The Rio Declaration firmly established the link between environmental issues and development by stating that:
  
"...in order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it."
  
Therefore, if environmental protection is to be considered as an integral part of the development process, how can the environmental risks associated with human activities be assessed?
  
The Rio Declaration sets out an extremely important idea, now widely accepted by policy makers, of a precautionary approach to environmental protection -
  
"In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation."
  
The concept is not new having emerged in association with Clean Air legislation in the Federal Republic of Germany in the 1970s. It has become an accepted principle in the European Union and a part of international environmental law. The German concept of 'vorsorgprinzip' embraces notions of risk prevention, cost effectiveness, ethical responsibilities towards the environment, and the (sometimes) uncertain nature of human knowledge and understanding.
  
Precaution is founded on a number of key concepts, such as -
  
Preventative anticipation - taking action if necessary before scientific proof is available on the grounds that a delay in the action will cause damage to nature and society.

Safeguarding ecological 'space' - not impinging on ecological margins so that we protect and widen the assimilative capacity of the natural environment. This means refraining from undesirable resource use.

Proportionality of response - to show that selected degrees of restraint are not unduly costly. In other words, allowing for the possibly greater dangers for future generation if important life support systems are undermined.

Duty of care - placing the onus of proof on those undertaking an activity or carrying out change to demonstrate no environmental harm.

Promoting intrinsic natural rights - allowing natural processes to function such that they maintain essential support for all life on earth.

Paying for ecological debt - or compensating for past errors of judgement as indicated by the notion of 'common but differentiated responsibility' enshrined in the UN Framework Convention on Climate Change.
  
It is important here to point out the existence of two concepts - the "precautionary approach", as embodied in Principle 15 of the Rio Declaration, and the "precautionary principle". A discussion of the precautionary principle is presented in the box below.

A Business Approach to the Concept of Precaution

The key element of a precautionary approach, from a business perspective, is the idea of prevention rather than cure. In other words, it is more cost-effective to take early action to ensure that irreversible environmental damage does not occur. Companies should consider the following:

While it is true that preventing environmental damage entails both opportunity - and implementation - costs, remediating environmental harm after it has occurred can cost much more, e.g. for treatment costs, or in terms of company image.

Investing in production methods that are not sustainable, i.e. that deplete resources and degrade the environment, has a lower, long-term return than investing in sustainable operations. In turn, improving environmental performance means less financial risk, an important consideration for insurers.

Research and development related to more environmentally friendly products can have significant long-term benefits. 

Nevertheless, interpretation of the precautionary approach can present difficulties for companies. They will be more effectively placed to assess any potential environmental harm if they have a thorough understanding of current environmental impacts, as well as the baseline environmental conditions, within their sphere of influence. This requires developing a life-cycle approach to business activities that can:

manage the uncertainty, and

ensure transparency. 

With respect to assessing the uncertainty, a number of useful tools are available to gather information on the potential issues and impacts associated with technological, process, planning and managerial changes, such as - 

• environmental risk assessment - establishes the potential for unintended environmental damage alongside other risks
• life cycle assessment (LCA) - explores the opportunities for more environmentally benign inputs and outputs in product and process development
• environmental impact assessment - ensures that impacts of development projects are within acceptable levels
• strategic environmental assessment - ensures that impacts of policies and plans are taken into account and mitigated. 

These tools provide the data that organisations need when deciding what actions to take. When precaution is a fundamental, strategic issue for business, a range of actions is possible -

• build-in safety margins when setting standards in areas where significant uncertainty still exists
• ban or restrict an activity whose impact on the environment is uncertain
• promote best available technology
• implement cleaner production and industrial ecology approaches
• communicate with stakeholders