The Inclusive Wealth Index: Measuring the Sustainability of the Sustainable Development Goals

Abstract

In 2015, 193 countries signed an ambitious global development agenda. The sustainable development goals set a path for all countries to achieve and an agenda that went beyond just focusing on economic growth but attention to 17 constituents and determinants of human well-being. Targets and indicators were designed for each of the 17 goals, and 2030 was set as the end date to achieve the set targets within each goal. However, what was not discussed was the sustainability of these sustainable development goals. Three key points emerge as countries prepare their sustainable development agenda. First, resources will be needed and this will have to come from the assets a country owns. Second, there will be instances, whereby trade-offs need to be managed but also the potential of synergies to be exploited when making decisions on the use of assets to achieve the set of SDGs. Third, the stock of assets in totality will need to be non-decreasing over time if improvements in well-being—now represented collectively by the SDGs—are to be achieved. This paper proposes an overall indicator to be used in conjunction with the individual indicators developed for each goal. The indicator called Inclusive Wealth Index (IWI) tracks the social value of the productive base of society. This productive base is comprised of the produced capital, human capital, and natural capital, and their values are computed using the social values of these assets. Some preliminary results are shown which contrast with the changes in IWI versus the GDP for these countries.