September 2005

STATISTICS
BRIEF

No. 10
Measuring Sustainable
Development
By Candice Stevens

Making the concept of sustainable development operational for public policies raises
important challenges in terms of measurement. Without indicators or a quantitative
framework, sustainable development policies lack a solid foundation on which to
advance.

The concept of sustainable development encompasses three dimensions of welfare —

economic, environmental and social - and involves complex synergies and trade-offs among
them (Chart 1). This Statistics Brief presents an update on progress in the development
of indicators of sustainable development and describes some of the challenges that lie
ahead.
In this issue
2 Sustainable Chart 1. Key dimensions of sustainable development
development: what is the
measurement challenge?
2 Why are
conceptual frameworks
needed? SOCIAL
2 Are some indicators
better than others for
measuring sustainable 4
development?
5
3 6
3 How are these
indicators used in policy
analysis?
2
4 What are ENVIRONMENTAL ECONOMIC
decoupling indicators? 1
4 Would
accounting frameworks
help?
1. Effects of economic activity on the environment (e.g., resource use, pollutant discharges,
5 How can the
waste).
social dimension be
measured? 2. Environmental services to the economy (e.g., natural resources, sink functions,
6 Are global contributions to economic efficiency and employment).
effects taken into 3. Environmental services to society (e.g., access to resources and amenities, contributions
account? to health, living and working conditions).
6 What are
4. Effects of social variables on the environment (e.g., demographic changes,
composite indicators?
consumption patterns, environmental education and information, institutional and legal
7 Conclusion frameworks).
8 Further information
5. Effects of social variables on the economy (e.g., labour force, population and
household structure, education and training; consumption levels, institutional and legal
frameworks).
6. Effects of economic activity on society (e.g., income levels, equity, employment).

Organisation for Economic Co-operation and Development

Sustainable development: what is the dimensions and their interactions, there is a vast range of
measurement challenge? relevant indicators in need of an organising principle. Such
frameworks should be simple and understandable so as
Progressing towards sustainable development implies to link the indicators to policy questions and make them
that the objectives of increasing economic efficiency useful to decision-makers and the public.
and material wealth must take into account social and
environmental objectives. Explicit in the concept is a OECD countries have adopted different types of
focus on inter-generational equity, implying that future frameworks. For example, Sweden has structured its
generations should have opportunities similar to those now indicators based on the Brundtland Report’s definition
available. Sustainable development also puts emphasis on of sustainable development, involving four integrated
equity that applies both across and within countries. themes: efficiency, contribution and equality, adaptability,
and values and resources for coming generations.
In 1987, the World Commission on Environment and
Development (WCED) published a report entitled “Our Some countries use their national strategies for sustainable
Common Future”. Known as the Brundtland Report, it development (NSSD) as the organising framework for
presented guiding principles for sustainable development. indicators. For example, Austria uses 48 indicators
Among other precepts, the report implied the need to to monitor progress on the 20 key objectives of its
develop indicators for monitoring long-term progress sustainability strategy. Similarly, the European Commission
towards “meeting the needs of the present generation has developed a pyramid of indicators based on the
without compromising the ability of future generations to themes and sub-themes of the European Union sustainable
meet their own needs”. development strategy.

Later, Agenda 21 (the 1992 Rio Declaration on Environment Countries such as Canada and Norway use a “capital”
and Development) urged countries to “develop indicators approach where the focus of measurement is on the
of sustainable development” in a way that would stocks and flows of different national assets: natural
“contribute to a self-regulating sustainability of integrated capital, financial capital, produced assets, human capital,
environment and development systems”. etc. Thus, in Norway, natural capital is measured in terms
of ecosystems and renewable resources, while financial
Indicators are needed to illustrate to policy makers and capital is captured in terms of net national income per
the public the linkages and trade-offs between economic, capita and petroleum adjusted savings. Here, the question
environmental and social values; to evaluate the longer- of sustainability is framed as whether the country is
term implications of current decisions and behaviours; managing its resource base – as embodied in different
and to monitor progress towards sustainable development types of national wealth – in a way that secures its
goals by establishing baseline conditions and trends. maintenance over time.
But simple and easily-understood measures that do not
compromise the underlying complexity of sustainable Measuring sustainable development requires both simple
development have been difficult to formulate. measures that inform decision-makers about major trends
and issues as well as more detailed measures to support
The sustainable development agenda is a broad one, in-depth analysis. Attention should be given to the “supply
covering virtually all aspects of life at national and side” – how statistics and related indicators can best be
international levels and of government policies. The fact constructed – as well as to the “demand side” – how these
that countries have different perspectives on sustainable indicators can be interpreted and used most appropriately.
development makes matters more complex. Demands for And frameworks are needed to assess sustainability at
information are multiple, change over time and originate different levels – local, national, regional and global.
from many sources – public and private. At the same time,
there is a need to maintain balance between short and
Are some indicators better than
long-term information needs and continuing efforts and
others for measuring sustainable
investments to improve information quality.
development?
Why are conceptual frameworks needed? A popular measurement approach to sustainable
development is to select and enumerate a number of
Frameworks are important to structure work on indicators indicators for each of the three dimensions – economic,
and on underlying statistics. Because sustainable environmental and social. The UN Commission on
development encompasses three different policy Sustainable Development (UNCSD), the European

2
Commission (EC) and the OECD are among those bodies Developing reduced sets of sustainable development
which have compiled a list of indicators for tracking indicators has both benefits and constraints. The combined
sustainable development trends. presentation of indicators from various disciplines
allows key aspects of sustainable development to be
In addition to international organisations, many countries communicated in a simple way. However, these indicator
and groups have elaborated sets of indicators for sets are not designed to provide a full picture of economic-
monitoring sustainable development. A review of social-environmental relationships, but rather to capture
sustainable development indicators assembled by OECD key trends and draw attention to selected issues.
countries, however, shows great diversity in the measures
selected under each of the categories and themes How are these indicators used in policy
proposed by the UNCSD (OECD, 2002c). analysis?
A related approach is to develop reduced sets of “core” Core sets of sustainable development indicators are
or “headline” indicators, which are more accessible and particularly useful in comparing countries and conducting
easily understood than longer shopping lists. In an earlier peer reviews of performance and policies. In the OECD,
publication, the OECD, for example, proposed a limited environmental performance reviews of countries are
set of headline indicators to quickly measure whether based on indicators describing economy-environment
we are maintaining current assets as well as satisfying relationships in terms of decoupling (described in the
current needs in sustainable development terms (Box 1) following section). These indicators have been developed
(OECD, 2001b). and agreed over a number of years (OECD, 2003).

Box 1. OECD core set of sustainable development indicators

Theme Indicators
Resource indicators: Are we maintaining our asset base?
Environmental assets
Air quality Greenhouse gases (GHG) emission index and CO2 emissions
NOx emissions
Water resources Intensity of water use (abstractions / renewable resources)
Energy resources Consumption of energy resources
Biodiversity Size of protected areas as a share of total area
Economic assets
Produced assets Volume of net capital stock
R&D assets Multi-factor productivity growth rate
Financial assets Net foreign assets and current account balance
Human capital
Stock of human capital Proportion of the population with upper secondary/tertiary qualifications
Investment in human capital Education expenditure
Depreciation of human capital Rate and level of unemployment
Outcome indicators: Are we satisfying current needs?
Consumption Household final consumption expenditure
Municipal waste generation intensities
Income distribution Gini coefficients1
Health Life expectancy at birth
Urban air quality
Work status / Employment Employment to population ratio
Education Education participation rates
1. The Gini index measures the extent to which the distribution of income among individuals or households within an economy
deviates from a perfectly equal distribution.
Source: OECD (2001), Sustainable Development: Critical Issues.

3
In addition, for a three-year period, the OECD economic Decoupling indicators are attractive in their simplicity and
surveys included sustainable development reviews of in their ability to highlight the contribution of technology
countries based on indicators structured according to the and structural factors to environmental pressures. They
following menu of issues (OECD, 2004c): can be used to compare physical trends to policy targets
a) Reducing emissions of greenhouse gases and indicate the scope for progress. However, the
b) Reducing air pollution simplicity of decoupling indicators is sometimes deceptive.
c) Reducing water pollution Most environmental pressures are generated by multiple
d) Sustainable use of renewable and non-renewable driving forces, which require complex modelling tools to
natural resources understand.
e) Reducing and improving management of waste
f) Ensuring sustainable retirement income policies Another weakness of decoupling indicators is that there are
numerous environmental variables where the externalities
g) Improving living standards in developing countries.
are not linear. Thus, continual pressure on a resource
Each country review focused on three topics (from a or species can occur with no apparent effect for a long
total of seven) selected for their relevance to the country time until a threshold is crossed and negative effects
being examined. A number of indicators were used to rise sharply. Many ecological systems are still poorly
assess performance under each of the seven themes. understood, underlining the need to address scientific
For example, reducing emissions of greenhouse gases gaps in order to develop better indicators.
was measured according to total GHG emission intensity
and that of carbon dioxide emissions in certain sectors The OECD has developed a range of decoupling indicators
(electricity, transport, manufacturing, residential) as well for environmental peer reviews: a number relate to
as growth rates in emission intensity. In this way, countries decoupling economic activity from climate change, air
were compared on the basis of selected indicators relating pollution, water quality, waste disposal, materials use and
to sustainable development and were able to see their natural resources, while others focus on environmental
relative performance. pressures in sectors such as energy, transport, agriculture
and manufacturing. These measures show that weak
The selection of indicators for monitoring sustainable decoupling (in relative terms) has been occurring across
development tends to vary by country depending the OECD countries since the early 1980s, but that strong
on their natural attributes, industrial structure, and decoupling of environmental damage from economic
political and social variables. In practice, it has been activity is a distant goal (OECD, 2002b).
difficult for countries to agree on a common core set
of sustainable development indicators to be applied Would accounting frameworks help?
to all nations. One approach is to develop different
core indicator sets for groups of countries based on Although indicators are important for measuring progress
selected variables (e.g., level of development, natural towards sustainable development, they do not provide
resource base). much insight into the interrelations among the various
measures. Accounting approaches are useful in structuring
While countries may use a broad range of indicators statistics and examining dynamic rather than static
to monitor their national performance in sustainable pictures as well as in constructing broader frameworks
development terms, some common indicator sets may for sustainable development measurement. They can
be needed for cross-country comparisons and peer provide both a representation of the relationships among
reviews. variables and a common scale by which to compare them
(OECD, 2004a).
What are decoupling indicators?
In the environmental field, for example, stock and flow
Decoupling indicators are useful in helping policy makers accounts have been developed for natural resources
understand the interface between developments in two and pollution as well as materials. These accounting
different spheres. In most cases, they compare the relative approaches help derive indicators on the intensity and
growth rates of environmental variables and economic sustainability of current patterns of the use of inputs to
variables. For example, the decoupling of damage to the production.
environment from economic growth is advanced when the
growth rate of environmental degradation is lower than In 2004, the OECD Council Recommendation on Materials
the expansion of gross domestic product (GDP) over a Flows and Resource Productivity encouraged the
given time period. development of indicators of material resource use within

4
and among countries and also tools to measure resource social variables such as labour force participation and
productivity. The development of material flow accounts in income distribution to various measures of economic
the OECD will eventually provide the basis for evaluating activity.
the resource efficiency of economies.
Accounting frameworks to bring the three dimensions
OECD work is based on developing accounts in of sustainable development together simultaneously
physical units (usually tonnes) comprising the extraction, are still lacking. Approaches based on the integration
production, transformation, consumption, recycling and (and not just the juxtaposition) of the three types of
disposal of different types of materials. Priority is being accounts is needed. This will partly depend on deriving
given to accounting for high volume flows (metals, wood, better measures of social capital and determining how
fish) and toxic flows (chemicals, pollutants). The aim is to various assets (natural, environmental, financial) are
develop a common accounting framework within which distributed among populations and countries. Over
countries can collect data and fashion indicators on time, core indicator sets could increasingly be based on
materials flows (OECD, 2004b). satellite accounts such as the SEEA and more developed
accounting approaches.
Other initiatives have aimed at supplementing and
expanding traditional national accounts with information How can the social dimension be
on resource and environmental conditions. For example, measured?
the Netherlands developed methods for grouping
economic and environment-related variables in the Much of the effort to derive sustainable development
National Accounts Matrix including Environmental indicators stems from dissatisfaction with measurement
Accounts (NAMEA) system. approaches based on purely economic concepts of well-
being. These tend to neglect the environmental and social
A major contribution to the development of such satellite aspects of sustainability. However, the social dimension
accounts is the System of Integrated Environmental of sustainable development has proved especially difficult
and Economic Accounting (SEEA) formulated jointly by to measure.
several international organisations including the OECD
(UN, OECD, et.al., 2003). The SEEA complements There are large differences across OECD countries in
standard economic accounts (i.e. the System of National how they interpret social sustainability: from concerns
Accounts, 1993, produced by the UN, OECD, Eurostat, about poverty in the developing world, to the health
IMF and World Bank) by providing a common framework consequences of environmental change, to issues relating
for examining interactions between the economy and the to ethnic minorities and gender balance, to broader
environment. considerations about the quality of life and social relations
(poverty, crime, education, etc.). The diversity of concerns
The SEEA contains physical flow accounts for four types of and lack of a common focus is one of the hurdles to
resources: natural resources, ecosystem inputs, products identifying suitable measures for the social side.
and residuals. Hybrid flow accounts then compare these
physical quantities to matching economic flows. In linking It has been difficult to derive indicators of “social capital” -
resource use to economic activity, the SEEA accounting comparable to economic and environmental capital -
framework leads to better understanding of policies for which can be measured in terms of aggregate stock. Many
decoupling environmental degradation from development social concerns relate to access to opportunities, e.g.,
and growth. whether some individuals or groups lack opportunities for
education and training, adequate health care or affordable
However, these accounts involve large sets of numbers housing. Devising statistical measures of the social
and it is a demanding task to extract easily understandable dimension of sustainable development requires data on
and politically relevant information. At present, accounting how economic, environmental and social resources are
approaches provide data more suitable as a basis for distributed in society.
detailed analysis in certain areas.
Social capital also reflects the shared norms and values
In addition, these approaches are limited to juxtaposing in society which bring benefits to individuals and groups
accounting schemes for two dimensions – environmental by facilitating co-operation and reducing opportunistic
and economic. There has been less progress in the social behaviour. This has led to attempts to develop indicators
field, despite attempts by groups such as the European of social cohesion in countries, regions and cities, but
Leadership Group on Social Accounting Matrices to link these tend to be very subjective.

5
Another dimension is the sustainability of institutions In the social sphere, indicators have been developed
over time, in particular the social protection system. to examine trans-boundary financial flows through
Measurement involves assessing the pressures on combining related, and sometimes off-setting, measures,
social institutions generated by the evolution of factors e.g., development aid and debt repayment. For many
such as ageing of the population and lower fertility developing countries, outflows in terms of loan principal
rates, labour market trends such as work polarisation, and interest are more than half of new inflows of
diversity and fragility of family ties and distribution of assistance. In effect, countries are borrowing to repay
economic resources. Indicators are needed to assess earlier loans.
these pressures, government policy responses, and the
outcomes delivered by various institutions. More sophisticated measures of global flows of capital,
human and natural resources are essential for arriving at
The range of social indicators is very broad and includes true indicators of sustainable development.
many measures that the OECD has developed over the
years. Social indicators provide objective measures of What are composite indicators?
the conditions in which people live, the factors shaping
these conditions and the actions taken by governments Composite indicators are synthetic indices of groups of
to preserve and improve them. OECD social indicators are individual indicators which are used to compare and rank
grouped under four broad policy objectives: enhancing countries in areas such as environmental performance and
the self-sufficiency of individuals, promoting equity in sustainable development. Composite indicators are valued
social outcomes, improving the health of populations, and for their ability to integrate large amounts of information
securing social cohesion (OECD, 2005b). into easily understood formats for a general audience.
They limit the number of statistics to be presented and
Devising suitable measures for the social dimension of allow for quick comparisons of country performance. In
sustainable development confronts a range of practical this, the use of composite indicators as a communication
and conceptual hurdles. As in the economic and and analytical tool is growing.
environmental fields, the selection of indicators relating
to the social dimension is a political act. Through this Examples include the Environmental Sustainability
selection, governments convey a sense of their priorities, Index, which compares countries based on over 100
make commitments to take action, and indicate that they indicators divided into five groups (environmental systems,
are ready to respond to their electorates for failures to environmental stresses, human vulnerability, societal
make progress. adaptability and global stewardship); the Ecological
Footprint which uses a range of indicators to measure
Are global effects taken into account? the amount of renewable and non-renewable land area
required to support given resource demands; and the
Nationally-based attempts to measure sustainable Dashboard of Sustainability, which links 100 economic,
development offer only limited insights into trans-boundary environmental and social indicators and examines their
effects or the impacts of countries on global sustainability. interactions on a country basis.
Country-level indicators need to be complemented
by measures of economic, environmental and social However, there are serious questions regarding the
externalities imposed beyond national borders. accuracy and reliability of composites, particularly in
ranking country performance (OECD, 2002a). Because
Various data sets have been proposed relating to their construction is not straightforward, they can provide
cross-border flows and impacts (OECD, 2005c). In misleading information, be manipulated to produce
the environmental sphere, for example, indicators desired outcomes or lead to simplistic policy conclusions.
of embedded carbon flows measure the import of Methodological issues include the sometimes lack
products with significant carbon content, e.g. steel and of a theoretical framework, the ad hoc nature of their
chemicals. These data show the impact of countries on construction, the sensitivity of results to different weighting
the stratosphere through their consumption (imports) and aggregation techniques, and continuing problems of
as well as production of carbon dioxide. Strict emission missing and weak data.
standards at the national level may be undermined by
large imports of goods produced under less restrictive Conflicting views on the merits of composite indicators
rules. While national indicators show a decoupling of are increasing at the same pace as their use. Yet, they can
harmful emissions and growth, international indicators be a useful starting point for policy discussions and can
may disprove such a trend. assist the public in understanding complex issues. The

6
OECD and the EC Joint Research Centre have developed
a handbook to assist both the users and builders of Previous issues of Statistics Brief
composites (OECD/JRC, 2005). www.oecd.org/statistics
No. 1, October 2001 – Trade in Goods and Services:
The aim of the handbook is not to resolve the debate Statistical Trends and Measurement Challenges
about composite indicators, but to contribute to a better
No. 2, February 2002 – Creation of the Euro Area:
understanding of their complexity and to an improvement
Implications for Economic Statistics
of the techniques currently used to build them. Through
this guide, users are acquainted with the advantages No. 3, March 2002 – Purchasing Power Parities –
and disadvantages of the application of composite Measurement and Uses
indicators and means for assessing their soundness. For
No. 4, June 2002 – Measuring Student Knowledge and
constructors, the methodological steps are explained and Skills: The PISA 2000 Experience
a toolbox presents different construction alternatives.
Methods for testing the robustness of composites and No. 5, November 2002 – Measuring the Non-observed
assuring their overall quality are also included. Economy

No. 6, October 2003 – Measuring Regional Economies

Conclusion No. 7, December 2003 – Comparing Growth in GDP and
Understanding sustainable development linkages and Labour Productivity: Measurement Issues
achieving the required policy trade-offs across the
No. 8, June 2004 – Comparison of Household Saving
environmental, economic and social spheres requires
Ratios: Euro area/United States/Japan
novel methodologies based on new types of statistical
approaches. The challenge in measuring sustainable No.9, July 2005 – The Comparability of International
development lies in developing new indicators and Migration Statistics: Problems and Prospects
combining these through accounting frameworks,
decoupling methods, global approaches and composite
indices. Solid analysis and measurement provide the
basis for implementing sustainable development policies
which accurately reflect the complexities of real world
choices. ■

7
Further information OECD Worldwide
• OECD (2000), Towards Sustainable Development Indicators to Measure OECD NORTH AMERICA
Progress, OECD Conference, OECD, Paris. OECD Washington Center
• OECD (2001a), Policies to Enhance Sustainable Development, OECD, Paris. 2001 L Street N.W., Suite 650
Washington, DC 20036-4922, USA
• OECD (2001b), Sustainable Development: Critical Issues, OECD, Paris.
Toll free: +1 (800) 456-6323
• OECD (2002a), Aggregated Environmental Indices: Review of Aggregation Fax: +1 (202) 785-0350
Methodologies in Use, OECD, Paris. General information:
+1 (202) 785-6323
• OECD (2002b), Indicators to Measure Decoupling of Environmental Pressure E-mail: washington.contact@oecd.org
from Economic Growth, OECD, Paris. Internet: www.oecdwash.org
• OECD (2002c), Overview of Sustainable Development Indicators Used by OECD JAPAN
National and International Agencies, OECD, Paris. OECD Tokyo Centre
• OECD (2003), OECD Environmental Indicators: Development, Measurement Nippon Press Center Bldg., 3rd floor
and Use, Reference Paper, OECD, Paris. 2-2-1 Uchisaiwaicho, Chiyoda-ku
Tokyo 100-0011, Japan
• OECD (2004a), Measuring Sustainable Development: Integrated Economic, Tel.: +81 (3) 5532 0021
Environmental and Social Frameworks, OECD, Paris. Fax: +81 (3) 5532 0035
E-mail: center@oecdtokyo.org
• OECD (2004b), Recommendation of the OECD Council on Material Flows and Internet: www.oecdtokyo.org
Resource Productivity, OECD, Paris.
OECD GERMANY
• OECD (2004c), Sustainable Development in OECD Countries: Getting the
OECD Berlin Centre
Policies Right, OECD, Paris.
Schumannstrasse 10
• OECD (2004d), World Forum on Key Indicators, Palermo, 10-13 November 10117 Berlin
2004, www.oecd.org/oecdworldforum. Tel: +49 30 288 8353
Fax: +49 30 288 83545
• OECD (2005a), OECD Factbook 2005: Economic, Environmental and Social E-mail: berlin.contact@oecd.org
Statistics, OECD, Paris. Internet: www.oecd.org/deutschland
• OECD (2005b), Society at a Glance – OECD Social Indicators, OECD, Paris. OECD MEXICO
• OECD (2005c), Sustaining Whose Development?, OECD Policy Brief, Paris. OECD Mexico Centre
• OECD/JRC (2005), Handbook on Constructing Composite Indicators: Av. Presidente Mazaryk 526
Colonia: Polanco
Methodology and User Guide, OECD Statistics Working Paper, Paris. C.P. 11560
• UN, OECD et. al. (2003), Handbook of National Accounting, Integrated Mexico D.F., Mexico
Environmental and Economic Accounting 2003 (SEEA), United Nations, New Tel: +52 55 9138 6233
Fax: +52 55 5280 0480
York. E-mail: mexico.contact@oecd.org
Internet: www.ocdemexico.org.mx

OECD PARIS

The Statistics Brief is published by the Statistics Directorate of the OECD OECD Paris Centre
Editor in chief: Enrico Giovannini 2, rue André-Pascal
Editor: Charles Aspden 75775 Paris Cedex 16, France
Editorial team: Benoit Arnaud, Eileen Capponi, Julien Dupont Tel: +33 1 45 24 81 67
Fax: +33 1 45 24 19 50
For further information contact: E-mail: sales@oecd.org
The Editor Internet: www.oecd.org
STATISTICS BRIEF
Statistics Directorate
OECD
2, rue André-Pascal
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email: STD.STATBRIEF@oecd.org
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