Developing a multicriteria approach for the measurement of sustainable performance

In Australia, cost–benefit analysis (CBA) is one of the conventional tools used widely by the public and the private sectors in the appraisal of projects. It measures and compares the total costs and benefits of projects that are competing for scarce resources in monetary terms. Growing concerns that the values of environmental goods and services are often ignored or underestimated in the CBA approach have led to the overuse and depletion of environmental assets. A model of a sustainability index as an evaluation tool that combines economic, social and environmental criteria into an indexing algorithm is presented and described. The sustainability index uses monetary and non-monetary approaches to rank projects and facilities on their contribution to sustainability. This process enables the principle of trade-off to occur in the decision-making process and thereby allows environmental values to be considered when selecting a development option. This makes it possible to optimize financial return, maximize resource consumption and minimize detrimental effects to the natural and man-made world. A case study is used to demonstrate the model.