As part of its participation in the Beyond Growth 2023 Conference in Brussels today, the International Federation for the Economy for the Common Good (ECG), which advocates for a Common Good Product, declared the following features as must-haves for the successor of Gross Domestic Product (GDP):
- Citizen participation
The components of a successor to GDP, for example the Common Good Product, should not be defined by experts alone, but worked out by the people by means of citizen participation in a democratic bottom-up process. While the qualitative sub-goals should come from the people, the quantitative indicators could be determined by experts, matching the bottom-up approach with the wisdom of science.
- Linkage from the macro to the micro level
Rather than developing the successor to GDP (at the macro level) and corporate sustainability reporting (at the micro level) independently, the underlying goals and values should be developed together and be linked. Businesses must make and demonstrate their contribution to the overarching goals of a society. Corporate goals can therefore no longer be measured and evaluated in isolation from overall societal goals.
- Indexing qualitative targets in order to replace GDP
All qualitative sub-goals, such as health, happiness, trust, justice, democracy, peace or ecological stability should be measured separately; at the same time, aggregation should also be possible.
“Only if these basic requirements are met, can GDP be effectively and systematically replaced by a new metric in all political strategies, programs and performance evaluations. GDP has to leave the main stage of economic success management and step back to a statistical variable without normative power.” explains Christian Felber, spokesman for the Economy for the Common Good.
Companies will not be able to achieve systemic de-growth on individual initiative alone. For this, the system design has to change. The ECG model includes the linkage of positive and negative incentives for companies according to the score of their sustainability performance. If a firm reduces the use of natural resources and emissions in absolute terms, and thus contributes to climate and biodiversity stabilization and protection, it could pay lower taxes and enjoy priority in public procurement and economic promotion programs; financial institutions could be mandated to give better conditions to high scorers and vice versa. A positive minimum score could be the precondition for being listed at stock markets and for the approval of mergers and acquisitions by antitrust authorities. Even access to the world market could be differentiated according to the score of the sustainability report. With the Common Good Balance Sheet, ECG offers a tool for measuring the overall social sustainability performance of a company that has been tried and tested for more than 10 years by more than 1000 companies and organisations.
In conjunction with the Common Good Product called for by ECG, the micro- and macroeconomic levels can be effectively linked. “In order to develop a broad social momentum, we must not define post-growth in terms of consumption reduction only, but must emphasize the much broader and deeper gain in well-being, quality of life, and the greater common good.”
Download CGP policy paper or read press release