CinnamonFOT - Professor Mohan Munasinghe

M I N D Munasinghe Institute for DevelopmentMunasinghe Institute for Development
Ayubowan
Vanakam
Good Morning

M I N D Munasinghe Institute for Development
How sustainable is our future
– role of tourism
Professor Mohan Munasinghe
Chairman, Munasinghe Institute for Development (MIND), Colombo
Shared the 2007 Nobel Prize for Peace (Vice Chair, IPCC-AR4)
Honorary Senior Advisor to the Govt. of Sri Lanka
KIVA Guest Prof. of Sustainable Development, Darmstadt Univ. Germany
Distinguished Guest Professor, Peking University, China
Plenary keynote speech presented at the
Future of Tourism Summit 2015
Organised by Cinnamon Tourism and Resorts
Colombo, 28 September 2015

Congratulations to Cinnamon Hotels and
Resorts for organising this conference.
Expectations are high with the announcement
of the Mega $770m Cinnamon Life project, in
the emerging Colombo Megapolis! We hope
that this conference will produce innovative
and practical ideas about how the tourism
sector can contribute towards making
development more sustainable in Sri Lanka
and the world. We will seek win-win outcomes
for people, planet and prosperity

M I N D
Why Tourism is important: Key Statistics
Munasinghe Institute for Development
World wide
International tourist
arrivals will increase
by 3.3% a year (2010-
2030) to reach 1.8
billion by 2030
Arrivals in emerging
destinations will
increase by 4.4% per
year – faster than the
global average
In 2014 Tourism
earned $1.1 trillion
Sri Lanka
Arrivals & income are growing. In 2014:
Over 1.5 million arrivals & Rs.300 billion
Expect 2.5 million arrivals by end-2016
Source- www.statistics.gov.lk

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

- Poverty, inequality & other bad socioeconomic trends
- Resource shortages (energy, water, food, etc.)
- Financial sector weakness and wealth concentration
- Conflict, insecurity & emerging polycentric world
- Weak leadership & poor decisionmaking
- Unsustainable values
- Trade, multinationals and special interests
- Unexpected shocks and disasters
- Climate Change: the ultimate threat multiplier
Multiple threats are inter-related and synergistic
Stakeholder interests are divergent. Responses
uncoordinated & piecemeal – lack of leadership
Robust integrated & comprehensive strategy needed
Multiple Heavy Shocks that can
cause Global Breakdown

M I N D
% of Population Undernourished
Almost 1 billion hungry: 1 in every 7 persons,
mainly in Africa and Asia!

Status of Global Resource Use & Limits
Red = exceeding limit
Green = within limit
Areas: climate change, biodiversity loss, nitrogen, freshwater
use, ocean acidification, stratospheric ozone, land use,
phosphorus, chemical pollution, atmospheric aerosols
SEI, 2009

M I N D
Banks bailed out by Govts – but still acting badly
In the aftermath of 2008 financial meltdown (IMF data)
 industrialised countries bailed out private banks for 1.75 trillion dollars,
equal to 70 million people earning 25,000 euro per year.
Bailouts created govt. debt, weakening especially Greece, Italy, Portugal,
Spain (GIPS not PIGS), imposing huge social & human costs.
Over 100 million people lost their jobs, mainly in the developing world.
Post-2010 Bank Fraud
Largest banks have been
fined hundreds of billions of
dollars for fraud (Barclays,
Deutsche Bank, Royal Bank
of Scotland, Societe
Generale, JP Morgan
Chase, HSBC, PNB-Paribas,
Credit Agricole, UBS, Credit
Suisse, etc)!

M I N D
Growing inequality and wealth concentration
“During past 300 years, the rich have got richer while the poor got
poorer, Growth of returns to capital is faster than general growth rate
– Thomas Piketty, French Economist
“85 richest people in the world, who will fit into a single London double-
decker, control as much wealth as the poorest half of global population
(3.5 billion people).” – Christine Lagarde, IMF Head
“ 300 wealthiest individuals increased their wealth last year by $524
billion - more than the combined revenues of Denmark, Finland,
Greece and Portugal” - Bloomberg Billionaires Index
Inequality in salaries
 Chipotle Mexican Grill: CEO salary $25 million/year - 1200
times wage of av. worker $21000. Plus stock bonus >$100 million.
 Walmart US: CEO salary $13 million/year – almost 500 times
wage of av. worker $27000.
 25 best paid hedge fund managers earned $21 billion in 2013.

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

M I N D
Climate Change – IPCC Findings
• Global warming in unequivocal. Total radiative forcing of the climate
now is unprecedented in several thousand years, due to rising
concentrations of GHG (CO2, CH4 & NO2).
• Humans activities since the 18th century are very likely to have caused net
warming of Earth’s climate, dominating over the last 50 years. More temp.
and sea level rise is inevitable, even with existing GHG concentrations.
• Long term unmitigated climate change would likely exceed the capacity
to adapt, of natural managed and human systems.
•Adaptation measures are available, but must be systematically developed
• Mitigation technologies are also available, but better policies and
measures (PAM) are needed to realize their potential.
• Poor countries & poor groups are most vulnerable to warming, sea
level rise, precipitation changes and extreme events. Most socio-
economic sectors, ecological systems and human health will suffer.
• Making development more sustainable (MDMS) is the most
effective solution - by integrating climate change policy into
sustainable development strategy.

M I N D
Financial Markets
Productive Economic Assets
Bio-geo-physical Resources
Econ. Growth
Three Levels of Reality
Sound financial markets and economic growth
should be based on the true value of the
productive economic asset base. In turn the value
and use of economic assets should closely reflect
the state of natural (bio-geo-physical) resources
Head in the clouds?
Feet firmly on the ground?
WHAT ARE OUR VALUES AND HOW WELL DO WE
ESTABLISH PRIORITIES ?

M I N D
Financial Markets
Asset Bubbles
Triple crisis bubbles driven by greed – enjoy now & pay later 2
A few get rich quickly, many innocents pay a heavy price afterwards
2008 crisis

M I N D
Financial Markets
Asset Bubbles
Econ. Growth
2008 crisis Poverty-Inequity

M I N D
Financial Markets
Asset Bubbles
Econ. Growth
Externalities
Climate change

M I N D
Financial Markets
Asset Bubbles
HumanValues/Choices
Econ. Growth
Govt. Bailout >$6 trillion Aid/yr ~$100 billion
Asset bubble >$100 trillion (1012), Global GDP >$60 trillion
World Military Expenditures: over $2 trillion in 2014
Externalities
Climate change
Few billion $

M I N D
Asset crisis: have we learnt from experience?
Are we not returning to business as usual?
Financial
Sector
Jobless Poor
(~100 million)

WHAT ?
HOW ?
are the challenges facing humanity
development efforts & need integrated solutions
can we move forward to transform risky current
trends into a safer and better future
Apply the SUSTAINOMICS framework to start
making development more sustainable (MDMS)

HOW DO WE GET THERE ?
Addressing Complex, Multiple,
Interlinked Sustainable Development
issues within the Integrated
SUSTAINOMICS Framework
First presented at 1992 Earth Summit
in Rio de Janeiro, and subsequently
taught & practically applied worldwide.

M I N D
Core Concept 1: Make Development More Sustainable
with EMPOWERMENT, ACTION & FORESIGHT
There are many definitions of sustainable development starting with
Bruntland (1987), and its precise meaning still remains elusive.
Parallel track strategy:
1. Short to medium term – make development more sustainable
(apply best practice).
2. Long term - aim for ideal goal of sustainable development
(identify next practice).
Making development more sustainable (MDMS) is a less ambitious
incremental strategy that is more practical to implement because
many unsustainable activities are easier to recognize and eliminate.
PRACTICAL TEST FOR PUBLIC POLICIES:
Does a specific policy make development more (or less) sustainable?

Lets move forward NOW!! If
we climb uphill, we will reach
the peak eventually
We cannot see the peak!!
Let’s stop to discuss &
analyze how to reach it.
Sustainable Development
Peak – including climate
change (covered by clouds)
Many obviously unsustainable practices exist today.
MDMS encourages us to eliminate them NOW! Examples
include energy wastage and deforestation.
EMPOWERED to Make Development More
Sustainable (MDMS) – BEST PRACTICE
ANALYSING SD and CC –
NEXT PRACTICE

Making Development More Sustainable: Personal Lifestyle Changes

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

Development
- Sectors (Agriculture, Energy, Industry,
Transport, Health, etc.)
- Systems (Environmental, ecological, etc.)
- Communities (Poor, Vulnerable, etc.)
SustainableDev.
(Social,Economic,Environmental)
Environment
Tourism
Sust.
Tourism
MDMS: National Level SD Integration
Make decision makers see Sustainable Tourism as key
element of integrated national development strategy

M I N D
Economic
Social
• empowerment/governance
• inclusion/consultation
• institutions/values
Environmental
• resilience/biodiversity
• natural resources
• pollution
Sustainable Development Triangle – harmonising key elements and
interconnections (corners, sides and centre) Source: Munasinghe [1992], Rio Earth Summit
•growth
•efficiency
•stability
Core Concept 2: Harmonise the SD Triangle for
BALANCE & INTEGRATION - 1

M I N D
Economic
Social
• empowerment/governance
• inclusion/consultation
• institutions/values
Environmental
• resilience/biodiversity
• natural resources
• pollution
• inter-generational equity
• values/culture
TOURISM
Poverty-Equity
Climate Change
Sustainable Development
•growth
•efficiency
•stability
Core Concept 2: Harmonise the SD Triangle for
BALANCE & INTEGRATION - 2

Building Assets for Sustainable Development
Social
Capital
Built
Capital
Natural
Capital
Social Capital
• Human
• Cultural
Source: Munasinghe
(1992), Rio Earth Summit
Tourism
Sector
Key role played by Social Capital embedded in Civil Society:
ignored, undervalued, invisible
• At individual level, it is built on personal networks that help us enormously in
our private and professional lives.
• At community and national levels, it: is the invisible glue that binds society
together – involving values- ethics, culture, behaviour, and social linkages.

Core Concept 3: Transcend Boundaries of SD
with INNOVATION & FRESH IDEAS
• Values – replace unsustainable, unethical values
• Disciplinary – complex issues need all disciplines
• Space – spans local to global scales
• Time – spans days to centuries
• Stakeholder – need to include all stakeholders
• Operational – full cycle from data to application
•Greed, selfishness and violence are unsustainable
•Selflessness, altruism, enlightened self-interest, and respect for other
humans and nature will make development more sustainable
Transcend Unsustainable Values - Build essential ethical
and moral values especially among YOUTH
Examples: Ethical Dimensions of Climate Change 2006
Interfaith Declaration on Climate Change 2009

M I N D
Wrong Values Drive Unsustainable Development: 1
Social
Capital
Environmental
Debt
Unsustainable
cons. & prod.
depleting NR
Unethical
Social Values
Greed, Selfishness,
Corruption, Inequity,
Violence, Injustice,
Elitism
Source: Adapted from Munasinghe (1992), Rio Earth Summit

M I N D
Social
Capital
Economic
Mal-development
growth based on
unsustainable debt,
waste & inequitable
consumption by
the elites
Environmental
Debt
Unsustainable
cons. & prod.
depleting NR
Unethical
Social Values
Greed, Selfishness,
Elitism

M I N D
Social
Capital
Economic
Mal-development
growth based on
unsustainable debt,
waste & inequitable
consumption by
the elites
Environmental
Debt
Unsustainable
cons. & prod.
depleting NR
Unethical
Social Values
Greed,Selfishness,
Elitism
Environmental
Debt
Unsustainable
Pollution &
Depleting Natural
Resources
Drivers of
Unsustainable
Development
(with feedback)

Transcending Stakeholder Boundaries to Ensure
Cooperation for Sustainable Development
Social
Capital
Business
Govern-
ment
Civil
Society
We can catalyse interactions among government, civil society and business
to strengthen local, national and global governance
Source: Munasinghe (1992), Rio Earth Summit
Cinnamon
Resorts &
Hotels

Many practical analytical tools and policy options to build
integrated SD strategy (global to local levels)
Many available case studies and best practice examples
involving sustainomics applications
Core Concept 4: Full cycle application of integrative
tools, from data gathering to practical policy
IMPLEMENTATION
Choosing Appropriate SD
Indicators
- Social
- Environmental
- Economic
- Institutional
many indicators are available;
thus correct choice is critical for
specific task at hand

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

M I N D
Economic
Social
•fairness/empowerment
•inclusion/consultation
•institutions/governance
Environmental
•natural resources
•resilience/biodiversity
•pollution
• values/culture
SD based on
Happiness &
Well-Being (GNH)
•efficiency
•growth
•stability 21st Century
Global Eco-
Civilization
VISION: Global Eco-Civilization of the 21st Century
focusing on Happiness & Well-Being (GNH) -
depending not only on material consumption (GNP)
“Happiness” is a state of mind like “Business Confidence”

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

M I N D
NumberofEarths
Sustainable
BAU
1.Ecol. Footprint of Humanity
In 2012 we needed 1.5 earths;
and by 2030 almost 2 Earths
Unsustainable
one
earth
2012 2030
Munasinhe Institute for Development
3. Millennium Development Goals (MDG) & 17 SDG
United Nations Millennium Declaration, 2000 and Post-2015 Agenda
1. Eradicate extreme poverty and hunger 2. Achieve universal primary education
3. Promote gender equality & empowerment 4. Reduce child mortality
5. Combat HIV/AIDS, malaria & other diseases 6. Improve maternal health
7. Ensure environmental sustainability 8. Global partnership for development
Worthy targets, but if the rich consume more than one planet
worth, where are the resources to feed the poor, esp. after CC.
Unfair World Consumption
Pattern 2010
Champagne Glass

ClimateRisk
(e.g.percapitaGHGemissions)
Development Level (e.g. per capita income)
Poor
Middle Income
Rich
Today
Source: M. Munasinghe (1995) "Making Growth More Sustainable," Ecological Economics, 15:121-4.
MDMS: Resource Use Reduction by Making
Consumption and Production More Sustainable: 1

ClimateRisk
Poor
Middle Income
Rich Transform
Dematerialise
Incentives/resources for developing countries
1. Safety net (vulnerability reduction) for poorest.

ClimateRisk
Poor
Middle Income
Rich
Leapfrog
(SRI LANKA)
Transform
Dematerialise
Business & Social Innovation vital to find SD tunnel
Incentives/resources for developing countries
1. Safety net (vulnerability reduction) for poorest.
2. Technology cooperation/support to tunnel

Food for a Week:
Affluent Family
Unsustainable – must
transform/dematerialise
towards sustainablity:
SDG - sustainable
consumption & production
Source: Menzel, 2005
Food for a Week:
Poor Family
Unsustainable/Unethical –
must leapfrog/tunnel to
prosperity:
SDG - poverty & inequality
Example: 1/3rd World food production lost/wasted. In homes:
USA - 50% & Europe - 30%. Yet about 1 billion are starving.

M I N D
The consumption of the rich is crowding out
the development prospects of the poor.
As resources (like energy, water and food)
become scarce, the “market” solution is for
prices to rise – but this will simply ration
those resources in favour of the rich and
deprive the poor of even their basic needs.
Recent events in many countries show that
deprivation leads to violence
We can enhance poverty eradication and
protect nature by persuading the rich to
consume more sustainably

M I N D
United Nations Post-2015 Agenda
endorsed by all Nations: Sep.-Oct. 2015
•Key Principle:
Integrated and comprehensive approach to
promoting all the dimensions of sustainable
development in a balanced manner
•Outcome Document:
“Transforming our world - the 2030 agenda for
global action”
•17 Sustainable development goals (SDG):
Universal goals proposed for all countries

M I N D
1. End poverty in all its forms everywhere
2. End hunger, achieve food security & improved nutrition and promote sustainable agriculture
3. Ensure healthy lives and promote well-being for all at all ages
4. Ensure inclusive & equitable quality educ. & promote lifelong learning opportunities for all
5. Achieve gender equality and empower all women and girls
6. Ensure availability and sustainable management of water and sanitation for all
7. Ensure access to affordable, reliable, sustainable and modern energy for all
8. Promote sustained, inclusive and sustainable economic growth, full and productive
employment and decent work for all
9. Build resilient infrastructure, promote inclusive & sust. industrialization & foster innovation
10. Reduce inequality within and among countries
11. Make cities and human settlements inclusive, safe, resilient and sustainable
12. Ensure sustainable consumption and production patterns
13. Take urgent action to combat climate change and its impacts
14. Conserve & sustainably use oceans, seas and marine resources for sustainable development
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage
forests, combat desertification, & halt and reverse land degradation & halt biodiversity loss
16. Promote peaceful and inclusive societies for sustainable development, provide access to
justice for all and build effective, accountable and inclusive institutions at all levels
17. Strengthen means of implementation and revitalize the global partnership for sust. dev.
UN Post-2015 Agenda: Sustainable Development Goals

The Government of Sri Lanka fully supports the Post-2015 Sustainable Development
Agenda and the Sustainable Development Goals and targets that have been adopted by this
Assembly.
Accordingly, I declare that the Government of Sri Lanka will act with determination as a
pioneer of eco-sensitive civilization that is emerging in the 21st century.
Sustainable development encapsulates the equilibrium between social and economic
development and environmental protection. The Government of Sri Lanka anticipates
achieving these goals fully by 2030.
In that respect, we will work towards the provision of basic needs of the people, progressive
alleviation of poverty, elimination of all forms of discrimination and inequalities, and
establish a society based on social justice and human security.
Parallel to this, while emphasizing on the protection of natural resources, we will also
formulate a state policy on resource consumption based on the sustainable capacity of the
environment.
We will strive to ensure that the relevant policy framework would be implemented within
an institutional structure based on the principles of good governance espoused by my
Government. Special attention will also be given to the concept of environmental good
governance, as an integrated part of the good governance policies.
HE President Maithripala Sirisena’s Speech at the UN General
Assembly on 27 September 2015 – Selected Excerpts

M I N D
SDG and the Tourism Industry
• Developing future business opportunities: SDG is new market that
needs innovative solutions and related products and services.
• Strengthening the license to operate: companies should align their
priorities with the SDGs to reduce risk from growing compliance,
regulatory, legal, social and reputational pressures.
• Investing in a sound business environment: Tourism industry
cannot succeed in societies that fail. Investing in the achievement of
the SDG supports business success in the society they operate in.
• Improving performance and productivity: economic incentives for
tourism companies to use resources more efficiently or to switch to
more sustainable alternatives
• Creating a common language and shared purpose: Tourism
industry can communicate better with stakeholders about SD trends
and impact on performance. It will bring together partners, globally.

Improved business attitudes to SD: 1960s to Now
“Few trends could so thoroughly undermine the very foundations of our free
society than the acceptance by corporate officials of a social responsibility
other than to make as much money as possible for stockholders.”
Milton Friedman (1962), Capitalism and History
“Over the past decade, sustainability has moved from the fringes of
the business world to the top of the shareholders' agenda….”
PriceWaterHouseCooper (2009)
Sri Lanka Business Sector
should develop similar vision

M I N D
Key Role for Sri Lanka: Leading the way to a
More Sustainable World
1. Growing economy finding new SD path
Economic: technology, resources and skills
Social: social & human capital, committed to peace, unity
Environmental: ancient culture that respects nature
2. Mobilizing civil society & business to work
with government, nationally and globally
Caution: SL is doing well on economic growth
but lagging on environmental and social
dimensions of sustainable development

M I N D
Best
Sri
Lanka
Maldives Pakis
tan
India Bangla
desh
Nepal Bhutan
HDI 0.743 0.741 0.551 0.619 0.547 0.534 0.579
HDI Rank 99 100 136 128 140 142 133
Gini Index 40.2 - 30.6 36.8 33.4 47.2 -
Health Expenses per
capita (PPP$)
163 494 48 91 64 71 93
Infant Mortality (per
1000 births)
12 33 79 56 54 56 65
Population without
electricity (Mn)
6.7 - 71.1 487.2 96.2 18.1 -
Sanitation (% popn with
access)
91 59 59 33 39 35 70
Adult literacy rate (%) 96 90 49.9 61 47.5 48.6 47
CO Emissions per capita
(tonnes)
0.6 2.5 0.8 1.2 0.3 0.1 0.2
HDI Data: SL ranks high in SAARC

M I N D
Growth of Per Capita GNP in Sri
Lanka (US dollars)
Need decades to catch up E. Asian countries

M I N D
•Sustainomics requires balance within SD triangle - Social
and environmental issues could threaten economic growth
•How can high growth be maintained? Debt, budget/trade
deficits, FX imbalance, low public sector efficiency, poor
returns to public investment (ICOR), etc. are growing issues.
•Inequality has worsened - Gap between rich and poor and
between rural and urban population is rising.
•Environmental & domestic resource costs are high due to
rapidly expanding GDP.
•Dependence on critical imports (like oil and coal) is rising
at rates that cannot be sustained for long – drain on FX.
Key SD Challenges for Sri Lanka

M I N D
Sri Lanka, Share of
household income by income
quintiles - 2012
The richest 20% have 54%
of the total household
income or twelve-fold more
than the poorest 20% who
have only 4.4%
Department of Census and Statistics, 2012; Central Bank 2013
0
0.1
0.2
0.3
0.4
0.5
0.6
Spending Unit
Income receivers
Gini Coeff. (Monthly
Income): 1953-2010
(Higher value is WORSE)
(a) Excluding Northern and Eastern Provinces.
(b) Excluding Killinochchi, Mannar and Mullaitivu
Districts.
*
2010/2012

M I N D
Environ-
mental
Sustainability
Index (ESI)
Country commitment to environmental
sustainability under 21 categories with
importance and effort given to environ.
protection, & impact on policy areas.
Sri Lanka Ranked 79th among 146
countries with a score of 48.5. Finland
is 1st with a core of 75.1.
Environ-
mental
Performance
Index (EPI)
General ranking of performance under:
Environment, Health, Air Quality, Water
Resources, Productive Natural
Resources, Biodiversity and Habitat, &
Sustainable Energy using 16 indicators
Sri Lanka 58th out of 163 countries
(score 63.8). Average EPI score for
income peer group: 56.2
Average EPI score for Asia and
Pacific: 57.4
Ecological
Footprint
(EF)
Tracks demand of human populations on
planet’s ecosystems relative to
biologically productive land and
available water
Sri Lanka ranked 126th out of 157
nations: ecological footprint is 0.45.
UAE has largest footprint of 10.68
and Puerto Rico lowest with 0.04
Sri Lanka: Poor Environmental Indicators - 2010
Perceived Levels of Public Sector Corruption
SL is 91st out of 177 countries: Score = 37 (100 is most clean)
Source: Transparency International 2013
% GDP spent on educ. & health is quite low.

M I N D
Train future leaders in govt. business & civil soc.
Top universities worldwide are starting to integrate
sustainability and SD concepts into their core curricula.
Emerging economies are leading in this area
Ethical and moral principles are emerging, which include
sustainability concepts.
Educate sustainable consumers & producers
Educating business and public through awareness building
about sustainable development is key, especially for youth
Human Capital is greatest asset
mobilize and empower business & civil society to synergise
with govt., to make built environment more sustainable
Business and civil society to work with Govt.

M I N D
Key Role for business & civil soc. in Good Governance
• Governance is not the sole preserve of the state
• Show greater activism in business, government, and civil
society, and participate more in decision making
• Set high standards, especially for youth (effectiveness, rule of
law, accountability, honesty/integrity, transparency, equity,
participation, etc.)
• Speak out for good governance & demand higher standards
• Reduce paternalism, micro-management, and excessive
interference of the state
• Provide leadership in building the social consensus

WHAT ?
WHICH?
HOW ?
practical analytical tools and policies are available
Many best practice examples exist, in Sri Lanka
and worldwide.
sustainable consumption & production.
WHO ?

Global Influences,
National SD strategy
(NSDS) & plans
Action Impact
Matrix (AIM)
applied to Tourism
Macro- and Sectoral
Models and Analyses
Implement Tourism
Policies& Projects
Tourism links with
national SD strategy
and stakeholders{
Identify Links,
Screen, Prioritize
Issues, Select
Remedies
Linking Tourism to SD (Macro to Micro Levels)
Action Impact Matrix (AIM)
National
Policy
Impact on People &
Local Environment
Tourism
Activities

Benefits: decent jobs; economic activity through value chains; goods and services
that meet the needs of individuals, other businesses, governments and others
Result: economic growth & sustainable development of society they operate in
Sustainable Business
Macro level (Big Picture)
Integrates principles of CSR+, CSV
& sustainability into operations,
relationships, and governance
Result:
 transparent, accountable, and
inclusive systems
 helps to address adverse impacts
of business activities
Promotes:
 accountable institutions;
 just and peaceful societies;
 respect & support for rule of law;
 model good business practices;
 upholding norms and standards of
human rights, labor, environment;
 anti-corruption.
Micro level (Details)
Sustainable Business: Key Features
Need for new branding concepts: Goodness, Beauty, etc.

Economic
• Improved profits & value added
• More employment and income
• Increased resource efficiency
• Higher worker productivity
Social
• Better conditions for workers
• Improved services to customers
• Better social services (health, educ.)
Environmental
• Less pollution
• Lower resource use
• Ecosystem & biodiv. protection
• values/culture
Sustainable
Tourism

Investment Imbalance: Blind focus on materialistic
growth, unrestrained market forces, corruption and
inequality destroy vital Social and Natural Capital
Social
Capital
Natural
Capital
Govern-
ment
Social
Capital
Built Capital
Materialistic growth,
Unrestrained market
forces, Corruption,
Inequality

M I N D
Economic Impacts of Tourism
• Positive Impacts
– Increased Forex earnings
– Direct contribution to government revenue: taxes, duties
– Employment generation
– Stimulation of infrastructure development: water, electricity,
transport
– Contribution to local economy
• Negative Impacts
– Leakage: Major transfer of tourism revenues out of host country
– Exclusion of local businesses and products
– Infrastructure costs: Public subsidies or tax breaks may reduce
government investment in key areas like education and health
– Increase in prices: price hikes due to increase in demand for
basic goods and services affects local population
transport

M I N D
Impact of tourism on Sri Lanka economy
Rapid growth of arrivals, income & jobs: 2010-2016
Source: SLTDA

M I N D
Environmental Impacts of Tourism
High environmental quality, both natural and human-
made, is essential for tourism.
– Contributes to environmental protection and conservation.
– Can raise awareness of environmental values and serve as a
tool to finance protection of natural areas and increase their
economic importance.
• Negative impacts
– Construction can harm environment: eg., roads and airports,
tourism facilities, including resorts, hotels, restaurants,
shops, golf courses and marinas.
– Depletion of natural resources – water, land degradation
– Pollution: air, noise, solid waste, littering, sewerage, oil &
chemicals, visual pollution

M I N D
Social Impacts of Tourism
– Generation of incomes and jobs; higher living standards
– Increased community pride
– Construction of new and improved infrastructure facilities
– Modernisation of the family via new gender roles
– Broader social horizons & reduced prejudice among tourists
– Global understanding and international peace
• Negative Impacts
– Polarisation of social structure & increased income inequality:
benefits not evenly distributed
– Disintegration of the family and traditional value structures
– Tourists fail to respect local norms or behaviour, customs and
moral values
– Social pathology, including prostitution, drugs, crime.

MACROECONOMY (Multisectoral CGE)
TRANSPORT ENERGY TOURISM
INDUSTRY
ROAD RAIL
OTHER
FOSSIL
FUELS
HDRO-
ELEC.
OTHER
REGION 1 REGION 2
REGION 3
Linking up with Sri Lanka Economy: Big Picture
Multi-sector Computable General Equilibrium Model
WATER

Basic
Input-Output
Table (with Tourism)
Distribution of Income
Satellite
Environmental
Accounts
Envir.-Social Links
Distribution of
Environmental
Impacts
Economic Links
(inter-industrial)
Environmental-
Economic Links
Economic-Social Links
(households)
Expanded Green National Accounts for Sust. Tourism
Source: Munasinghe (2001), Macroeconomics and Environment

Tourism Sector Project Analysis: Details
Sustainable Development Assessment Tools
1. Economic/Financial Assessment (CBA)
2. Environmental Assessment (EA)
3. Social Assessment (SA)
4. Multi-Criteria Analysis (MCA)
5. Poverty Assessment (PA)
6. Technical Assessment (TA)
Choice of appropriate indicators is vital for SDA
Examples of Tourism Projects
1. Constructing new hotel
2. Ancient cities tour package
3. Nature tour package

M I N D
Sustainable Production: Insights from Workshops
& Seminars on Business & Sustainability for Senior
Managers of Leading Multinationals
Recent Examples:
• KUONI, Swiss (Travel & Tourism)
• BASF, Germany (Chemicals)
• TESCO, UK (Supermarkets)
• Unilever, Coca Cola, Reckit-Benkeiser, Johnson SC, Danone,
Nestle (Retail)
• Petrobras, Brazil (Energy, Oil and Gas)
• OPEC (energy, oil and gas)
• Sime Darby, Malaysia (Plantations Conglomerate)
• Novozymes, Denmark (Biotechnology)
• Vale, Brazil (Mining)
• Siemens, Shanghai Electric Group (Heavy Industry)
• WCW, Denmark (300 CEOs in Europe)
• Amorim, Portugal (Cork)

M I N D
Corporate Social
Responsibility
(CSR) Vs. Creating
Shared Value (CSV)
•Covers the three dimensions of SD triangle: People (society), Planet
(environment) & Profit (economy). Firms must widen performance
reporting framework to include ecological & social issues
•The TBL concept demands that a company's responsibility lies
with stakeholders much as with shareholders. Stakeholder means
anyone who is affected (directly or indirectly) by the firm’s actions.
Sustainability or Triple Bottom Line (TBL) Accounting

M I N D
Source: Adapted from Munasinghe et al. (2009)
Raw material
production
Manufacture
& processing
Logistics
distribution
transport
Retail Consumer
use
Recycling
&
disposal
Light bulb (UK 11W)
2% 1% 1% 95% 1%
Sustainable Production - life cycle analysis of CO2
emission hot spots along the supply/value chain: 1

M I N D
Raw material
production
Manufacture
& processing
Logistics
distribution
transport
Retail Consumer
use
Recycling
&
disposal
Light bulb (UK 11W)
2% 1% 1% 95% 1%
Orange Juice (Brazil freshly squeezed 1L)
28% 19% 47% 5% 1% 0%

M I N D
Raw material
production
Manufacture
& processing
Logistics
distribution
transport
Retail Consumer
use
Recycling
&
disposal
Light bulb (UK 11W)
2% 1% 1% 95% 1%
Orange Juice (Brazil freshly squeezed 1L)
28% 19% 47% 5% 1% 0%
Milk (UK, National Tesco)
76% 5% 4% 10% 3% 1%

M I N D
Case study: Life Cycle Value/Supply
Chain Analysis of Garment Industry in
Sri Lanka
(Focus on CO2/Energy/Labour)
The product – Bra manufactured
at MAS Intimates, Thurulie factory
Sri Lanka.
•Identification of HOT SPOTS
•Trade-offs among economic-social-
environmental indicators

M I N D
Detailed Life Cycle Process Map of Product
Wing mesh
Galloon lace
Mechanical stretch mesh
Narrow stretch lace
Embroidered Fabric
Denier
Bow
Wires
Stretch satin
Strapping
Hook and eye
Fortitube
Binding
Seam tape
Rings
Slides
Mesh elastic
Plain elastic
Autograph tab
MAS
RM STORE
CUTTING
MOULDING
SEWING
PACKING
WAREHOUS
E
Electr
icity
Energ
y
Material
Waste
COLOMBO
PORT
COLOMBO
PORT
Warehouse
Retail store
CUSTOMER
USE PHASE
WASHING
DRYING
UK PORT
Disposal
Packaging
Waste
Electri
city
Packaging
waste
Energ
y
Raw materials
Packing material
Manufacturing
process
Retail operation
Consumer phase
Energy/Electricity
Waste
Disposal
Land Transport
Sea transport
Electri
city
Packaging
Waste
Packaging
Waste
Packaging
Waste
Hanger
Hanger Sticker
UPC
Collar Card
Price sticker
Care Label
Bell Sticker
Raw Material Manufacture Transport Retail End Use & Disposal

M I N D
Life cycle analysis of CO2/Energy hot spots
along the supply/value chain for garments
Raw
Material
Incoming
Transport
Manufac
turing
Distrib
ution
Storag
e/ retail
Use Disp-
osal
56% 3.1% 19.5% 1.9% 5.0% 10.1% 4.7%
16.8%* 5.7% 22.6% 25.8
%
0.42
%
28.5% Lack
of
Data
Carbon reduction: Raw Materials - sustainable procurement is key
Energy reduction: Manuf., Distrib. & Use stages are all critical
Carbon
Energy

M I N D
Sustainable Procurement: Detailed C-footprint of
Raw Materials – Elastics, Laces & Packing are key
Fabrics, 13%
Laces, 17%
Elastics, 28%Strip cuts, 4%
Trims &
Accessories, 9%
Cup, 11%
Packing material,
17%

M I N D
Energy efficiency gains
The product is manufactured in an eco-friendly plant (MAS-
Thurilie) that uses less energy than a standard plant.
Energy savings: Thurulie vs. standard factory (also MAS owned)
0
0.5
1
1.5
2
2.5
Thurulie Plant A
Remaining Components
Manufacturing Footprint

M I N D
Social Aspects:
Labour Input at the Manufacturing Plant
Gender Balance
Job Type Female Male Total
Manager 2 (13%) 14 16
Executive 21 (31%) 47 68
Staff 55 (42%) 76 131
Worker (indirect) 52 (35%) 97 149
Machine Operators 829 (87%) 121 950
Total 959 (73%) 355 1314
73% of work force female, but males dominate high levels

M I N D
• An effective sustainability approach for hotels is based
on monitoring and managing several indicators:
– Energy Measurement and Management
– Carbon Footprinting and Mitigation
– Water Footprinting and Mitigation
– Waste Management
– Resource Efficient Cleaner Production
• All these aspects are combined within an integrated
sustainability approach, rather than applying piecemeal
methods.
Integrated Approach to Sustainability in
Tourism Industry: Case Study of Hotel Chain

M I N D
Energy Flow Analysis
Input
Oil
Elect-
ricity
Gas
Renew-
ables
Waste
Output
CO2
SOX,
NOX etc
Kitchen
Rooms
Laundry
Usage
Point

M I N D
Water Flow Analysis
Input
Water
Source
Ground
Piped
Harvested
Rain
Recycled
Waste
Output
Waste
Water
- Drain
- Recycle
Kitchen
Rooms
Laundry
Usage
Point

M I N D
Waste Flow Analysis
Input
Water
Energy
Raw
Mate-
rial
Waste
Output
Wastewater
Energy &
Heat loss
Solid Waste
Noise
GHG
Particulate
Matter
Kitchen
Rooms
Laundry
Usage
Point

M I N D
Key findings – Energy
• Potential energy savings: 15-18%
• Converting Energy Waste to steam through Heat Recovery Systems
• Harvesting waste energy, mobilizing clean energy based on gas & wind power
• Improving and implementing Solar Energy
• Viability of implementing a Bio Gas Plant
Key findings – Water
• Potential to reduce water consumption by 10% in year 1
• Lack of waste water harvesting in many instances
• Potential to re-cycle water use from the swimming pool filtering system
• Additional rainwater harvesting potential
Key findings – Carbon
• Setting up systems to measure waste and carbon emission on a regular basis
• Greening the supply chain & the vehicle fleet
• Integrating sustainability software into daily operation to track carbon output
• Setting reduction targets for carbon emissions
• Calculating the carbon footprint of a guest night to offer guest the option to
offset their own footprint

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

M I N D
Sustainable Consumption empowers households
Influence people’s behaviour to promote sustainable change
• Empower and motivate – using prices, labels
information, psychology and advertising.
• Change values, habits and socio-cultural
contexts to shift to low-carbon products and
behaviour. Eg., public attitude to smoking
• Adapt material and physical elements of
production - goods and infrastructures are
inter-connected
Social capital embedded within individuals and communities, can
be better mobilized, organized, and empowered to synergise with
business and influence government, for MDMS.!
Individual
Community
Producer
Example: 1/3rd World food production lost/wasted. In homes:
USA - 50% & Europe - 30%. Yet about 1 billion are starving.

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

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

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

Other
Sustainable
Consumers
Sustainable
Consumers
Sustainable
Producers
Other
Sustainable
Producers
Cinn-
amon
Group
Govt.
Civil
Society
Busi-
ness
Bringing Sustainable Consumers & Producers Together: 2
Sustainability Culture - Making Development More Sustainable (MDMS)
Sustainable behaviour spreads throughout the country

Key Role of Communications & Responsible Media
in Making Developmenty More Sustainable
Social
Capital
Business
Govern-
ment
Civil
Society
Responsible
Media for
Responsible
Tourism
Media must play greater role in disseminating correct information to
strengthen civil society and business in supporting and influencing
government to move towerds a more sustainable development path.

Maintain and rebuild the Resilience of Socio-
economic and Ecological Systems on which
Humanity and TOURISM INDUSTRY depend
So Watch Out for Potential Surprises
• Economic Crises (like 2008)
• Environmental Crises & Resource Shortages
• Social Unrest and Conflicts
• Climate Change (Risk Multiplier)
• Disruptive Technologies

FUTURE: Potentially Disruptive Technologies!
1. Mobile internet
2. Automation of knowledge work
3. Internet of things
4. Cloud technology
5. Advanced robotics
6. Autonomous and near-autonomous vehicles
7. Next generation genomics
8. 3-D printing
9. Energy storage
10. Advanced materials
11. Advanced oil and gas technology
12. Renewable energy

WHAT ?
WHICH?
HOW ?
practical analytical tools and policies are available
Many best practice examples exist, in Sri Lanka
and worldwide.
sustainable consumption & production (SCP)
WHO ?

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

“DEVO VASSATU KALENA
SASSA SAMPATTI HETU CA
PHITO BHAVATU LOKO CA
RAJA BHAVATU DHAMMIKO”
“May the rains come in time,
May the harvests be bountiful
May the people be happy & contended
May the king be righteous”
Even in ancient times, a favourable environment,
economic prosperity, social stability (and good
governance), were clearly identified as key pre-requisites
for making development more sustainable.
Environmental:
Economic:
Social:
Ancient Pali Blessing (Sri Lanka)

M I N D
"making development more sustainable - MDMS“
10/1 De Fonseka Place, Colombo 5, Sri Lanka
Phone/Fax: +9411-259-0131; E-mail: MIND@mindlanka.org ; Web: www.mindlanka.org
• Awards, Scholarships & Training
• Applied Research on Sustainability
• Engagement in Public Policy

M I N D
MIND SD Training Course, Beijing, July-Aug. 2006: 270 Senior Chinese Officials
Other examples
MIND Govt.-SD Training Course, Delhi, Feb. 2007: Senior Indian Civil Servants
MIND Business-SD Training Course, Cape Town, Oct. 2007, Senior Co. CEOs
PhD Course in Universities – Brazil: Federal Univ. of Para, China: Peking Univ.,
Denmark: Copenhagen Univ., India: TERI Univ., Sri Lanka: Colombo Univ., UK:
Manchester Univ., USA: Yale Univ., Germany: Darmstadt Univ.

MIND Press
Book:
650 pages
Third Edition
Published in
2015 -
Translated
into Chinese
& Portuguese
Further reading: Visit website: <www.mindlanka.org>

Sthuthi
Nandri
Thank You

CinnamonFOT - Professor Mohan Munasinghe

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