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Mainstreaming sustainability indicators for measuring economic success

Economic indicators overlook vital social and environmental factors. An EU-financed project has worked to develop ways of integrating sustainability measures into economic benchmarks.

Digital Economy

Conventional economic measures and indicators can tell us a lot about the performance and health of the economy. However, they provide little insight into how the market is affecting the well-being of citizens and the environment. This highlights a pressing need to develop and utilise indicators that reflect relevant social and environmental factors in conjunction with traditional economic benchmarks. The 'Integrating mainstream economic indicators with those of sustainable development' (IN-STREAM) project worked to bridge this gap both quantitatively and qualitatively. Funded by the Environment theme of the Seventh Framework Programme (FP7), the project assessed the needs and opportunities for the increased use of sustainability indicators. It also evaluated the main weaknesses of mainstream economic indicators in measuring environmental sustainability and social welfare. For instance, gross domestic product (GDP) measures flow rather than stock, ignores environmental damage and neglects income distribution. However, although there is agreement on the need to measure these factors, there is no consensus on whether this should be done using a single composite indicator or a suite of individual benchmarks. Given the broadness of the 'Beyond GDP' debate, IN-STREAM focused its efforts on three main areas: biodiversity, green growth and resource efficiency. The project also explored the potential value of composite indicators. IN-STREAM found that social indicators tend to be more common and popular than environmental ones. This suggests that the project's primary focus on environment and biodiversity will help raise the profile of these vital indicators among policymakers.

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