Economists deny that Gross Domestic Product (GDP) was ever intended as a metric of overall country progress or well-being. However, that’s how it is being used. Leaders express alarm if the GDP—the value of all goods and services produced within a nation in a given year—falls. Countries are ranked by GPD or GDP per citizen, implying that countries with higher rankings are doing better overall than countries with lower rankings. What nonsense. We need a better metric for improved quality of life and progress. We need a Genuine Progress Indicator (GPI) that accounts for not only monetized economic wealth but, more importantly, includes vital environmental and social factors. Here are five reasons why it’s time we replaced the GDP with a GPI.
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Three recent reports provide positive reinforcement that traction on sustainability is building in the private and public sector. This news reenergizes our efforts. We live on hope that our combined efforts as sustainability champions will accelerate the take-up of environmentally, socially, and economically responsible strategies. Usually, during economic recessions, we lose ground. Strangely, in the current recession, the opposite has happened: sustainability-related strategies have been embraced more strongly.
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Our current economic and financial systems sanction obscene excesses at the expense of society. It’s easy and therapeutic to rant. It’s more helpful, but more challenging, to propose viable alternatives. In my last three blogs, I reviewed Hazel Henderson’s, Michael Moore’s, and David Korten’s thoughtful proposals on how to repair our economic and financial systems. We also need more responsible business models, like Benefit Corporations (B Corps).B Corps are a new kind of company which uses the power of business to solve social and environmental problems.
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Posted in Business, Finance on Jan 25th, 2011
We have trapped ourselves in an economic model that requires over-consumption to fuel its progress. Unfortunately, the collateral damage of funding relentless growth is often excessive levels of personal, institutional, and national debt. The way we deal with debt says a lot about the basic assumptions baked into our current economic model.
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Was the financial crisis triggered by a unique combination of unusual circumstances, or was it the inevitable outcome of a decaying system? Noted futurist, author, and ecological economist, Hazel Henderson, declares that Wall Street has degenerated into a global casino, with a far too dominant influence on the global economy. She says it must be rehabilitated and suggests seven reforms that would be a good start.
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Too often, we wait for the people in charge to fix world problems. Why not? Isn’t that their role? Our hopes are raised when we see people with our point of view gain power, and then we are disappointed when they fail to live up to our expectations. The status quo inertia in the current political and economic systems is amazingly strong. When people with important titles fail to shake it up, we may wonder if mere mortals like us can possibly make a difference.
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Sustainability issues can be overwhelming, depressing, and almost traumatizing. At times we may feel powerless to make a difference. In The Cult of Impotence: Selling the Myth of Powerlessness in the Global Economy, author Linda McQuaig provocatively suggests that helplessness is exactly what some large institutions want us to feel, so that they can get away with
solutions that are more in their interests than ours. She encourages us to take more personal responsibility for global sustainability challenges. The following three videos strongly support our capitalizing on our ripple effect.
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Our current business models, energy solutions, and transportation approaches are unsustainable. If we are to become a sustainable society, they must be changed. Change requires doing things differently—creatively inventing innovative ways to do things differently from how we are doing them today. Innovation gives us hope.
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When I reflect on the current corporate interest in sustainability, I am increasingly convinced that a root cause is global concern about climate change. Despite the best efforts of well-funded climate change deniers, people around the world believe the scientific evidence—we are in a climate change crisis.
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Today’s business model demands continuous growth. It is designed to foster ever-higher levels of consumption of our increasingly scarce resources. It permits a company to externalize the costs of many of the social and environmental impacts of its operations and of its products’ usage. It limits a company’s liabilities for impacts for which it is, or should be, accountable. It almost requires companies to continue their race to the bottom and seek ever-cheaper sources of labor.
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