On the practical use of corporate single- index sustainability measures in agriculture

Abstract

It goes without saying that sustainability is at the forefront of the public debate. Sustainability assessment is an essential part in our aim to reach a more sustainable production and consumption pattern. A wide range of different sustainability assessment methodologies are already being developed and applied. These approaches can for example differ regarding the scale (e.g. macro versus micro scale), the sustainability view (weak versus strong sustainability), and the orientation (burden versus value based). The most familiar approaches to assess sustainability performance are burden orientated: they assess the costs or potential harm of resource use. These burden-oriented approaches focus on the level of environmental impacts caused by an economic activity compared to another set of environmental impacts (and thus focus on the question how resources should be substituted by each other). Conversely, value-oriented impact assessment analyses how much value has been created with this set of environmental impacts as compared with the use of these resources by other companies (and thus answer the question where resources should be optimally allocated). An example of a value oriented approach is the sustainable value approach (SVA), developed by Figge & Hahn (2004, 2005). This approach measures fi rm contributions to sustainability, based on the assessment of opportunity costs of using economic, social and ecological resources. Recently, Kuosmanen & Kuosmanen (2009) draw a sharp distinction between the conceptual idea and the operational estimator. They argue that the proposed estimator rests on a number of strong assumptions. On the other hand, Figge and Hahn (2009) reply that their argument rests on a fundamental misspecifi cation of the Sustainable Value approach. This session wants to discuss the practical use of single-index sustainability measures (such as the SVA) and show in how far this methodology opens new perspectives for assessing fi rm sustainability. In this session, all practical applications will focus on the sustainability measures of agricultural activities. The lessons drawn from these applications can however generate useful insights for value oriented measurement of environmental management across different sectors. This session provides useful information for ecological and agricultural economists analysing sustainability. Moreover, this session tries to link and to integrate the general congress themes: green business, sustainable development and land use. Further it is practical and methodological oriented and certainly may interest a number of ecological economist trying to assess firm sustainability