WEAll revealed the latest rankings of the Happy Planet Index (HPI) today, which compare countries by how efficiently they are creating long, happy lives using our limited environmental resources.

The Happy Planet Index (HPI) is the leading global measure of ‘sustainable wellbeing’. It measures ‘efficiency’, using three indicators:

This is the fifth edition of the Happy Planet index. It was first launched in 2006, with subsequent editions published in 2009, 2012, and 2016.

The 2021 Happy Planet Index: Which countries are most ‘efficient’?

The top 10 countries by Happy Planet Index score are as follows:

  1. Costa Rica
  2. Vanuatu 
  3. Colombia 
  4. Switzerland 
  5. Ecuador 
  6. Panama 
  7. Jamaica 
  8. Guatemala 
  9. Honduras
  10. Uruguay 

Notably, Central and South America dominate the Happy Planet Index, with 8 of the top 10 highest ranking countries from the region. However, there has been a decline in wellbeing in several countries in South America, including Brazil.

Selected other countries:

11.   New Zealand

14.   United Kingdom

29.   Germany

31.   France

35.   Ireland

41.   Sweden

88.   Australia

94.   China

105. Canada

122. USA

The full Happy Planet Index rankings are available to view at www.happyplanetindex.org

How does your country measure up?

This year, the Happy Planet Index features an interactive website, where viewers can explore the data, make comparisons between countries and regions, and view trends over time, from 2006 to 2020. You can also download the data to make your own analyses!

There is also a new ‘Personal Happy Planet Index’ test to help users see what country they are most like based on their own lifestyles – and to reflect on how they can create their own “good life that doesn’t cost the Earth.

How is the Happy Planet Index different?

Unlike other indices, such as the Quality of Life Index or World Happiness Report, the Happy Planet Index does not rank countries in terms of quality of life or happiness. Instead, it looks at which countries are best at using minimal ‘inputs’ of natural resources to create the maximum possible  ‘outputs’ of long, happy lives – thus delivering truly “sustainable wellbeing”. 

Rankings serve as a compass pointing in the overall direction in which societies should be travelling – towards higher wellbeing lifestyles with lower ecological footprints. 

The Happy Planet Index does not consider societies truly successful if they deliver “good lives” which use more resources than the earth can support OR if they consume within the Earth’s limits, but have very low levels of wellbeing or life expectancy. 

Promoting human happiness doesn’t have to be at odds with creating a sustainable future.

The Happy Planet Index turns the old world order on its head by highlighting how high-income Western nations are often inefficient at creating wellbeing for their people. 

Costa Rica has again been ranked in first place for a fourth time due to its commitment to health, education, and environmental protection. In contrast, the USA was placed as the lowest scoring G7 nation at 122nd place, ranking low on both wellbeing and ecological footprint.

Costa Rica has been ranked in first place for a fourth time due to its commitment to health, education, and environmental protection. According to the Happy Planet Index, Costa Rica has a more efficient economy than the USA.

  • Costa Rica outperforms the USA (#122) on each of life expectancy, wellbeing, and environmental sustainability.
  • Costa Rica’s GDP per capita is less than half that of the USA. Despite this, Costa Ricans have higher wellbeing, and on average live longer. 
  • Costa Rica’s per capita Ecological Footprint is just one third of the size of the USA’s.

Countries that rank highly on the Happy Planet Index show that it is possible to live long, happy lives with a much smaller ecological footprint than found in the highest-consuming nations. 

Many nations achieve green lights in each of the individual components of the Happy Planet Index – meaning that these targets are genuinely attainable. 

Stories from a ‘Happy Planet’?

Overall, the Happy Planet Index shows that we are still far from achieving sustainable wellbeing: only a third of nations (representing 38% of the global population) consume within environmental limits and no country scores successfully across the three goals of high life expectancy for all, high experienced wellbeing for all, and living within environmental limits. 

Still, the Happy Planet Index rankings highlight many success stories that demonstrate the possibility of living good lives without costing the Earth – and we’re making progress towards this goal.

Environmental progress made in Western Europe – but more must be done.

  • Switzerland jumps to 4th place out of 152 countries on the Happy Planet Index, becoming the top ranking European country on the Index – and the only one in the top 10.
  • The UK rises to 14th place; now the highest scoring G7 country. 
  • Other Western European countries rank fairly well on the index: the Netherlands (#18), Germany (#29), Spain (#30), France (#31).

Mixed results among high-income countries.

  • North America falls in the bottom third of rankings of 152 countries: USA (#122) is the lowest ranking G7 country; Canada (#105) and Australia (#88) are not much further ahead.
  • In contrast, New Zealand is now in 11th  place,  becoming the second highest Western country in the rankings. 
  • South Asia and the Middle East dropped in the rankings; India dropped to 128th place out of 152 countries due to significant decline in wellbeing since 2006, but also a rising ecological footprint.
  • Sub-Saharan Africa’s scores are rising due to rapid increases in life expectancy.

The Impact of the Pandemic

Data from 2020 shows that despite the largest pandemic in living memory and a complete re-organisation of the world economy, people’s wellbeing had, at least in 2020, on average, remained surprisingly stable.

This demonstrates that our wellbeing is not inevitably linked to the fast-paced economic system that we have become used to – and suggests that it is possible to sustain good lives with a lower impact on the Earth.

To effectively address the climate crisis, positive changes we see on the Happy Planet Index need to be much more rapid. To do that, we need to rethink how our global economic system is designed. All signs point to a Wellbeing Economy.

Share the Happy Planet Index

Use our promotion pack to start the conversation: “How can we live good lives that don’t cost the Earth?”

For further information or to speak to the founder of the Happy Planet Index, Nic Marks, please contact: Rabia Abrar at happyplanet@weall.org 

By Shaleen Porwal

At the start of this year, as I was navigating through the Regenerative Building Blocks of the Wellbeing Economy Alliance (WEAll), I paused when I read, “People safe & healthy in their communities, rather than necessitating vast expenditures on treating, healing & fixing”. And in the definition of the health goal, it appropriately mentions, “both mental & physical.” 

Being a mental health advocate myself, this resonated so well with me. I am practising the science of Positive Psychology that focuses on what works well for people and how we can make it even better. This combination piqued my interest and paved my way to be able to contribute to the WEAll network.

The Wellbeing Economy talks about Mindsets that, “…economies should have human… wellbeing” and this encompasses the mental and emotional states besides physical safety, therefore the need permeates through all humans, irrespective of their trade and beliefs. This includes teachers.

I am focusing on teachers because they are an incredibly special group of employees who are empowered with the unique responsibility of shaping the future of a nation through their everyday interaction with young humans, who in turn will become into adults and will be taking up the responsibility of adding value to their nation, themselves, their family, and their community.

Every interaction that we have with another person, has the potential to bring about a notable change in our emotions. This change in emotions further leads to the development of thoughts and subsequently into action. Every day at a school, frequent communication channels are established between teachers and students, among teachers, and among student peers. These collaborations are vital for the functionality of performance and behaviour – students and teachers – for the continuity of “business as usual” i.e., a day in school. 

There are global reports on mental health that we have been made aware of and repercussions which we are observing in our local contexts as well, with a radical shift in the psychological state of children, teachers, and families, and that the World Health Organisation has fully acknowledged as follows: “…there has been increasing acknowledgement of the significant role mental health plays in achieving global development goals, as illustrated by the inclusion of mental health in the Sustainable Development Goals…”  

With the advent of the global pandemic – COVID-19 – Vulnerability, Uncertainty, Complexity, and Ambiguity (‘VUCA’) are adding fuel to fire. All of us, from a national level to an individual level, are struggling through it with our fair share of challenges currently. 

However, with a solution-focused approach, I want to see the silver lining of this dark ‘VUCA’ cloud.

We have surpassed the time where we put our resources to destigmatise psychological dysfunction and make efforts for it to be viewed in the light of normalcy. There are already examples of systems, companies, and collaborations that are disintegrating because they are unable to manage the emotional states of employees – after all, the organisation comprises of humans. According to a recent news report, “Mental and emotional well-being are now one of the most important topics in many companies”.

Considering a school as an employer for the teachers, most of the psychological challenges either for teachers or for students pertain to emotions and anxiety. These non-verbal cues need unique skills and methods to tackle and address and at initial stages as a proactive mechanism. We are not in a situation to imagine a scenario where we see attrition of teachers in a similar proportion and events of school dropouts due to the negligence of mental well-being.

Therefore, it calls for:

  1. Accepting this emotional ‘Vulnerability’,
  2. Creating an ‘Understanding’ for each other and the ecosystem, 
  3. All of us coming together for ‘Collaborative’ exercise with experts and within the system, and
  4. Doing what humans have historically always been best at – ‘Adaptability’, in the face of every adversity

Thereby creating a healthy and transparent environment where the teachers and students can freely speak about their psychological challenges to appropriate authorities – a psychologically safe ecosystem with the intent of finding solutions.

As a practitioner myself, below are few recommendations:

  1. Invitation by school management and principal, for teachers to participate in designing well-being policies and systems, in partnership with well-being service providers
  2. This will help in addressing the local pain points by customising the needs of the individual school cultures
  3. Create a transparent and permeable climate for open conversations around challenges in managing psychological distress – walking the talk
  4. Proactively recording and addressing instances of signs and observation by teachers of their students through this established well-being machinery
  5. Including vocabulary, integrating practices and interventions in school curriculum – this will have a double advantage, i.e., it will be an effective strategy to enhance the mental well-being of the current workforce, as well as it will equip today’s students (future workforce) with the skillset for managing well-being in their times of distress
  6. Working on changing definitions and popular beliefs around most widely misrepresented terms like success, failure, vulnerability, emotions, and the like. 
  7. Appreciating meaningful and bigger picture initiatives taken by teachers and students

We know that we are cognitive misers and implementation of a schooling system with a psychologically safe ambience might sound financially unwanted and time-consuming, the truth is that there is no quick fix to it. It will not only save time and effort in the long run but also create a healthy systemic effect for a Wellbeing Economy to function automatically with enhanced belonging to the organisation and finding deeper meaning in education – both for students and teachers – and to the nation.

As I connect the dots backwards, I figure out that this is exactly what Goal Number 3 of the United Nations Sustainable Development Goals 2030 talks about i.e., Target 3.4 “…promote mental health and well-being

About the author

Shaleen Porwal is a Positive Parenting and Education practitioner, based in Singapore. This blog forms part of the Faces of the Wellbeing Economy series, sharing expert opinions from across the WEAll network.

References

  1. American Psychological Association. Apa dictionary of psychology. American Psychological Association. https://dictionary.apa.org/cognitive-miser. 
  2. American Psychological Association. Apa dictionary of psychology. American Psychological Association. https://dictionary.apa.org/positive-psychology. 
  3. Brown Brené. (2019). Dare to lead: Brave work, tough conversations, whole hearts. Random House Large Print Publishing. 
  4. Chuan, W. P. (2021, July 16). Commentary: The coming resignation tsunami – why many may leave their jobs in a pandemic economy. CNA. https://www.channelnewsasia.com/commentary/resign-quit-new-job-office-remote-work-employer-hr-covid-19-2052156. 
  5. Edmondson, A. C. (2019). The fearless organization: Creating psychological safety in the workplace for learning, innovation, and growth. John Wiley & Sons. 
  6. Singer, T. & Ricard, M. (2015). Caring economics. Picador. 
  7. WEAll. (2021, March 18). Home. Wellbeing Economy Alliance. https://weall.org/
  8. What vuca really means for you. Harvard Business Review. (2014, August 1). https://hbr.org/2014/01/what-vuca-really-means-for-you. 
  9. World Health Organization. (n.d.). Mental health. World Health Organization. https://www.who.int/health-topics/mental-health#tab=tab_1. 

By Gary Stevenson

In 2008, I started a job predicting interest rates and the strength of the world’s largest economies.  In the thirteen years since then, financial markets, economists, and global central banks, predicted a recovery for both interest rates and the economy in every single year from 2009 to 2020.

Despite these twelve consecutive years of predicted recovery, now, in 2021, interest rates all over the world, much like the global economy, remain at emergency levels.  This was true even before the onset of the Covid-19 economic crisis.

So why have economic forecasts, as well as the recovery of economies, been so disappointing since the 2008 crisis?  I have devoted the last twelve years of my life to figuring this out.

The logic behind these optimistic predictions has been as follows:

The economic collapse of 2008, as well as the prolonged “Great Recession” that has followed it, were both what economists would call “demand crises”.  That means that, at their core, they are caused by society, as a whole, not spending enough money.  When people don’t spend enough money, businesses can’t sell their products, and they respond by closing down, shrinking, or stopping hiring.  That pushes up unemployment and pushes down wages, leaving people with even less money to spend, making the problem worse.

Modern economics is well familiar with this kind of problem, and has two broad solutions which can be used.  The first, often referred to as “fiscal stimulus”, refers to the government boosting spending and employment directly, either by giving money to people, or large scale spending and investment projects.  The second, often called “monetary policy”, refers to making large amounts of low interest rate loans, via the banking system, in the hope that companies and individuals will use the cheap loans to increase their own spending and investment.

After the 2008 crisis, at first, both of these policies were used in large amounts.  Soon afterwards, however, with the election of an austerity-focused government in the UK, and the emergence of the sovereign debt crisis in Europe, direct spending from many governments was cut back, and “monetary policy” was left to take centre stage, with increasingly larger and larger amounts of money lent, rather than spent, into the economy via the financial system.

Despite cutbacks in government spending across the world, financial markets, central bankers and economists continued to predict that these aggressive “monetary policy” interventions, such as zero or even negative interest rates, and “quantitative easing” would be enough to kick start the economy.  The fact that these supposedly temporary measures are still in place today, shows that they were wrong.

So why didn’t this policy work, and why were economists still predicting a recovery as recently as early 2020, before the Covid crisis hit?

These were the questions about which I obsessed in 2010 and 2011.

At that time, I was an interest rates trader at Citibank in London.  My job was to predict when interest rates would recover, and I had witnessed markets incorrectly predict a recovery for the previous three years.  I was also, at that time, still living in my family home, a small terraced house squeezed in between a railway track and a disused factory in Ilford, East London.

I had studied Economics at the London School of Economics, and I knew that economic theory suggested that the huge amount of cheap loans being lent out by the Bank of England should stimulate the economy.  But I could not see any trace of a meaningful effect on the people who grew up with me in this working-class corner of East London.

At the same time, I was working on an enormous trading floor, in a glittering skyscraper in Canary Wharf.  I was immersed in financial markets, which had been rocketing despite the despondent economy, and was working shoulder to shoulder with millionaires, who got richer each day that financial markets rose.

It started to become apparent to me that “monetary policy” had an achilles heel.  No matter how much money global central banks poured into the economy, cheap loans were only available to the rich.  Not only that, but the rich were not spending the money – they were using it to buy assets, such as stocks and property, which did nothing to boost the economy.  Inequality was the missing link.  Unless the money was channeled to ordinary and poorer working families, rather than just the wealthy, it would never boost the economy, only asset prices.

My conclusion from this was inescapable, but depressing – since inequality was at the heart of the crisis, but was not being addressed, the economic crisis would be interminable: wages would stay low forever, and new money would constantly be pushed, via wealthier individuals, into stock and house prices.  The economy would never get a boost.  Upon realising this, in 2011, I started to bet that there would be no end to the economic recession.  By the end of that year, I was Citibank’s most profitable trader in the world.

This is a bleak economic forecast, and I believe it is true.  But it also provides profound opportunity for improvement and change.  Our current tools have not been working to boost the economy, but that is only because we have been failing to address this key issue.  Richer people tend to save their money, whereas ordinary working families spend almost everything they make.  When too much wealth accumulates in the hands of very wealthy families, it causes problems of underspending in society, and oversaving, pushing down wages and interest rate and crushing the economy, whilst simultaneously making housing unaffordable and pushing stock markets up.  All of these problems can be resolved, and both the economy and collective wellbeing can be improved enormously, if we only start treating wealth inequality as a serious issue and policy goal.

I have personally made millions by betting that failing to tackle wealth inequality will keep our economy in a slump forever.  I firmly believe that wealth, well paid work, and good quality, secure housing could be a realistic possibility for all if we deal with wealth inequality as a society.

The only realistic path to reduced wealth inequality is a serious change to the way that we tax the super rich.  Reducing wealth inequality is not about increasing tax on hard working, well paid workers and professionals.  These people may be relatively high income, but they generally do not hold huge amounts of wealth.  Billionaires and multi-millionaires, increasingly sitting on large amounts of inherited, family wealth, do not earn their incomes from working and, as a result, do not pay income taxes.  Instead, they pay other, lower taxes, which are often completely avoidable.  If we allow this situation to continue, it is inevitable that wealth inequality will increase, and our economic and societal problems will get worse.  We must amend the tax system so that the richest pay higher rates of tax than the rest of us, not lower rates than their cleaners, as they often do now.

It will not be an easy task, undoubtedly.  The super rich have the best tax lawyers and often the ability to amplify their voice in the media. They will proclaim that leaving them untaxed is essential for the economy.  I have made a career and a fortune by betting that isn’t true.

If you want to know more about the damage that wealth inequality does to our economy and society, please feel free to watch and share my videos on Youtube, or to read the full theory on my website.

A prosperous, dignified future can be available to all of us.  But only if we fix wealth inequality.

Photo by Simran Singh Mohan

New Zealand is aiming to adopt a wellbeing economy approach in its economic policy. The Government, for example, presented the world’s first Wellbeing Budget to Parliament on 30 May 2019.

Against that background, Paul Dalziel and Caroline Saunders prepared a Research Briefing in September 2020. It summarises lessons learned in the initial New Zealand experience with the wellbeing economy approach. The authors are the Deputy Director and Director of the Agribusiness and Economics Research Unit at Lincoln University, New Zealand.

You can access the Research Briefing from the Lincoln University archive here.

Francesco Temperini

About the author: Francesco Temperini is a 24-year old MSc graduate in Environmental and Development Economics and a member of WEAll Youth, located in Rome, Italy

I joined WEAll Youth because I think that sharing ideas between people moved by the same interests could lead to a new shape of economic thinking: with Multidimensional Wellbeing as a focal point around which all people and institutions converge.

From my academic experience, I developed a passion for and interest in multidimensional analysis of wellbeing, which I applied in an empirical study in the city I live in, Rome.

Often, economic indicators are synonymous with quality of life, and many times the development of a country is taken into account to measure the wellbeing of that country. 

Multi-dimensional analysis speaks to the importance of reshaping the way we measure quality of life and can promote economic thinking centred on how people feel about their lives and how much they are satisfied with it.

Having studied Rome divided in its 15 municipalities and having chosen a representative sample for each municipality, there are lots of inequalities between municipalities for any dimension of wellbeing such as the multidimensional index. This is the aggregation of 9 different dimensions (including: safety, environment, housing, education, satisfactory work, enjoying free time, health, social engagement, travel mobility).

The interesting findings are shown in the image below: in the richest municipalities (highest level of income) there weren’t the highest levels of wellbeing (multidimensional wellbeing indicator). Firstly I was surprised by this result, but then I realised this outcome confirmed my research thesis: profit is merely a tool to reach the state of wellbeing.

The findings can be seen in these two maps: the left one is the level of income maps for municipalities (the darkest colour represents highest values of wellbeing); and the right one is the multidimensional well being map, showing the aggregation of all the nine dimensions I found in my research (the darker colour are higher values of wellbeing).

How can you understand multi-dimensional wellbeing where you are?

For anyone interested in measuring wellbeing in his/her neighbourhood, city, region or country, here is a summary of the measurement process.

First step: take a sample of the population you are interested in to measure the wellbeing. It’s difficult to interview all the population, so it could be good to take a representative sample, divided by age, gender or professional status.

The sampling processes are different, you can choose which one you prefer for example from the this book’s chapter nine. In Rome, used sampling by quota.

Second step:  create qualitative research with your sample using a focus group investigation method (group interview composed of a moderator and 6-8 people). In these groups, it’s important to study the aspects of individuals’ life values (the subjective and objective ones). It is crucial to make a group analysis to understand how people interact in the same dimensions of their wellbeing, as well as to underline the individuals’ different points of view and the minority groups’ ideas.

These steps were necessary in my case study because it’s helpful to see how people that live in the same city interact and express the same concerns but different issues related to living in an urban area, as I found in my research, different municipalities have different levels of wellbeing.

Third step: After all this qualitative research, there is an evaluation with all the outcomes of the focus group. The reader will summarise the same issues on a singular dimension and then measure it with more than one indicator( as an example of a dimension: “safety in Rome” is composed of two indicators, a subjective one and an objective one).

Fourth step: Following this process line, it’s time to create a survey based on the focus group’s outcomes, with the survey you can measure the achievement of any wellbeing dimension of the people interviewed.

Fifth step: Then, the sampling population fills out the questionnaires for your city, region or country.

Sixth step: Finally, when you have collected enough data (survey could be filled out either physically or online) of the sample that you choose as representative, you can analyse and aggregate the answers.

Remember that the wellbeing of an individual is currently a much-debated issue. Over time, an attempt has been made to define and measure it at a national as well as an individual level, and even today, no common solution has been found: it clearly is a definition that encompasses several dimensions within it, as well as the approach of human development.

Dr Girol Karacaoglu BA MBA Bogazici, PhD Hawaii 
Professor of Policy Practice, Victoria University of Wellington

The former Chief Economist of The Treasury in New Zealand has written a book examining the processes by which wellbeing-focused public policy objectives can be established, prioritised, funded, implemented, managed, and evaluated.

Professor Girol Karacaoglu is Head of the School of Government at Victoria University of Wellington and was previously New Zealand’s Chief Economist of The Treasury. Before then, he was the Chief Executive of PSIS (then Co-operative Bank of New Zealand) for nine years. His new book asks:

HOW WOULD WE DESIGN, IMPLEMENT AND EVALUATE PUBLIC POLICY IF IT WERE BASED ON OUR LOVE FOR FUTURE GENERATIONS?

For the philosopher Water Kaufman, ‘I love you’ means:

I want you to live the life that you want to live.
I will be as happy as you if you do; and as unhappy as you if you don’t.

Professor Karacaoglu said that ‘wellbeing is about the ability of individuals and communities to live the lives they value – now and in the future. This is their human right. It would be extremely unjust to prevent the enjoyment of lives centred on chosen values. Preventing such injustice across generations should be the focus of a public policy that has intergenerational wellbeing as its objective.’

‘Half of the net revenue from sales of this book will be donated to The Nest Collective, which gives baby and children’s essentials to families in need’, he said.

Tuwhiri publisher Ramsey Margolis said that ‘while humanity may well come to grips with the current pandemic in the foreseeable future, ballooning inequalities and injustice threaten to shred the fabric of our societies, and the climate emergency menaces all life forms on the planet.

‘In the face of these enduring humanity-induced catastrophes, we owe a special duty of care to future generations to overcome them, and to leave our successors with a safer, fairer world in which they may thrive. We need to express our care for coming generations in many ways, from changing own personal lifestyles, to choosing political representatives who advance cogent, long-sighted policies in aid of a better world.”

Find out more and order the book via the publisher Tuwhiri

Dr. Katherine Trebeck

A major report published this week calls for the Scottish Government to introduce wellbeing budgeting to improve lives for children as part of a radical systems change in the wake of the coronavirus.

The new report, Being Bold: Building Budgets for Children’s Wellbeing, by WEAll Advocacy and Influencing lead Dr Katherine Trebeck, with Amy Baker, was commissioned by national charity Children in Scotland, early years funder Cattanach and the Carnegie UK Trust.

Click here to download and read the report

It makes a series of bold calls focused on redirecting finances to tackling root causes of inequality and poverty as Scotland emerges from Covid. Key recommendations include:

  • A post-Covid spending review, with all spend proposals assessed against evidence of impact on children’s wellbeing
  • Training of the civil service to ensure effective budget development and analysis, and moving to multi-year budgeting aligned with wellbeing goals
  • Establishing an independent agency, modeled on the Future Generations Commissioner for Wales, to support activity and scrutinise effectiveness of delivery of wellbeing budgeting by the government
  • An overarching change to the ways of working in the Scottish Government budget process to ingrain greater transparency; cross-departmental working; and a participatory approach involving the public and the diversity of children’s voices.

The report argues that the Scottish Government’s stated aims of improving wellbeing across society and addressing the fact that one quarter of children live in relative poverty cannot be met unless we create conditions for our youngest children to be healthy and supported from the outset.

To do this, it makes the case for directing funds at root causes that diminish child wellbeing, rather than targeting symptoms ‘downstream’, which is inefficient, stifles implementation of policy and legislation, and slows ambitions for societal change.

First steps towards wellbeing budgets would involve holding a conversation with the public about budget-setting to absorb lived experience; interrogating data to ‘map’ the distribution of wellbeing in Scotland; and ensuring policy development was properly connected to evidence on what would actually change outcomes for children and addressing the root causes of what undermines their wellbeing.

The report’s lead author, Dr Katherine Trebeck, said:

“If the Scottish budget is to be a mechanism that brings about change, we need to create a context where children can flourish in Scotland. Then we need to think about a few fundamentals. The budget needs to be holistic, human, outcomes-oriented, and rights-based. It needs to be long-term, upstream, preventative and precautionary. Finally, a bold budget for children’s wellbeing needs to be participatory – children’s voices in all their diversity need to be at the heart of setting the budget agenda.”

Katherine speaks about the report in more detail in this short video:

Sophie Flemig, Chief Executive of Cattanach, said:

“This report shows why it is necessary to set out a high-level vision for wellbeing outcomes and hardwire it into government processes. Countries need to acknowledge that the economy is in service of wellbeing goals, not a goal in and of itself. Meaningful public involvement is key. Ministerial responsibility for wellbeing outcomes drives progress. And cross-departmental work is essential for success.”

Jennifer Wallace, Head of Policy at Carnegie UK Trust, said:

“This project has focused on one important lever of change – the finance system, the way that we think about money and spend in Scotland, asking: what is value for money when we’re talking about our children’s lives? We know it’s not a silver bullet, but we do think it’s important that we consider how we spend that money if we’re going to begin improving outcomes for children and putting our money where our mouth is when it comes to children’s wellbeing.”

As the election campaign approaches, and following Tuesday’s vote to incorporate the United Nations Convention on the Rights of the Child into Scots law, the report’s calls and the case for wellbeing budgeting informs Children in Scotland’s manifesto for 2021-26, backed by organisations across the children’s sector.

The report is published as Scotland takes stock of the damage the pandemic has done to individuals, families, communities, and the macroeconomy, and an increasing number of people recognise that we must not revert to pre-Covid ways of working.

Jackie Brock, Chief Executive of Children in Scotland, said:

“Now is the time for us to reset our economy and the way in which we prioritise our budgets. Katherine’s work gives us a real manifesto for how we will secure children’s rights and wellbeing. We call on you to read the report, particularly the section which identifies what the crucial next steps are. We don’t need any more research or evidence – we need to work together to put a budget for Scotland’s children into place, this year, and we look forward to working with you to make that happen.”

This content is reposted from Children in Scotland

Authors: Olga Koretskaya, Gus Grosenbaugh

Read Paper

For the past several decades, the primary question for many businesses has been: “How much money can we make?”. It is still largely assumed that the social responsibility of business is to increase profits for shareholders, as that wealth should trickle down to benefit all. While the formal economy has never been larger, the unprecedented scale of environmental degradation and inequality it has created today makes us question business-as-usual and to look for alternatives.

In fact, all around the world, people are rejecting the status-quo of self-interest. In the midst of the global pandemic, more than ever, we see purposeful work towards building an economy that delivers environmental and social wellbeing.

  • With the election of Joe Biden, the US appears primed to re-enter the Paris Agreement.
  • New Zealand’s Wellbeing Budget makes health a key, driving metric in economic decision making.
  • The ‘rights of nature’ are being recognised by national and local laws, predominantly in the countries of the Global South: Ecuador, Bangladesh, Bolivia, Mexico, Uganda, and Colombia.

While public awareness and government policies are crucial in supporting Wellbeing Business, it is companies – both large and small – that will be the engine behind the transition. The good news is: many of them already exist, and we know how to recognise them.

Here are eight key principles that define a Wellbeing Business.

  1. Redefining the vision. Primarily driven by the desire to create products and services that satisfy the needs of society, while staying in harmony with nature. 
  2. Ensuring transparency. Proactive in disclosing data about their environmental, social, and economic performance.
  3. Internalising externalities. Aware of the ‘negative externalities’ or negative environmental and social impacts they produce, and strive to reduce them.
  4. Having a long-term mindset. Make decisions that benefit the company and all important stakeholders including society and nature. This implies, for example careful consideration of resource use, and investment in employees and the communities within which companies operate.
  5. Making people an asset. Prioritise the dignifying of work and empowering of diverse voices within the company.
  6. Localising production. Become much more embedded in the community and ecosystems by striving to localise energy sources, financial sources, as well as distribution.      
  7. Switching to circular production. Design business processes to coexist with environmental and social systems.
  8. Embracing diversity. Acknowledge and embrace diversity in values, ownership structure, finance as key to a resilient business environment.

On 18 December we hosted a webinar to discuss this paper. You can watch the recording here:

Also, do check out the WEAll Business Guide as a nice pair to this work.

by: Erinch Sahan

A fundamental change is sweeping across the business world. Big ideas are spreading, new slogans being echoed, and the very purpose of business being questioned. A host of concepts and initiatives are driving this conversation. From BCorps to Social Enterprise, Cooperatives to Shared Value, the market-place of ideas is heating up.

These are all, by-and-large, positive developments. But how do these enterprise design ideas compare? Here’s an attempt to compare their essential structural features and assess the extent to which shareholder dominance and profit primacy remain embedded in enterprise design. In other words, the framework below compares the minimum in structural design that is required by these concepts.

It’s worth noting that we are comparing a mixture of legal forms, certifications and management concepts. For instance, many jurisdictions allow legal registration as a CooperativeSocial Enterprise or Benefit Corporation. Others are certifications to validate claims of being a Social Enterprise or BCorp. Meanwhile, new concepts like Shared Value or Triple Bottom Line are infiltrating MBA programmes, to guide a new generation of corporate leaders. They all (at least implicitly) deviate from shareholder primacy.

Turning away from Friedman? The answer lies in enterprise design.

In 1970, Milton Friedman penned, in the New York Times Magazine, the article ‘The Social Responsibility of Business is to Increase its Profits’. While proclaiming this today would seem short-sighted (and a public relations own-goal), it is an honest account of shareholder primacy. This remains baked into the DNA of most companies – a persistent straight-jacket that most executives must wear.

The economic imagination has since moved away from this singular obsession with profits for shareholders as the exclusive purpose of business. But enterprise design hasn’t. 

While trapped in shareholder primacy, a growing chorus of business leaders declare their discovery of enlightened self-interest, where their long-term profitability relies on being socially responsible. Inconvenient trade-offs are swept aside and questioning how profits are shared remains taboo (the largest shareholders always get the biggest dividend cheques). Yet, some executives pronounce that the purpose of their company is ‘people and planet before profits’ – a far cry from Friedman’s doctrine and the prevailing corporate model that financial markets hold firmly in place. Nonetheless, the narrative has moved, substantially.

How the narrative has shifted

This means enterprise design has become central as we explore purpose and impact. It has crept up on us all. It probably started a few decades ago, with new corporate goals like minimising or eliminating the worst harms of corporate behaviour (usually where a PR-disaster beckoned). Think sweatshops and poisoned rivers. It then evolved to focus on broader social and environmental impacts: human rights impact assessments, environmental impact reports, or indicators for how a business impacts sustainable development. This focus on impact largely happened over the last decade. 

But positive impact requires practices and investments that actively foster it. Without inclusive trading partnerships, workers in supply chains remain trapped in poverty wages and precarious employment. Without investment into water-treatment plants, local rivers remain polluted. Under shareholder primacy, if the cost-benefit analysis doesn’t add-up, people and planet take a back-seat (unless regulated by government).

To embrace ‘purpose’, a business must be designed to prioritise such investments and practices. 

This means enterprise designs that allow objectives other than profit growth to be a priority, and to give voice and power to stakeholders other than shareholders. Otherwise, doing good is only possible where it grows profits. 

A note here to not confuse profit maximisation with commercial viability. Staying in business is necessary for all businesses. Continuously growing profits isn’t.

Pursuing purpose while in a straight-jacket

The enthusiasm for corporate purpose is evidence that we are joining the right dots. However, unless business is designed to focus on people and planet, it chases ever more profits and ignores social and environmental impacts, where the financial rewards don’t suffice. And it is enterprise design that can unlock the practices and impacts that we all agree business must embrace.

Expectations of dividend growth and boards full of shareholder representatives lock-in the shareholder primacy design. This dominant structure ensures a focus on always increasing profits, and forces extraction of profits for the purpose of growing shareholder wealth. It’s a straight-jacket, within which inclusive and truly sustainable corporate culture is held in check, often relegated to projects and initiatives that don’t threaten the pursuit of growing profits. 

All businesses need to be profitable, but it’s the focus on maximising or growing profits that holds back authentic corporate purpose. Whether an enterprise is designed to deviate from this paradigm is the central question. 

In recognition, an increasing number of businesses are claiming to possess a more evolved design. But how can we know if a business is truly designed to put people and planet before (or alongside) profit? Ideas and movements like Social Enterprise, Triple Bottom Line, BCorp, Shared Value and Cooperatives are attempting to give the answer.

People, Planet & Profit: how far do ideas really go?

While on paternity leave, I’ve had some headspace to grapple with how enterprise design ideas compare. I threw up on Twitter some thoughts, and a discussion unfolded (see thread here):

What emerged is a framework that helps draw key distinctions between concepts like BCorp and Social Enterprise. The focus is on the most fundamental and structural features that determine enterprise design.

Based on my analysis, I believe the following claims are the best way to describe the concepts, certifications and legal forms assessed:

  • Shareholder Primacy: Only Profit Matters
  • Shared Value: People and Planet, if it Helps Profit
  • Triple Bottom Line and BCorp: People and Planet without undermining Profit
  • Social Enterprise and Cooperatives: People and Planet before Profit

There are nuances missing and exceptions within each category. A business with a shareholder primacy structure may be majority controlled by an altruistic shareholder, who uses their power to ensure it behaves like a social enterprise. I don’t account for such optional benevolent use of power. In cooperatives, members (therefore power-holders) could be an already empowered stakeholder (e.g. consumer cooperatives in developed economies) or truly marginalised communities (e.g. low-income workers). My framework doesn’t draw such distinctions. Many BCorps or companies embracing Shared Value will go well beyond what the table implies about their structure. This will not do them justice.

But the framework does help draw key distinctions in comparing the minimum in structural design required by these concepts. The differences are meaningful.

We should all applaud the narrative shift (and positive impacts) all of these ideas are driving. Equally, we need to compare and contrast the ideas that profess to fundamentally transform the business world. I hope this table helps achieve this.

Note to reader: I conducted this analysis in my personal capacity through October 2020 (while on paternity leave). To remain credible, I left out the Fair Trade Enterprise model (the global network I lead as Chief Executive of WFTO – see relevant report here and a talk about it here). Other ideas and concepts were also left out, where they lack concrete enterprise design features relevant to this comparison (e.g. Stakeholder Capitalism, Conscious Capitalism) or are broader concepts that capture multiple ideas (e.g. Fourth Sector/For-Benefit).

Erinch Sahan is Chief Executive of the World Fair Trade Organization. He has spent over a decade on enterprise development, campaigning for responsible business, lecturing on sustainability and researching new business models. His career spans Oxfam, Procter & Gamble and the Australian Government. He holds degrees in law and business, and an honorary Doctorate.

Connect with Erinch on Twitter: @ErinchSahan and on LinkedIn

Faces of the Wellbeing Economy Movement is a series highlighting the many informed voices from different specialisms, sectors, demographics, and geographies in the Wellbeing Economy movement. This series will share diverse insights into why a Wellbeing Economy is a desirable and viable goal and the new ways of addressing societal issues, to show us how to get there. This supports WEAll’s mission to move beyond criticisms of the current economic system, towards purposeful action to build a Wellbeing Economy.