At the country-level, Gross Domestic Product (GDP) is an incomplete measure of societal progress, as this is not what the indicator was initially designed to be used for. GDP captures economic activity, but it does not cover social and environmental factors, like well-being, inequality, health, education and natural resource wealth. At the business level, financial reporting similarly fails to provide stakeholders with a complete picture of the value added by the company.
How we measure progress matters, as we manage what we measure. Relying on an incomplete measure means we will not be best informed on where to direct investment to optimise societal progress. The challenge remains determining how to measure progress in a way that is both holistic, pragmatic and relevant for business, finance and policy makers. While many attempts have been made to develop alternatives to GDP, including the Human Development Index, the Inclusive Wealth Index and the Happy Planet Index, GDP remains the most widely used measure of progress at the country-level. Business reporting on environmental and social impacts remains insufficiently integrated with financial reporting. The challenge: How might we measure wealth more holistically for societies, businesses and individuals?