The first phase of the ESDI Initiative focussed on existing indicator work, developing conceptual framework, and seeking input on this approach. This phase ended in March 2001, after a workshop for potential users of these indicators.

The NRTEE is recommending a "capital approach," that will track stocks of key types of capital (produced, natural and human) needed by future generations. Some of the important assets that will be tracked will include stocks of natural resources, as well as the crucial ecosystem services (such as the provision of clean water and soil) that our society and our economy depend upon.

This emphasis on capital shifts the focus of indicators from traditional measures of economic activity such as GDP, to trends in the investment and stocks of the different forms of capital, that all support a high quality of life.

While the concept of produced capital is relatively easy to identify and place a value upon, and progress has been made in the area of human capital, the most difficult challenge is that of natural capital. For example, developing indicators for ecosystem services such as wetlands does not easily lend itself to simple measurement processes. This is one of the major issues for the next program phase, which will focus on defining specific indicators.

Existing indicator and data collection work will be examined through the use of cluster groups of experts, which will be tasked with recommending national indicators, valuation methodologies and data sources for each domain or category the ESDI Initiative proposes to tackle. These groups will act in advisory capacity to the ESDI Steering Committee.

The NRTEE will also continue to ask potential users to provide input concerning the relevance and usefulness of the proposed indicators.

The NRTEE also recognizes the social aspects of sustainable development. In response to stakeholder input the NRTEE will increase its existing support of organizations working in these areas so as to increase the capacity to eventually develop national indicators on social aspects.

The testing, refining and validation of the indicators will form the third phase of the Initiative.