Francesco Temperini

About the author: Francesco Temperini is a 24-year old MSc graduate in Environmental and Development Economics and a member of WEAll Youth, located in Rome, Italy

I joined WEAll Youth because I think that sharing ideas between people moved by the same interests could lead to a new shape of economic thinking: with Multidimensional Wellbeing as a focal point around which all people and institutions converge.

From my academic experience, I developed a passion for and interest in multidimensional analysis of wellbeing, which I applied in an empirical study in the city I live in, Rome.

Often, economic indicators are synonymous with quality of life, and many times the development of a country is taken into account to measure the wellbeing of that country. 

Multi-dimensional analysis speaks to the importance of reshaping the way we measure quality of life and can promote economic thinking centred on how people feel about their lives and how much they are satisfied with it.

Having studied Rome divided in its 15 municipalities and having chosen a representative sample for each municipality, there are lots of inequalities between municipalities for any dimension of wellbeing such as the multidimensional index. This is the aggregation of 9 different dimensions (including: safety, environment, housing, education, satisfactory work, enjoying free time, health, social engagement, travel mobility).

The interesting findings are shown in the image below: in the richest municipalities (highest level of income) there weren’t the highest levels of wellbeing (multidimensional wellbeing indicator). Firstly I was surprised by this result, but then I realised this outcome confirmed my research thesis: profit is merely a tool to reach the state of wellbeing.

The findings can be seen in these two maps: the left one is the level of income maps for municipalities (the darkest colour represents highest values of wellbeing); and the right one is the multidimensional well being map, showing the aggregation of all the nine dimensions I found in my research (the darker colour are higher values of wellbeing).

How can you understand multi-dimensional wellbeing where you are?

For anyone interested in measuring wellbeing in his/her neighbourhood, city, region or country, here is a summary of the measurement process.

First step: take a sample of the population you are interested in to measure the wellbeing. It’s difficult to interview all the population, so it could be good to take a representative sample, divided by age, gender or professional status.

The sampling processes are different, you can choose which one you prefer for example from the this book’s chapter nine. In Rome, used sampling by quota.

Second step:  create qualitative research with your sample using a focus group investigation method (group interview composed of a moderator and 6-8 people). In these groups, it’s important to study the aspects of individuals’ life values (the subjective and objective ones). It is crucial to make a group analysis to understand how people interact in the same dimensions of their wellbeing, as well as to underline the individuals’ different points of view and the minority groups’ ideas.

These steps were necessary in my case study because it’s helpful to see how people that live in the same city interact and express the same concerns but different issues related to living in an urban area, as I found in my research, different municipalities have different levels of wellbeing.

Third step: After all this qualitative research, there is an evaluation with all the outcomes of the focus group. The reader will summarise the same issues on a singular dimension and then measure it with more than one indicator( as an example of a dimension: “safety in Rome” is composed of two indicators, a subjective one and an objective one).

Fourth step: Following this process line, it’s time to create a survey based on the focus group’s outcomes, with the survey you can measure the achievement of any wellbeing dimension of the people interviewed.

Fifth step: Then, the sampling population fills out the questionnaires for your city, region or country.

Sixth step: Finally, when you have collected enough data (survey could be filled out either physically or online) of the sample that you choose as representative, you can analyse and aggregate the answers.

Remember that the wellbeing of an individual is currently a much-debated issue. Over time, an attempt has been made to define and measure it at a national as well as an individual level, and even today, no common solution has been found: it clearly is a definition that encompasses several dimensions within it, as well as the approach of human development.

Dr Girol Karacaoglu BA MBA Bogazici, PhD Hawaii 
Professor of Policy Practice, Victoria University of Wellington

The former Chief Economist of New Zealand has written a book examining the processes by which wellbeing-focused public policy objectives can be established, prioritised, funded, implemented, managed, and evaluated.

Professor Girol Karacaoglu is Head of the School of Government at Victoria University of Wellington and was previously New Zealand’s Chief Economist. Before then, he was the Chief Executive of PSIS (then Co-operative Bank of New Zealand) for nine years. His new book asks:

HOW WOULD WE DESIGN, IMPLEMENT AND EVALUATE PUBLIC POLICY IF IT WERE BASED ON OUR LOVE FOR FUTURE GENERATIONS?

For the philosopher Water Kaufman, ‘I love you’ means:

I want you to live the life that you want to live.
I will be as happy as you if you do; and as unhappy as you if you don’t.

Professor Karacaoglu said that ‘wellbeing is about the ability of individuals and communities to live the lives they value – now and in the future. This is their human right. It would be extremely unjust to prevent the enjoyment of lives centred on chosen values. Preventing such injustice across generations should be the focus of a public policy that has intergenerational wellbeing as its objective.’

‘Half of the net revenue from sales of this book will be donated to The Nest Collective, which gives baby and children’s essentials to families in need’, he said.

Tuwhiri publisher Ramsey Margolis said that ‘while humanity may well come to grips with the current pandemic in the foreseeable future, ballooning inequalities and injustice threaten to shred the fabric of our societies, and the climate emergency menaces all life forms on the planet.

‘In the face of these enduring humanity-induced catastrophes, we owe a special duty of care to future generations to overcome them, and to leave our successors with a safer, fairer world in which they may thrive. We need to express our care for coming generations in many ways, from changing own personal lifestyles, to choosing political representatives who advance cogent, long-sighted policies in aid of a better world.”

Find out more and order the book via the publisher Tuwhiri

Dr. Katherine Trebeck

A major report published this week calls for the Scottish Government to introduce wellbeing budgeting to improve lives for children as part of a radical systems change in the wake of the coronavirus.

The new report, Being Bold: Building Budgets for Children’s Wellbeing, by WEAll Advocacy and Influencing lead Dr Katherine Trebeck, with Amy Baker, was commissioned by national charity Children in Scotland, early years funder Cattanach and the Carnegie UK Trust.

Click here to download and read the report

It makes a series of bold calls focused on redirecting finances to tackling root causes of inequality and poverty as Scotland emerges from Covid. Key recommendations include:

  • A post-Covid spending review, with all spend proposals assessed against evidence of impact on children’s wellbeing
  • Training of the civil service to ensure effective budget development and analysis, and moving to multi-year budgeting aligned with wellbeing goals
  • Establishing an independent agency, modeled on the Future Generations Commissioner for Wales, to support activity and scrutinise effectiveness of delivery of wellbeing budgeting by the government
  • An overarching change to the ways of working in the Scottish Government budget process to ingrain greater transparency; cross-departmental working; and a participatory approach involving the public and the diversity of children’s voices.

The report argues that the Scottish Government’s stated aims of improving wellbeing across society and addressing the fact that one quarter of children live in relative poverty cannot be met unless we create conditions for our youngest children to be healthy and supported from the outset.

To do this, it makes the case for directing funds at root causes that diminish child wellbeing, rather than targeting symptoms ‘downstream’, which is inefficient, stifles implementation of policy and legislation, and slows ambitions for societal change.

First steps towards wellbeing budgets would involve holding a conversation with the public about budget-setting to absorb lived experience; interrogating data to ‘map’ the distribution of wellbeing in Scotland; and ensuring policy development was properly connected to evidence on what would actually change outcomes for children and addressing the root causes of what undermines their wellbeing.

The report’s lead author, Dr Katherine Trebeck, said:

“If the Scottish budget is to be a mechanism that brings about change, we need to create a context where children can flourish in Scotland. Then we need to think about a few fundamentals. The budget needs to be holistic, human, outcomes-oriented, and rights-based. It needs to be long-term, upstream, preventative and precautionary. Finally, a bold budget for children’s wellbeing needs to be participatory – children’s voices in all their diversity need to be at the heart of setting the budget agenda.”

Katherine speaks about the report in more detail in this short video:

Sophie Flemig, Chief Executive of Cattanach, said:

“This report shows why it is necessary to set out a high-level vision for wellbeing outcomes and hardwire it into government processes. Countries need to acknowledge that the economy is in service of wellbeing goals, not a goal in and of itself. Meaningful public involvement is key. Ministerial responsibility for wellbeing outcomes drives progress. And cross-departmental work is essential for success.”

Jennifer Wallace, Head of Policy at Carnegie UK Trust, said:

“This project has focused on one important lever of change – the finance system, the way that we think about money and spend in Scotland, asking: what is value for money when we’re talking about our children’s lives? We know it’s not a silver bullet, but we do think it’s important that we consider how we spend that money if we’re going to begin improving outcomes for children and putting our money where our mouth is when it comes to children’s wellbeing.”

As the election campaign approaches, and following Tuesday’s vote to incorporate the United Nations Convention on the Rights of the Child into Scots law, the report’s calls and the case for wellbeing budgeting informs Children in Scotland’s manifesto for 2021-26, backed by organisations across the children’s sector.

The report is published as Scotland takes stock of the damage the pandemic has done to individuals, families, communities, and the macroeconomy, and an increasing number of people recognise that we must not revert to pre-Covid ways of working.

Jackie Brock, Chief Executive of Children in Scotland, said:

“Now is the time for us to reset our economy and the way in which we prioritise our budgets. Katherine’s work gives us a real manifesto for how we will secure children’s rights and wellbeing. We call on you to read the report, particularly the section which identifies what the crucial next steps are. We don’t need any more research or evidence – we need to work together to put a budget for Scotland’s children into place, this year, and we look forward to working with you to make that happen.”

This content is reposted from Children in Scotland

Authors: Olga Koretskaya, Gus Grosenbaugh

Read Paper

For the past several decades, the primary question for many businesses has been: “How much money can we make?”. It is still largely assumed that the social responsibility of business is to increase profits for shareholders, as that wealth should trickle down to benefit all. While the formal economy has never been larger, the unprecedented scale of environmental degradation and inequality it has created today makes us question business-as-usual and to look for alternatives.

In fact, all around the world, people are rejecting the status-quo of self-interest. In the midst of the global pandemic, more than ever, we see purposeful work towards building an economy that delivers environmental and social wellbeing.

  • With the election of Joe Biden, the US appears primed to re-enter the Paris Agreement.
  • New Zealand’s Wellbeing Budget makes health a key, driving metric in economic decision making.
  • The ‘rights of nature’ are being recognised by national and local laws, predominantly in the countries of the Global South: Ecuador, Bangladesh, Bolivia, Mexico, Uganda, and Colombia.

While public awareness and government policies are crucial in supporting Wellbeing Business, it is companies – both large and small – that will be the engine behind the transition. The good news is: many of them already exist, and we know how to recognise them.

Here are eight key principles that define a Wellbeing Business.

  1. Redefining the vision. Primarily driven by the desire to create products and services that satisfy the needs of society, while staying in harmony with nature. 
  2. Ensuring transparency. Proactive in disclosing data about their environmental, social, and economic performance.
  3. Internalising externalities. Aware of the ‘negative externalities’ or negative environmental and social impacts they produce, and strive to reduce them.
  4. Having a long-term mindset. Make decisions that benefit the company and all important stakeholders including society and nature. This implies, for example careful consideration of resource use, and investment in employees and the communities within which companies operate.
  5. Making people an asset. Prioritise the dignifying of work and empowering of diverse voices within the company.
  6. Localising production. Become much more embedded in the community and ecosystems by striving to localise energy sources, financial sources, as well as distribution.      
  7. Switching to circular production. Design business processes to coexist with environmental and social systems.
  8. Embracing diversity. Acknowledge and embrace diversity in values, ownership structure, finance as key to a resilient business environment.

On 18 December we hosted a webinar to discuss this paper. You can watch the recording here:

Also, do check out the WEAll Business Guide as a nice pair to this work.

by: Erinch Sahan

A fundamental change is sweeping across the business world. Big ideas are spreading, new slogans being echoed, and the very purpose of business being questioned. A host of concepts and initiatives are driving this conversation. From BCorps to Social Enterprise, Cooperatives to Shared Value, the market-place of ideas is heating up.

These are all, by-and-large, positive developments. But how do these enterprise design ideas compare? Here’s an attempt to compare their essential structural features and assess the extent to which shareholder dominance and profit primacy remain embedded in enterprise design. In other words, the framework below compares the minimum in structural design that is required by these concepts.

It’s worth noting that we are comparing a mixture of legal forms, certifications and management concepts. For instance, many jurisdictions allow legal registration as a CooperativeSocial Enterprise or Benefit Corporation. Others are certifications to validate claims of being a Social Enterprise or BCorp. Meanwhile, new concepts like Shared Value or Triple Bottom Line are infiltrating MBA programmes, to guide a new generation of corporate leaders. They all (at least implicitly) deviate from shareholder primacy.

Turning away from Friedman? The answer lies in enterprise design.

In 1970, Milton Friedman penned, in the New York Times Magazine, the article ‘The Social Responsibility of Business is to Increase its Profits’. While proclaiming this today would seem short-sighted (and a public relations own-goal), it is an honest account of shareholder primacy. This remains baked into the DNA of most companies – a persistent straight-jacket that most executives must wear.

The economic imagination has since moved away from this singular obsession with profits for shareholders as the exclusive purpose of business. But enterprise design hasn’t. 

While trapped in shareholder primacy, a growing chorus of business leaders declare their discovery of enlightened self-interest, where their long-term profitability relies on being socially responsible. Inconvenient trade-offs are swept aside and questioning how profits are shared remains taboo (the largest shareholders always get the biggest dividend cheques). Yet, some executives pronounce that the purpose of their company is ‘people and planet before profits’ – a far cry from Friedman’s doctrine and the prevailing corporate model that financial markets hold firmly in place. Nonetheless, the narrative has moved, substantially.

How the narrative has shifted

This means enterprise design has become central as we explore purpose and impact. It has crept up on us all. It probably started a few decades ago, with new corporate goals like minimising or eliminating the worst harms of corporate behaviour (usually where a PR-disaster beckoned). Think sweatshops and poisoned rivers. It then evolved to focus on broader social and environmental impacts: human rights impact assessments, environmental impact reports, or indicators for how a business impacts sustainable development. This focus on impact largely happened over the last decade. 

But positive impact requires practices and investments that actively foster it. Without inclusive trading partnerships, workers in supply chains remain trapped in poverty wages and precarious employment. Without investment into water-treatment plants, local rivers remain polluted. Under shareholder primacy, if the cost-benefit analysis doesn’t add-up, people and planet take a back-seat (unless regulated by government).

To embrace ‘purpose’, a business must be designed to prioritise such investments and practices. 

This means enterprise designs that allow objectives other than profit growth to be a priority, and to give voice and power to stakeholders other than shareholders. Otherwise, doing good is only possible where it grows profits. 

A note here to not confuse profit maximisation with commercial viability. Staying in business is necessary for all businesses. Continuously growing profits isn’t.

Pursuing purpose while in a straight-jacket

The enthusiasm for corporate purpose is evidence that we are joining the right dots. However, unless business is designed to focus on people and planet, it chases ever more profits and ignores social and environmental impacts, where the financial rewards don’t suffice. And it is enterprise design that can unlock the practices and impacts that we all agree business must embrace.

Expectations of dividend growth and boards full of shareholder representatives lock-in the shareholder primacy design. This dominant structure ensures a focus on always increasing profits, and forces extraction of profits for the purpose of growing shareholder wealth. It’s a straight-jacket, within which inclusive and truly sustainable corporate culture is held in check, often relegated to projects and initiatives that don’t threaten the pursuit of growing profits. 

All businesses need to be profitable, but it’s the focus on maximising or growing profits that holds back authentic corporate purpose. Whether an enterprise is designed to deviate from this paradigm is the central question. 

In recognition, an increasing number of businesses are claiming to possess a more evolved design. But how can we know if a business is truly designed to put people and planet before (or alongside) profit? Ideas and movements like Social Enterprise, Triple Bottom Line, BCorp, Shared Value and Cooperatives are attempting to give the answer.

People, Planet & Profit: how far do ideas really go?

While on paternity leave, I’ve had some headspace to grapple with how enterprise design ideas compare. I threw up on Twitter some thoughts, and a discussion unfolded (see thread here):

What emerged is a framework that helps draw key distinctions between concepts like BCorp and Social Enterprise. The focus is on the most fundamental and structural features that determine enterprise design.

Based on my analysis, I believe the following claims are the best way to describe the concepts, certifications and legal forms assessed:

  • Shareholder Primacy: Only Profit Matters
  • Shared Value: People and Planet, if it Helps Profit
  • Triple Bottom Line and BCorp: People and Planet without undermining Profit
  • Social Enterprise and Cooperatives: People and Planet before Profit

There are nuances missing and exceptions within each category. A business with a shareholder primacy structure may be majority controlled by an altruistic shareholder, who uses their power to ensure it behaves like a social enterprise. I don’t account for such optional benevolent use of power. In cooperatives, members (therefore power-holders) could be an already empowered stakeholder (e.g. consumer cooperatives in developed economies) or truly marginalised communities (e.g. low-income workers). My framework doesn’t draw such distinctions. Many BCorps or companies embracing Shared Value will go well beyond what the table implies about their structure. This will not do them justice.

But the framework does help draw key distinctions in comparing the minimum in structural design required by these concepts. The differences are meaningful.

We should all applaud the narrative shift (and positive impacts) all of these ideas are driving. Equally, we need to compare and contrast the ideas that profess to fundamentally transform the business world. I hope this table helps achieve this.

Note to reader: I conducted this analysis in my personal capacity through October 2020 (while on paternity leave). To remain credible, I left out the Fair Trade Enterprise model (the global network I lead as Chief Executive of WFTO – see relevant report here and a talk about it here). Other ideas and concepts were also left out, where they lack concrete enterprise design features relevant to this comparison (e.g. Stakeholder Capitalism, Conscious Capitalism) or are broader concepts that capture multiple ideas (e.g. Fourth Sector/For-Benefit).

Erinch Sahan is Chief Executive of the World Fair Trade Organization. He has spent over a decade on enterprise development, campaigning for responsible business, lecturing on sustainability and researching new business models. His career spans Oxfam, Procter & Gamble and the Australian Government. He holds degrees in law and business, and an honorary Doctorate.

Connect with Erinch on Twitter: @ErinchSahan and on LinkedIn

Faces of the Wellbeing Economy Movement is a series highlighting the many informed voices from different specialisms, sectors, demographics, and geographies in the Wellbeing Economy movement. This series will share diverse insights into why a Wellbeing Economy is a desirable and viable goal and the new ways of addressing societal issues, to show us how to get there. This supports WEAll’s mission to move beyond criticisms of the current economic system, towards purposeful action to build a Wellbeing Economy.