How the Doughnut Economy Drives Sustainability Forward?
What Is the Doughnut Economy?
The doughnut economy, introduced by economist Kate Raworth, reimagines the 20th-century growth-centered economic model into a framework that aligns with sustainability and ESG principles.
It prevents underperformance in our social responsibilities or overshooting our ecological limits by presenting a double-layered, doughnut-like model:
- The Social Foundation (Inner Layer) Represents the minimum standard required for human well-being. This should underpin our products, services, organizations, and decision-making processes.
- The Ecological Ceiling (Outer Layer): Defines the environmental limits that we must not exceed to avoid degrading the planet.
We need to meet the social foundation to stay strong economically and socially. When we breach the ecological ceiling, we risk long-term unsustainability. The space between these two boundaries forms the "safe and just space for humanity," where everything we create and organize should exist.
The Challenge with the Classic Economy
Traditional economies are centered on constant and unlimited growth, which is inherently unsustainable.
- This growth model depletes social and ecological resources, creating long-term instability.
- The "rational economic man" philosophy prioritizes short-term gains and egocentric decision-making, harming both future generations and our current systems.
- Events like COVID-19 and stress on social systems (e.g., care for the elderly) reveal the cracks in this model.
To move forward, we must embrace alternatives that prioritize balance and sustainability.
The Need for Balance
The doughnut economy is fundamentally about balance. Growth should only be achieved while the social foundation is met and the ecological ceiling isn’t breached. Everything in the world—products, services, organizations—should exist within this balanced framework.
Key Design Questions
To align with the doughnut model, organizations and designers should consider the following:
- Purpose: Why does your product, service, or organization exist? How does it fit within the doughnut framework?
- Networks: What is the network surrounding your organization? How aligned are stakeholders with your value proposition?
- Governance: How are decisions made, and how is adherence to the doughnut model ensured?
- Ownership: Who owns the organization or product? Who controls data, physical assets, and intellectual property?
- Finance: Where does funding come from, and what are the financiers' objectives? Are they focused solely on financial returns or prioritize philanthropy and sustainability?
Best Practices for Doughnut Thinking
- Embrace the Boundaries: Start by aligning with the doughnut's foundation and ceiling.
- See the Bigger Picture: Recognize your role within interconnected systems.
- Design for Inclusion: Nurture human nature by involving diverse perspectives in the design process.
- Think in Systems: Adopt a systemic approach; processes are non-linear and interconnected.
- Be Disruptive: Use your power to redistribute it among co-creators.
- Be Regenerative: Focus on reuse and working within the planet's natural cycles.
- Aim to Thrive: Prioritize thriving over endless growth. Growth as a goal often breaches the ecological ceiling; instead, focus on equitable distribution.
Let's Talk Doughnuts
Let's enjoy a doughnut over a conversation on how we can design or transform your business model to thrive within the doughnut economy framework.
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