Editorials



International Journal of Audit – April 2004

Environmental Auditing And Sustainable Development: SAIs Matter

Editor’s note: The INTOSAI Working Group on Environmental Auditing is seeking ways to collaborate with the United Nations Environmental Programme (UNEP) on issues of mutual concern. In this context, Klaus Toepfer, Executive-Director of UNEP, shares his views with Journal readers on the importance of the SAI role in the environmental arena.

The connection between Supreme Audit Institutions (SAI) and sustainable development may not be obvious to most people at first glance. Sustainable development—that is, development that meets the needs of the present generation without compromising the a ability of future generations to meet their own needs—would appear to have little to do with government auditing. However, when one reflects on the fact that sustainable development rests on three pillars—society, the economy, and the environment—and that all three are closely related and equally important to the well-being of people and nations, the connection becomes more apparent. Simply put, sustainable development cannot be achieved without good governance, and good governance, in turn, is greatly furthered by the valuable work of SAIs. Therefore, SAIs can play a vital role in informing and supporting efforts to achieve sustainable development.

The Environment and Development

The environment is our life support system—it provides people with the goods and services essential for human survival, well-being, cultural diversity, and economic prosperity. Current rates of growth in the consumption and transformation of environmental resources are threatening the sustainability of this life support system and our own security. For this reason, there is a need to cherish the environment and to continually improve our understanding of the relationship between the environment and development, including interactions with human society.

“Sustainable development cannot be achieved without good governance, and good governance, in turn, is greatly furthered by the valuable work of SAIs.”

In its report Our Common Future (1987), the World Commission on Environment and Development captured the complex linkages among the different environmental problems and between the environment and development. The report noted, “From space, we see a small and fragile ball dominated not by human activity and edifice but by a pattern of clouds, oceans, greenery and soils . . . .We can see and study the Earth as an organism whose health depends on the health of all its parts. We have the power to reconcile human affairs with natural laws and to thrive in the process.”

Furthermore, major development challenges, such as those expressed in the World Summit on Sustainable Development and the Millennium Development Goals, are closely related to the main environmental problems. Alleviating poverty and promoting
fair trade, good health, food security, and access to energy are closely related to climate
change, the loss of biodiversity, land and water degradation, the depletion of stratospheric ozone, and the accumulation of waste and persistent organic pollutants in the environment.

Since the United Nations General Assembly established the United Nations Environment Programme (UNEP) in 1972, a key component of its mandate has been to monitor the world environmental situation. UNEP does so to ensure that emerging environmental problems of broad international significance receive appropriate and adequate consideration by governments. Environmental change induced by humans has accelerated over the last three decades, as UNEP’s flagship Global Environment Outlook (GEO) reports clearly illustrate. The increasing complexity of environmental degradation and its linkages to many other factors have profound implications for sustainable development and its other pillars—society and the economy.

Environmental Threats and Governance

As we monitor and review the condition of the world’s environment, the connection between environmental threats and governance becomes vividly apparent. Governance
is an overriding issue that applies to all levels and sectors of society—from the local to
the global level and from the private to the public sector. It has an impact on all aspects of society—law and human rights; political, parliamentary, democratic, and electoral systems; civil society; peace and security; public administration; public information; the media; the corporate world; and the environment.

Both awareness of and attention to governance issues have grown in every aspect of modern life, not least in relation to the environment. However, our progress in this area has failed to match the rate of environmental degradation. If we are to succeed in addressing this degradation and the consequent threats to the human environment, our dedication to good governance must be as great as our dedication to sound environmental policies. And that dedication must be coupled with a resolve to improve our approach to governance—a paradigm shift in the way that governance is carried out and decisions are made and implemented.

Keeping the public informed of government actions—what is sometimes referred to as “government in the sunshine”—has been shown to be a highly effective means of ensuring that the environment is taken into account in decision making.

We must recognize that greater democracy and transparency are not abstract, procedural safeguards, but essential components of the framework on which sustainable development rests. Ensuring that the public is informed of and involved in decision making is an essential part of this process. Keeping the public informed of government actions—what is sometimes referred to as “government in the sunshine”—has been shown to be a highly effective means of ensuring that the environment is taken into account in decision making. In short, “government in the sunshine” means “green government.”

The power of the people to influence policy has long been recognized. As the Commission to Study the Organization of Peace stated in 1972, “It is only through the deep concern, information and knowledge, commitment and action of the people of the world that environmental problems can be answered. Laws and institutions are not enough. The will of the people must be powerful enough, insistent enough, to bring about the truly good life for all mankind.”

Promoting Transparency on Environmental Issues

SAIs play a vital role in facilitating the transparency of government operations and ensuring that an informed public guides the actions of governments. SAIs promote sound financial management and public accountability—both of which are essential elements of sustainable development. Moreover, SAIs’ independence in carrying out financial, compliance, and performance or value-for-money audits puts them in a unique position to legitimately and credibly evaluate the efficiency and effectiveness of government policy and obligations.

In this context, UNEP’s greatest area of interest is the growing importance of SAI environmental auditing at the national level and the work of the INTOSAI Working
Group on Environmental Auditing (WGEA) in particular. UNEP has recently started
exploring with the WGEA ways of mutually reinforcing one another’s activities. For UNEP, the initial point of contact is through our GEO integrated environmental assessment (IEA) reports and related processes (www.unep.org/geo). GEO uses the driving forces-pressure-state-impact-response (DPSIR) approach to assess the state of the environment. The DPSIR approach links the following questions:

  • What is happening to the environment and why?
  • What is the impact on the environment?
  • What are the policy responses and their impact?

The work of environmental auditors therefore provides an invaluable source of independent, legitimate, and credible information that assesses the efficiency and effectiveness of environmental policy at the national level. This information not only can feed into GEO reports at the global, regional, subregional, and national levels, but also can make an important contribution to UNEP’s overall mandate of keeping the global environmental situation under review. We encourage the WGEA to continue its work of promoting environmental auditing in as broad and integrated a manner as possible, bearing in mind the constraints inherent with highly diverse systems at the national level.

Capacity-building in Environmental Auditing

Lastly, a few words on capacity-building, which I know that my friend and colleague James Wolfensohn wrote about in the January edition of this Journal. We recognize that his is a key area for collaboration between UNEP and INTOSAI’s WGEA because both of us face overwhelming demands from our individual constituencies. I consider the first pilot courses in environmental auditing that the WGEA and the INTOSAI Development initiative (IDI) recently sponsored to be a very positive development. Through collaboration between the WGEA and GEO, we plan to improve our IEA methodology and training materials by incorporating environmental auditing approaches and outputs. Effective capacity-building in both environmental auditing and IEA can provide countries with the tools and knowledge they need to make informed decisions, bring about positive change, and ultimately contribute to sustainable development. This will be no small achievement.