Background Note
The Urgent Need for a New Development Paradigm
In recent years, it has become increasingly evident that the traditional economic growth model, primarily measured by Gross Domestic Product (GDP), is insufficient for ensuring the true wellbeing of societies. Despite concerted efforts, only 15% of the Sustainable Development Goals (SDGs) are on track, with high debt levels in middle- and lower-income countries hindering substantial progress in expanding sustainable and climate finance at scale. The COVID-19 pandemic exacerbated inequalities, extreme hunger and poverty, and wealth distribution has become more imbalanced, as shown by the nearly US $1.7 trillion in global dividends distributed by the top 1200 listed companies in 2023—more than double the amount in 2010.
The 2030 Agenda aims to tackle the many interlinked crises the world is facing, but the glaring gaps in progress have made it increasingly evident that addressing these challenges requires greater emphasis on tackling their root causes. These challenges are in many ways by-products of economic systems that prioritize GDP growth and short-term financial gains over long-term sustainability and the wellbeing of people and the planet. They cannot be resolved without addressing the systems that give rise to them.
Life Economies: An Integrated Approach to Development
As broadly recognized through the adoption of the UN Sustainable Development Goals (SDGs), the Addis Ababa Action Agenda on Financing for Development, and the Paris Agreement on Climate Change, the need for transformative economic models that address inequalities in multiple dimensions and prioritize wellbeing is more pressing than ever. Recognizing the critical need for a new development paradigm, the G20 adopted the High-Level Principles on Lifestyles for Sustainable Development in 2023 under India's presidency. These principles underscore the importance of integrating development, climate, and biodiversity agendas and highlight the need for scaling Life Economies—economic systems that recouple growth with societal wellbeing and environmental health, fostering inclusive development, inter-generational equity, and ecological sustainability.
Life Economies prioritize long-term benefits over short-term profits, promoting shifts in values, mindsets, and behaviors among individuals, businesses, investors, and institutions. They encompass a wide range of innovative models and approaches, such as the Bioeconomy (sustainable use of biological resources), Blue Economy (ocean-based development), Conscious Capitalism (aligning business with social values), Doughnut Economics (balancing social needs within planetary boundaries), Green Economy (promoting environmentally friendly practices), Impact Economy (prioritizing positive social and environmental impact), Inclusive Capitalism (ensuring prosperity for all stakeholders), Regenerative Economics (restoring ecosystems while fostering economic growth), Social Solidarity Economy (emphasizing cooperation and community), Stakeholder Capitalism (considering diverse stakeholder interests), Sustainable Economy (balancing growth with ecological limits), Wellbeing Economy (focusing on people’s quality of life), and Economy for the Common Good (incentivizing private and public sector activities towards co-defined common good). By aligning finance and economic activities with the SDGs, Life Economies offer a path to sustainable and inclusive growth that benefits all members of society.
Over the past two decades, we have witnessed the building of a global momentum, by all G20 members, along with nations like Colombia, Ethiopia, Ghana, Malaysia, the Philippines, Singapore, and Sri Lanka, who have taken steps to begin to enable Life Economies by instituting legal frameworks recognizing new ‘for-benefit’ models of enterprise, such as social enterprises, sustainable businesses, cooperatives, community interest companies, and numerous others (see the diagram below). Innovations like impact investing, wellbeing measurement, corporate governance reforms, circular economy, ESG, venture philanthropy, and blended finance are also driving this new paradigm. The growth of Life Economies is giving rise to new measurement tools and frameworks that seek to ensure finance, public policies, and economic activities are SDG-aligned and contributing to the quality-of-life of all people and the planet.
The Brazilian G20 Presidency has recognized the potential of Life Economies as a transformative approach to addressing the root causes of inequalities and achieving sustainable development, commissioning a global baseline study on Life Economies which is currently underway. By fostering inclusive economic models, fair labor practices, and community empowerment, Life Economies can help reduce disparities in access to essential services, economic opportunities, and resources, and they can dismantle systemic barriers and create pathways for social mobility and economic empowerment. The growth of Life Economies can effectively address structural discrimination, economic disparities, social biases, and historical injustices that perpetuate inequality.
In the African context, the development of Life Economies advances Agenda 2063 by fostering inclusive, sustainable, and resilient economic growth that aligns with Africa’s aspirations for prosperity, social equity, and environmental sustainability. It promotes sustainable resource management, climate resilience, and innovative economic models such as the circular and green economies, supporting the continent’s goals of eradicating poverty, reducing inequalities, and enhancing food security. Life Economies empower youth and women, strengthen social inclusion, and encourage ethical governance, driving forward a people-centered development approach that benefits all Africans. By leveraging innovation and technology, Life Economies contribute to building integrated, competitive economies that position Africa as a global powerhouse by 2063.
Despite their progress and potential, Life Economies face significant challenges in the current paradigm. Overcoming these barriers requires creating enabling environments with supportive government policies, financial mechanisms, reporting standards and more. A far more comprehensive understanding of Life Economies is required to develop such ecosystems.
Policy initiatives to enable Life Economies in G20 and other countries
Moving Beyond GDP Metrics
Development finance agencies and governments have been pursuing the SDGs as independent goals rather than as an integral part of economic development strategies, leading to misalignment between development finance, budget-making, and pursuit of the SDGs. The weak progress towards the SDGs makes it clear that they need to become endogenous to economic and social systems in order to ensure real and durable progress.
The dominance of national income and economic growth in public discussions and economic decision-making processes, thanks to traditional utility theory, equates utility with the satisfaction achieved through the consumption of material goods, services, and leisure. However, research has shown that higher income levels do not necessarily translate into higher wellbeing, especially in the context of adverse climate change, biodiversity loss, lack of access to basic amenities, social inequality, and increased stress levels. GDP ignores economic inequality and does not integrate environmental services into economic decisions.
Life Economies play a crucial role in moving beyond GDP metrics by integrating comprehensive measures of progress that capture the full scope of human, environmental, and societal wellbeing. Unlike GDP’s sole focus on economic output, Life Economies emphasize metrics that account for quality-of-life, including ecological sustainability and social equity. Over the years, a range of such innovative metrics have evolved that aim to capture the multi-dimensional nature of progress, such as UNDP’s Human Development Index (HDI), The Multidimensional Vulnerability Index (MVI), The World Happiness Report, Genuine Progress Indicator (GPI), Gross National Happiness, OECD Better Life Index, Social Progress Index (SPI), Happy Planet Index, and others. Several G20 countries, including Canada, France, Germany, Italy, Japan, Republic of Korea, Mexico, and the UK, have designed their own wellbeing indicators to meet their specific needs, and similar initiatives also exist in Bhutan, Sweden, and New Zealand.
By advancing holistic metrics that reflect the multi-dimensional nature of development, Life Economies promote policies and practices that create resilient, equitable, and sustainable societies that thrive for generations to come.
Objectives of the Side Event
This side event will examine how incorporating the Life Economy into the global development agenda can help ensure that future development efforts are aligned with the holistic wellbeing of people and the planet. The gathering will:
Promote Understanding of Life Economies. Highlight how development of Life Economies aligns finance and economic activity with the SDGs and Agenda 2063 and provides a strategic pathway for evolving from GDP metrics toward more holistic measures of progress.
Facilitate Knowledge Sharing and Partnerships. Bring together experts, policymakers, and practitioners to share knowledge, build partnerships, and develop strategic actions to advance Life Economy solutions.
Inform Policy and Practice. Gather inputs to inform a G20 commissioned study on the transformative potential of Life Economies in addressing the root causes of inequalities and advancing sustainable development.
Programme.
15:00-15:30 – Arrival and Networking
15:30-15:45 – Welcome
Pamla Gopaul – Senior Programme Officer, African Union Development Agency-NEPAD
Symerre Grey-Johnson – Director of Human Capital and Institutional Development, Directorate of Social Development, African Union Development Agency-NEPAD
Keynote Remarks:
Michelle Muschett – UN Assistant Secretary-General, Assistant Administrator and Director of the Regional Bureau for Latin America and the Caribbean of the United Nations Development Programme (UNDP)
15:45-16:25 – High-Level Panel: Life Economies – Rethinking Progress and Development
Panelists will discuss how Life Economies provide a framework that recouples economic growth with societal wellbeing and environmental health, share insights into successful Beyond GDP metrics currently in use and their application in policy, and examine the role of Life Economies in addressing inequality, promoting inclusive growth, and advancing the goals of Agenda 2063.
Moderator
Sandrine Dixson-Declève – Co-president, The Club of Rome, and Executive Chair, Earth4All
Panelists
H.E. Abena P.A. Busia – Ambassador Extraordinary and Plenipotentiary of Ghana to the Federative Republic of Brazil
Raquel Lagunas – Head of Gender, Bureau for Policy and Programme Support, UNDP
Sanjay Reddy – Professor of Economics, The New School for Social Research
Andreas Schaal – Director, OECD Global Relations and Co-operation, OECD Sherpa to the G7, the G20 and APEC
Gustavo Westmann – Head of the Special Advisory Office for International Affairs, General Secretariat of the Presidency of the Republic of Brazil, and Coordinator, G20 Social
Ilcheong Yi – Senior Research Coordinator, UNRISD, and Research Coordinator, GALERI
16:25-16:55 – High-Level Dialogue Among Participants
An open, facilitated discussion among participants to gather perspectives, ideas, and experiences on implementing Life Economy principles and Beyond GDP metrics.
What are the most significant challenges and opportunities for implementing Life Economies?
What actions can governments, philanthropy, businesses, and civil society take to advance Life Economies?
How can we better integrate holistic measures of quality-of-life into national and global economic policies and planning?
Moderator
Heerad Sabeti – CEO, Fourth Sector Group
16:55-17:00 – Closing Remarks and Next StepsSummary of key insights and action points raised and next steps for continued collaboration and commitment to advancing innovative development models.
Pamla Gopaul – Senior Programme Officer, African Union Development Agency-NEPAD
About GALERI
The G20 has endorsed the formation of the Global Alliance for Life Economies Research and Innovation (GALERI), envisioned in 2022 during the G20 Indonesia and formally launched in 2023 during the G20 India. GALERI fosters global engagement, coordination, and collaboration among governments, think tanks, academia, international organizations, philanthropy, business, civil society, and other actors to accelerate the growth of inclusive and sustainable economies. GALERI aims to create a wide space for collaborations to effectively support policymaking in G20 countries and beyond, guide global processes in developing norms, and create global public goods, particularly in research and innovation. Founding members of GALERI include ADBI, AUDA/NEPAD, Development Alternatives, Fourth Sector Group, GIZ, Impact Hub Network, OECD, RIS, UNDP, and UNRISD.