Programme / Thematic session III/a – The Science of Measuring Sustainability: Going Beyond GDP

Summary of the session by session rapporteur Dr Gyöngyi Csongrádi, Associate Professor, Budapest Business University, Faculty of Finance and Accountancy:

The issue of gross domestic product (GDP) is a recurring topic in economic discourse, given that a significant proportion of economic decisions are predicated on this particular measure. However, this single figure does not provide a comprehensive picture of the state of the economy. Rather, it offers insight into the level of production. This panel discussion brought together leading experts to explore innovative approaches to measuring sustainability that transcend GDP. The first speaker, Chantal Line Carpentier, stressed that the UN has made considerable efforts to update the system of national accounts in accordance with the Sustainable Development Goals (SDGs), but it has been found that neither a single figure nor a multitude of indicators can adequately represent this phenomenon. The criteria for evaluating metrics that extend beyond GDP have also been outlined. Furthermore, Carpentier stated that there is an openness to initiatives proposed by younger generations. Huadong Guo underscored the potential of digital technologies to facilitate the implementation of SDGs. The Earth is being monitored by satellites, and the widely available data allow the conditions of natural resources to be continuously tracked. However, the data alone are insufficient to bring about an acceleration of sustainable development. This can be accomplished through digital technologies endorsed by all participants. As Gustavo Merino noted, the use of indicators is crucial because improvement and measurement are inextricably linked. However, a mere focus on GDP is insufficient. There is a need for long-term goals for businesses and governments alike, as well as a more profound comprehension and more effective incorporation of scientific principles into decision-making processes. It is therefore recommended that these metrics be developed with due consideration of the barriers.

Sibel Eker presented the model developed by the International Institute for Applied Systems Analysis, which considers not only profit but also people and the planet. It is anticipated that a singular, composite, multidimensional indicator that employs empirical data will emerge as a new metric. By leveraging the “Years of Good Life” (YoGL) approach, which incorporates feedback loops and nonlinear dynamics of development, it is possible to begin to model these new metrics. Gábor Bartus presented the Hungarian approach to conceptualizing this new integrated system, which includes two composite indices and one GDP-based metric, the Sustainable GDP. This methodology encompasses all 17 SDGs and does not conflate input and output variables. Consequently, trade-offs may be observed. However, the system's principal advantage is its modularity and flexibility.