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We need to rewire the economy

We need to rewire the economy  

 Polly Courtice, Director, Cambridge Institute for Sustainability Leadership

3 July 2015


Economic success is generally measured in terms of growth rather than positive outcomes for people and places. Although the key metric of growth, 'Gross Domestic Product' (GDP), is increasingly recognised as a poor proxy for human progress, it continues to drive fundamental decisions about the way we manage and grow our economies.

This year, the UN will launch a bold set of Sustainable Development Goals (SDGs). A once in a generation statement of direction for the whole world, the SDGs will guide the global agenda for the next decade and beyond containing seventeen ambitions to, for example, 'end poverty in all its forms everywhere' and 'take urgent action to combat climate change and its impacts'.

But if we are to fulfil these ambitions, we need to look at that key engine – the economy – and ask ourselves if in its current form it can deliver what the world needs in terms of sustainable development. And if not, how should we rewire it to do so?

Governments have cited the central role of business in delivering these goals, but they cannot realistically expect that to happen unless they are prepared to establish ground rules that enable economic activity to generate social and environmental value. In an appropriately guided economy, business can be an engine of sustainable development, not just economic growth, dealing with challenges such as poverty and climate change as a function of doing business.

Today we are seeing increasing numbers of powerful business leaders collaborating with peers, politicians, policymakers and civil society to turn sustainability ambition into practice. We have seen bold commitments from companies to decouple growth from environmental impact, to deliver social returns on investment and an increasing determination to become 'net positive'.

However, in spite of this, inequality is still rising, ecosystems are being depleting, scarce resources degraded and greenhouse gas levels are increasing. What is getting in our way?

Our analysis at the Cambridge Institute for Sustainability Leadership is that a fundamental rewiring of our economy is required to tilt the game in favour of sustainable business models. Business models which create prosperity and provide decent jobs, without eroding the natural and social capital upon which they rely.

That's why, building on twenty-five years of working with leaders across business and government, and in consultation with our extensive network and alumni, we've launched Rewiring the Economy, our ten-year, ten-point plan to lay the foundations for a sustainable economy.

This is not about creating yet another model for sustainable development. The UN is doing that. Few of the tasks are new and work is already underway on many of them. Rather, our framework shows how these ten tasks can be tackled collaboratively by governments, business and finance.

This is important because many of the global challenges targeted by the SDGs can seem unsurmountable, especially when working in isolation.

Rewiring the Economy provides a pragmatic yet ambitious model to catalyse collaborative action and set clear tasks within an achievable horizon – for example using fiscal policy to address externalities (Task 2), or broadening the measurement and disclosure framework used by companies (Task 8). On a practical level this means recognising and addressing where policies have unintended, and unaccounted environmental or social consequences – such as the subsidies governments pay to support fossil fuels directly in contradiction with the UN goal to combat climate change.

At the University of Cambridge we bring academic rigour and the best and latest thinking to these global challenges. We convene leaders across traditional boundaries, such as The Prince of Wales's Corporate Leaders Group (CLG) – a group of business leaders advocating for low carbon transformation with global policymakers.

If the economy is to become an engine for sustainable development, then we need more such collaboration between government, finance and business working on these ten tasks to rewire it for better outcomes for society and the environment.

If the present economy can't deliver what we need then we must rewire it. As the man who first wired the world – Thomas Edison – said, "There's a way to do it better – find it."


 

Share your thoughts using #RewireEconomy or @CISL_Cambridge.

Read the Rewiring the Economy report and model and read more about the Cambridge Institute for Sustainability Leadership.

 


Article first published in the Huffington Post.

About the author

Polly is Director of the University of Cambridge Institute for Sustainability Leadership (CISL). She is also Founder Director of The Prince of Wales's Business and Sustainability Programme, and Academic Director of the University’s Master of Studies in Sustainability Leadership

Polly is a member of the University’s Environmental Sustainability Strategy Committee and the Board of Executive and Professional Education. She is a Director of Jupiter Green Investment Trust and a Non-Executive Director of Anglian Water Services Ltd, and is on the environmental/sustainability advisory boards for AstraZeneca, Freshfields Bruckhaus Deringer LLP, Lloyds Banking Group and Nespresso. In 2008 Polly was made a Lieutenant of the Victorian Order (LVO) announced in the Queen's Birthday Honours list.

Polly is a graduate of the University of Cape Town and has an MA from the University of Cambridge.

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