In a world grappling with climate change, social inequality, and resource depletion, the limitations of traditional economic models are becoming increasingly evident. As global leaders, businesses, and communities search for alternatives, Doughnut Economics has emerged as a groundbreaking framework for creating sustainable and equitable economies.
Developed by economist Kate Raworth, the model challenges the pursuit of infinite growth and instead reimagines success as thriving within ecological limits while meeting societal needs. But what does this look like in practice, and how can this bold vision be applied to business sustainability strategies? Keep reading as we delve further into this below.
What is Doughnut Economics?
Doughnut Economics is a conceptual framework developed by economist Kate Raworth that reimagines traditional economic models to address 21st-century challenges, particularly social inequality and environmental degradation. The framework presents an alternative to growth-driven economics by balancing human needs with the planet’s ecological limits.
The “doughnut” is a visual model shaped like a ring, representing two critical boundaries:
- The Social Foundation (inner boundary): The minimum requirements for human well-being, such as food, water, education, healthcare, and social equity. Falling below this foundation means people lack access to essential resources.
- The Ecological Ceiling (outer boundary): The limits of Earth’s environmental systems, such as climate stability, biodiversity, freshwater availability, and clean air. Overshooting these boundaries leads to ecological degradation and climate change.
The space between the social foundation and ecological ceiling (the “safe and just space for humanity”) is where societies can thrive sustainably. Ultimately, Doughnut Economics challenges the traditional pursuit of infinite GDP growth and advocates for regenerative and distributive systems. It encourages policymakers, businesses, and communities to design socially fair and sustainable economies.
Key principles of Doughnut Economics
The Doughnut Economics model is guided by principles that challenge conventional economic thinking and aim to create a regenerative, distributive, and sustainable economy. Below are some of the key principles:
Change the goal
Move beyond the singular pursuit of GDP growth. The goal should be to thrive within the “doughnut” – meeting human needs while respecting planetary boundaries.
See the big picture
Recognise the economy as part of a broader system that includes society and the environment. This principle emphasises the importance of ecological and social health alongside economic performance.
Nurture human nature
Move away from the idea of “rational economic man” driven by self-interest. Instead, embrace a more realistic view of humanity as socially adaptable, cooperative, and driven by shared values.
Design to distribute
Aim for economic systems that actively distribute wealth, opportunities, and resources more equitably. This principle focuses on addressing inequality through better-designed systems rather than relying on redistributive measures alone.
Create to regenerate
Shift from an extractive, linear economy to a regenerative one that restores and renews natural systems. This involves adopting circular economy practices, reducing waste, and protecting ecosystems.
Be agnostic about growth
Challenge the obsession with infinite GDP growth. Instead, focus on economic activities that promote well-being and sustainability, recognising that growth may not always be necessary or desirable.
Aim for systems thinking
Understand that economies, societies, and ecosystems are interconnected. Systems thinking helps identify patterns, feedback loops, and relationships that influence outcomes, leading to more effective and holistic solutions.
Applications of the Raworth Doughnut Economics
Doughnut Economics is a versatile framework with practical applications across various sectors, helping governments, businesses, and communities achieve social and environmental balance.
Urban planning and development
Cities are using Doughnut Economics to create sustainable urban environments that meet residents’ needs while respecting ecological limits. For instance, Amsterdam adopted the Doughnut model in 2020 to guide its post-pandemic recovery, ensuring economic activities prioritise social well-being and environmental sustainability. Initiatives include circular economy projects, renewable energy integration, and sustainable housing development.
Corporate strategy and business models
Businesses are aligning their strategies with the Doughnut framework by focusing on regenerative and distributive practices. This includes reducing carbon footprints, embracing circular economy principles, and promoting social equity. For example, companies integrate sustainable supply chain practices, reduce resource extraction, and adopt models that prioritise ethical labour and equitable wealth distribution.
Policy-making and governance
Governments are incorporating the Doughnut framework into policy design to address societal and environmental challenges. Policies focus on sustainable economic development, poverty alleviation, and ecosystem restoration. Costa Rica, for example, has integrated regenerative agriculture and conservation initiatives to balance economic growth with ecological preservation.
Sustainable agriculture and food systems
Doughnut Economics promotes regenerative agriculture practices that restore soil health, enhance biodiversity, and support food security while respecting planetary boundaries. For instance, shifting to agroecological systems and localised food production helps reduce greenhouse gas emissions and improve community resilience.
Conclusion
Doughnut Economics offers a transformative blueprint for addressing some of the most pressing challenges of the 21st century. By guiding urban development, influencing corporate strategies, and reshaping governance, the Doughnut Economics model showcases its potential to inspire meaningful change. Ultimately, it’s a call to action for policymakers, businesses, and individuals to join forces in building regenerative, distributive, and thriving societies and a reminder that a just future is within reach.
