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How a new economy based on the common good is being spearheaded by the grassroots

The Pope’s recent encyclical could have been the mission statement of a new movement championing an economic model based on social, economic and climate justice.

In his Encyclical Laudatio Sí, Pope Francis calls upon citizens, governments and the business community to begin a new dialogue about how to shape the future of the planet. He argues that this conversation must be fundamentally democratic and focus on the common good. He defines the common good as:

“a central and unifying principle of social ethics”.

The Pope goes on to say that:

“Society as a whole, and the state in particular, are obliged to defend and promote the common good.”

Laudatio Sí could be a preamble to the mission statement of a new grassroots movement in Europe which has been growing rapidly since 2010. The Economy for the Common Good (ECG) calls for a new economic system with the interests of society and the environment at its very core.

Today businesses are rewarded in strictly financial terms. Ever-increasing profits, newly won markets and raising stocks are the sole indicators for success. Worker’s well being, environmental impact and job security play no role in measuring business success and can even be detrimental to financial returns. Banks refer strictly to a company’s financial development to determine its credit worthiness. Local governments bend over backwards to attract businesses that are constantly expanding.

What do these indicators really tell us about a company? Does growth mean that more jobs are being created? While profits are obviously necessary to stay in business, why do we view higher and higher profit margins as something good? Does it tell us anything about a company’s environmental track record or whether it is an equal opportunity employer?

The Economy for the Common Good has developed a sort of litmus test to measure companies according to ethics-based principles. It can be seen as a potential blueprint to guide the public discourse demanded by Pope Francis.

A central element of this new tool is the so-called Common Good Balance Sheet which allows companies to measure their performance according to the universal values of human dignity, justice, sustainability and democracy. A business first creates an internal report which is then independently audited. Unlike conventional social impact tools like the Global Reporting Initiative, the Common Good Balance Sheet is comprehensive, measurable, easily understood and requires an external audit. Greenwashing and cherry-picking are next to impossible.

Can this help us create an economic and financial system where greed, endless growth and environmental degradation are not the driving forces?

In his new book “Change Everything: Creating an Economy for the Common Good”, Christian Felber says it can. He describes an international movement with thousands of people, hundreds of companies and dozens of communities participating, developing and implementing it. From Finland to Spain, from Serbia to London, local chapters are meeting and organizing and businesses are asking the tough questions that matter:

  • Is our company creating jobs or downsizing?
  • Are working conditions becoming more humane?
  • Is income distributed fairly?
  • Do our products help improve the environment and are they beneficial to the community?

The idea is also advancing on the political level. At the European Union, the European Economic and Social Committee (EESC) is examining the merits and the applicability of a concept for a new sustainable economic model. The state parliament of South Tyrol, Italy passed a comprehensive resolution on the ECG. The new law amends guidelines for government assistance programs, adding goals of the ECG, and specifies that ECG certified companies be given priority in public contracts.

There is a flurry of activity on the academic level. The Europa University in Flensburg, Germany began a three-year research project comparing the ECG with existing sustainability reports and includes empirical research from the German postal service, Deutsche Post. Students across the globe have also written bachelors and master’s theses on the topic and even a number of dissertations have been dedicated to this topic.

Call to Action

For me one of the most exciting aspects of the ECG is that it’s hands-on. It’s not about a legislative or election campaign. It’s not only a protest movement opposing something. It’s an activist-oriented grassroots movement with participation of business and you can start today.

If you are an employee start asking those hard questions within your company. What is the income disparity within the company? To what extent are workers involved in the decision-making process? If you are a business owner or in management the questions are the same. What is our contribution to the common good? Are our products actually helping society?

If you work at an NGO or another non-profit the indicators in the Common Good Balance Sheet can also serve as a framework to guide strategic decision-making. Is our financial management guided by ethical principles? Do we consider the social and ecological impact of our investments?

You can also start a local chapter or hook up with an existing one and join an international network of over 100 activist groups.

Although I am not a Catholic I support the Pope’s call to take action for climate and distributive justice. He argues that politics and business have been to slow to act. I say that it is within our power to demand from economic actors that they behave responsibly and that they prove this to us.

This is a guest blog by Gus Hagelberg from Economy for the Common Good.   11 August 2015

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