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 GFOA BEST PRACTICE APPLICABLE IN CANADA Incorporating Sustainability in Public Finance Practices (June 2004) (BUDGET) *
Background. Sustainability is the notion that current economic and consumption patterns should not
reduce opportunities for future generations by depleting or impairing resources. The driving force behind
sustainability is the recognition that the earth’s - and by extension, our communities’- natural capital is
limited and that pollution and waste are a drain on the economy. Sustainability demands balance among
economy, environment, and community. Emphasizing any one of these factors over the others causes an
imbalance in intergenerational equity and undermines the ability to support current business practices
over the long term. In contrast, a “triple bottom line” approach aspires to a strong and growing economy,
while simultaneously maintaining the quality of the environment and working to achieve social fairness.
Programs to reduce air pollution and clean up our rivers, harbors, and landfills are all very real and
immediate examples of the high cost of sidestepping sustainable practices. Both the public and private
sectors have experienced the complexity and costs of rectifying mistakes caused by an imbalance between
economic and environmental goals. At the same time, many businesses worldwide have demonstrated that
they can operate profitably while employing sustainable practices. Similarly, many governments have
adopted and implemented sustainable policies and business practices. Through the power of example, the
public sector must continue to lead the way toward a sustainable future. Standing at the vortex of the
policymaking process, government finance officers have an important role to play in this critical effort.
Recommendation. The Government Finance Officers Association (GFOA) recommends that the issue of
sustainability be considered a core value in setting organizational policy and establishing business
practices in all areas of public finance. Accordingly, GFOA encourages governments to consider the
following actions:
Public Policy:
• Incorporate a commitment to sustainability into mission and value statements.
• Develop organizational goals that reflect sustainability principles both at the jurisdiction-wide and
departmental levels.
• Encourage policy development that supports the environmental sustainability of the jurisdiction.
• Implement policies encouraging or requiring the use of products certified as sustainable and/or
environmentally friendly.
• Evaluate how the jurisdiction’s tax structure affects its goals for a healthy economy, a healthy
environment, and social fairness.
• Form partnerships with other government agencies and with the private and not-for-profit sectors that
promote sustainability.
Budget and Management:
• Develop budget processes that reflect sustainability goals and objectives, measure government
performance in realizing those goals and objectives, and benchmark such performance against
comparable jurisdictions and/or accepted standards.
• Consider financing and capital planning processes that systematically identify future costs and
allocate those costs equitably across generations. The use of life-cycle costing and similar analytical
tools is advised.
* Budgeting & Fiscal Policy
Sustainable Business Practices:
• Implement purchasing practices that support the procurement of sustainable and recycled goods and
services consistent with the jurisdictions’ financial plans and resources. Promote the use of products
certified by reputable third-party organizations.
• Develop sustainability principles and guidelines for facility and infrastructure development. Adopt
green building standards, such as LEED, for construction projects.
• Adopt policies that promote sustainable business practices in governmental operations, such as fleet
management, building maintenance, and parks and greenspaces. Consider adopting guidelines
established by independent organizations.
• Implement practices and procedures that reduce waste, carbon dioxide emissions, and reliance on
non-renewable resources; promote recycling and reuse; and minimize employee exposure to
hazardous materials.
• Educate and inform employees of the importance of sustainable practices and offer suggestions they
can employ in the workplace.
• Report on sustainable business practices and goals in annual reports, budget documents, and other
core communications.
• Include sustainability in job descriptions and performance reviews.
References.
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GFOA Recommended Practices;
x Sustainability; 2002, Approved by the GFOA’s Executive Board, June 17, 2002.
“Portland, Oregon: A Case Study in Sustainability,” Government Finance Review, February 2002.
“Purchasing Power: The Massachusetts Environmental Procurement Program,” Government Finance
Review, February 2002.
“Economic Development and Environmental Protection: The Northampton County, Virginia,
Experience,” Government Finance Review, February 2002.
“Policy Guide on Planning for Sustainability,” American Planning Association, 2000
(www.planning.org/policyguides/sustainability.htm)
Sustainable Communities: From Vision to Action, Lamont C. Hempel, Claremont Graduate
University, 1998.
The Ahwahnee Principles, Local Government Commission, 1994.
Our Ecological Footprint: Reducing Human Impact on the Earth, William Rees and Mathis
Wackernagel, New Society Publishers, 1996.
Caring for the Earth: A Strategy for Sustainable Living, World Conservation Union et. al., 1991.
Approved by the GFOA Committee on Canadian Issues, June, 2004.
* Budgeting & Fiscal Policy