Sustainable island businesses

Regarding sustainability, most island communities face two major challenges: energy supply and waste disposal. First, most islands do not have indigenous energy resources, but instead have to ship in fuels over often considerable distances, at a considerable financial burden. Second, most islands do not have enough space for operating landfills, so that waste is often burnt under hazardous conditions, with resulting toxic emissions to air.

Amongst the many obstacles preventing new energy and waste technologies to be implemented on remote islands are

the regulatory, legal and institutional barriers, the high upfront capital cost and lack of aid, the lack of skills to maintain technically sophisticated Facilities, the lack of knowledge, especially by policy makers, and inappropriate technology design, the small size of the island economies preventing economies of scale for some technologies, and the visual obstruction, noise, odour and other community objections.


The Global Reporting Initiative (GRI) has chosen the notion of the Triple Bottom Line (TBL) in laying the groundwork for such guidelines. TBL extends the single (financial) bottom line usually encountered in corporate annual reports, by adding a social and an environmental

bottom line.

The TBL accounts calculated for the business case studies assume that the responsibility for TBL impacts is shared amongst producers and consumers. This convention is based on the intuitive understanding that in any economic transaction, the demander and supplier play some role in causing the transaction. It is also necessary in order to avoid doublecounting of life-cycle impact. In this work, I assume that suppliers and demanders of any commodity assume a 50%e50% share of the responsibility that the production of the commodity entailed.

In this work the following TBL indicators were used:

Economic indicators

  • Gross operating surplus (GOS) is defined as the residual of a producer’s total inputs, after subtracting all intermediate inputs, compensation of employees, and net taxes an  subsidies. It consists of operating profits, and consumption of fixed capital for capacity growth and replacement (depreciation). GOS indicates the capacity to innovate through turnover of the capital stock as well as the capacity for expansion and investment.
  • Total intermediate uses are the sum of the supply of goods and services by all industries in the economy. It describes the indirect turnover generated by a particular producer, and thus indicates the general stimulus created in the whole economy by that producer.

Social indicators

  • Employment means full-time-equivalent employment measured as full-time employment plus 50% part-tim employment of employees, including employers, own account workers and contributing family workers.
  • Family income reflects compensation of employees, including wages, salaries, superannuation and workers’ compensation payments.
  •  Government revenue consists of taxes less subsidies on products for intermediate demand, other net taxes on production and net taxes on products for final demand (incorporated within the sales price).

Environmental indicators

  • Energy consumption, in primary terms, is the combustion of fuels, such as coal, natural gas, fuel petrol, diesel and kerosene. Items such as crude oil for refinery feedstock and wood are not included, since they are either not combusted or renewable. As a measure of non-renewable fossil-fuels this indicator is crucial to an understanding of resource depletion.
  •  Material flow describes the mass of primary resources and other biomass extracted from the natural environment in order to produce industrial output. This mass includes metal ores, coal, oil, gas, timber, livestock and crops (but not water, which is a separate indicator e see below).
  • Water use denotes the consumption of self-supplied and in-stream water (from rivers, lakes and aquifers, mainly extracted by farmers for irrigation) as well as mains water. Collected rainfall such as in livestock dams on grazing properties is not included. In regions under water pressure, significant environmental damage has occurred because of water diversion.
  • Land disturbance factor considers effects of land use on biodiversity and ecosystem quality, expressed as the species diversity of vascular plants. It measures the condition of land, that is, the degree of alteration from its natural state.
  • The combined climate change effect of all greenhouse gas emissions into the atmosphere is expressed in terms of the equivalent amount of carbon dioxide which would produce the same effect. This indicator includes the carbon footprint.


Norfolk Island is a self-governed Australian Territory in the South Pacific, situated at approximately south latitude and east longitude, about half way between Auckland in New Zealand and New Caledonia. This translates into a power requirement of below 0.5 kW per capita, which is low in comparison with other islands comply.It is interesting to see that (Table 7) Norfolk Island has a comparatively low population density; in terms of the numbers of tourist on the island at any on time per resident,30 Norfolk Island ranks 2nd amongst 37

island destinations; in terms of the numbers of annual tourist arrivals per resident, Norfolk Island (16 per resident) ranks 1st

amongst 37 island destinations; in terms of overall tourist income per resident, Norfolk Island (US$12,500 per resident) ranks 7th amongst 37 island destinations; but in terms of tourist spending per day, Norfolk Island (US$102) ranks only 23rd amongst 37 island destinations.

The average period of stay (7.7 days on Norfolk) is higher than the average across the 37 destinations (5.9 days). Thus, in comparison, Norfolk Island achieves its high tourist income per resident through sheer arrival and bed-night numbers, which are almost unprecedented amongst island destinations. However, those tourists spend below-average amounts of

money on the island. In comparative terms of tourists and arrivals per resident the Norfolk Island is already one of the

most strained island communities, plans for further increases in tourist numbers should be accompanied by thorough social,

environmental and resource assessments.

Conventional measures aimed at tackling the energy and waste issues of island communities focus on technological solutions, such as the introduction of renewable energy sources. There exists a history of technology implementations on small islands that have failed because of a lack of continuing skills and financial resources needed for ongoing operation and maintenance. Despite these experiences, what has

received little attention so far are measures aimed at achieving island-friendly solutions by reducing their material metabolism, for example by recycling and re-use. The two case studies presented in this work have shown that vision and creativity can work wonders in achieving ‘‘more with less’’.

The whole-of-island analysis demonstrates that e from a sustainability point of view e increasing tourist yield rather than tourist numbers is a preferred strategy for coping with price hikes and limited resource base. Attempting to reduce the material metabolism of an island

community has at least one critical advantage over such shortterm solutions: it reveals to the decision-maker the real magnitude of resource needs and constraints of an island setting, instead of giving the impression that e with the ‘‘right’’ technology and ‘‘healthy’’ growth e consumption and affluence can be limitless.31 In a future of depleted resources, climate change and sea level rise, island communities will sooner or later focus their attention on these real issues: to understand and live within the limits posed by their finite paradises.




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