The Doughnut Theory is a clear, visual model that simplifies the complexity of CSR (Corporate Social Responsibility) issues. It is an excellent tool for anyone involved in the sustainable transition, whether personally or professionally.
The Doughnut Theory is particularly useful for CSR managers who need an overview of the various issues related to the economic and social transitions their companies face. It is also indispensable for managers seeking to understand how to address this vast, complex, yet unavoidable subject. Additionally, it benefits many others.
Let's delve deeper into how the Donut Theory works.
- What is the Doughnut Theory?
- Focus on the ecological ceiling of the Doughnut Theory
- Focus on the social foundation of the Doughnut Theory
- A safe and just space for humanity: the Doughnut
- How can a company relate its business to the Doughnut Theory?
- Links between the Doughnut and the CSRD sustainability report
- Conclusion
What is the Doughnut Theory?
The Doughnut Theory, conceptualized by British economist Kate Raworth, is an economic model that balances environmental limits with essential social needs.
This theory envisions sustainable development within a "doughnut-shaped" space. The inner ring of the doughnut represents a social foundation, ensuring that basic human needs are met. While the outer ring represents an ecological ceiling, protecting the planet's natural systems. The goal is to achieve development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
Focus on the ecological ceiling of the Doughnut Theory
The ecological ceiling in the Doughnut Theory refers to planetary limits, which are vital for maintaining the balance of Earth's ecological systems. The aim is to avoid overstepping these limits to prevent irreversible environmental damage, which would ultimately affect human life. These concepts are rooted in research by the Stockholm Resilience Center .
Here are the 9 planetary limits and their major challenges:
- Climate Change: Maintain climate stability to prevent extreme weather events and irreversible shifts in climate patterns.
- Biosphere Integrity: Preserve the diversity of species and ecosystems to ensure the continued functioning of essential ecological processes.
- Biogeochemical Flows (Nitrogen and Phosphorus): Manage nutrient flows to prevent eutrophication, which can lead to excessive growth of algae and disrupt aquatic and terrestrial environments.
- Ocean Acidification: Protect marine ecosystems by regulating ocean acidity, which is influenced by the absorption of atmospheric CO₂.
- Land-system Change: Use land sustainably to prevent deforestation, desertification, and the loss of biodiversity.
- Freshwater Use: Manage water resources to meet human needs while safeguarding aquatic ecosystems.
- Atmospheric Aerosol Loading: Control airborne particles that impact human health and climate systems.
- Chemical Pollutants: Limit the use and release of toxic substances, including plastics, to protect human health and the environment.
- Stratospheric Ozone Depletion: Preserve the ozone layer to protect life on Earth from harmful ultraviolet radiation.
It is important to note that these limits are interconnected. For example, 25% of the carbon dioxide emitted is absorbed by the oceans, leading to their acidification; thus, the first limit impacts the fourth. This interdependence extends to all the limits.
The latest update from the Stockholm Resilience Center shows that 6 out of the 9 global limits have been exceeded.
The 2023 update to the Planetary boundaries. Licensed under CC BY-NC-ND 3.0. Credit: "Azote for Stockholm Resilience Centre, based on analysis in Richardson et al 2023".
Focus on the social foundation of the Doughnut Theory
The social foundation in the Doughnut Theory represents the fundamental needs that every society must meet to ensure the well-being of its citizens. These needs include:
- Access to Drinking Water and Food: Ensuring that everyone has sufficient, safe drinking water and nutritious food.
- Health: Providing access to healthcare and maintaining healthy living and working conditions.
- Education: Enabling individuals to learn and develop throughout their lives.
- Income and Employment: Ensuring stable income and fair working conditions for all.
- Resilience: The capacity to withstand and recover from crises, including access to housing, energy, and community support.
- Peace and Justice: Maintaining social order and ensuring access to justice.
- Voice: The freedom to express oneself, including the right to vote.
- Gender Equality and Social Equity: Promoting equal opportunities and fair treatment for all individuals.
- Energy: Access to reliable and sustainable energy sources.
These elements are inspired by the United Nations' Sustainable Development Goals (SDGs).
A safe and just space for humanity: the Doughnut
The Doughnut consists of two concentric circles:
- The outer circle represents the ecological ceiling.
- The inner circle represents the social foundation.
The Doughnut of social and planetary boundaries. Licensed under CC-BY-SA 4.0. Credit: Kate Raworth and Christian Guthier.
The space between these two circles – known as the safe and just space for humanity – is where a balance is achieved between meeting social needs and respecting environmental limits. This zone is where sustainable human development can occur, ensuring that the needs of the present are met without compromising the ability of future generations to meet their own needs.
The Doughnut Theory tells us that it is indeed possible to operate within this space. The floor and ceiling leave room for sustainable human activity…
How can a company relate its business to the Doughnut Theory?
The Doughnut Theory offers a powerful framework by visually organizing key CSR concepts, making them easier to understand and implement. It demonstrates that social and environmental objectives can be harmonious and highlights the significant space available for meaningful action.
A company looking to integrate the Doughnut Theory into its strategy can consider the following practices:
1. Define a Goal in Line with Doughnut Principles
The company should identify its main objectives and ensure they align with sustainable development and social equity. This might involve striving for a positive environmental and social impact while remaining economically viable, such as by adopting a mission-driven enterprise model.
2. Assess and Adapt Operational Practices
The company needs to evaluate its processes to find ways to reduce its ecological footprint and enhance its social impact. This could include initiatives like waste reduction, using renewable energy, and providing fair wages and good working conditions for employees.
3. Engage Stakeholders
Involve various stakeholders, including employees, suppliers, and customers, in fostering a corporate culture that supports the Doughnut principles. Collaborative workshops and feedback sessions can help integrate stakeholder ideas into the company’s vision and strategy.
4. Measure and Communicate Progress
Track progress towards the Doughnut goals and communicate achievements transparently. This not only demonstrates commitment but also builds trust with stakeholders and highlights the company’s dedication to sustainable and equitable practices.
Links between the Doughnut and the CSRD sustainability report
The new European CSRD directive aligns with the Doughnut Theory by classifying environmental impacts into categories that correspond to global limits:
- Climate Change: Corresponds to the 1st global limit.
- Pollution: Relates to limits 3, 7, 8, and 9.
- Aquatic and Marine Resources: Ties to limits 4 and 6.
- Biodiversity and Ecosystems: Corresponds to the 2nd limit, and to a lesser extent, the 5th.
- Resource Use and Circular Economy: Related to the 5th limit.
In the social/societal domain, the CSRD focuses on areas directly within companies’ control, through 4 ESRS thematic standards:
- The Company’s Own Workforce,
- Workers in the Value Chain,
- Communities Affected by the Company’s Activities,
- Customers and End-Users.
These standards, which categorize the company's stakeholders, aim to measure criteria similar to those in the Doughnut Theory, particularly for "affected communities." The first two standards focus more specifically on human rights within the domain of labour, including ethics and inclusion.
Conclusion
The Doughnut Theory is not just an economic theory; it helps to understand the complexity of CSR issues and provides a clear path to action. By integrating the Doughnut principles into their strategy, companies can anticipate associated risks and prepare to be more resilient, boosting long term competitiveness.
An additional benefit is the satisfaction of contributing to a more sustainable world.
This article was originally written in French and published in the Cegos Mag’.
If you would like to know more about how Cegos Group can help your organisation implement effective CSR policies and training, contact us today.
