European Commission agrees to use social progress tool alongside GDP | Guardian Sustainable Business | The Guardian

Reposted from the Guardian.

In a breakthrough for campaigners seeking a more holistic approach to measuring the health of nations, the European Commission has committed to integrating social and environmental considerations into the heart of its economic decision making.

The EC’s director general of regional and urban policy, Walter Deffaa, has agreed to use the Social Progress Index (SPI), which enables countries to evaluate how effectively they translate economic success into social progress, as a key tool in deciding how to allocate €63.4bn to deprived regions in the European Union.

Focusing on GDP growth fails to account for the value of nature

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The index uses 52 indicators ranging from healthcare and housing to ecosystem sustainability and freedom from discrimination.

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An EC spokesman said: “Going beyond GDP is a longstanding interest of the Commission services. Through this work we hope to understand where GDP is a poor proxy for a region’s quality of life or its social progress.”

While it is no easy task to create an SPI for all 272 regions in 28 European countries, the EC says the ability for different countries to share knowledge on socially innovative policies “was identified as a key demand arising from policymakers”.

Harvard professor Michael Porter, the creator of the concept of shared value, created the index in 2013, arguing it made no sense to be measuring success purely on the idea of growth at a time when countries are facing massive social upheavals.

Rather than seeking to integrate wellbeing and happiness into the economic agenda, the SPI looks only at social and environmental considerations and therefore gives them authority in their own right, enabling them to be compared and contrasted with traditional economic measures.

via European Commission agrees to use social progress tool alongside GDP | Guardian Sustainable Business | The Guardian.

‘Deglobalization’ Is the Way to Reduce Inequality | Pablo Solon

The race of globalization is leaving the majority of the world’s population far behind. According to Unicef, the richest 20 percent of the population gets 83 percent of global income, while the poorest quintile has just 1 percent. This trend is getting worse. A new UNDP report called “Humanity Divided” estimates that 75 percent of the population lives in societies where income distribution is less equal now than it was in the 1990s, although global GDP ballooned from $22 trillion to $72 trillion.

For developing economies in Asia, the Gini coefficient — which measures income inequality on a scale from zero to one where one is worst — rose from 0.33 in 1990 to 0.46 in 2010.

Inequality corresponds with greater economic uncertainty, lower investment and high social tensions and political instability — with the potential for violence and conflicts between groups. It demolishes human rights for the vast majority, especially for vulnerable groups like women, children and the elderly…..

via ‘Deglobalization’ Is the Way to Reduce Inequality | Pablo Solon.

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