A new economic model for purpose and profit

By Leslie Harroun, Director, Partners for a New Economy

Despite the promises of the 1992 Rio Earth Summit, global environmental and climate damage continues unabated. A new donor collaborative, Partners for a New Economy, feels that this can only be stopped by addressing the root cause – our current economic model.

Not much has changed since the 1992 Rio Earth Summit

The Rio Earth Summit in 1992 was a heady time, with over 170 countries signing off on biodiversity and climate change initiatives destined to protect the planet for future generations. Fast forward 25 years however, and the unfortunate reality is that not much has changed. Unprecedented economic growth has pushed our planet’s climate and soils beyond sustainable limits, resulting in unacceptable levels of environmental damage and an uncertain future.  So how can we stop this downward spiral?

Partners for a New Economy adopts a radically new approach

Enter four international family foundations that decided to address what they see as the root cause of environmental harm – our economic system.  In 2015, the MAVA, Oak, KR and Marisla Foundations launched Partners for a New Economy (P4NE), a fund that seeks to change our economic system to include beneficial environmental and social outcomes.

While our current economic system has helped create extraordinary strides in human wellbeing, it evolved during a period of natural abundance and low population.  Given the new challenges we face in the 21st Century—climate change, growing inequality, and political and financial instability—it is no longer fit for purpose.

Looking at the big picture

The economy is a complex and dynamic system deeply connected to nature, culture and behavior. P4NE has an ambitious agenda, which is to influence the whole system, and not just a slice, in order to achieve real change.

For example, to save a species of fish, it is not enough to prevent over-fishing; there are other factors to consider. For example, you also need to ensure there is enough clean water and food to sustain a healthy habitat in which the fish can thrive and reproduce.

Similarly for the economy, if we want to protect nature, we need to address multiple components simultaneously – and we need to do so fast.

Bringing new thinking to traditional economics

There are three main economic components that we want to address at P4NE:

– Our monetary and banking system needs to become accountable for the long-term impact to biodiversity, communities and people.

– Today’s dominant enterprise model must evolve to one that values both purpose and profit, so that companies operate within the context of sustainable development goals.

– We need to foster the emergence of new economic thinking, frameworks and narratives to help build the foundation for a new system.

By pooling our resources and aligning with other donors, Partners for a New Economy seeks to solve some of humanity’s most intractable problems.  We are willing to take risks, fund innovation and build communities and networks to better understand the complex and interdependent relationships we’re trying to influence.

This radically new approach by the four family foundations will help us to create meaningful change that will protect the planet for generations to come.

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