UNSW Course Journal of Industrial

Ecology and Sustainable

Engineering
GSOE9740 2016 S2

Triple-bottom-line performance of the Construction and Trade

Services and Non-Metallic Mineral Mining sectors of the
Australian economy.
Afnan FAZLI a
a) UNSW Australia, Sydney NSW 2052, Australia

Abstract

Human progress and developments greatest existential threat is undoubtedly climate change. The challenge for
sustainable development in this consumption and consumer driven world is undeniable. In most cases, economic
growth and financial considerations are the dominant criteria for determining policy and activities. Consequently,
there has been a rise in concern, and there is now a heavy focus on viewing activities and progress through the lens
of sustainability. The most concrete accounting for sustainability is the triple-bottom-line (TBL) approach, taking
environmental, social and economic considerations into account. A well-developed quantitative analysis is the
extended input-output analysis, which this report will utilize to account for the environmental performance of two
sectors in Australia, the Construction and Trade and Non-Metallic Mineral Mining. Research found that
sustainability in these sectors has room for improvement.
2017 The Authors. Published by Elsevier Ltd.
Peer-review under responsibility of the organizing committee iHBE 2016.
Keywords: sustainability; triple-bottom-line, Construction and Trade Services; Non-Metallic Mining; Australia;

1. Introduction
Climate change is without a doubt the greatest existential threat that humanity faces. The issue and direction of
human development has always had a tension primarily between financial and environmental objectives, more often
than not leaning towards the former. Sustainable development is widely defined as development that meets the
needs of the current generation without compromising the needs of future generations. (IUCN, 1980). With human
activities and development continuing to have larger impact on the environment, this accentuates the threat that
climate change has on future generations. The well observed fact of rising greenhouse gasses (GHG) in the recent
past culminating with increasing carbon levels in the atmosphere, has driven the need for critical attention towards
managing sustainable development effectively and efficiently.
2017 The Authors. Published by Elsevier Ltd.
Peer-review under responsibility of the organizing committee iHBE 2016.

Afnan FAZLI/ GSOE9740 201

The most widely used accounting framework to measure sustainability is the triple-bottom-line approach, taking
into account environmental, economic and social considerations. A robust and simple method for evaluating
environmental effects is an Environmentally-extended input-output analysis (EEIO). This method is popularly used
to evaluate upstream causes of environmental impacts through assessing the relationship between economic
activities and downstream consumption activities (Kitzes, 2013).
This manuscript uses the triple-bottom-line approach to assess the sustainability performance of two sectors in the
Australian economy. Quantitative analysis of the assessment utilises an EEIO derived from a double-region inputoutput table obtained from the Australian Bureau of Statistics (ABS). The two sectors of the Australian Economy
analysed here are; Construction and Trade Services, and Non-metallic mineral mining. There are numerous
indicators to calculate the performance of economic, social and environmental factors, however the quantitative
scope for this assessment is limited to GHG emissions releases for the environmental footprint, total industry value
added to the nation, or its Gross Domestic Product (GDP) for the economic footprint, and total industry employment
for the social footprint. A literature review discussing the sustainability performance representing these two sectors is
also included to allow for a more rigorous analysis.
1.1. Construction and Trade Services (3201)
The Construction and Trade services are listed under the Australian and New Zealand Standard Industrial
Classification (ANZSIC) as Subdivision 32 within Division E Construction. This subdivision encompasses five
groups, including Land Development and Site Preparation Services, Building Structure Services, Building
Installation Services, Building Completion Services, and Other Construction Services. The ANZSIC four-digit code
that is assigned to Construction and Trade Services, identifying the industry in the input-output table is 3201, which
will henceforth be the method of referral throughout this manuscript.
Due to the specialised nature of this classification, it was relatively difficult to find academic literature addressing
sector 3201, most works focused on the broader construction industry. There was better progress on locating
academic works that covered overseas industries, which corresponded to defining sector 3201 as maintenance and
repair construction. This area is a significant component, and has direct proportional effects of change within the
construction sector. Thus trends and information extracted from literature related to the broad construction industry
can be relevantly applied and extrapolated to sector 3201.
Australias per capita carbon emissions are the highest in the world (Wise and James, 2013). The construction
sector is the largest contributor to this, representing 21-24% of Australias total Carbon footprint (Chen et al, 2016).
A significant factor behind this is the emissions that have resulted from the energy used in construction activities.
The main source of energy usage is not from direct activities of construction and trade, but more so upstream
activities such as transporting goods, occupants and services to and from worksites (UNEP SBCI Sustainable
Builldings and Climate Initiative, 2010). As a result, an IPCC report concluded that the construction sector has the
largest potential for GHG emissions reduction (IPCC IntergovernomentalPanel on Climate Change, 2007).
An analysis of the US construction industry, conveyed results that the largest sustainability impacts came from
indirect suppliers compared to on-site activities, an example being that 95% of total water use was attributed to
indirect suppliers (Kucukvar and Tatari, 2013). It also reinforced that other indirect emissions not controlled directly
by the construction industry were the highest contributor towards GHG emissions, thus having a significant impact
in the estimation of the triple-bottom sustainability for this industry.
From 1990 to 2012, carbon dioxide equivalent (CO2-e) emissions in the Australian construction industry, and
hence the Construction and Trade sector has increased gradually (Hu and Liu, 2015). This however, can be attributed
to the increased activity that came as a result of the mining boom, and the associated construction and services
required for building necessary supporting infrastructure for the operations.
It can be argued though, that there was a relatively flat increase in emissions, compared to the corresponding
increase in GDP and amount of employment added during that period. One explanatory factor would be that there
was an increasing emphasis from governments and stakeholder groups on sustainable development, thus leading to
more efforts in reducing environmental impacts (Thorpe et al., 2008).
From an economic perspective, Construction, renovation and maintenance of buildings have a significant impact,
contributing 10-40% of GDP for many countries (Sattarty and Thorpe, 2016). In the US, the construction sectors
account for 4.4% of the total GDP. The Residential/Non-Residential maintenance and repair section of the

Afnan FAZLI/ GSOE9740 201

construction sector accounts for $148.9 billion out of a rough total of $1 trillion for the total industry output
(Kucukvar and Tatari, 2013). Accounting for 15% of the total construction sector, this indicates that the maintenance
and repair section has significant positive impact from an economic perspective.
From a societal perspective, the Australian construction industry is a strong engine for social benefits. Overall, an
average of 1,033,100 people is employed by the construction industry (Hu and Liu, 2015). The ABS industry tables
for that corresponding year indicate that the Construction and Trade Services section accounts for 639,464 people of
this total. This is a significant percentage of the total construction industry, and accounts for roughly 0.75% of the
total employment for Australia. Furthermore, the goods and services sector of the construction industry has an
8.52% share of total factor income (Hu and Liu, 2015). This indicates a major positive social sustainability indicator
for construction and trade services.
1.2. Non-Metallic Mineral Mining (0901)
Non-Metallic Mineral Mining is listed under ANZSIC as Subdivision 9 within Division B Mining. This
subdivision encompasses two groups, Construction Material Mining and Other Non-Metallic Mineral Mining and
Quarrying. The ANZSIC four-digit code that is assigned to Non-Metallic Mineral Mining, identifying the industry in
the input-output table is 0901. This section deals with the mining and quarrying of materials such as sand, gravel,
limestone, clay, salt, silica, gemstones and phosphates to name a few.
A large component of the demand for products of non-metallic mineral mining arises from construction. Australia
has the largest material footprint per capita with construction minerals accounting for roughly five out of a total of
thirty-four tonnes/capita (Wiedmann et al., 2015). China has the largest material footprint of the world, with sixty
percent of it consisting of construction materials (Wiedmann et al., 2015). This is without doubt due to the rapid
industrialisation and urbanisation of China. The recent population growth has resulted in a higher demand of this
sectors products, resulting in higher material flows and thus higher GHG emissions.
However, recent advances in technology have reduced this impact. The trend of recycling building materials as
opposed to sending them to landfill combined with development of safe and efficient extraction and processing for
surface mining helps to mitigate much of the environmental impact (Bloodworth et al., 2009). As a result, a study of
the Australian economy measuring against a metric of one dollar of final demand found that GHG emissions, water
use and land disturbance for sector 901 were between 40-95% below average (Foran et al., 2005). This indicates that
from an environmental perspective, sustainability is relatively good and is trending towards a positive incline.
The technological advancement in large and physically efficient machinery has led to a negative impact for social
indicators, requiring relatively few operators and thus a small employer (Foran et al., 2005). The negative social
indicator is also compounded by the fact that sector 901 is predominantly quarrying and open-cut mining, which are
often in remote, mountainous zones close to mineral producing areas (Gazi et al., 2012). The poor work location and
thus lifestyle combined with lower than average employment rates conveys an unsustainable social aspect for sector
901.
This leads to poor economic indicators, sector 901 contributing only 0.36% of GDP to the Australian economy
(Foran et al., 2005). This is also the case in Europe where mineral extraction or sector 901 against a metric of a Euro
of final demand accounts for approximately 1% of the total industry for building. In the UK, Construction and
industrial minerals accounts for 2.909 billion out of a total of 33.722 billion for total minerals production in 2007
(Bloodworth et al., 2009). This poor showing from an economic perspective, combined with negative social
indicators, demonstrates an unsustainable industry for sector 901.
2. Method and Data.
The data used for the quantitative analysis of the two sectors is an extended two-region input-output table derived
from the ABS for the year 2013-14. The methodology adopted here is using an EEIO to accomplish a calculation of
the national upstream impact that occurs as a result of the two sectors interactions with other industries, as well as
their downstream impact through consumer demand for their products. The advantages of this methodology are that
it is relatively quick to perform, solving the system boundary problem of a Life Cycle Analysis and is suitable for
the top-down environmental footprint analysis required for a TBL. However, there are disadvantages such as

Afnan Fazli/ GSOE9740 2016 S2

aggregation errors which come as a result of broad product groups, and has a couple of assumptions which might
provide limitations to the accuracy of its analysis, primarily assuming proportionality between different types of
flows and assuming linear scalability. The methodologys process and explanations can be found in more detail
through Wiedmann et al (2006) and Kitzes (2013). A brief summary is listed below. The data and calculations were
read into and processed via MATLAB R2016a. A production layer decomposition (PLD) of the carbon footprint for
the two sectors, using the Taylor expansion of the Leontief inverse was then performed to observe the impacts of the
two sectors products towards the Australian National Carbon Footprint. The EEIO method applied involves these
steps:
4

Step 1: Analyse Supply-use Table (SUT) and extract GDP, direct employment and direct GHG emissions
associated with two sectors.
Step 2: prepare combined supply and use matrix (250 250)
Step 3: calculate direct and indirect requirement matrix, utilizing Leontief Inverse (250 250)
Step 4: calculate direct and indirect intensity multipliers (1 250)
Step 5: calculate Ecological Footprints of final demand categories, multiplying intensity multipliers with
final demand matrix
Step 6: disaggregate final demand categories

3. Results
The results of the analysis are presented in tabulated form, comparing the environmental, social and economic
indicators of the two sectors with the average and total national indicators. Table 1 contains the national inputs and
direct impact multipliers (DIMs). Table 2 contains the total impact multipliers (TIMs) and footprint intensities. Table
3 contains the PLD data. The proportion of imports with regard to the final demand is also analysed. The PLD is
presented in a graphical format in Figure 1.
TableNational
1
Australian industry totals
Total industry emissions (kt
CO2e)
494,526
1,383,73
Total GDP ($m)
8
2,860,57
Total industry input ($m)
7
9,769,44
Total Industry employment (FTE)
8
Australian national average direct
intensities (DIMs)
GHG Emissions (kt/$m)
0.39
Employment (FTE/$m)
3.46
GDP ($/$)
0.41
Table 2
Total final demand
for
1,497,07
Australia ($m)
3

Sector Totals

901

3201

GHG Emissions (kt CO2e)

1,117

5,942

GDP ($m)

1,614

62,513

Industry input ($m)

4,516

182,653

16,975

639,464

Employed Persons (FTE)

Sector direct intensities (DIMs)

GHG Emissions (kt/$m)
Employment (FTE/$m)
GDP ($/$)

0.25
3.76
0.36

Australian National Footprints and Footprint Intensities

(TIMSs)
Total Australian
GDP
footprints
GHG (kt CO2e)
EM (FTE)
($m)
1,444,1
Total
520,554 13,831,414
09
Imported Only
118,088
3,239,287 132,983
Imported Percentage
22.69%
23.42%
9.21%

0.03
3.50
0.34

Afnan FAZLI/ GSOE9740 201

Sector 901
Sector 3201
National Average TIMs
Average
Sector Transposed
TIMs
Sector 901
Sector 3201

0
20
GHG (kt CO2e/
$m)
0.66
GHG (kt/$m)
0.57
0.29

0
643
EM (FTE/
$m)
10.78
EM (FTE/
$m)
10.48
9.74

0
68
GDP ($/
$)
1.00
GDP ($/
$)
1.00
1.00

Fig 1.

Table 3
Table 3

PLD
901
3201
Cumulativ
e

f*I*
y
Lay
er 1
0
0
0

f*A*y
Layer
2
0
2.189
7
2.189
7

f
*A*A
*y
Laye
r3
0
1.21
07
3.40
04

GHG PLD Footprint by Layers

f
f
f
*A*A*A*A*
*A*A*A*A
*A*A*A*y
y
*A*y
Layer 4
0
5.55089
208
8.95129
208

f
*A*A*A*A*A
*A*y

f
*A*A*A*A*A*
A*A*y
Layer 8

Layer 5

Layer 6

Layer 7

0
1.2343716
23
10.185663
7

0
3.911010
026
14.09667
373

0
0.8523812
63
14.949054
99

0
2.183924945
17.13297994

4. Discussion and Conclusions

The results of the quantitative analysis for the have some surprising results, especially when compared to the
literature reviews assertions of the two sectors sustainability. Both sector 901 and 3201 are well below the national
average GHG emissions DIM of 0.39, with sector 901 being 0.25 and sector 3201 being a very low 0.03. This
corresponded with the TIM results as well. This indicates that 3201 is quite sustainable from an environmental
perspective. With respect to the social factor of employment added, while the total number of persons employed in
3201 was far higher than 901, as a measurement of its direct impact with reference to the GDP output, 3201 was
lower than 901 by 0.04. This corresponded with the TIM results, with both sectors just around and even a little
below the average. That indicates from a societal perspective, these two sectors, especially 3201 isnt as sustainable
as expected. Both sectors direct intensities with regard to GDP output were disappointingly slightly lower than
average, with 901 being marginally higher than 3201. Both these figures are similar contributions towards the
national totals when compared to international figures mentioned in the literature review such as the US construction
and UK mining industries.
For the PLD analysis, there is a surprising result, which indicates that 901 has a zero impact on any emissions
output demand for the Australian national footprint. It also corresponds to zero output for employment and GDP

Afnan Fazli/ GSOE9740 2016 S2

share. This indicates that the products for 901 are being exported almost entirely overseas, with the associated
demand outputs offloaded as well. This indicates that the sustainability of both industries within the national context
is good, with 3201 marginally better than 901 due to the product output demand figures. It should be noted though,
that the sustainability indicators analysed here need to have more aspects to provide a more rigourous understanding
of the effects that the two sectors have, especially from an environmental and social perspective.
6

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