The System of National Accounts (SNA) is a key document that underpins the functioning of the global economy. Developed by the United Nations, and continuously refined over the past 70 years, the SNA defines the globally agreed measures of economic performance including gross domestic product (GDP), household saving, business investment and national wealth among many other economic variables. These measures, and the underlying data, are used by countries to assess the health of their economies and to build models of future economic activity.
The current version of the SNA was adopted in 2008 and a 5th revision is now underway. And, for the first time, there is agreement on the inclusion of material concerning the relationship between the various economic measures listed above and the broader measurement of human wellbeing and sustainability.
Increasingly, there is the political and societal understanding that measuring the economy alone is not sufficient for assessing national or global progress. Further, the data and methods to measure the additional factors that go ’beyond GDP’ are more widely available.
These developments are allowing policy makers to expand their thinking from the purely economic to a more holistic view that includes economic, social and environmental factors. By way of example, the Australian Government is joining a number of other countries in considering how to implement wellbeing budgets.
Our Director, Carl Obst, is involved in the SNA revision process and is leading the drafting of the three new chapters for the revised SNA concerning the measurement of wellbeing and sustainability.
But it won’t happen overnight. Although, the revision process is well underway, the new SNA is not due to be adopted until March 2025.
The revised SNA is not aiming to encompass all aspects of the ‘Beyond GDP agenda’, but it does aim to support the wider discussion. This direction aligns well with the changes that are taking place in global economies, where businesses and governments are moving progressively towards accounting for human, social and natural capital and the benefits that are essential for our wellbeing.
An important aspect feeding into the revision is the uptake of the United Nations System of Environmental-Economic Accounting (SEEA). The SEEA’s two standards were adopted in 2012 and 2021 and now almost 100 countries have implementation programs. The SEEA gives the world a framework for measuring the state of the environment and its connection to economic activity.
Watch this space. While these kinds of structural changes take time – especially when working globally – they are landmark opportunities for improving environmental and human wellbeing in the future.
