Doughnut Economics and Sustainable Business Growth

Traditional economic models depend upon perpetual material increases to thrive. However, we live on a round planet with finite resources, begging the question: is uncontrolled business growth sustainable? If the reality of climate change is any indication, the current mindset is toxic to the planet. 

It’s not exactly great for humanity, either. Depression and anxiety are at all-time highs, leading to countless deaths of despair. Furthermore, despite technological innovations promising to make life easier, many people work longer and harder than ever. 

People could continue doing the same thing, hoping for different outcomes, but someone defined such behavior as insanity. Is there a better way? Economist Kate Raworth thinks so, and her doughnut economics model offers an alternative to the traditional worldview that may just be what humanity and the planet need to coexist in harmony while fostering sustainable business growth. 

What Is Doughnut Economics? 

Doughnut economics addresses two of humankind’s most urgent problems: eradicating global poverty while staying within the means of the planet’s limited resources. It sounds simple, but the mindset shift is the toughest part of implementing such a program. Instead of worshiping growth as the sole indicator of progress, it relies on human and environmental well-being as measures of sustinable business growth. 

What Is “the Doughnut?”

Doughnut economics takes its name from its visual representation as two discs: 

• The social foundation: The innermost ring representing fundamental rights. 
• The ecological ceiling: The threshold humankind cannot exceed to maintain a liveable planet for all. 

The rich, gooey middle represents progress and how far humanity can go while respecting the planet’s limits. It allows for growth that collectively elevates the life experience without making it harder for other living beings. 

That’s why the mindset shift is the toughest hurdle leaders often face when implementing doughnut economic principles for sustainable business growth. It requires nurturing human nature’s cooperative and caring side instead of the competitive, individualistic half.

The 12 Essential Goals of Doughnut Economics 

In a traditional economic system, progress is straightforward and easy to measure: growth or, more specifically, GDP. However, doughnut economics determines how well a society is doing by its ability to meet 12 essential goals for sustainable business growth, which are: 

• Food Security: A new model of food security, including more emphasis on small, local producers instead of large-scale industrial agriculture. 
• Health: Promoting the well-being of all by working toward eradicating disease and infirmary.  
• Education: The foundation to improving lives. 
• Income and work (including traditionally unpaid labor): Work should promote equality, including compensation and recognition of unpaid labor, such as child-rearing. 
• Peace and justice: Ensuring access to justice for all and holding institutions accountable. 
• Political voice: Protecting free speech and democracy. 
• Social equity: Promoting the advancement of all in the interest of justice and fairness. 
• Gender equity: Promoting equal advancement opportunities for both genders. 
• Housing: Providing all humans with shelter for warmth and security. 
• Networks: Facilitating social capital for the effective functioning of all. 
• Energy: Clean energy for all. 
• Water: Clean, accessible water for all. 

In examining the goals of doughnut economics, the necessary mindset shift becomes more apparent. Instead of individual and tribal achievements, doughnut economics seeks the advancement and betterment of all humanity. 

The Nine EnvironmentalThresholds of Doughnut Economics 

Doughnut economics recognizes the stark reality that advancement for a few individuals can mean significant destruction for many other people and their way of life. This becomes most apparent in using the world’s natural resources for economic purposes. 

This theory proposes nine thresholds that individuals, corporations and nations should not cross to achieve the goals of a better life for all — and keep the planet inhabitable. We can foster sustainable business growth by taking measures to address the folowing: 

• Climate change: Recognizing the impact varying weather patterns have on the economies of different places and mitigating the effect humans have. 
• Ocean acidification: Understanding the impact of ocean pH on living organisms and protecting them. 
• Chemical pollution: Avoiding hazardous substances in the air, soil and waterways.
• Nitrogen and phosphorus loading: Often caused by industrial agriculture when runoff from fertilizers flows into waterways, causing eutrophication. 
• Freshwater withdrawals: Managing the world’s freshwater drinking supply. 
• Land conversion: Appropriating land use to allow adequate space for humans and various ecosystems. 
• Biodiversity loss: Preventing the extinction of species as a result of human activity. 
• Air pollution: Rendering the atmosphere safer for all living creatures to breathe. 
• Ozone depletion: The ozone layer plays a crucial role in maintaining global climate consistency.

Doughnut Economics in Real-World Economies 

Critics of doughnut economics often cite that it is too pie in the sky, taking an unrealistic view of human nature. Can these principles work in real-world scenarios? How can people implement them without the government playing too heavy of a role in enterprise? Will people accept human and environmental well-being as measures of sustainable business growth? 

You can see two examples of doughnut economics in practice in Amsterdam and Brussels. 

Amsterdam

The capital of the Netherlands has embraced doughnut economics as part of its COVID-19 recovery plan. Some of their projects include: 

• Reclaiming six offshore islands from the sea with foundations that respect local wildlife. 
• Setting new standards for the circular use of building materials in government buildings. 
• Providing computer-less residents with refurbished PCs and laptops, allowing them to access services during lockdowns. 
• Committing to reducing food waste by 50% by 2030. 

Brussels

Neighboring Brussels is also giving doughnut economics a go at the local and national levels. Some of their projects include:

• Refurbishing the abandoned Ministry of Finance while minimizing the environmental and social impacts. The new space will become a nonprofit center for the arts. 
• The Arc-n-Ceil Housing Project offers affordable and accessible housing that is community-owned. Residents designed the building according to code, minimizing the edifice’s carbon footprint through a passive thermal regulation system. 

These examples show that introducing doughnut economic principles need not entail an abrupt and catastrophic overhaul of national financial systems. What it requires is making active policy choices that align with the 12 essential goals, fostering sustainable business growth while remaining within the nine thresholds. 

Shifting to doughnut economics necessitates a mindset shift away from the “greed is good” philosophy embraced by Michael Douglass in “Wall Street” and toward one where human potential is considered the most valuable capital asset. However, it also offers a powerful way forward toward a world where everyone is truly free to actualize their potential.

How Doughnut Economics Offers a Way Forward for Businesses and Society

The harsh reality is our round planet has finite resources. It’s also the only habitat uniquely suited for human life, making protecting it a matter of survival. 

Doughnut economics proposes a way for businesses to enjoy sustainable growth in which all individuals collectively share in the advances and wealth created. By embracing eco-friendly, circular principles for material use, it conserves sufficient resources for everyone. 

Perhaps more importantly, its principles of fairness and equity elevate the human quality of life within the economic system. Operating within sensible ecological boundaries lets people enjoy today’s technological conveniences by making them create less “busy work,” not more. 

Instead of improved production methods resulting in higher workloads, more stress and isolation from the community, they can instead reduce overflowing to-do lists, allowing individuals more time for their passions and bonding with loved ones. A human-centered economy leaves more time for personal development and achieving self-actualization and for people to assist one another with these aims. 

To achieve this, the first thing people need to do is adjust their worldview. Doughnut economics offers a more realistic and human-centered approach to value — but it requires all people to value fellow life and the greater good more highly than more easily measurable traditional material wealth. 

Doughnut Economics and Sustainable Business Growth

Doughnut economics offers a radically new way to look at financial systems. Instead of material goods being the sole indicator of sustainable business growth, this philosophy values human potential as the ultimate measure of achievement. 

Doughnut economics offers a way for businesses to embrace sustainable growth that works in conjunction with the planet. By conserving and reusing resources responsibly, humans have the knowledge and ability to maintain comfortable living conditions for all for an immeasurable time to come — if they make the right choices.