Beyond GDP indicators

Beyond GDP indicators refers to alternative economic indicators that do not place economic growth as the most important variable in assessing a country's progress. Beyond GDP indicators are inclusive of other aspects of development, such as, environmental and social.

This page is part of an ongoing, open-ended online collaborative database, which collects relevant approaches that can be used by city-makers to tackle unsustainability and injustice in cities. It is based mainly on knowledge generated in EU-funded projects and touches on fast changing fields. As such, this page makes no claims of authoritative completeness and welcomes your suggestions.

General introduction to approach

The Human Development Index launched in 1990 was a first big milestone in broadening the measurement of societal progress by including a social dimension to the economic one. Aligned with the United Nations 2030 Agenda for Sustainable Development, as well as citizens’ concerns and with the latest technological and political evolutions, new frameworks and indicators propose more comprehensive ways in which to think, assess and monitor progress. Several projects within the EU have helped evolve the “Beyond GDP” debate through various approaches which aim to address the pressing need of bridging the indicator gap, both quantitatively and qualitatively.

Investors and business organizations are starting to pay more attention to sustainability and to use environmental, social and governance indicators in addition to purely economic ones. This trend is reflected in the increasing adoption of Corporate Social Responsibility departments and of the Global Report Initiative in big companies.

“Beyond GDP” approaches should be of particular interest to policymakers, statistical offices and planning agencies, as well as academia, and other assessment/monitoring stakeholders. However, designing indicator sets can be done by any agent of society, not just large companies and established institutions. Other agents bring their own knowledge of local challenges and priorities.

New evaluation frameworks and indicators have been generated to better assess, benchmark and monitor societal progress, within a broad definition of sustainability. For example, the monetisation of natural capital and ecosystem services operationalises the environmental dimension feeding into the economics and capitalist logic to transform it from within (OpenNESS). Most approaches go beyond the pure economic rationale, and assign weights to the economic, social and environmental pillars of sustainability in various ways. Some of the new alternative frameworks (BRAINPOoL, Welfare, Wealth & Work for Europe) prioritise the social dimension, while others clearly underline the environmental one (IN-STREAM). Locally co-created frameworks and indicators are of particular interest (WeValue)for their educational and community-building aspects carried throughout the design process.

Shapes, sizes and applications

The BRAINPOoL project proposes - at the EU-level - shifting the primary focus onto other indicators than GDP. After brokering knowledge between policy-makers, statistical offices and planning agencies, this “priorities/needs assessment” has led to a joint action plan for the implementation of new indicators, providing new insights into the barriers and drivers of their use.

Welfare, Wealth & Work for Europe have developed and intensively disseminated a “Wellbeing in a sustainable environment” benchmark system that balances out three dimensions: increasing incomes; social inclusiveness, gender equality and equitable distribution; and environmental sustainability. They have also made sectoral policy recommendations to support a people-centered growth path by changing the consumption structure towards less material and energy-intensive products (specifying the institutional changes needed at all policy levels).

Also including citizen wellbeing and social justice, but focusing on the less represented indicators of biodiversity, green growth and resource efficiency, IN-STREAM proposes an integrated framework for sustainable prosperity to complement mainstream economic benchmarks, and explores the potential value of alternative composite indicators.

While keeping the economic dimension as the centre, the OpenNESS project gives the keys to operationalisation of natural capital (e.g. air, water, biodiversity) and ecosystem services (e.g. climate regulation, waste decomposition, pollination of crops, and other vital or wellbeing services to human societies). This innovative approach is based on the idea that giving nature a monetary value can help manage it more sustainably. Although, commodification of nature could have implications for justice, as the monetisation of environmental benefits challenges their status as public goods. Furthermore, the logic can lead to serious social implications if applied to human capital. There is no ethical way to calculate human capital value/loss. Indeed, giving greater economical value to a human being than another (based on its level of education, age, gender, state of health, or whatever other criteria) is politically very dangerous.

The WeValue project proposes a co-creative design of ethical/values-based indicators by using a combination of indicators based on perceptions and observable outputs. The dynamic ‘inside-out’ process of designing indicators is framed within clearly defined contexts of collective action. Multiple sets of values-based indicators can be created depending on what should be measured either within specific educational initiatives, projects or programmes (micro-level) or across a whole organisation or institution (meso-level).

All of these six approaches have a good level of maturity and transferability, some being more adequate for implementation within certain scale, which is a positive sign of complementarity between national and local levels. Nevertheless, the implementation of some approaches would probably require more ressources than others. For instance the WeValue values-based indicators is a participatory and educational process, where indicators definition process is as important as - to not say more than - the use of indicators.

Relation to UrbanA themes: Cities, sustainability, and justice

Urban: These approaches are not necessarily urban per se, but are highly relevant and applicable in urban / peri-urban ecosystems and functional domains.

Sustainability: This topic strongly links together the three dimensions of sustainability. All approaches explicitly embrace the sustainability debate trying to combine the growing environmental concerns with socio-economic issues, while weighing the economic, social and environmental priorities differently.

Justice: Three types of justice (distributional, interactional, and procedural). It raises big questions - for example of equitable distribution of material resources and services, especially when “nature” is considered a stakeholder itself. Spatial justice and interactional equity are tackled as well to some extent, although not explicitly. As most of the approaches are of interest to technical agents primarily, only the WeValue project answers to procedural justice, including potentially multiple layers of society in the design of indicator sets.

Narrative of change & Transformative Potential

Skepticism towards the economy-centered capitalist model is on the rise. GDP, the single dominant metric for the three past generations, has set growth as the indicator to prosperity and wellbeing of a society, and shaped the management of our economy without taking into consideration resources limitations or assessing the level of fairness of its society. Indeed the limitations of GDP as an indicator are that it measures economic flows only and is unable to differentiate between transactions which are sustainable and beneficial from those which are not. Complementary and especially alternative frameworks and indicators bring ethics, well-being, social and environmental questions to the fore.

Alternative (and complementary) approaches and indicators to GDP carry ground-breaking transformative potential as it challenges the established belief that GDP growth is the n°1 indicator of a healthy economy and society. By providing more inclusive knowledge of sustainability and mainstreaming alternative indicators, these approaches can inform and transform the management of the socio-eco-environmental system we live in and depend on. Also, the process of defining the indicators can be as transformative as the indicators themselves. While the operationalisation of natural capital and ecosystem services and the co-design of values-based indicators are innovative, the other approaches are not. Nevertheless, they all explicitly seek to overcome the current unsustainable and unfair patterns, by altering the societal progress narrative, its definition and its GDP-centered measurement framework, and by broadening the stakeholder groups for the benefit of the common good, and with that for the sake of environmental sustainability.

Additional reading

EU Projects:

IN-STREAM BRAINPOoL Welfare, Wealth & Work for EuropeOpenNESS WeValue ESDINDS

Wikipedia Pages:

Beyond GDP Human Development Index Global Report InitiativeCorporate Social Responsibility

Other Websites:

Beyond GDP Website Global Reporting Initiative Happiness Pulse Index

Articles:

Fourcade, M. (2011). Cents and sensibility: economic valuation and the nature of “nature”. American journal of sociology, 116(6), 1721-77