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ARCHIVE: Sustainable development impact test

The UK Government is committed to sustainable development – essentially that the current generation satisfies its basic needs and enjoys an improving quality of life without compromising the position of future generations. This central principle should underpin all policy development.

The role of the Sustainable Development Specific Impact Test is to enable Government departments conducting policy appraisal to identify key impacts of their policy options relevant to sustainable development and to give informed advice to ministers on sustainability-related issues.

Because sustainable development cannot be adequately appraised by cost benefit analysis alone, this test provides a framework within which to combine information about Sustainable Development impacts with information from the rest of the Impact Assessment about the balance of monetised and non-monetised costs and benefits.

Key steps in completing the SD Impact Test

You should consider and answer the questions below. Use the following proforma to record the results:

After you have filled in the proforma, copy and and paste it into the Evidence Base of your Impact Assessment.

The two stages of the test involve firstly considering the policy’s SD-relevant impacts, and secondly considering if and how these impacts should be factored into further policy development. These steps, and the questions involved, may change as our understanding of this area develops.

Applying the test

The Sustainable Development Specific Impact Test should be applied when first considering an issue and throughout the policy development process as appropriate. The test can help policy analysts to understand issues in a broader context and to identify the evidence required to appraise policy options.

The results of the test are also extremely important when putting advice to ministers. The test can show ministers whether or not the options are compatible with sustainable development.

Stage 1

1. Environmental Standards

As part of completing the Impact Assessment, you should establish whether there are any significant environmental impacts of your policy proposal using the Wider Environmental Specific Impact Test.

  • Legal and statutory standards are often a proxy for ‘true’, but usually unknown, ecological thresholds. Compare the findings of your Wider Environmental test to the list of statutory standards to identify whether any are relevant (This will be available within the next few weeks.)
  • If you have identified above that your policy proposal may contribute to breaching environmental standards you should notify the Government Department which has legal responsibility for the threshold and seek advice on (i) how to account for the impact, (ii) whether to inform ministers of the risk and iii) identifying mitigating or compensating actions where appropriate.

2. Intergenerational impacts:

Understanding the impacts of our actions on future generations is a key aspect of assessing the sustainability of policy proposals.

Get the IA template from the Impact Assessment Guidance and Toolkit (on the BIS website) and use the table on page 4 (Annual profile of monetised costs and benefits – you may need to extend it to account for impacts beyond ten years) to illustrate how the costs and benefits of your policy are distributed over time and thereby identify significant impacts on future generations.

You should also use the table to note when any significant non-monetised costs and benefits will arise. If the policy proposals impose significant costs on future generations then there is a risk that they are not sustainable and you should a) inform ministers of that risk b) identify mitigating or compensating actions where appropriate.

Where there are significant long-term impacts that involve “substantial and, for practical purposes, irreversible wealth transfers between generations” you should ensure that sensitivity analysis is included in the NPV calculation using the supplementary Green Book guidance.

3. Social aspects

Impacts of any policy which affect the generation of social benefits are important in sustainable development.  Over the next few months, further consideration will be given to social aspects and how to incorporate these into the Sustainable Development Specific Impact Test.

Stage 2

This stage brings together the results from the impact assessment with those from the first stage of the SD test. 

If the IA suggests that the balance of monetised and non-monetised costs and benefits has a net positive impact on society and that there are no significant SD-related issues, then the combined analysis suggests that the policy should proceed.

Where it is calculated that the balance of monetised and non-monetised costs and benefits result has a net positive impact on society but there are SD-related issues, then:

  • In the event of impacts on an environmental limit, accounting for advice from the responsible department, you should consider whether any necessary changes or additions to the policy affect the conclusion of the IA.
  • In the event of significant long-term impacts, you should present this clearly to ministers, alongside any mitigating actions where appropriate, in order to allow them to decide whether or not the strength of the net benefits implied by the IA result is sufficient to outweigh any negative long-term impacts.

The questions in the proforma will help you to complete and record this part of the test.

Further information

Page last modified: 1 April 2010
Page published: 1 April 2010

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