If the fundamentals of consumption are evolving, then so too will the metrics used to measure progress and growth. National and corporate models apply tried-and-tested financial indicators as a bell wether for the health of an economy (such as GDP, growth and debt), or for a company (such as revenues, growth and profitability). Progress is defined by growth, a robust GDP or revenue growth — all signal that things are going in the right direction or, when they decline, start alarm bells ringing. But how important will growth be in the future? Pressure is mounting from some quarters to transition national development indicators from financial metrics to a “wellbeing economy,” which uses the health of people and the planet as a measurement of success.
There has always been a correlation between wealth and wellbeing. Focusing development on the latter rather than simply assuming the former delivers it would be a step change in how economies develop. This is increasingly being reflected in how company strategies evolve. Environment, social and governance (ESG) factors are taking a greater role in shaping investment decisions. Social or environmental goals are often reported in tandem with financial ones, leading to a rising number of companies aspiring to gain B-Corp status.
When a consumer company presents its quarterly financial results, it will typically use the platform to also discuss its priorities on plastic waste, Scope 3 emissions, consumer wellness, and diversity and inclusion. That’s if a consumer company wants to share quarterly results at all.
Over the last decade, many have opted out of quarterly reporting because it puts too much scrutiny on short-term financial goals and not enough on long-term value creation. As with changing consumption patterns, there are dozens of drivers of change that could reshape perceptions of growth and progress.