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Sustainability Metrics for the Assessment of Textile Value Chains in South Africa 1st South African LCA Colloquium, 7 November 2016 Pippa Notten & Ilhaam Patel
OUTLINE
Introduction
The Development Process
•
Background research
•
Stakeholder engagement
Proposed set of sustainability metrics and its application: •
The environmental and socio-economic impacts of a textile value chain in South Africa
Conclusions: Key insights and recommendations
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INTRODUCTION Why a life cycle assessment of South African cotton?
Seek a competitive advantage through sustainable products •
Many global apparel companies and retailers using LCA to enhance their brand and identify supply chain risks, e.g. Nike, Levi Strauss & Co., Patagonia, Adidas, Hugo Boss, H&M and Walmart
Operational: Improve the sustainability of South African cotton products •
Identify hotspots and biggest wins
•
Benchmark current performance
Strategic: Drive the SA textile sector towards most sustainable options •
Explore trade-offs between economic, environmental and social benefits/ impacts
Sustainable = efficient (lower cost, lower risk)
INTRODUCTION Within a LCSA, the set of environmental and socio-economic metrics provide the basis for the life cycle model. These will be used in: Benchmarking the current environmental and social performance of textile value chains; Identifying “hotspots” of positive or negative impacts; Tracking changes in sustainability performance as a result of interventions; and Exploring trade-offs between economic, environmental and social benefits and impacts of different value chains, both within a particular value chain, as well as across different value chains.
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THE DEVELOPMENT PROCESS REVIEW AND SYNTHESIS OF BACKGROUND RESEARCH
Review of LCA and social assessment studies
Review of sustainability standards
Master list of issues
Material issues study
- Industry wide issues - Issues for standards - Metrics for value chain assessment
Internal workshop STAKEHOLDER ENGAGEMENT
External workshop
Revised master list of issues
Workshop outcomes Final analysis and categorisation of issues
FINAL ANALYSIS OF ISSUES Final list of sustainability issues
Final list of sustainability issues
Final list of sustainability issues
ENVIRONMENTAL IMPACTS ACROSS THE TEXTILE VALUE CHAIN Fibre production
Textile production
Garment manufacture
Retail and distribution
Consumer use
End-of-life
Resource Depletion
Ecosystem Impacts
Human Health Impacts
Global warming Ozone depletion Human toxicity Photochemical ozone creation Ecotoxicity Acidification Eutrophication Cumulative Energy Demand Water use
Waste Generation
Water consumption Radioactive waste Slag waste Bulky waste
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SOCIAL CONCERNS ACROSS THE COTTON VALUE CHAIN Fibre production
Textile production
Garment manufacture
Retail and distribution
Consumer use
End-of-life
Child labour Forced labour Indebtedness/ agrarian distress Gender discrimination
Worker Rights
Low wages Communication/ work environment Working hours Freedom of association & collective bargaining Occupational H&S
Worker Health & Safety
Training, education and awareness
Poverty Alleviation Cultural impacts Economic Impacts
Employment opportunity Destruction of cultural heritage Gross domestic product or economic well-being
ISSUES RAISED IN GLOBAL SUSTAINABILITY STANDARDS Social impact groups
Issue categories
Human rights
Treatment of workers Social dialogue Compensation and benefits Discrimination Employment terms Labour management Minor protection Voluntary employment Working hours Worker training and development
Worker health and safety Resource and environmental management
Compliance, governance and product integrity
Occupational health and safety Resource management Energy management Water management Chemical management Pollution management Crop management Soil management Solid waste management Environmental management Climate change Business ethics and anti-corruption Compliance Community engagement Product integrity Supplier accountability
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ISSUES RAISED BY VALUE CHAIN ACTORS Material Issues study undertaken by The Moss Group: The objective of this research was to identify the key material issues affecting the sustainability of the textile and apparel value chain in South Africa.
The research followed a two-pronged approach: • •
Desktop research Interviews with companies across the value chain
Issues identified grouped into 5 key challenges (included in Master List) • • • • •
“Money, money, money” “Shaky human capital” “The Wild West” “Dodgy Ethics” “The Poor Cousin”
MASTER LIST OF ISSUES Large number of sustainability issues identified in the background research – delineate into: Industry challenges:
Decision metrics:
Issues that are material to doing business, but would not be used to assess particular textile value chains, e.g. lack of skilled workers, corruption in the workplace etc.
• Measures of system performance (qualitative and quantitative)
Standards: • •
Minimum performance criteria Any options that don’t meet certain performance are excluded
e.g. compliance with health and safety legislation, no child labour etc.
• Allow for comparison between options • Emphasis changes for different decision types: • Strategic decisions • Operational decisions • Technical decisions • Emphasis changes for different value chain stages: • Agricultural • Manufacturing • Retail
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ELICITING STAKEHOLDER INPUT • Buy-in critical for ensuring acceptability of outcomes • Identify anything you may have missed • Provide data
Value chain actors
Consumers
Society
Workers
Local community
ELICITING STAKEHOLDER INPUT Two half-day workshops were held to gain outside input into the sustainability metrics set.
Internal workshop – held for members of wider project team • •
allowed the project team to test their approach and to gain feedback gain input on sustainability issues from those with a different perspective to the immediate project team
The external workshop – involved stakeholders of textile industry •
aimed to identify stakeholder input regarding what is important in assessing the environmental, social and economic sustainability of the textile industry in South Africa.
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HIGH LEVEL SUMMARY OF MASTER LIST (1) Category (Appendix section number) Human health & ecosystem damage
Sustainability Issue
Standards
Issue raised in: Life cycle textile Material Issues study studies
Climate change
M, S
Water pollution (effluent) Air pollution Solid waste Use of toxic substances
(A.1)
Land use, biodiversity and soil (A.2)
Stakeholder workshop
M, S M, S M, S
Biodiversity
M, S
Soil fertility Food security, competition for land Water scarcity Resource depletion; access to resources (A. Use of fossil fuels & 3) mineral resources Labour rights & decent Decent work, attractive work work Training, education, (A.4) skills development Wages and benefits Diversity & equal opportunities Labour/management relations Treatment of workers & minors Job creation (number, Job creation & type) community Effect on local development (A.5) communities Safe, hygienic & healthy working Health & safety (A.6) conditions
M, S M M, S
M, S M, S, I M, S
S, I S M, S, I M, S, I S
HIGH LEVEL SUMMARY OF MASTER LIST (2) Category (Appendix section number) Consumers & society (A.7) Compliance & governance (A.8)
Sustainability Issue
Standards
Issue raised in: Life cycle textile Material Issues study studies
Consumer health & safety Affordability & availability of textiles Business ethics & anticorruption Compliance with laws & legislation
Stakeholder workshop M, S, I M S, I S, I
Supplier accountability Indebtedness and cash Economic sustainability flow (A.9) Economic risks, energy security Government support for industry Strategic direction & competitiveness (A.10) Industry competitiveness
M, S, I M, S, I M, S, I I M, I
Key to shading and symbols used in the table: Indicates issues was raised through this channel Indicates issue was raised in 10 or more standards or studies Indicates issue was raised in 20 or more standards Indicates issue was raised in 30 or more standards M
Issue raised as a “Sustainability metric”
S
Issue raised as an “Issue for standards”
I
Issue raised as an “industry-wide issue”
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PROPOSED SET OF ISSUES TO BE CONSIDERED Category
Issue
Environmental
Social
Economic
Environmental:
Human health & ecosystem damage
Land use, biodiversity and soil
Resource depletion; access to resources
Climate change Water pollution (effluent) Air pollution Solid waste Use of toxic substances (e.g. pesticides) Biodiversity Soil fertility Food security, competition for land Water scarcity (process water, drinking water) Use of fossil fuels & mineral resources
Socio-economic:
Labour rights & decent work
Decent work, skilled work, attractive work Training and education, skills development Wages and benefits Diversity & equal opportunities Labour/management relations Treatment of workers, protection of minors Job creation (number, type and skill level)
Job creation & community development
Development of, and effect on, local communities
Occupational health & safety
Safe, hygienic & healthy working conditions Consumer health & safety, product labelling Affordability & availability of textiles Indebtedness and cash flow Economic risks, energy security
Consumer & society Economic sustainability Industry competitiveness
Value addition & innovation, industry responsiveness
APPLICATION OF SUSTAINABILITY METRICS
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THE LIFE CYCLE MODEL Important considerations: Goal and scope of the study Two pilot value chains of Integrated Supply Chain project: t-shirt and towel
•
The life cycle product system Cotton product system boundary: what is included, what is excluded? Data collection and data sources Modelling choices (allocation)
• • •
Sustainability impact categories Environmental impact categories and models Socio-economic impact categories Methods chosen for aggregation and interpretation
• • •
COTTON LIFE CYCLE SYSTEM BOUNDARY Cotton fibre production Manufactured materials:
Land
agro-chemicals; chemicals for textile refinement; dyes; packaging; etc.
Water
Commercial dryland farm
Commercial irrigated farm
Smallholder dryland farm
Emissions to air
Cotton gin
Yarn production
Landfill of textile wastes
Spinner Energy inputs:
Fossil fuel resources
electricity; diesel; petrol; LPG; heavy fuel oil
Emissions to water T-shirt production
Towel production
Knitter
Dyehouse
Mineral resources
Integrated mill: weaver, dyehouse, CMT
Emissions to soil
CMT
LEGEND From/to environment Processed inputs to systems Textile waste streams Transport steps
Retail & distribution
Retail & distribution
Consumer use (washing, drying, ironing)
Consumer use (washing, drying, ironing)
End-of-life (disposal)
End-of-life (disposal)
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SUSTAINABILITY INDICATORS Socio-economic impacts
Labour rights and decent work • • • • • • • •
Hours of work Training and education Skills development Wages and benefits Freedom of association and collective bargaining Labour-management relations Protection of minors and vulnerable persons Diversity and equal opportunity
Job creation and community development • • •
Occupational health and safety • •
Safe, hygienic and healthy working conditions Commitment to occupational health and safety
Product quality and economic sustainability • • • • •
Product labelling and certification Feedback mechanisms and customer satisfaction Value addition and innovation Indebtedness and cash flow Economic risk
Magnitude and stability of employment Poverty reduction and impact on the local community Impact on community health and safety
EMPLOYMENT INTENSITY (T-SHIRT VALUE CHAIN)
Number of jobs
2.0 1.8
Retail
1.6
CMT
1.4
Dyeing
1.2 1.0
Knitting
0.8
Spinning
0.6
Ginning
0.4 0.2
Farming
0.0 Permanent
Temporary
Full-time equivalent
Number of jobs per 10,000 t-shirts • Full-time equivalence assumes temporary jobs are 10 weeks in duration • T-shirt mass of 150 g
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GENDER DIVERSITY IN EMPLOYMENT (T-SHIRT VALUE CHAIN)
0.35
1.8 Retail
1.4
Dyeing
1.2
0.25 0.20
Knitting
0.15
Spinning
0.10
1.6
CMT Number of jobs
Number of jobs
0.30
Ginning
0.05
1.0 0.8 0.6 0.4
Farming
0.2
0.00
0.0 Men Women Permanent jobs, per 10,000 t-shirts
Men Women Temporary jobs, per 10,000 t-shirts
AGGREGATION OF IMPACT CATEGORIES Constructed scales serve a number of purposes: Condense the large number of socio-economic indicators so as to provide a visual overview Protect data confidentiality Synthesize inconsistent and/or data deficient data sets into a consistent output
Defined in this study Four sets with a colour rating system, intention is to highlight the socioeconomic strengths and weaknesses across the supply chain Should ideally be constructed together with stakeholders and decision-makers GOOD
FAIR
WEAK
POOR
NO INFO GIVEN
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CONSTRUCTED SCALES CATEGORY
GOOD
Workers not exceeding 45 hours per week or 9 hours per day; OR 45 hours per week with overtime of not more than 3 hours per week paid at a wage premium
LABOUR RIGHTS AND DECENT WORK
Hours of work
10% or more of the workforce receives skills development training; OR 5% or more of annual working hours are spent on training or skiils development; OR 5% of more of operating spend is on training; OR 5% or more of the workforce made up of learnerships or apprenticeships
Training and Education; and Skills development
Wages and benefits
Wages and benefits above sector standards/union agreements
FAIR
Workers occasionally exceeding 45 hours per week or 9 hours per day, with overtime paid at a wage premium and total hours per week not exceeding 60; OR Workers exceeding 45 hours per week but only for relatively short defined periods (e.g. cotton pickers) More than 2% of the workforce receives skills development training; OR More than 2% of annual working hours are spent on training or skills development; OR More than 1% of operating spend is on training; OR More than 0.5% of the workforce is made up of learnerships or apprenticeships Wages and benefits aligned with union agreements; OR Wages at or above appropriate sector minimum wage with some additional benefits given OR Workers paid on production scheme rather than fixed rate and where, on average, it is possible to exceed sector minimum wage
WEAK
POOR
Workers exceeding 45 hours per week or 9 hours per day, with overtime paid but not at a wage premium, and total hours per week not exceeding 60
Workers exceeding 45 hours per week or 9 hours per day with overtime not paid; OR Total hours per week exceeding 60
2% or less of the workforce receives skills development training; OR 2% or less of annual working hours are spent on training or skills development; OR 1% or less of operating spend is on training; OR 0.5% or less of the workforce made up of learnerships or apprenticeships
No formal skills development training (possibly some on the job training) and no learnerships
Wages at appropriate sector minimum wage with no additional benefits given; OR Workers paid on production scheme rather than daily rate and where, on average, it is possible to attain a daily wage close to sector minimum wage
Wages below appropriate sector minimum wage (whether fixed rate or production based)
EXAMPLE: HOURS OF WORK Value chain stage
Survey response Permanent workers not exceeding 45 hours/week; temporary workers (82% of workforce) possibly are but their time is not monitored (they work weekends)
COTTON FARM
Permanent workers not exceeding 45 hours/week; temporary workers (96% of workforce) possibly exceed this but their time is not monitored Permanent workers sometimes given overtime to compensate for slow periods; temporary workers (96% of workforce) possibly exceed this but their time is not monitored
GINNING
45 hours per week normal period; overtime 10 hours per week during production period (assume not paid at wage premium)
SPINNING
Office and "basic" workers under 45 hours per week; total working hours do not exceed 60 hours per week (including overtime), overtime paid at double or triple hourly rate.
KNITTING
42.5 hours per week; overtime paid but not explicitly stated whether this is at a wage premium. Working hours never exceed 60 hours per week.
DYEING
45 hours per week; paid overtime for work on Sunday and public holidays; overtime voluntary; not explicitly stated that regular plus overtime hours do not exceed 60 hours per week; overtime paid double but statement that this might not apply to all workers 44.25 hours per week, 9.25 hours Mon-Thurs; overtime voluntary; not explicitly stated that regular plus overtime hours does not exceed 60 hours per week; overtime "incentives" in contract
GARMENT 45 hours per week; sometimes 60 with overtime; overtime "incentives" in MANUFACTURE (CMT) contract 44 hours per week; 58 with overtime (Saturday and Sunday)
Hours of work Workers rarely exceeding 45 hours per week or 9 hours per day; OR overtime not more than 3 hours per week and paid at a wage premium
Workers occasionally exceeding 45 hours per week or 9 hours per day with paid overtime not exceeding 15 hours per week (60 hours total); OR workers exceeding 45 hours per week for relatively short defined periods (e.g. cotton pickers)
Workers exceeding 45 hours per week or 9 hours per day with overtime paid but not at a wage premium; total hours not exceeding 60 hours per week Workers exceeding 45 hours per week or 9 hours per day with overtime not paid; OR total hours exceeding 60 hours per week
44 hours per week; hardly any overtime. MANUFACTURE & DYE RETAIL & DISTRIBUTION
28 employees whose working hours (incl. overtime) exceed 60 hours/week (11%) Sectoral Determination for the Wholesale and Retail Sector (45 hours per week, less than 10 hours per week paid overtime)
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EXAMPLE: HOURS OF WORK Value chain stage
Survey response
Hours of work
Permanent workers not exceeding 45 hours/week; temporary workers (82% of workforce) possibly are but their time is not monitored (they work weekends)
Workers rarely exceeding 45 hours per week or 9 hours per day; OR overtime not more than 3 hours per week and paid at a wage premium
Permanent workers not exceeding 45 hours/week; temporary workers (96% of workforce) possibly exceed this but their time is not monitored
COTTON FARM
Permanent workers sometimes given overtime to compensate for slow periods; temporary workers (96% of workforce) possibly exceed this but their time is not monitored GINNING
45 hours per week normal period; overtime 10 hours per week during production period (assume not paid at wage premium)
SPINNING
Office and "basic" workers under 45 hours per week; total working hours do not exceed 60 hours per week (including overtime), overtime paid at double or triple hourly rate.
KNITTING
42.5 hours per week; overtime paid but not explicitly stated whether this is at a wage premium. Working hours never exceed 60 hours per week.
DYEING
45 hours per week; paid overtime for work on Sunday and public holidays; overtime voluntary; not explicitly stated that regular plus overtime hours do not exceed 60 hours per week; overtime paid double but statement that this might not apply to all workers
Workers occasionally exceeding 45 hours per week or 9 hours per day with paid overtime not exceeding 15 hours per week (60 hours total); OR workers exceeding 45 hours per week for relatively short defined periods (e.g. cotton pickers)
Workers exceeding 45 hours per week or 9 hours per day with overtime paid but not at a wage premium; total hours not exceeding 60 hours per week
44.25 hours per week, 9.25 hours Mon-Thurs; overtime voluntary; not explicitly stated that regular plus overtime hours does not exceed 60 hours per week; overtime "incentives" in contract
Workers exceeding 45 hours per week or 9 hours per day with overtime not paid; OR total hours exceeding 60 hours per week
GARMENT 45 hours per week; sometimes 60 with overtime; overtime "incentives" in MANUFACTURE (CMT) contract 44 hours per week; 58 with overtime (Saturday and Sunday) 44 hours per week; hardly any overtime. MANUFACTURE & DYE RETAIL & DISTRIBUTION
28 employees whose working hours (incl. overtime) exceed 60 hours/week (11%) Sectoral Determination for the Wholesale and Retail Sector (45 hours per week, less than 10 hours per week paid overtime)
SUSTAINABILITY INDICATORS Environmental impacts
Potential damage to human health • • •
Potential damage to ecosystems • • •
Substances toxic to humans (cancer and non-cancer effects) Substances that destroy the ozone layer Substances that cause smog and lead to respiratory illnesses Substances toxic to ecosystems Acidifying substances Excessive macronutrients (nitrogen and phosphate)
Global warming potential •
Water scarcity •
Land use • •
Potential biodiversity loss Loss of biotic production potential (soil organic carbon)
Non-renewable resource depletion • •
Water use that deprives others of freshwater
Use of fossil fuels Use of mineral resources
Energy use •
Cumulative energy demand
Greenhouse gases leading to climate change
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COMPARISON OF IRRIGATED AND NON-IRRIGATED COTTON 12
7E-06
10
6E-06
kg CO2e
6 4
Disposal
5E-06
Retail
4E-06
Retail
3E-06
T-shirt production
T-shirt production
2
DALY
8
0
Yarn production
2E-06
-2
Fibre production
1E-06
-4
Fibre production
0E+00 Irrigated
Irrigated Non-irrigated Human health damage potential, 1 kg t-shirts
Non-irrigated
Global warming potential (net), 1 kg t-shirts 7.0
0.04
6.0
0.04
5.0
Retail
4.0
T-shirt production
3.0
Yarn production
2.0
Fibre production
kg N equivalents
CTUe
Yarn production
1.0
0.03 0.03 0.02 0.02 0.01
Retail T-shirt production Yarn production Fibre production
0.01
0.0
0.00 Irrigated Non-irrigated Ecotoxicity, 1 kg t-shirts
Irrigated Non-irrigated Eutrophication potential (N), 1 kg t-shirts
COMPARISON OF IRRIGATED AND NON-IRRIGATED COTTON 1.4
14.0 12.0
1.0
Retail
0.8
T-shirt production
0.6
Yarn production
0.4
Fibre production
square metres.year
cubic metres
1.2
10.0
0.2
T-shirt production
6.0
Yarn production
4.0
Fibre production
2.0
0.0
0.0 Irrigated Non-irrigated Water depletion potential, 1 kg t-shirts
Irrigated Non-irrigated Biodiversity stress index, 1 kg t-shirts
40
0.6
35 25 20 15 10
0.5 Retail
0.4
T-shirt production $
kg carbon
30
Retail
8.0
Yarn production Fibre production
0.3 0.2
Retail T-shirt production Yarn production Fibre production
0.1
5 0
0.0 Irrigated Non-irrigated Biotic production potential, 1 kg t-shirts
Irrigated Non-irrigated Non-renewable resource depletion, 1 kg t-shirts
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AGGREGATION OF IMPACT CATEGORIES Constructed scales
There are four sets with a colour rating system, consistent with that used for socio-economic impact categories Relative size / significance of the impact Small / minor significance Moderate significance High signficance Large / very significant
Contribution of stage/process to overall supply chain impact 90%
Significance of environmental impacts – based on normalised results using the ReCiPe LCIA method (Goedkoop et al., 2009). Category Fossil Carbon Footprint Human toxicity Particulate matter formation Terrestrial acidification (in SA) Freshwater ecotoxicity Freshwater eutrophication Marine eutrophication Water Stress Index, SA (SA data) Fossil fuel depletion Land & biodiversity
Significance Moderate High Moderate High Moderate Very high Very high Very high High Minor
SIGNIFICANCE AND CAUSES OF ENVIRONMENTAL IMPACTS
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COMPARISON OF THREE COTTON FARMS Overview of sustainability performance Sustainability Indicator
Commercial, irrigated
Cotton farms Commercial, non-irrigated
Smallholder, non-irrigated
Environmental: Human health and ecosystems Impact on global climate change Potential human health effects Potential impacts on ecosystems Environmental: Resources Consumption of scarce water resources Impact on land resources Consumption of non-renewable resources Socio-economic: Labour rights and decent work Hours of work Training, education & skills development Wages and benefits Collective bargaining; labour relations Diversity and equal opportunity Socio-economic: Job creation and community development Magnitude and stability of employment Poverty reduction and community impact Socio-economic: Commitment to occupational health and safety Working conditions, commitment to OHS Socio-economic: Product quality and economic sustainability Product quality and innovation Indebtedness and cash flow Energy, water and waste cost sensitivity KEY
GOOD
FAIR
WEAK
POOR
CONCLUSIONS
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KEY LEARNINGS Collecting sustainability information is challenging • Little or no appetite for sustainability initiatives (especially environmental) • Challenges included long turn-around times, information gaps and language barriers • Indicators need to be kept to a minimum and tailored, where possible, to existing record-keeping • Data needs thorough auditing and checking Socio-economic information has its own challenges • Possibly high biases by engaging only with business owners and management • Often information not available or no standard format for recording • Reluctance to divulge costs and other financial information
FUTURE DIRECTIONS Usefulness of life cycle approach to capture sustainability performance of textile value chains demonstrated Larger sample size needed for results to represent SA’s textile industry Indicators point to interesting trade-offs between different regions and farming approaches that could be explored with a larger sample size Possible model improvements, e.g. chemical compositions, wastes Wider-ranging interviews for more robust benchmarking of socio-economic performance Taking the life cycle model forward Further refinement of sustainabilty indicators
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