Over 700 statisticians, policy wonks, government officials and business leaders convened here at the first ICONS conference on measuring sustainable progress, prosperity and quality-of-life. Preceding this historic conference was a gathering of 600 business executives hosted by the leading business association of Parana and its visionary president Rodrigo Loures, CEO of Nutrimental, a leading food company in Brasil. The agenda: Business As Agent of World Benefit – exploring socially responsible business and investing, co-sponsored by Brasil’s Instituto Ethos de Empresas Responsibilidade Sociale, COPEL, Parana’s electric utility and many other companies.
This focus on socially responsible companies, ethical investing and overhauling economic statistics and national accounts (GNP and GDP) is encouraged by Brasil’s Minister Tarso Genro, Special Secretary of the Federal Social and Economic Council, whose speech opened the ICONS conference, together with the Governor of Parana. Tarso Genro was the former mayor of Porto Alegre and initiator of many social innovations – from that city’s Participatory Budgeting to the NGO-led World Social Forum, which offers positive alternatives to the “Washington Consensus” views of the World Economic Forum in Davos, Switzerland.
Both these groundbreaking conferences drew participants from all over Latin America as well as from North America, Europe and China. Most impressive at the ICONS conference (papers at www.sustentabilidade.org.br) were the quality-of-life indicators from Brasil’s statisticians at the Brasilian Institute of Geography and Statistics (IBGE), The Research Institute of Applied Economics (IPEA), the Universities of Sao Paulo, Fundacao Dom Cabral, the Social and Economic Development Index and of the State of Rio Grande do Sul. Many municipal research institutes also presented, including the State and City of Sao Paulo’s social responsibility indicators, SEADE and the Atlas ranking Quality of Life in Brasil’s cities. Host city Curitiba, a world mecca for urban design for its well-laid out boulevards, greenery and transit system ranks number 2 after Florianopolis, the coastal capital of the State of Santa Caterina.
Most participants, while using economic statistics recognized the problems with macro-economic measures like GNP and GDP, which are too highly aggregated to offer useful real world detail. They “fly over” a country like a plane at 50,000 feet, so that per-capita averaged income masks poverty gaps, social exclusion and mal-distribution between urban, rural and regional populations. Even sessions organized by business groups focused on broader health, education and equity issues, as well as on “triple bottom line” (social environmental and economic) corporate accounting, socially responsible business, investing and consumerism. The Brasil Council for Sustainable Development focused on the environment and eco-efficiency.
Brasil hosted the 1992 UN Earth Summit in Rio de Janeiro, where over 170 governments agreed on Agenda 21 to overhaul GNP/GDP by broadening its scope to account for human, social and environmental capital and costs of depletion and social disruption – “externalities” not born by the private sector and ignored by mainstream economists. Only when all these costs are “internalized” on corporate and government balance sheets, can prices reflect full costs, so as to steer societies in more optimal, healthy directions toward sustainable development and quality of life. Thus, Brasil has led in the creation of the new indicators. All this new activity has been accelerated by the growing corporate crime wave in the USA. Daily revelations continue of accounting fraud, cooking of company books and ignoring the costs of harmful effects borne by others – “externalities” in economist-speak. Now those hidden social and environmental costs are being quantified.
As the crisis of trust in capital markets grows deeper, market leader John C. Bogle, founder of USA-based mutual fund giant, the Vanguard Group, now regularly examines “What Went Wrong in Corporate America” in a series of revealing speeches (available on the website of his Bogle Financial Markets Research Center, www.vanguard.com/bogle). Even the sudden spurt in the USA of GDP-growth to 7.2% is short-lived, since it was fueled by debt (tax-cuts and government spending that helped balloon the deficit, mortgage re-financing and credit cards) and 1% interest rates. Meanwhile, the US trade deficit stands at 5% of GDP – auguring a still weakening dollar.
The enthusiasm of all the participants in both conferences may be related to their former sense of isolation within traditional business and government institutions and operating under conventional economics. Fragmented approaches of individual disciplines have created a conceptual Tower of Babel, with an inability to see whole social systems now requiring integrated policies. Economists, sociologists, demographers, anthropologists, game theorists, biologists, health statisticians and ecologists all rubbed shoulders and found useful interfaces and opportunities for more trans-disciplinary cooperation.
As I left this intellectual feast and its palatial venue, I learned that ICONS 2004 would be hosted by the Parliament of Latin America in Sao Paulo and co-hosted by the Assembly of Deputies of the State of Sao Paulo. This city of 16 million inhabitants – one of the world’s mega-cities, matches Shanghai, China, in size. Both are concerned with urban renovation, reducing poverty and social exclusion, decent jobs and overall quality of life – as reflected in presentations at ICONS. Professor Zhang Xin Hua of the Shanghai Academy of Social Sciences described Shanghai’s new parks and quality of life indicators.
Discussions of additional ICONS conferences in Europe and China attested to the excitement as these innovative experts with their broader statistical “cameras” revealed new social, epidemiological and environmental landscapes. Methodological issues: what to measure, how to measure, at what levels – from local, municipal, corporate to national and international – dominated the sessions. Values and cultural norms underlying government statistics and corporate accounting were highlighted – particularly the new “triple bottom line” reporting of corporations’ economic, social and environmental performance (www.gri.org).
New alliances were forged between banks and “green” asset managers, for example, Banco REAL, Banco do Brasil and the new BOVESPA Index of superior corporate governance (which ahs outperformed the regular BOVESPA since its inception some 2 years ago). BOVESPA will also launch a new “green” Index of sustainable companies, similar to the Dow-Jones Sustainability Group Index, London’s FTSE 4Good, the US-based CALVIN Index and the Domini Social 400.
Brasil is emerging as a world leader in many dimensions beyond the new statistics – based on its cultural assets: creativity, design, music, art and growing efforts to close its poverty gap and create a participatory democracy to include all its racially and ethnically diverse citizens. As the ICONS participants agreed, statisticians and technicians should strive to communicate their data widely – as servants to all people and the democratic process.
Brasil will take up its seat in the United Nations Security Council January 2004. I expect the new Brasil under the leadership of President Lula to continue its leadership in articulating peaceful paths to more sustainable human development and quality of life. The new quiet revolution of statisticians will be playing a key role in this great transition.
Hazel Henderson, author of Beyond Globalization and other books, is partner with the Calvert Group of socially responsible mutual funds in the USA in creating the Calvert-Henderson Quality of Life Indicators (updates at www.calvert-henderson.com). She participated in the ICONS and Business As Agent of World Benefit conferences.