how can we advance towards a new economy

HOW CAN WE ADVANCE TOA NEW ECONOMY

Introducing new bases in favour of society

OW CAN WE ADVANCE TOWARDS

A NEW ECONOMY?


Fernando Varela

WARDS


How can we advance towards a New Economy?

APPENDIX

1. Why talk about a New Economy?

2. What is meant by a New Economy

3. What needs to be done to promote a New Economy

From the private sector (corporate and financial)

From the public sector ................................

From civil society ................................

4. The role of the public sector in the promotion of a New Economy

5. Some actions to facilitate the change

6. Obstacles and justification to advance in the implementation of the New Economy

7. Some ideas for Europe that Spain can make its own

References ................................


1. Why talk about a New Economy? .............................................................................................

2. What is meant by a New Economy ............................................................................................

3. What needs to be done to promote a New Economy ...........................................................

(corporate and financial) ................................................................

................................................................................................

................................................................................................

4. The role of the public sector in the promotion of a New Economy ................................

5. Some actions to facilitate the change ................................................................

6. Obstacles and justification to advance in the implementation of the New Economy

7. Some ideas for Europe that Spain can make its own ............................................................

................................................................................................................................

Many of the problems we face are rooted in our understanding of the economy and its relationship with nature. This paper is based on the demand for a more inclusive and sustainable economy. To do this we will review some of the proposals that are being promoted as alternatives to the current system and some actions that would advance new standards are proposed. These involve changing perceptions of what is meant by the success of companies, enabling the consumer to distinguish the quality of companies on their social and environmental contributions, as well as the establishment by the public sector of an environment that promotes the business sector that contributes the most to society. Ultimately, the goal of this reflection is to offer a guidance towardsthe necessary corrections to make a more general interest oriented model, which puts people at the centre and preserves the environment. Is this possible?

February 2016

2

............................. 3

............................ 7

........................... 13

.................................. 15

........................................... 18

................................................... 29

..................................... 31

..................................................... 35

6. Obstacles and justification to advance in the implementation of the New Economy ........ 37

............................ 42

.................................... 46

Many of the problems we face are rooted in our understanding of the economy and its relationship with nature. This paper is based on the demand for a more inclusive and sustainable economy. To do this we will review some of the proposals that are being

moted as alternatives to the current system and some actions that would advance new standards are proposed. These involve changing perceptions of what is meant by the success of companies, enabling the consumer to distinguish the quality of

eir social and environmental contributions, as well as the establishment by the public sector of an environment that promotes the business sector that contributes the most to society.

reflection is to offer a guidance towards he necessary corrections to make a more general interest oriented model, which puts people at the centre and preserves the



Capitalism, as we conceive it today, is the story ofWhen it started in the late eighteenth century it was not known how it was truly going to develop. It was thought that it was a system that would boost the economy, which would increase productivity through competition and that the cascading effect of the growth would benefit everyone. Today, with a long history during which the system has spread across many parts of the world, we can know the results and make an assessment. We can say that the invisible hanSmith spoke about is not able to correct the contradictions of market laws. While we cannot deny that in some areas this system has generated spectacular levels of material development, we also now know with certainty that there have been undmaintenance over time determines the very survival of the system. Many are the problems that we face whose impacts have effects on all of us: deterioration of the labour market, high and chronic unemployment, rising inequality, illegal immigration, accelerated destruction of natural habitats, biodiversity loss, deterioragroundwater and pollution of freshwater sources, air pollution by nonwarming, etc. Many of these problems are rooted in our undnature. In the history of mankind we find examples of people who have disappeared as a result of practices that ended up tragically affecting their livelihoods. Today, the impact of problems like those mentioned above have a global reach, creating enormous diffpopulation and threatening the future of people in both industrialised countries and those in the process of industrialisation. There is a widespread appreciation that we cannot go on like this, we need to change. The vocalling for a new economy that produces a positive impact on people and the environment have increased worldwide1. In other words, an economy that increases opportunities for people caring for the planet's resources is in demand The question is whether the economic system, aswhat the world expects in terms of sustainable human development. Since reality shows us that it is not like thissystem, it is important that we begin to raise the economy on new bases.

1 According to the CESCE (Compaa Espaola de Seguros de Crdito a la ExportacinCompany), according to the 2014 Global Surveycountry where most people believe that the economic system is fair. In this sense, four out ofthe economic system favours the rich. Also, 88% of Germans and 90% of Austrians want a "new economic order" Foundation Survey1- and, without a doubt, this data is endorsed in countries that have suffered crisis, such as Greece, Portugal, Ireland, Spain and Italy.



Capitalism, as we conceive it today, is the story of the growing subordination of labour to capital. When it started in the late eighteenth century it was not known how it was truly going to develop. It was thought that it was a system that would boost the economy, which would increase productivity

competition and that the cascading effect of the growth would benefit everyone.

Today, with a long history during which the system has spread across many parts of the world, we can know the results and make an assessment. We can say that the invisible hanSmith spoke about is not able to correct the contradictions of market laws.

While we cannot deny that in some areas this system has generated spectacular levels of material development, we also now know with certainty that there have been undesirable effects and their maintenance over time determines the very survival of the system.

Many are the problems that we face whose impacts have effects on all of us: deterioration of the labour market, high and chronic unemployment, rising inequality, illegal immigration, accelerated destruction of natural habitats, biodiversity loss, deterioration of soils for cultivation, reduction of groundwater and pollution of freshwater sources, air pollution by non-renewable energy, global

Many of these problems are rooted in our understanding of the economy and itse. In the history of mankind we find examples of people who have disappeared as a result of

practices that ended up tragically affecting their livelihoods. Today, the impact of problems like those mentioned above have a global reach, creating enormous difficulties for an increasingly large population and threatening the future of people in both industrialised countries and those in the

There is a widespread appreciation that we cannot go on like this, we need to change. The vocalling for a new economy that produces a positive impact on people and the environment have

. In other words, an economy that increases opportunities for people caring in demand.

her the economic system, as it is designed and works today,what the world expects in terms of sustainable human development.

hows us that it is not like this, that it is necessary to introduce corrections to the system, it is important that we begin to raise the economy on new bases.

Compaa Espaola de Seguros de Crdito a la Exportacin - Spanish Insurance of Export Credit Company), according to the 2014 Global Survey1 by the International Trade Union Confederation (ITUC), there is not a single country where most people believe that the economic system is fair. In this sense, four out of five people (78%) are convinced that the economic system favours the rich. Also, 88% of Germans and 90% of Austrians want a "new economic order"

and, without a doubt, this data is endorsed in countries that have suffered most severely from the economic crisis, such as Greece, Portugal, Ireland, Spain and Italy.

3


the growing subordination of labour to capital. When it started in the late eighteenth century it was not known how it was truly going to develop. It was thought that it was a system that would boost the economy, which would increase productivity

competition and that the cascading effect of the growth would benefit everyone.

Today, with a long history during which the system has spread across many parts of the world, we can know the results and make an assessment. We can say that the invisible hand which Adam

While we cannot deny that in some areas this system has generated spectacular levels of material esirable effects and their

Many are the problems that we face whose impacts have effects on all of us: deterioration of the labour market, high and chronic unemployment, rising inequality, illegal immigration, accelerated

tion of soils for cultivation, reduction of renewable energy, global

erstanding of the economy and its relationship with e. In the history of mankind we find examples of people who have disappeared as a result of

practices that ended up tragically affecting their livelihoods. Today, the impact of problems like iculties for an increasingly large

population and threatening the future of people in both industrialised countries and those in the

There is a widespread appreciation that we cannot go on like this, we need to change. The voices calling for a new economy that produces a positive impact on people and the environment have

. In other words, an economy that increases opportunities for people caring

it is designed and works today, can produce

, that it is necessary to introduce corrections to the

Spanish Insurance of Export Credit by the International Trade Union Confederation (ITUC), there is not a single

five people (78%) are convinced that the economic system favours the rich. Also, 88% of Germans and 90% of Austrians want a "new economic order" - Bertelsmann

most severely from the economic


And it is not about returning to models that have had their moment in history and have proven inadequate. It is about evolvingon other approaches that ensure the desired impact. It is therefore necessary to introduce corrections to the system, implementing necessary regulations to guide the economy putting people at the heart of it, promoting general welfare Obviously in order to achieve this,environmental value are requireddecent jobs, without eroding the social and environmental contexts in which they operate. To facilitate this process it is necessarypromote and prevail, those that provide economic And consumers, through our purchasing power, opt for these companies. Beyond this general justification, there are other reasons making up the argument for a different economy: In the first place, it is necessary to mention that a market economy with a social focus is the gothe economic policy of the European Unionit says in the context of the European internal market, that the EU "sustainable development of Europe based on balanced economic growth and price stability, in a highly competitive social market economy, aiming at full employment and social progress, at a high level of protection and improvement of the quality of the environment" In addition, the constitutions of most countries establish that the goal of economic activity sdirected towards the general good. Also, because solving the world's problems requires the involvement of all acting parties. And the private sector, as a powerful agent of transformation of societies, has the ability to minimise negative externalities, generating greater social and environmental value. So companies, in the framework of a market economy withpowerful generators of sustainable development generating positive effects that contribute to the challenges of poverty and climate change. It is important to note that numerous investigations have highlighted that apprsocial and environmental value are also interesting to risk, provide stability for investment and generate new opportunities upon having a positive impact on their reputation2. Also the financial system, which has shown great creativity in extracting economic valucompanies and society converting into a very successful businessstrengthening its role as a catalyst for the real economy, increasing its ability to finathat offer value and solutions forgenerating instability and crisis.

2 For reference see the World Business Council of Sustainable Development which has researched and produced numerous studies and publications.


And it is not about returning to models that have had their moment in history and have proven inadequate. It is about evolving, taking advantage of the benefits of the current economy but based on other approaches that ensure the desired impact. It is therefore necessary to introduce corrections to the system, implementing necessary regulations to guide the economy putting

at the heart of it, promoting general welfare and preserving the environment

iously in order to achieve this, companies with business models that produce real social anenvironmental value are required. It is all about business approaches that generdecent jobs, without eroding the social and environmental contexts in which they operate. To

tate this process it is necessary that the regulatory frameworks in which companies operate promote and prevail, those that provide economic value but also social and environmental value. And consumers, through our purchasing power, opt for these companies.

Beyond this general justification, there are other reasons making up the argument for a different

ssary to mention that a market economy with a social focus is the goEuropean Union (EU). In Article 3, Paragraph 3 of the Maastricht Treaty

it says in the context of the European internal market, that the EU "shall work towards the sustainable development of Europe based on balanced economic growth and price stability, in a

titive social market economy, aiming at full employment and social progress, at a high level of protection and improvement of the quality of the environment".

In addition, the constitutions of most countries establish that the goal of economic activity sdirected towards the general good.

Also, because solving the world's problems requires the involvement of all acting parties. And the private

agent of transformation of modify impacts and

negative externalities, generating greater social and environmental value.

framework of a market economy with social characteristics, can become powerful generators of sustainable development generating positive effects that contribute to the challenges of poverty and climate change.

It is important to note that numerous investigations have highlighted that apprlue are also interesting to companies because they reduce business

risk, provide stability for investment and generate new opportunities upon having a positive impact

tem, which has shown great creativity in extracting economic valuconverting into a very successful business, can direct its activities to

strengthening its role as a catalyst for the real economy, increasing its ability to finathat offer value and solutions for a more sustainable society avoiding distortions and speculation generating instability and crisis.

For reference see the World Business Council of Sustainable Development which has researched and produced numerous studies

The problems which we face are

related to our way of

understanding the economy

4

And it is not about returning to models that have had their moment in history and have proven , taking advantage of the benefits of the current economy but based

on other approaches that ensure the desired impact. It is therefore necessary to introduce corrections to the system, implementing necessary regulations to guide the economy putting

and preserving the environment.

companies with business models that produce real social and about business approaches that generate prosperity,

decent jobs, without eroding the social and environmental contexts in which they operate. To that the regulatory frameworks in which companies operate

value but also social and environmental value.

Beyond this general justification, there are other reasons making up the argument for a different

ssary to mention that a market economy with a social focus is the goal of (EU). In Article 3, Paragraph 3 of the Maastricht Treaty

shall work towards the sustainable development of Europe based on balanced economic growth and price stability, in a

titive social market economy, aiming at full employment and social progress, at a high

In addition, the constitutions of most countries establish that the goal of economic activity should be

social characteristics, can become powerful generators of sustainable development generating positive effects that contribute to the

It is important to note that numerous investigations have highlighted that approaches with more companies because they reduce business

risk, provide stability for investment and generate new opportunities upon having a positive impact

tem, which has shown great creativity in extracting economic value from , can direct its activities to

strengthening its role as a catalyst for the real economy, increasing its ability to finance companies avoiding distortions and speculation

For reference see the World Business Council of Sustainable Development which has researched and produced numerous studies

The problems which we face are

related to our way of

understanding the economy


Another factor of instability and slowdown in the economy is the growing inequality that is favoured by the current economic systemrevitalisation of the economy since the balance in terms of consumption is lower among individuals who accumulate income and the same income distributed to a greater numbegoing into the criteria of social justice, excessive inequality adversely affects the economy and creates social instability. On the other hand, the extent of national progress inper capita, is an inexact variable, that says little as an indicator of the development of people. This reductionist view, however, is widely used for the definition of public policies and obvious aspects linked to social and environmental development. In addition, through a people-objectives of Sustainable Development, a recently acqnations of the world, or the Paris Framework Convention about Climate Change. international submits which pursue in many occasions face great difficulties Europe is getting to know firstgrowing influx of economic migration. The quick answer is that things have to be fixed in their origins. For this new programmes of But they are palliative. The causes are structural. The economic system favours the strong and relegates the weak. The most vulnerable countries have great difficulty in competing in a market dominated by those who define the rules, aggravating inequalities. European countries grow little and generate less employment. There is a need to change the model of growth to a more sustainable and inclusive one with greater potential for the generation of employment. In a more competitive world, where emerging countries are growing faster than the European economy and with production costs difficult to match, Europe has the opportunity to link itself to quality and sustainability, giving more value to prodsignificant competitive advantage. It is significant that the burdenworryingly high, in spite of havingin materialistic societies is different, more related to psychological respect to societies with lower per capita incometo better health. People's welfare or happiness is related to other dimensions such as relationships, participation, community building, etc. In short, a people-oriented economy, which contributes moregreater potential to generate opportunities is reresources in the long term. 3 See the last report of Oxfam An economy 4 See Stiglitz: 'The Price of Inequality'. According to this author who is a winner of a Nobel Prize in economics, the rise in incomes has a lower impact on consumption than the rise in average and l5 According to information from the World Health Organization (Burden Disease)


Another factor of instability and slowdown in the economy is the growing inequality that is favoured e current economic system3. Economic concentration in few hands has an effect on the

revitalisation of the economy since the balance in terms of consumption is lower among individuals who accumulate income and the same income distributed to a greater number of peoplegoing into the criteria of social justice, excessive inequality adversely affects the economy and

On the other hand, the extent of national progress in economic growth in terms of GDP and incom, is an inexact variable, that says little as an indicator of the development of people. This

reductionist view, however, is widely used for the definition of public policies and obvious aspects linked to social and environmental development.

-centred economy and the general good we can better achieve the objectives of Sustainable Development, a recently acquired commitment by consensus of

Paris Agreement reached at the end of 2015 and thatFramework Convention about Climate Change. This comment is valid for the goals of

which pursue progress in the reduction of poverty and sustainabilitygreat difficulties to become reality.

Europe is getting to know first-hand the reality of many people's lives in the world due to the growing influx of economic migration. The quick answer is that things have to be fixed in their

ew programmes of cooperation have been proposed. Which is all good and well. But they are palliative. The causes are structural. The economic system favours the strong and relegates the weak. The most vulnerable countries have great difficulty in competing in a market

nated by those who define the rules, aggravating inequalities.

European countries grow little and generate less employment. There is a need to change the model of growth to a more sustainable and inclusive one with greater potential for the generation of

In a more competitive world, where emerging countries are growing faster than the European economy and with production costs difficult to match, Europe has the opportunity to link itself to quality and sustainability, giving more value to products. The 'Europe Brand' implies and can imply significant competitive advantage.

that the burden of illnesses of societies with greater material development is having the best health system, and it appears that the type of illnesses different, more related to psychological and cardiovascular

respect to societies with lower per capita income5). Material development doesn't necessarily lead welfare or happiness is related to other dimensions such as relationships,

participation, community building, etc.

economy, which contributes more to the common good, which has potential to generate opportunities is required, it creates more jobs and preserves natural

rt of Oxfam An economy for the 1%. February 2016 See Stiglitz: 'The Price of Inequality'. According to this author who is a winner of a Nobel Prize in economics, the rise in

incomes has a lower impact on consumption than the rise in average and low incomes. the World Health Organization (Burden Disease)

5

Another factor of instability and slowdown in the economy is the growing inequality that is favoured . Economic concentration in few hands has an effect on the

revitalisation of the economy since the balance in terms of consumption is lower among individuals r of people4. Without

going into the criteria of social justice, excessive inequality adversely affects the economy and

terms of GDP and income , is an inexact variable, that says little as an indicator of the development of people. This

reductionist view, however, is widely used for the definition of public policies and obvious aspects

centred economy and the general good we can better achieve the uired commitment by consensus of all the

greement reached at the end of 2015 and that has fostered the the goals of most of the

and sustainability, and that

hand the reality of many people's lives in the world due to the growing influx of economic migration. The quick answer is that things have to be fixed in their

proposed. Which is all good and well. But they are palliative. The causes are structural. The economic system favours the strong and relegates the weak. The most vulnerable countries have great difficulty in competing in a market

European countries grow little and generate less employment. There is a need to change the model of growth to a more sustainable and inclusive one with greater potential for the generation of

In a more competitive world, where emerging countries are growing faster than the European economy and with production costs difficult to match, Europe has the opportunity to link itself to

ucts. The 'Europe Brand' implies and can imply

societies with greater material development is the type of illnesses

and cardiovascular aspects (with Material development doesn't necessarily lead

welfare or happiness is related to other dimensions such as relationships,

mon good, which has quired, it creates more jobs and preserves natural

See Stiglitz: 'The Price of Inequality'. According to this author who is a winner of a Nobel Prize in economics, the rise in high


Is this possible? Can we evolvout? What actions will have to be carried out?


Is this possible? Can we evolve towards an economy like this? On which bases should it be laid out? What actions will have to be carried out?

6

? On which bases should it be laid


2. What is meant

Currently and for years now we have been experiencing a blossoming of proposals that provide different approaches advocating a New Ewhich respects the environment more. Some involve constitute really new economic systems supported by completely different bases. Departing from the current situation, the focus of this paperparties can take to move towards a New Econsidered key to improvement in terms of impacts on people and the planet. The Social Market Economy The Social Market Economy is based on the market system to optimise resourcorrecting and establishing the institutional, ethical and social conditions to guide towards efficient and equitable results. It is characterised by being based on the market system, but with a social policy constituting the greatest differsocio-political model comes from the ideas developed by core of the Social Market Economy is the "combination of the principle of the free market with the principle of social equity." The anthropologicalliberty complemented by social justice. The system that promotes thethe advantages of the market economic system: promoting individual initiative, productivity, efficiency, tendency to self-regulation, with the fundamental contributions of the Christian social tradition of solidarity and cooperation, which are necessarily based on equity ansociety. In this sense it proposes a theoretical and economicseeks to combine individual freedom of action within an order of personal and social responsibility. The social market economy is based solidarity and subsidiarity. The goal is to implement an economic system that is at the service of the people. The Economy for the Common Good The Economy for the Common Good is established as a maand objectives of the companies are based on and not on profit motive and competition. The economy for the common good is based on the values which allow our relationshidevelop: Confidence, Responsibility, Appreciation, Democracy, Solidarity and Cooperation. The results of the contemporary investigations show that these values, despite the prejudices in the background, are more compatible with 'human nature'. The postulates of the Economy for the Common Good have been developed by C2010 in collaboration with of a group of businessmen. In 2015 the Economy for the Common Good received the recognition of the European Economic and Social Committee (EESC) as an economic model oriented towards social


meant by a New Economy

Currently and for years now we have been experiencing a blossoming of proposals that provide ferent approaches advocating a New Economy more in line with the demands of the people and

which respects the environment more. Some involve corrections to the market system and others constitute really new economic systems supported by completely different bases. Departing from

ituation, the focus of this paper is centred on suggesting the steps that different acting to move towards a New Economy and proposing some actions to take that are

considered key to improvement in terms of impacts on people and the planet.

Social Market Economy

The Social Market Economy is based on the market system to optimise resourcorrecting and establishing the institutional, ethical and social conditions to guide towards efficient and equitable results. It is characterised by being based on the market system, but with a social policy constituting the greatest difference to neoliberalism. The Social Market Economy as a basic

political model comes from the ideas developed by Alfred Mller-Armack core of the Social Market Economy is the "combination of the principle of the free market with the principle of social equity." The anthropological-social referential framework is the concept of human liberty complemented by social justice.

the Social Market Economy stems from the interest in synthesising all the market economic system: promoting individual initiative, productivity,

regulation, with the fundamental contributions of the Christian social tradition of solidarity and cooperation, which are necessarily based on equity ansociety. In this sense it proposes a theoretical and economic-institutional policy framework that seeks to combine individual freedom of action within an order of personal and social responsibility.

The social market economy is based on the following values: human dignity, the common good, solidarity and subsidiarity. The goal is to implement an economic system that is at the service of

Economy for the Common Good

The Economy for the Common Good is established as a market system, in which the motivations the companies are based on contribution to the common good

profit motive and competition.

The economy for the common good is based on the values which allow our relationshidevelop: Confidence, Responsibility, Appreciation, Democracy, Solidarity and Cooperation. The results of the contemporary investigations show that these values, despite the prejudices in the background, are more compatible with 'human nature'.

postulates of the Economy for the Common Good have been developed by Cof a group of businessmen. In 2015 the Economy for the Common Good

the recognition of the European Economic and Social Committee (EESC) as an economic model oriented towards social cohesion and of interest for to European region.

7

by a New Economy

Currently and for years now we have been experiencing a blossoming of proposals that provide conomy more in line with the demands of the people and

corrections to the market system and others constitute really new economic systems supported by completely different bases. Departing from

is centred on suggesting the steps that different acting conomy and proposing some actions to take that are

The Social Market Economy is based on the market system to optimise resource allocation, correcting and establishing the institutional, ethical and social conditions to guide towards efficient and equitable results. It is characterised by being based on the market system, but with a social

ence to neoliberalism. The Social Market Economy as a basic Armack (1901-1978). The

core of the Social Market Economy is the "combination of the principle of the free market with the social referential framework is the concept of human

Social Market Economy stems from the interest in synthesising all the market economic system: promoting individual initiative, productivity,

regulation, with the fundamental contributions of the Christian social tradition of solidarity and cooperation, which are necessarily based on equity and justice in a given

institutional policy framework that seeks to combine individual freedom of action within an order of personal and social responsibility.

on the following values: human dignity, the common good, solidarity and subsidiarity. The goal is to implement an economic system that is at the service of

rket system, in which the motivations contribution to the common good and cooperation

The economy for the common good is based on the values which allow our relationships to develop: Confidence, Responsibility, Appreciation, Democracy, Solidarity and Cooperation. The results of the contemporary investigations show that these values, despite the prejudices in the

postulates of the Economy for the Common Good have been developed by Christian Felber in of a group of businessmen. In 2015 the Economy for the Common Good

the recognition of the European Economic and Social Committee (EESC) as an economic


The EESC considers that "the model of the Economy for the Common Good (ECG) is designed to be included in the European and national legal framework in order to move towards a single European market through a more ethical economy based on European values and the achievements of social responsibility policies, also creating synergies aimed at stre The economic model that seeks the common good is founded on values recognised as universal: human dignity, solidarity, ecological sustainability, social justice, transparency and democratic participation. The Circular Economy The circular economy attempts to respond to the question of how to produce goods by limiting the amount of raw materials and non'produce, use and throw' isn't viable any more. The circular economy is an econoon the functioning of ecosystems in nature. For this it promotes the use of what it calls biological and technical nutrients6. Biological nutrients are biodegradable and can be introduced into nature after their use value is no longer profbiodegradable plastic materials (polylactic acid, PLA), organic esters (soap), etc. Technical nutrients refer to the technological components that are unfit for human beings and, therefore, are reused again and again without going into nature.

These components are designed to be assembled and disassembled many times, encouraging the re-use of materials and energy saving. The concept of a circular economy is based on the life cycle of the use of resources. Thus, recycling, the replacement of certain resources, durability and reof products or parts and waste reduction is promoted. The concept integrates product design with this philosophy, and new forms of business.

6 Definition from the Ellen Macarthur Foundation


The EESC considers that "the model of the Economy for the Common Good (ECG) is designed to be included in the European and national legal framework in order to move towards a single European market through a more ethical economy based on European values and the achievements of social responsibility policies, also creating synergies aimed at stre

The economic model that seeks the common good is founded on values recognised as universal: human dignity, solidarity, ecological sustainability, social justice, transparency and democratic

economy attempts to respond to the question of how to produce goods by limiting the amount of raw materials and non-renewable energy we consume and waste. The lineal focus of 'produce, use and throw' isn't viable any more. The circular economy is an econoon the functioning of ecosystems in nature. For this it promotes the use of what it calls biological

. Biological nutrients are biodegradable and can be introduced into nature after their use value is no longer profitable. Examples of biological nutrients could be cotton, biodegradable plastic materials (polylactic acid, PLA), organic esters (soap), etc. Technical nutrients refer to the technological components that are unfit for human beings and, therefore, are

ed again and again without going into nature.

These components are designed to be assembled and disassembled many times, encouraging the use of materials and energy saving. The concept of a circular economy is based on the life cycle

resources. Thus, recycling, the replacement of certain resources, durability and reof products or parts and waste reduction is promoted. The concept integrates product design with this philosophy, and new forms of business.

Definition from the Ellen Macarthur Foundation 8

The EESC considers that "the model of the Economy for the Common Good (ECG) is designed to be included in the European and national legal framework in order to move towards a single European market through a more ethical economy based on European values and the achievements of social responsibility policies, also creating synergies aimed at strengthening it".

The economic model that seeks the common good is founded on values recognised as universal: human dignity, solidarity, ecological sustainability, social justice, transparency and democratic

economy attempts to respond to the question of how to produce goods by limiting the renewable energy we consume and waste. The lineal focus of

'produce, use and throw' isn't viable any more. The circular economy is an economy that is based on the functioning of ecosystems in nature. For this it promotes the use of what it calls biological

. Biological nutrients are biodegradable and can be introduced into nature itable. Examples of biological nutrients could be cotton,

biodegradable plastic materials (polylactic acid, PLA), organic esters (soap), etc. Technical nutrients refer to the technological components that are unfit for human beings and, therefore, are

These components are designed to be assembled and disassembled many times, encouraging the use of materials and energy saving. The concept of a circular economy is based on the life cycle

resources. Thus, recycling, the replacement of certain resources, durability and re-use of products or parts and waste reduction is promoted. The concept integrates product design with


Circular economy develops from other proposals such as the blue economy and the economy of functionality (explained below); regenerative design (processes that renew the resources used themselves); cradle to cradle (consideration of the materials used as nutrients); industrial eco(closed production systems that eliminate the generation of bythe production processes of nature itself). The Blue Economy The Blue Economy aims to achieve a radical change in our models of design, production andconsumption to ensure that our production systems are able to imitate as much as possible what nature has undergone in billions of years of evolution. Gunter Pauli's proposal in his book Economy tries to take advantage, with an innovative attitthroughout new production processes that emulate nature's ecosystems. The Blue Economy already has a lot of experience such as the cultivation of edible mushrooms with high quality coffee waste (present also in Spain), biodegtransformation of petrol stations into charging stations for electric vehicles. Collaborative Consumption The term 'Collaborative Consumption' comes from the expression 'Sharing Economy', divulged separately by Lisa Gansky and Rachel Botsman with Roo Rogers in 2010 Collaborative consumption implies newarise from the new uses of the Internet and mobile technology. According to the EU, "Collaborative consumption represents advantageous complementation from the innovative, economic and ecological point of view of the production economy for the consumptionrepresents a solution to the economic and financial crisis as far as facilitating the exchange in cases of need."

promote the open dissemination of knowledge, and the ability to reuse and redistribute without legal, social or technological obstaclconsumption: access to goods and services without unlawfully holding the ownership thereof, through digital platforms - such as Streetbank, free, or Uber and Blablacar, paid production: also includes professional structures (networks) in which direct contacts between users are established for the management and development of shared projects, services or objects of all

7 Reference: Botsman, R. and Rogers, R. (Rogers, R. (2010). 8 According to Joaco Alegre, Vice-president of the Oru Driving Group

There is a flourishing

development of alternative

proposals with interesting ideas

with potential to transform the

economy


from other proposals such as the blue economy and the economy of functionality (explained below); regenerative design (processes that renew the resources used themselves); cradle to cradle (consideration of the materials used as nutrients); industrial eco(closed production systems that eliminate the generation of by-products); biomimicry (emulation of the production processes of nature itself).

The Blue Economy aims to achieve a radical change in our models of design, production andconsumption to ensure that our production systems are able to imitate as much as possible what nature has undergone in billions of years of evolution. Gunter Pauli's proposal in his book

tries to take advantage, with an innovative attitude, of many sources of income throughout new production processes that emulate nature's ecosystems. The Blue Economy already has a lot of experience such as the cultivation of edible mushrooms with high quality coffee waste (present also in Spain), biodegradable detergents with traces of orange peel or the transformation of petrol stations into charging stations for electric vehicles.

The term 'Collaborative Consumption' comes from the expression 'Sharing Economy', divulged separately by Lisa Gansky and Rachel Botsman with Roo Rogers in 20107.

implies new forms of exchange, the hire of goods and services thatarise from the new uses of the Internet and mobile technology. According to the EU, "Collaborative consumption represents advantageous complementation from the innovative, economic and ecological point of view of the production economy for the consumptionrepresents a solution to the economic and financial crisis as far as facilitating the exchange in

In collaborative consumption initiatives of various kinds are integrated, with the common feature of being based on information and communication technologies. Through the creation of social networks and portals, interactions take place between individuals on a mass scale. In this type of economy the following are included1) open knowledge (collaborative initiatives that

promote the open dissemination of knowledge, and the ability to reuse and redistribute without legal, social or technological obstacles - such as Wikipedia and open Software consumption: access to goods and services without unlawfully holding the ownership thereof,

such as Streetbank, free, or Uber and Blablacar, paid production: also includes professional structures (networks) in which direct contacts between users are established for the management and development of shared projects, services or objects of all

Botsman, R. and Rogers, R. (2010). What's Mine is Yours: The Rise of Collaborative Consumption.

president of the Oru Driving Group The collaborative currency-.

development of alternative

proposals with interesting ideas

with potential to transform the

9

from other proposals such as the blue economy and the economy of functionality (explained below); regenerative design (processes that renew the resources used themselves); cradle to cradle (consideration of the materials used as nutrients); industrial ecology

products); biomimicry (emulation of

The Blue Economy aims to achieve a radical change in our models of design, production and consumption to ensure that our production systems are able to imitate as much as possible what nature has undergone in billions of years of evolution. Gunter Pauli's proposal in his book The Blue

ude, of many sources of income throughout new production processes that emulate nature's ecosystems. The Blue Economy already has a lot of experience such as the cultivation of edible mushrooms with high quality coffee

radable detergents with traces of orange peel or the

The term 'Collaborative Consumption' comes from the expression 'Sharing Economy', divulged

forms of exchange, the hire of goods and services that arise from the new uses of the Internet and mobile technology. According to the EU, "Collaborative consumption represents advantageous complementation from the innovative, economic and ecological point of view of the production economy for the consumption economy. It also represents a solution to the economic and financial crisis as far as facilitating the exchange in

In collaborative consumption initiatives of various kinds are integrated, with the common feature of being based on information and communication technologies. Through the creation of social networks and portals, interactions take place

on a mass scale.

In this type of economy the following are included8: 1) open knowledge (collaborative initiatives that

promote the open dissemination of knowledge, and the ability to reuse and redistribute without such as Wikipedia and open Software -); 2) collaborative

consumption: access to goods and services without unlawfully holding the ownership thereof, such as Streetbank, free, or Uber and Blablacar, paid -; 3) Collaborative

production: also includes professional structures (networks) in which direct contacts between users are established for the management and development of shared projects, services or objects of all

What's Mine is Yours: The Rise of Collaborative Consumption. Botsman, R. and


kinds - like in the fields of design, architecture and indFinances financial transactions that occur directly between individuals without the intervtraditional financial institution - This economy offers advantages from the environmental point of view because it increases efficiency, stimulates the development of better products and eliminates surplus due to excess production and consumption9. The Economy of Functionality The economy of functionality advocates an economy based on the use and maintenance of resources as opposed to an economy based on energy and raw materials. The intention is to sell the use and not the product. In this way manufacturers are driven to opt for more robust adurable products avoiding the waste of raw materials. The intention is the movement of an industry with high consumption of raw materials to an industry of durable goods, which is more sustainable and where the business is to sell the use of goods. Participatory Economics Emerging in the early nineties, participatory economics seeks to encourage that all economic decisions during production and consumption are made in a democratic and participatory manner. It is based on the thesis of Michael Albert anafter Capitalism10. This type of economics promotes that determine their economic preferences and benefit from them, in a way that promotes equity, solidarity, diversity and self-management. the means of production trying to involve Economy of Communion The Economy of Communion, founded by Chiara Lubich in May 1991 in Sao Papromotion of a practice and an economical culture characterized by Communion, reciprocity, offering and living an alternative way of life system. The Economy of Communion is an economic development project with a supportive involving companies from the five continents. The owners of companies which project decide to put in communion their benefits, people in need, creating new development of the company. 9 According to Rachel Botsman and Roo Rogers (2010). What's MineCollins. 10 Reference: Albert, M. (2006). Parecon: Life after Capitalism. Akal.


like in the fields of design, architecture and industrial engineering financial transactions that occur directly between individuals without the interv

- such as microcredits, multitudinous funds, social loans and savings.

nomy offers advantages from the environmental point of view because it increases efficiency, stimulates the development of better products and eliminates surplus due to excess

Economy of Functionality

functionality advocates an economy based on the use and maintenance of resources as opposed to an economy based on energy and raw materials. The intention is to sell the use and not the product. In this way manufacturers are driven to opt for more robust adurable products avoiding the waste of raw materials. The intention is the movement of an industry with high consumption of raw materials to an industry of durable goods, which is more sustainable and where the business is to sell the use of goods.

Emerging in the early nineties, participatory economics seeks to encourage that all economic decisions during production and consumption are made in a democratic and participatory manner. It is based on the thesis of Michael Albert and Robin Hahnel synthesised in the book

. This type of economics promotes that workers and consumers cooperate to determine their economic preferences and benefit from them, in a way that promotes equity,

management. This type of economics rejects the private ownership of oduction trying to involve workers more and reward their effort.

The Economy of Communion, founded by Chiara Lubich in May 1991 in Sao Papromotion of a practice and an economical culture characterized by Communion, reciprocity, offering and living an alternative way of life to the one predominating in the system. The Economy of Communion is an economic development project with a supportive involving companies from the five continents. The owners of companies which

decide to put in communion their benefits, according to three objectives: 1.) support, creating new job positions; 2.) disseminate a culture of giving and love; 3.) the

development of the company.

According to Rachel Botsman and Roo Rogers (2010). What's Mine is Yours: The Rise of Collaborative Consumption. NY. Harper

Reference: Albert, M. (2006). Parecon: Life after Capitalism. Akal.

10

ustrial engineering -. 4) Collaborative financial transactions that occur directly between individuals without the intervention of a

such as microcredits, multitudinous funds, social loans and savings.

nomy offers advantages from the environmental point of view because it increases efficiency, stimulates the development of better products and eliminates surplus due to excess

functionality advocates an economy based on the use and maintenance of resources as opposed to an economy based on energy and raw materials. The intention is to sell the use and not the product. In this way manufacturers are driven to opt for more robust and durable products avoiding the waste of raw materials. The intention is the movement of an industry with high consumption of raw materials to an industry of durable goods, which is more sustainable

Emerging in the early nineties, participatory economics seeks to encourage that all economic decisions during production and consumption are made in a democratic and participatory manner.

d Robin Hahnel synthesised in the book Parecon: Life workers and consumers cooperate to

determine their economic preferences and benefit from them, in a way that promotes equity, This type of economics rejects the private ownership of

The Economy of Communion, founded by Chiara Lubich in May 1991 in Sao Paulo, is based on the promotion of a practice and an economical culture characterized by Communion, donations and

to the one predominating in the capitalist system. The Economy of Communion is an economic development project with a supportive nature involving companies from the five continents. The owners of companies which freely adhere to the

three objectives: 1.) support to giving and love; 3.) the

is Yours: The Rise of Collaborative Consumption. NY. Harper


Community economy The Economy based in community or the so called eco-villages. Within the last few yeinitiatives which also integrateeconomies. A community in transition is a cior resilience against negative effects of economy. It ifavour of agro-ecology, Permaculture, summary, towards the recovery

The Resource-Based Economy The Resource-Based Economy (RBE) is a proposal of life that is based on the efficient use of resources to generate wealth through technology and human empathy, where the scientific method and other similar ones are applied to social interest and welfare. Specifically, this proposal is also seen asgoods and services are available to everyone asof our planet, where there is no need to useother system of exchange or trade. In short, these proposals provide a whole different way of understanding the economy, attempting to return it to the purpose for which it was designed, redevelopment of individuals and societies and not as an end in itself. The above proposals share Some are in favour of introducing corrections to the market system. Other more extreme ones propose different systems. From then some interesting ideas can be identified with the potential toimprove the economic system as we know it today.

11 Definition provided by the RBE Community (Resource


The Economy based in community or Community Economy fosters a simple ways of life such as . Within the last few years, an extra interest has appeared for this kind of ate the Transition Towns that are advocating for a return to local scale in transition is a civic communitarian project aiming to create resistance

negative effects of economy. It is a pragmatic and an apolitical movement in ermaculture, consumption of local and/or collective products, decrease, in

towards the recovery of abilities for life and harmony with the rest of Nature.

Based Economy

Based Economy (RBE) is a proposal of life that is based on the efficient use of generate wealth through technology and human empathy, where the scientific method

and other similar ones are applied to social interest and welfare.

Specifically, this proposal is also seen as a local and global resource management system in which nd services are available to everyone as a common asset of humanity to all the inhabitants

of our planet, where there is no need to use money, systems of credit or finance, bartering or any other system of exchange or trade.11

vide a whole different way of understanding the economy, attempting to return it to the purpose for which it was designed, re-conceiving it as a means for the development of individuals and societies and not as an end in itself. The above proposals share interest in a more humane and environmentally friendly economy. Some are in favour of introducing corrections to the market system. Other more extreme ones propose different systems. From then some interesting ideas can be identified with the potential toimprove the economic system as we know it today.

Definition provided by the RBE Community (Resource-Based Economy) 11

simple ways of life such as ppeared for this kind of

are advocating for a return to local scale t aiming to create resistance

apolitical movement in tive products, decrease, in

life and harmony with the rest of Nature.

Based Economy (RBE) is a proposal of life that is based on the efficient use of generate wealth through technology and human empathy, where the scientific method

a local and global resource management system in which a common asset of humanity to all the inhabitants

money, systems of credit or finance, bartering or any

vide a whole different way of understanding the economy, attempting conceiving it as a means for the

environmentally friendly economy. Some are in favour of introducing corrections to the market system. Other more extreme ones propose different systems. From then some interesting ideas can be identified with the potential to


The Social Market Economy advocates a social policy tempered by a better balance between free market economy and social equity. The Economy for the Common Good understands that this must be the objective of the economy and proposes that competition is replaced by cooperation which is a sentiment ultimately more in line with human nature. The concept of a Circular Economy is based on the life cycle of resource use and proposes that profrom the perspective of the functioning of natural ecosystems ensuring a more rational use of resources. It is based on the principles of the Blue Economy extending them to any production process and on the Economy of Fugoods, seeking to deal with the business strategy of planned obsolescence. Collaborative Consumption is based on information technologies to promote the sharing of resources by decreasing the pressure on the production of new resources. It shares the same principle as the Economy of Functionality of prioritising the use (when faced with property) exploiting the interconnection potential of new technologies. the use of resources, rejecting private property for the benefit of greater worker participation. Economy of Communion focusessolidarity and corporate growthtransiting towards more simple lives that dont exercise Resource-Based Economy proposes that goods and services are common assets avoiding the need to use the money.


The Social Market Economy advocates a social policy tempered by a better balance between free market economy and social equity. The Economy for the Common Good understands that this must be the objective of the economy and proposes that competition is replaced by cooperation which is a sentiment ultimately more in line with human nature. The concept of a Circular Economy is based on the life cycle of resource use and proposes that production is designed and carried out from the perspective of the functioning of natural ecosystems ensuring a more rational use of resources. It is based on the principles of the Blue Economy extending them to any production process and on the Economy of Functionality, which stimulates the production of more durable goods, seeking to deal with the business strategy of planned obsolescence. Collaborative Consumption is based on information technologies to promote the sharing of resources by

ssure on the production of new resources. It shares the same principle as the Economy of Functionality of prioritising the use (when faced with property) exploiting the interconnection potential of new technologies. Participatory Economics proposes to the use of resources, rejecting private property for the benefit of greater worker participation.

focuses on the use of business benefits that shouldcorporate growth. The community economy aims to promote

transiting towards more simple lives that dont exercise so much pressure on resources. Finally, theBased Economy proposes that goods and services are common assets avoiding the

12

The Social Market Economy advocates a social policy tempered by a better balance between free market economy and social equity. The Economy for the Common Good understands that this must be the objective of the economy and proposes that competition is replaced by cooperation which is a sentiment ultimately more in line with human nature. The concept of a Circular Economy

duction is designed and carried out from the perspective of the functioning of natural ecosystems ensuring a more rational use of resources. It is based on the principles of the Blue Economy extending them to any production

nctionality, which stimulates the production of more durable goods, seeking to deal with the business strategy of planned obsolescence. Collaborative Consumption is based on information technologies to promote the sharing of resources by

ssure on the production of new resources. It shares the same principle as the Economy of Functionality of prioritising the use (when faced with property) exploiting the

Participatory Economics proposes to democratize the use of resources, rejecting private property for the benefit of greater worker participation.

should be allocated to to promote local dynamics

much pressure on resources. Finally, the Based Economy proposes that goods and services are common assets avoiding the


3. What needs toNew Economy

The transformation into a new economy requires adequate operating bases that lead to the expected results. Which are these bases:

- Setting a different measure of business success (economic, social and environmental) and economic progress

- Implementation of incentives that favour more sustainable

- Enabling consumer information so they are able to choose more sustainable products and services

The development of a more active role and of regulation of the public sector in economy is usually not well received by some acting parties in the economic system, especially those companies or investors who prefer to have no restriction on their forms of action or the contents of the projects or companies they fiassociated with the negative externalities that their activities generate is rejected. However, the reality is that the abuses and excesses of numerous entities of the private sector and the financial sector as well as the lack of regulation are at the core of the crisis and of adverse effects on people and the environment. And it has a high cost for citizens. Better regulation which preferably rewardsgreater impact is something that should be seen as positive for society. This is not about putting up barriers but favouring those that contribute more, those that are of interest to society and that dogenerate more negative impact

many examples. It is imperative to overcome willingness and selfobligations and parameterisation, enabling the external audit of the non

The transformation into a new

economy requires adequate

operating bases.


Measuring from progress an

in the most complete way (economic, social

and environmental)

Facilitating consumer choice of more

sustainable products and services

Granting advantages to companies that

contribute more to society

needs to be done to promote a conomy

The transformation into a new economy requires adequate operating bases that lead to the

Setting a different measure of business success (economic, social and environmental) and economic

Implementation of incentives that favour more sustainable companies

Enabling consumer information so able to choose more


The development of a more active role and of regulation of the public sector in economy is usually not well received by some acting parties in the economic system, especially those companies or investors who prefer to have no restriction on their forms of action or the contents of the projects or companies they finance. The requirement to include any costs associated with the negative externalities that their activities generate is rejected.

However, the reality is that the abuses and excesses of numerous entities of the private sector and well as the lack of regulation are at the core of the crisis and of adverse

effects on people and the environment. And it has a high cost for citizens.

preferably rewards companies and investors to support an economy with a greater impact is something that should be seen as positive for society. This is not about putting up barriers but favouring those that contribute more, those that are of interest to society and that dogenerate more negative impact.

The voluntary character of many initiatives in this field is important but not enough. Voluntarism has its limits especially when the hunger forcontracts or the improvement of exert pressure, calling into question operating or the politics of CSR. And there are

many examples. It is imperative to overcome willingness and self-regulation advancing towards parameterisation, enabling the external audit of the non-financial aspects.

The transformation into a new

economy requires adequate

13

nd business results

in the most complete way (economic, social

Facilitating consumer choice of more


Granting advantages to companies that

be done to promote a

The transformation into a new economy requires adequate operating bases that lead to the

The development of a more active role and of regulation of the public sector in the direction of the economy is usually not well received by some acting parties in the economic system, especially those companies or investors who prefer to have no restriction on their forms of action or the

nance. The requirement to include any costs associated with the negative externalities that their activities generate is rejected.

However, the reality is that the abuses and excesses of numerous entities of the private sector and well as the lack of regulation are at the core of the crisis and of adverse

companies and investors to support an economy with a greater impact is something that should be seen as positive for society. This is not about putting up barriers but favouring those that contribute more, those that are of interest to society and that don't

The voluntary character of many initiatives in this field is important but not enough. Voluntarism has its limits especially when the hunger for new

racts or the improvement of annual results sure, calling into question ways of

operating or the politics of CSR. And there are regulation advancing towards

financial aspects.


A favourable framework is needed to prioritise those companies that have clear principles and rules generating favourable results for themselves and for society. To the principle contaminate pay, we must add that those who contribute more are rewarded. To make this framework reality all acting parties are needed, though certainly the public sector has a crucial role in establishing dynamic incentives and appropriateproposals outlined by the main acting parties in society:

Source: Own elaboration

SCHEME OF TRANSFORMATION TOWARDS THE NEW ECONOMY


A favourable framework is needed to prioritise those companies that have clear principles and rules generating favourable results for themselves and for society. To the principle contaminate pay, we must add that those who contribute more are rewarded.

To make this framework reality all acting parties are needed, though certainly the public sector has a crucial role in establishing dynamic incentives and appropriate regulations. Here are some proposals outlined by the main acting parties in society:


14

A favourable framework is needed to prioritise those companies that have clear principles and rules generating favourable results for themselves and for society. To the principle that those who

To make this framework reality all acting parties are needed, though certainly the public sector has regulations. Here are some



From the private sector

Transform businesses to generate more social and value chain) The commitment to sustainability and approaches aimed at increasing social and environmevalue are beneficial to a company. company that generates a positive impact on the environment in which it operates, reduces corporate risks by strengthening business. The studies of numerous casesfrom requiring additional costs, the investments tuoperating and taking into account some factors often reviled. The corporate approaches that contribute most to society generally are more attractive to the local client and improve reputation and consumer appreciation, strengthening customer loyaltyfacilitating partnerships and agreements. In the case of investments in other countries, they can create a positive appreciation of the public sector (in aligning with its objectives of promoting the general interest) which will give greater stabilityuncertainty on investment. Also, reducing the negative impacts means lower compensation costs. Moreover, the idea of contributing, through entrepreneurship, to improve and promote living conditions and opportunities for people, is a source of motivation and ca company, providing in the opinion of some an element of sense and commitment to the job.

It is essential that a company seeking to contribute to sustainability and society in general, reviews its value chain: it is possible to do the same but in another way, maximising the socioenvironmental impact of its production process. This requires revchain taking into account environmental, social and politicalnumerous methodologies that enable the carrying out this type of analysis. All that is needed is the will to do it. We are talking about sustainable methods of cultivation for agricultural products, development of circular systems in industrial processes, the introduction of renewable energy or energy efficient measures, transport systems and sustainable packaging, workinaccountability, etc. Although some companies have already integrated this philosophy, it implies a big change for many; it requires taking the life cycle of products and services fully into account, working differently with suppliers and part In promoting this approach to business, business associations have an important role, forming, promoting the exchange of experiences and disseminating good practices.

12 The WBSCD offers many examples. Also the Ureferenced book of analysis of cases: 'The suitability of pro

Companies generating


private sector (corporate and financial)

Transform businesses to generate more social and environmental value (reviewing the

The commitment to sustainability and approaches aimed at increasing social and environmecompany. There is ample evidence that an environmentally careful a positive impact on the environment in which it operates, reduces

corporate risks by strengthening business. The studies of numerous cases12 demonstrate that, far from requiring additional costs, the investments turn out to be beneficial in changing the waoperating and taking into account some factors often reviled.

The corporate approaches that contribute most to society generally are more attractive to the local client and improve reputation and consumer appreciation, strengthening customer loyaltyfacilitating partnerships and agreements. In the case of investments in other countries, they can create a positive appreciation of the public sector (in aligning with its objectives of promoting the general interest) which will give greater stability to investment, reducing political risk or legal uncertainty on investment. Also, reducing the negative impacts means lower compensation costs.

Moreover, the idea of contributing, through entrepreneurship, to improve and promote living opportunities for people, is a source of motivation and commitment in the staff with

company, providing in the opinion of some an element of sense and commitment to the job.

It is essential that a company seeking to contribute to sustainability and society in general, reviews its value chain: it is possible to do the same but in another way, maximising the socioenvironmental impact of its production process. This requires review of the supply and distribution chain taking into account environmental, social and political-institutional aspects. There are already numerous methodologies that enable the carrying out this type of analysis. All that is needed is the

are talking about sustainable methods of cultivation for agricultural products, development of circular systems in industrial processes, the introduction of renewable energy or energy efficient measures, transport systems and sustainable packaging, workinaccountability, etc. Although some companies have already integrated this philosophy, it implies a big change for many; it requires taking the life cycle of products and services fully into account, working differently with suppliers and partners and introducing innovations in the value chain.

In promoting this approach to business, business associations have an important role, forming, promoting the exchange of experiences and disseminating good practices.

The WBSCD offers many examples. Also the United Nations Global Compact. For the author's contribution see the following referenced book of analysis of cases: 'The suitability of pro-development approaches in international businesses'.

Companies generating economic, social and environmental value

15

(corporate and financial)

environmental value (reviewing the

The commitment to sustainability and approaches aimed at increasing social and environmental environmentally careful

a positive impact on the environment in which it operates, reduces demonstrate that, far changing the ways of

The corporate approaches that contribute most to society generally are more attractive to the local client and improve reputation and consumer appreciation, strengthening customer loyalty and facilitating partnerships and agreements. In the case of investments in other countries, they can create a positive appreciation of the public sector (in aligning with its objectives of promoting the

to investment, reducing political risk or legal uncertainty on investment. Also, reducing the negative impacts means lower compensation costs.

Moreover, the idea of contributing, through entrepreneurship, to improve and promote living ommitment in the staff with

company, providing in the opinion of some an element of sense and commitment to the job.

It is essential that a company seeking to contribute to sustainability and society in general, reviews its value chain: it is possible to do the same but in another way, maximising the socio-

iew of the supply and distribution institutional aspects. There are already

numerous methodologies that enable the carrying out this type of analysis. All that is needed is the are talking about sustainable methods of cultivation for agricultural products,

development of circular systems in industrial processes, the introduction of renewable energy or energy efficient measures, transport systems and sustainable packaging, working conditions, accountability, etc. Although some companies have already integrated this philosophy, it implies a big change for many; it requires taking the life cycle of products and services fully into account,

ners and introducing innovations in the value chain.

In promoting this approach to business, business associations have an important role, forming,

nited Nations Global Compact. For the author's contribution see the following development approaches in international businesses'.

economic, social and environmental value


Measuring not only their econ A New Economy needs to measure results taking into account not only economic but also social and environmental dimensions. The company that wants to promote the creation of value for society must measure their imp In the large company field, reporting environmental) in corporate CSR policies is widespread but remains voluntary. The GRI (Global Reporting Initiative) guidelinesmeasurement of an organisation's contributions to sustainability. The somemories are one step further since they provide information about all the company's activity from the three areas and they are spreading.

From the point of view of regulations, since 201obliges companies with more than 500 employees to report on regulations are demanding more transparency so that companies account for their impacts. Just as the World Business Council of Sustainable Development (WBCSD) indicates there are numerous methods to measure the impact of Economy for the Common Good which proposes a simple matrix adaptable to all types of business that would show the value of the company to society, to the common good (see Common Good Balance). A major transformation factor would be to extend the measurement of value creation to all types of companies, so that administrations can distinguish companies with bigger and better contribution to sustainable development. Thus the granting of tax benefits or additiproposals under bidding processes would be made possible, in order to reward companies that contribute more to the betterment of society. Developing skills and aligning business incentives with sustainability The commitment to sustainability requires vision on the part of company management and corporate capabilities to orient the model and processes, activities and products in this regard.do this companies have to train their staff, reassign them and/or incorporate sp It is also necessary for business objectives and employee incentives to be aligned with sustainability integrating not only economic but also social and environmental variables on the activity of the company), recognising the contribution of value in the long term. This also applies to the financial sector.

13 Reference: WBCSD (2012). Measuring Impact. Framework method

"Measuring the social and environmental impact"


Measuring not only their economic but social and environmental impact

conomy needs to measure results taking into account not only economic but also social and environmental dimensions. The company that wants to promote the creation of value for society must measure their impact and review their value chain.

In the large company field, reporting the triple profit and loss account (economic, social and environmental) in corporate CSR policies is widespread but remains voluntary. The GRI (Global Reporting Initiative) guidelines are a standard for the production of reports that facilitate the measurement of an organisation's contributions to sustainability. The somemories are one step further since they provide information about all the company's activity from the three areas and they are spreading.

view of regulations, since 2014 there has been a European directive which obliges companies with more than 500 employees to report on no financial aspects. The regulations are demanding more transparency so that companies account for their impacts.

Just as the World Business Council of Sustainable Development (WBCSD) indicates there are numerous methods to measure the impact of companies13. What stands out is the proposal of the Economy for the Common Good which proposes a simple matrix adaptable to all types of business that would show the value of the company to society, to the common good (see Common Good

nsformation factor would be to extend the measurement of value creation to all types of companies, so that administrations can distinguish companies with bigger and better contribution to sustainable development. Thus the granting of tax benefits or additional points in the evaluation of proposals under bidding processes would be made possible, in order to reward companies that contribute more to the betterment of society.

Developing skills and aligning business incentives with sustainability

nt to sustainability requires vision on the part of company management and corporate capabilities to orient the model and processes, activities and products in this regard.do this companies have to train their staff, reassign them and/or incorporate specialised personnel.

It is also necessary for business objectives and employee incentives to be aligned with sustainability integrating not only economic but also social and environmental variables on the activity of the company), recognising the contribution of value in the long term. This also

Reference: WBCSD (2012). Measuring Impact. Framework methodology. Understanding the business contribution to society.

Business incentives aligned with sustainability

"Measuring the social and environmental impact"

16

conomy needs to measure results taking into account not only economic but also social and environmental dimensions. The company that wants to promote the creation of value for

the triple profit and loss account (economic, social and environmental) in corporate CSR policies is widespread but remains voluntary. The GRI (Global

are a standard for the production of reports that facilitate the measurement of an organisation's contributions to sustainability. The so-called integrated memories are one step further since they provide information about all the company's activity from

there has been a European directive which financial aspects. The

regulations are demanding more transparency so that companies account for their impacts.

Just as the World Business Council of Sustainable Development (WBCSD) indicates there are . What stands out is the proposal of the

Economy for the Common Good which proposes a simple matrix adaptable to all types of business that would show the value of the company to society, to the common good (see Common Good

nsformation factor would be to extend the measurement of value creation to all types of companies, so that administrations can distinguish companies with bigger and better contribution to

onal points in the evaluation of proposals under bidding processes would be made possible, in order to reward companies that

nt to sustainability requires vision on the part of company management and corporate capabilities to orient the model and processes, activities and products in this regard. To

ecialised personnel.

It is also necessary for business objectives and employee incentives to be aligned with sustainability integrating not only economic but also social and environmental variables (depending on the activity of the company), recognising the contribution of value in the long term. This also

ology. Understanding the business contribution to society.

Business incentives aligned with sustainability


Integrating the culture of sustainability into corporate communication The communication of businesses reaches all areas of society. If this communication integrates and promotes the values of society the capacity for social influence increases exponentially. The work that marketing and communication departments can do in senimportant. This is an area where companies can also exert a positive influence on policy changes and consumer behaviour.

Integrating interest in sustainability and suitability of approaches with greater social and environmental value into the curriculum of business schools Business schools, where future entrepreneurs are trained, play an important role in ensuring the expansion and maintenance of launched the Principles for Responsible Management Education (PRME) through which, the business schools that adhere undertake to develop the capabilities of students to be generators of company value in society and work for a more inclusive and sustainable global economy. To do this, they incorporate this training into their curriculum committing themselves to developing and promoting research, learning and over

how can we advance towards a new economy

Documents