Economic Growth and Sustainability – Which Metrics?

GDP is the common measure of growth, but as World Economic Forum’s former chief economist Jennifer Blanke pointed out “there are three key questions that GDP overlooks: is growth fair, is it green and is it improving our lives?”

As the business and economic landscape continues to evolve due to demographic shifts, increasing inequality, alarming levels of climate change and rapid technological advancement, it is feasible to suggest that GDP may not always be relevant.

Alternative indicators of progress generally fall into one of three categories (Goossens et al 2007):

> Adjusting GDP usually involves adjusting traditional measures of economic performance to include environmental and social factors.

> Replacing GDP includes indicators that attempt to assess progress more directly. For example, by assessing the achievement of basic human functions (like the Human Development Index) or average satisfaction (like the Happy Planet Index).

> Supplementing GDP includes approaches designed to complement GDP with additional environmental and/or social information (such as dashboards).

Importantly, the United Nation’s Sustainable Development Goals (SDGs) – and their related thematic issues – recognise that strategies are needed to improve health and education, reduce poverty and inequality, without ignoring economic growth.

This Sustainability Leadership conversation will be guided by two Melbourne Forum members Stan Krpan, CEO of Solar Victoria and Dianne Jacobs, a Melbourne Forum board member and chair of the interest groups committee.

Ahead of this Interest Group discussion it may help to consider:

> Can we achieve long-term economic growth without negatively impacting social, environmental and cultural aspects of the community?

> Do we want to focus on wealth or how the wealth is distributed?

> Do we really need an economic case to convince ourselves to address climate and sustainability threats?

> Can economic growth and environmental sustainability co-exist?

> Can businesses look beyond the bottom line and pursue a stakeholder-centric approach and meaningful ESG metrics?

> How can companies adapt their business models for a net zero economy?

> Which environmental metrics: electricity usage, fuel consumption, carbon emissions, materials, water usage and waste diversion?

> Which social metrics: employee satisfaction, health & wellbeing, diversity & inclusion, pay equity, safety, supply chain management?

> Which governance metrics, codes and accountabilities: board diversity, ESG strategy, regulatory compliance, risk and reputation management, stakeholder perspectives, capital management?

Come with an open mind and definitely be prepared for a stimulating and challenging discussion as part of Melbourne Forum’s Sustainability Leadership interest group.

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This Melbourne Forum Sustainability Leadership Interest Group brings together those interested in sharing perspectives and exploring key issues with fellow members about sustainability and ESG (environmental, social, and governance). The intimacy of the experience is enhanced when everyone who attends gets to comment and exchange ideas. The hosts are members whose role is to gently guide the group’s conversation.

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