3.2.2 Three Level Model

Actors in the decision making process can be ascribed to one of three levels of decision making based on their legal and economic power, influence on policy and the types of integration process they are involved in. These three levels are described below.

Macro level actors include the European Commission, central government and its agencies. Dependant on the legal context, they are responsible for establishing both generic and sectoral policies including strategies, objectives, targets, regulations, guidance, and the fiscal framework - which may or not incorporate sustainability principles. Macro level policies set the framework for decision making about sustainable production and consumption at the meso and micro levels.

Macro level actors are responsible for strategic decision making which helps create the context, send messages and provide incentives for decision makers at the meso and micro levels to consider integration. Without this macro level foundation, it is difficult for integration to become systematic at other levels. Both EC and national governments are recognising this responsibility and the necessity to involve meso level actors (particularly academics, agencies, NGOs and producer and consumer groups) and civil society in strategic decision making processes to achieve integration.

To date, consultation by macro level actors has tended to favour groups over individuals, larger over smaller enterprises, and institutions already involved in the subject area. However, consultation does not necessarily guarantee that actors at meso and micro levels will be motivated to consider integration in their own decision making. The responsiveness of actors at different levels is often dependant on the historical context, tradition or corporate culture. This issue is discussed further in Section 4 (on framework conditions) and Section 6 (on integration tools).

The Meso Level

Meso level actors typically include trade associations, producers groups, NGOs with a particular sectoral or environmental focus, and municipalities (see Box 3.1) in both policy making and enforcement roles at a local level and as providers of information to businesses and consumers. In this context the meso level also includes regulators who set standards for commercial , social or environmental performance for deregulated service providers (eg energy companies).

Box 3.1 Municipalities as Meso level actors

Municipalities have been included as meso level actors because they are influential in influencing central government policies and setting their own at a regional level, and are also key in influencing market based actors (producers and consumers) in their sustainable production and consumption decisions. Municipalities are generally consulted by central government on sustainability policies and generally set and implement their own land use and urban development policies. They may also be responsible for implementing national sustainable production programmes (e.g. agri-environment schemes). Many municipalities have developed their own sustainability strategies, means for assessing the sustainability of their current plans, screening new policies and projects and sustainability indicators for measuring progress. As planners and implementing agencies in some sectors (such as road development) they are able to influence the infrastructure for sustainable consumption choices (e.g. in the transport sector). They are also able to address key parameters for businesses decisions about production (e.g. by monitoring air and water quality they can influence perceptions about the need to comply with EU and central government environmental standards) They can provide information via NGOs or directly to consumers on environmentally preferred products and how to use and dispose of them (e.g. through local information campaigns and through lists of hazardous chemicals, a route followed by a number of Swedish municipalities). Municipalities are also micro level actors in their own right as: Providers of goods and services such as housing, waste management services, transport services and, in Denmark, production and distribution of energy. They can therefore set themselves targets for sustainable production and move to less damaging processes (e.g. renewables and CHP) within the competitive confines of the market they are operating in. Consumers of goods and services on their own account and also on behalf of businesses and households. As consumers they are generally more accountable than true micro level actors since they may be subject to central government set procurement policies, and will have to report to their constituents on value for money and quality of services. Thus their ability to make environmentally preferred purchasing choices may be constrained by their obligation to provide the most economical goods and services.

Meso level actors tend to make sustainability decisions in a consultative way because they are not able to directly affect the macro level framework for integration by introducing regulations or fiscal measures. They therefore tend to be key movers in raising government awareness of environmental issues and lobbying at both the international and national level for changing the framework conditions for integration.

They can affect producer behaviour by setting good practice standards, entering negotiated agreements with government on the part of groups of producers and by providing enabling information to help businesses make more sustainable production and consumption decisions.

Meso level actors - particularly NGOs - also have a role in influencing framework conditions for individuals and households to make more sustainable consumption decisions eg by providing independent and credible information on products, their contents and how to use them. They are also increasingly involved in disseminating information on the environmental and social performance of companies through financial rating and ranking schemes for the benefit of shareholders. NGOs and producer associations have also been directly involved in developing and independently verifying Ecolabels and may also be involved in voluntary product taxes and green tax break schemes.

An example of how a non governmental meso level actor can work to influence both policy makers and market based actors is highlighted in Box 3.2.

Box 3.2 Meso Level Actors in the Industry Sector - Chemicals

CEFIC (European Chemicals Industry Association) has recognised the key environmental challenges affecting the sector and the need to be pro-active in addressing them. In particular the association recognises the public's growing concern with health issues and product safety which are increasingly requiring companies to listen to stakeholders and be ready to take voluntary action. At least three such actions are already being taken by the sector: Firms have pledged to fund accelerated risk assessments for priority, high-production volume chemicals in the context of the EU's review of regulation of "existing" chemicals; CEFIC has recently strengthened an existing voluntary commitment on improving energy efficiency at manufacturing plants by adopting a new goal to achieve a 20% improvement over 1990 levels by 2005. A long term research programme of funding independent research on potential future environmental and health issues. In similar fashion the UK chemical industries association (CIA) has recently announced a series of ‘high-level commitments’ to sustainable development. The CIA has decided to form both a sustainable development strategy group and an ‘industry reputation board’ designed to communicate the industry's commitment to sustainable development and its substantial achievements.

Meso level actors have been included in the study to the extent that they are involved in either changing framework conditions or directly implementing tools for integration aimed at micro level decision makers.

The Micro Level

Micro level decision makers comprise the market based actors in the supply chain for goods and services including producers, wholesalers, retailers and consumers (individuals, other businesses and institutions such as municipalities in their role as producers or consumers of goods and services). These actors make day to day production and consumption decisions within the wider framework set at the macro level, although their decision making tends to be driven by perceptions of risks, opportunities and the immediacy of pressures. These characteristics enable much more rapid and less constrained decisions to be made.

The parameters which constrain and influence micro level decisions reflect the characteristics of the actors and the significance of individual decisions in environmental terms. The availability of information and knowledge, the importance of perceptions (quality and suitability), habit or established behaviour, and the importance of price (which may/not encompass wider economic considerations through the life-cycle) are often the determining parameters in decision making.

Individual decisions at the micro level, about production/provision (eg. choice and source of raw materials, operation for energy efficiency, etc) or about consumption patterns (eg. choice of transport mode, choice of food retailer, etc) are generally only significant in environmental terms when considered in aggregate. As these decisions are constantly being made, it is important that integration is achieved to address potential environmental impacts. The challenge at this level is the very large number of individuals that are making decisions, generally on an ad hoc and inconsistent basis. The fact that they are not held accountable for their day to day decisions also results in the problem that surveys show little relation between reported decisions and actual purchasing decisions (the so called ‘big mouth’ problem with the purchase of ‘green’ products such as organic foods).

Micro level decision makers are generally less accountable to other stakeholders compared with the meso and macro levels. However, businesses are becoming increasingly accountable: to their employees, shareholders and those above and below them in the supply chain (all micro level); and indirectly to meso level actors who may develop and influence investment and reporting policies (financial institutions and regulators, NGOs etc). There is also the increasing likelihood of civil society holding producers responsible for damage to the environment and human health (eg class actions on tobacco producers, proposed environmental liability legislation, etc).

3.3 Identifying Key Actors

Table 3.1 illustrates the different levels of actors within the four sectors. An example of a stakeholder analysis is presented in Box 3.2 and a full description of the actors and their roles within each sector is presented in Annexes A-D.

Table 3.1
Summary of Key Actors and Decision Making Levels

Box 3.2
Example of Stakeholder Analysis: Agriculture

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