and policies, and thentaking the results to decision makers through meet-ings and publications. In 1995/6 two major con-ferences were co-sponsored by IISD. The first, inMay 1995, in Lincoln, Nebraska, was for the sci-entific community to ensure that the sustainabilityneeds of the Great Plains are reaching theresearch agenda. The second, in August 1995 in

Winnipeg, co-sponsored by the WinnipegChamber of Commerce, was to promote a betterunderstanding of sustainable prairie agricul-ture and to review IISD’s evaluative frame-work for decision-makers.As well as activities covering thewhole of the Great Plains, IISD’swork has had a special focus onthe Manitoba-Minnesota regionstraddling the Canada-US bor-der. We have been instrumentalin the formation of a sister insti-tute, the Great Plains Institute inMinneapolis. IISD supported theGlobal Tomorrow Coalition, in astudy resulting in the development of aGreat Plains Regional Forum based inMinnesota, which will meet bi-annually tobring together policy-makers from throughout theregion. The Forum will be backed by the GreatPlains Regional Network, an electronic networkallowing a continuous policy dialogue and infor-mation exchange. IISD has also signed an agree-ment to participate in a Fulbright Scholarshipfocused on environmentally sustainable economicand social development strategies in the Red Riverregion of the Great Northern Plains.IISD has started work in Manitoba on the strategieswith which Great Plains communities cope withstress and change. A Manitoba AdaptationWorkshop was held involving a wide range ofstakeholders. The participants at the workshop sawthe need to form the Manitoba Rural AdaptationCoordinating Council (MRACC). The lead agencyin forming MRACC is Keystone AgriculturalProducers (KAP), a powerful grassroots farm orga-nization with which IISD collaborates closely.Throughout the year, IISD staff have provided asustainable development perspective to meetingsthroughout the Great Plains. For example, at anorganizational workshop for the proposed PrairiesImpacts and Adaptation study held in Edmonton,Alberta in February 1996, attendees discussed thepotential impacts of climate variability and changeon the prairie provinces. At the SaskatchewanCouncil for Community Development conferenceheld in Regina, Saskatchewan in February, 1996IISD’s work on prairie adaptation was presented toleaders in Saskatchewan community development.

Sustainable Development for theGreat Plains

…this study – with its focus on aframework to assess agricultural andtransportation policies from a sustain-able development perspective – offersuseful suggestions to consider inaddressing concerns arising frominternational trading pressures.

Paul Martin, P.C. M. P.Minister of Finance,Canada


Principles for Great PlainsSustainable Development:

Management

Conservation

Rehabilitation

Market Viability

Cost Internalization

Scientific and TechnologicalInnovation

Trade Policy

Societal Consideration

Global Responsibility


Several studies were completed in 1995-96. Oneexamined the sustainability of the St. LawrenceSeaway, a route by which some of the produce ofthe Great Plains is exported, the other researchedcarbon sequestering on the Canadian Prairies andpolicies used around the world to reduce emissionsof carbon dioxide.Over the next three years, IISD intends to extendmany of the program’s initiatives more widely inthe US and Canadian plains, and to other semi-arid agricultural regions, such as the Ukraine orparts of Africa or Asia.

IISD is committed to assessing and reporting onour own achievements and challenges in the

process of integrating environmental integrity, peo-ple’s well being and economic efficiency.

Environmental IntegrityEnergy Efficiency – IISD staff are encouraged touse energy efficient means of transportation tocommute to work (bicycle, walk, public transport,or car pool) and to use the stairs rather than eleva-tors. Awareness notices are posted to encouragestaff to conserve energy in their own offices byturning out lights and machines. We are unable toset targets and measure performance in the energyarea because our rented space is not individuallymetered.Pollution Prevention – All employees actively par-ticipate in the Institute’s multi-material recyclingprogram. This year through our pollution preven-tion program we have diverted approximately2,151 kg or nearly 60 kg per employee of wastefrom landfill.We have engaged in a community based project with the Rotary Club. Our paper and card-board is recycled through the “Paper to Trees” pro-gram where the profits from the recyclables are used to plant trees to “green”Winnipeg for the 1999 Pan American Games.Our other recyclables are picked up by a commer-cial service. Due to this change in recycling proce-dures, specific measurement data between years isnot comparable.Purchasing – Our policy is to use suppliers whoadhere to environmentally responsible practicesand standards including products with maximumuse of post-consumer waste, minimal packaging,and bulk purchases. We use hotels and catererswho have practical environmental conservationprograms in place. We offer repeat business tosuppliers who are exemplary in their sustainabledevelopment practices.Electronic communications – We emphasize theuse of electronic mail and computer discs for com-munication and data storage. We have an activeprogram for electronic publishing. To the extentpossible we operate nationally and internationallyusing telephone and electronic communicationrather than travel.

People’s Well BeingIISD is an evolving entity. Our policies are basedon values which are lasting and promote sustain-able development within the organization whileremaining adaptable to the changing work envi-ronment. During the year the Institute’s policies andprocedures affecting people were assembled and distributed in the formof a comprehensive employee information manual.IISD has incorporated performance incentives intoour agreements with our program leaders. In addi-tion, a formal performance appraisal system forthe administrative support staff group whichrewards staff based on their performance hasbeen implemented. A formal performanceappraisal system for program staff will be imple-mented during the 1996-97 fiscal year.Weekly one hour staff meetings are held to keepcommunication channels open and clear. Eachmeeting includes a “roundtable” discussion duringwhich all staff have the opportunity to share ideasand achievements with their colleagues. Other, lessstructured “breakfast brainstorming sessions” areheld regularly to encourage program staff workingin different program teams to exchange informa-tion and ideas.Ergonomic improvements have been made to indi-vidual workstations such as replacing older stylekeyboard trays and other measures to preventrepetitive strain injuries.A snapshot picture of our organizational profile asof March 31, 1996 shows that of the 38 peopleassociated with the Institute, 53% are women, 3%are disabled, and 24% are minorities or of aborig-inal descent. Compared to the position at March31, 1995, the proportion of women in the work-place has increased, but there has been adecrease of one person in our minority representa-tion. All of IISD’s current Fellows and Associatesare men. Of the thirteen current Board Members,31% are women. Our bylaws require that amajority of our Board be Canadian citizens.IISD continues to engage in outreach activities inour own community of Winnipeg, Manitoba.These include the Winter Cities conference, EarthDay, Careers Day, the city’s CentrePlan initiativeand other community fora. We invite communitygroups who are interested in sustainable develop-

ment to tour the Institute and visit our informationcentre. We make our conferencing facilities avail-able to other organizations in the community, on acost recovery basis, when they are not required forour own activities.

Economic EfficiencyWe continue to dedicate efforts in both programsand operations to maintain or improve our costeffectiveness. For example, virtual office links havebeen established as the Institute’s network of staffmembers and associates expands to include repre-sentation in various strategically significant placesoutside of the Winnipeg centre. These links integrate our people with uselectronically while allowing them to work out ofpremises which are otherwise available to them.The result is that we enjoy the benefits of represen-tation in these localities, without having to incursignificant additional fixed infrastructure costs. Changes in key performance indicators over thepast year reflect IISD’s continuing transition towardgenerating revenues from an increasingly diversebase of supporters. Program expenditures as aproportion of total expenditures have declinedslightly from 84% to 82%. Designated grants andother income as a proportion of total expenditureshave increased significantly to 43% from 36%.

Independent Opinion onManagement’sSustainableDevelopment ReportTo the MembersInternational Institute for SustainableDevelopment

We have assessed the attachedSustainable Development Report forthe year ending March 31, 1996. Thereport is the responsibility of the management of the Institute. Ourresponsibility is to express an opinionon the report based on proceduresdescribed in the next paragraph.

We have reviewed the Institute’s policies and objectives related to sustainable development and assessedmanagement’s approach to measuringthe achievement of these objectives.Our assessment included interviewswith management and staff, observa-tion of the premises and office practices and examination, on a testbasis, of relevant documents.

Based on the above measures, in ouropinion, the objectives related to sustainable development and manage-ment’s approach to measuringachievement of these objectives arereasonable and management’s conclusions in the attachedSustainable Development Report

are presented fairly.

Chartered AccountantsWinnipeg, ManitobaApril 24, 1996


Balance SheetMarch 31

1996 1995

Assets (restated)

Current

Cash $ 700,685 $ 237,632Accounts receivable 2,131,106 1,202,746Marketable securities 6,219,533 4,954,774Accrued interest 111,032 96,420Prepaid expenses and deposits 115,699 72,570

9,278,055 6,564,142

Capital Assets (Note 4) 455,231 476,340

$ 9,733,286 $ 7,040,482

Liabilities and Net AssetsCurrent

Accounts payable and accrued liabilities $ 346,373 $ 409,176Deferred revenue 2,433,130 284,390

2,779,503 693,566

Net AssetsNet assets invested in capital assets 455,231 476,340Reserve for program development 4,251,783 4,251,783Reserve for long-term development 1,871,250 1,618,793Unrestricted net operating assets 375,519 -

6,953,783 6,346,916

$ 9,733,286 $ 7,040,482


Auditors’ ReportTo the MembersInternational Institute for SustainableDevelopment

We have audited the balance sheet ofthe International Institute forSustainable Development as at March31, 1996 and the statements of opera-tions and changes in net assets andcash flows for the year then ended.These financial statements are theresponsibility of the Institute’s man-agement. Our responsibility is toexpress an opinion on these financialstatements based on our audit.

We conducted our audit in accordancewith generally accepted auditing stan-dards. Those standards require thatwe plan and perform an audit toobtain reasonable assurance whetherthe financial statements are free ofmaterial misstatement. An auditincludes examining, on a test basis,evidence supporting the amounts anddisclosures in the financial state-ments. An audit also includes assess-ing the accounting principles usedand significant estimates made bymanagement, as well as evaluatingthe overall financial statement presen-tation.

In our opinion, these financial state-ments present fairly, in all materialrespects, the financial position of theInstitute as at March 31, 1996 andthe results of its operations and thechanges in its financial position forthe year then ended in accordancewith generally accepted accountingprinciples.

Chartered AccountantsWinnipeg, ManitobaApril 25, 1996

1995-96 Revenue and Expenditure by Program

Total: $4,687,446

Business Strategies7%

Operations, Board andFundraising

18%

Community Adaptation andSustainable Livelihoods12%

Information andCommunications

17%

Trade &Sustainable Development11%

Great Plains8%

Measurement andIndicators6%

EarthNegotiations

Bulletin21%

Designated Grantsand Other Revenue

Operating Grants

Statement of Operations and Changes in Net AssetsYear Ended March 31

1996 1995Revenue (restated)

Operating grants (Notes 3 and 2 a) i)) $ 3, 295,000 $ 4,653,632Designated grants (Note 2 a) ii)) 1,502,143 1,550,896Interest 406,008 321,647Other revenue (Note 3) 91,162 96,804

5,294,313 6,622,979

Expenses (Schedule 1)

ProgramsBusiness Strategies 317,413 -Trade and Sustainable Development 532,895 847,568Community Adaptation andSustainable Livelihoods 566,730 764,583The Great Plains 381,581 -Measurement and Indicators 269,891 -Information and Communications 779,624 763,719Earth Negotiations Bulletin 982,825 899,801Business and Government - 1,336,244

3,830,959 4,611,915

Operations 605,623 643,879Fundraising 117,201 16,066Board 133,663 216,583

Total Expenses 4,687,446 5,488,443

Excess of Revenue over Expenses 606,867 1,134,536

Appropriation from (to) Net Assets

Reserve for long-term development 117,201 -Net assets invested in capital assets 21,109 51,998Reserve for long-term development (369,658) (780,708)Reserve for program development - (405,826)

Increase in Net Operating Assets 375,519 -

Balance, beginning of year - -

Net Operating Assets, End of Year $ 375,519 $ -


Notes to the FinancialStatements March 31, 19961. Incorporation, Mandate and

Tax Status

The International Institute for SustainableDevelopment (IISD) was incorporated onMarch 15, 1990 as a corporation withoutshare capital under Part II of the CanadaCorporations Act. It commenced opera-tions shortly thereafter at its head officein Winnipeg, Manitoba, Canada.

IISD is a registered charity in Canada. Itis also exempt from U.S. income tax underparagraph 501(c)(3) of the InternalRevenue Code.

The objects of IISD are to promote the concept of environmentally sustainableeconomic development and the integrationof the principles and practices of sustain-able development within and between thepublic, private and voluntary sectors on anational and international basis.

2. Significant Accounting Policies

The financial statements have beenprepared in accordance with generallyaccepted accounting principles andinclude the following significant account-ing policies:

a) Revenue recognition

i) Operating grant revenue

Operating grants are subject to thecondition that they must be expendedin accordance with the mandate ofthe Institute. Operating grant rev-enue from the Government ofCanada is recorded annually in theaccounts in an amount equivalentto one fifth of the total fundingcommitment over the period April1, 1995 to March 31, 2000.Operating grant revenue from theProvince of Manitoba is recorded inan amount equal to the

... continued page 18

Statement of Cash FlowsYear Ended March 31

1996 1995

Cash Provided by Operations (restated)

Operating Grants Government of Canada

Environment Canada $ 2,300,000 $ 2,375,000Canadian International Development Agency 1,000,000 $ 1,000,000

Government of Manitoba 1,375,000 1,328,000

4,675,000 4,703,000

Designated GrantsGovernment of Canada 797,547 388,695Governments of Provinces 55,000 459,000Governments of other nations 698,411 386,039United Nations agencies 430,635 247,988Philanthropic foundations 160,886 180,094Private sector and other 121,476 44,470

2,263,955 1,706,286

Other RevenuePublication sales 31,207 36,804Facilities rentals 19,132 -Cost recoveries 47,751 60,000

98,090 96,804

7,037,045 6,506,090Interest received for operating purposes 36,350 -Cash used in operating activities (5,555,344) (6,362,909)

Net Cash Generated Through Operating Activities 1,518,051 143,181

Cash Provided from Investing Activities

Interest received for long-term development 355,046 252,489Purchase of capital assets (145,285) (116,262)

Net Cash Generated through Investing Activities 209,761 136,227

Net Increase in Cash and Marketable Securities 1,727,812 279,408Cash and marketable securities, beginning of year5,192,406 4,912,998

Cash and Marketable Securities, End of Year $ 6,920,218 $ 5,192,406

Represented by:Cash $ 700,685 $ 237,632Marketable securities 6,219,533 4,954,774

$ 6,920,218 $ 5,192,406


2. Significant Accounting Policies (continued)

lesser of one third of funding from allother sources and annual amounts prescribed in the funding agreement.Any additional amounts received undercurrent grant agreements are reflected asdeferred revenue.

ii) Designated grant revenue

Designated grants must be expended inaccordance with the donor’s designation.Revenue for grants designated for cur-rent activities is recorded in the accountsas the related expenses are incurred.Revenue for grants designated for use inprogram or long-term developmentactivities is recorded in the accounts inthe year in which the grant is awarded.

b) Capital asset expendituresCapital asset expenditures are recorded at cost.Amortization, which is based on the cost lessthe residual value over the useful life of theasset, is computed using the straight-linemethod over the following terms:

Equipment 10 years, 5% residualLeaseholds Initial term plus one renewalComputer 3 years, no residual

Systems

c) Publication production costsPublication production costs are expensed inthe year in which the publication is printed.

d) Change in accounting policiesIISD has adopted the recommendations of theCanadian Institute of Chartered Accountantsapplicable to Not for Profit entities which wereissued in March 1996.This resulted in record-ing capital assets and a related category of netassets invested in capital assets in the amountof $455,231. In addition, as a result of theserecommendations, IISD established a reservefor program development into which accumu-lated unexpended balances of unrestrictedgrants previously received were transferredamounting to $4,251,783. These changeshave been applied retroactively and arereflected in the comparative figures presentedfor 1995.


Notes to the Financial StatementsMarch 31, 1996

3. Funding Arrangements

IISD has entered into renewed funding arrangements with the Government of Canada(Environment Canada and the Canadian International Development Agency) and the Governmentof Manitoba. The arrangements with the Government of Canada provide operating grants for thefive year period April 1, 1995 to March 31, 2000. The arrangement with the Government ofManitoba provides operating grants for the six year period April 1, 1995 to March 31, 2001.

A summary of the funding is as follows:

($000’s)Funding

Funding Funding ReceivedCommitmentCommitment 1996 Remaining

Government of CanadaEnvironment Canada $ 4,600 $ 2,300 $ 2,300Canadian InternationalDevelopment Agency 5,000 1,000 4,000

Government of Manitoba 6,875 1,375 5,500

$ 16,475 4,675 $ 11,800

Operating grant revenue (Note 2a) i)) 3,295

Balance added to deferred revenue $ 1,380

In addition to its operating grants IISD derives revenue from designated grants, publication salesand cost recoveries in connection with specific program activities as summarized below:

($000’s)Sales and Designated

Program Cost Recovery Grants Total

Business Strategies $ 25 $ 30 $ 55Trade and Sustainable Development 10 137 147Community Adaptation and

Sustainable Livelihoods 4 226 230The Great Plains 3 96 99Measurement and Indicators 4 9 13Information and Communications 4 114 118Earth Negotiations Bulletin 4 890 894Operations 37 - 37

$ 91 $ 1,502 $ 1,593

Governments in Canada20%

PhilanthropicFoundations

12%

OtherNational

Governments30%

International Organizations31%

Private Sectorand Other

7%

1995-96 Designated Grant Revenue

by Donor

Total: $1,502,143

1991 1992 1993 1994 1995 1996

0

10

20

30

40

Fiscal Years Ended March 31

% o

f Tot

al R

even

ue

$1,969,347

$732,551

$323,719

$328,268

$67,341

50

$1,999,313

1995-96 Designated Grants and Other

Income as Percent of TotalExpenditure


Schedule 1: ExpensesMarch 31, 1996The following table summarizes expenses incurred in each of the IISD’s programs.

($000’s)Community

Trade Adaptation Earthand and The Measurement Information Negoti- Total

Business Sustainable Sustainable Great and and ations Fund- Total 1995Strategies Development Livelihoods Plains Indicators Communications Bulletin Operations raising Board 1996 (restated)

Personnel $ 242 $ 289 $ 259 $ 236 $ 179 $ 449 $ 185 $ 398 $ 69 $ - $ 2,306 $ 2,270Travel 16 54 33 19 24 39 369 13 16 - 583 463Publishing 2 16 38 5 7 13 82 - 26 - 189 631Consulting (1) 61 114 64 - 37 254 2 4 - 535 485Meetings 7 21 18 2 3 - 2 - 1 - 54 469Rent 22 40 49 24 24 41 32 29 - - 261 351Supplies and other 13 20 21 14 11 20 17 55 1 - 172 170Telecommunications 7 16 15 8 12 16 22 22 - - 118 140Research materials - - - - - 52 - - - - 52 42Amortization ofcapital assets (Note 5) 6 10 13 6 6 106 20 21 - - 188 167Special projects 3 6 7 4 4 6 - 65 - - 95 83Board - - - - - - - - - 134 134 217

$ 317 $ 533 $ 567 $ 382 $ 270 $ 779 $ 983 $ 605 $ 117 $ 134 $ 4,687 $ 5,488

4. Capital Asset Expenditures and Amortization

The categories of capital assets and components of net assets invested in capital assets are summarized as follows:

1996 1995

Accumulated Net NetCategory Cost Amortization Asset Value Asset Value

Equipment $ 541,838 $ 245,727 $ 296,111 $ 338,762Leaseholds 82,309 49,385 32,924 42,801Computer Systems 456,153 329,957 126,196 94,777

$ 1,080,300 $ 625,069 $ 455,231 $ 476,340

5. Commitments

The IISD is obligated to make payments under various leases expiring up to March 31, 2001 as follows:

1997 $ 57,3501998 58,7511999 58,7512000 58,0312001 58,031

ACCT (Agency for Cultural and TechnicalCooperation of the FrancophoneCountries)Agriculture and Agri-Food CanadaB.C. Ministry of ForestsCanadian International DevelopmentAgencyCanadian Pulp and Paper AssociationCanadian Shipowners AssociationCANARIE Inc.CCME - Canadian Council of Ministers ofthe EnvironmentChina Council for InternationalCooperation on Environment andDevelopmentCity of Thunder BayClimate Change SecretariatDepartment of National Defense, CanadaEnvironment CanadaEuropean CommissionFederal Minister for the Environment,Nature Conservation and Nuclear Safety(BMU), GermanyGesellschaft für TechnischeZusammenarbeit (GTZ)Government of ManitobaGovernment of Switzerland - InternationalAffairs DivisionHabitat II SecretariatHuman Resources Development CanadaIndian and Northern Affairs CanadaInterim Secretariat to the FrameworkConvention on Climate ChangeInternational Development ResearchCentreIUCN - The World Conservation UnionLakehead Port CouncilLakehead Terminal Elevators’ AssociationLes Elevateurs des Trois Riviere Manitoba Department of Highways &TransportationMinistère de Transport du QuébecMinistry of the Environment - Sweden

Montreal Port Corporation/Bunge duCanada/Port of Quebec CorporationNatural Resources CanadaNetherlands Minister for DevelopmentCooperationNorwegian Directorate for NatureManagementNorwegian Ministry of EnvironmentOntario Corn Producers’ AssociationOntario Ministry of TransportationOntario Wheat ProducersOverseas Development Administration(UK)Organization for Economic Cooperationand DevelopmentPermanent Mission of IcelandPew Charitable TrustsPrairie Farm Rehabilitation Administration Port des Trois RivieresRoyal Danish Ministry of Foreign AffairsRoyal Ministry of Foreign Affairs ofNorwaySeaway Bulk CarriersSt. Lawrence Seaway AuthorityThe Ford FoundationThe John D. & Catherine T. MacArthurFoundationThunder Bay Harbour CommissionUnited Nations Centre for HumanSettlementsUnited Nations Development ProgrammeUNIFEM - United Nations DevelopmentFund for WomenUnited Nations Environment ProgrammeUnited Nations Population FundUS Agency for International DevelopmentUS Department of AgricultureWinnipeg Chamber of CommerceWorld Bank

FINANCIALCONTRIBUTORS

IISD wishes to express our sincere appreciation to the following organizations whohave contributed to our work over the past year.

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