What if Europeâs biggest risk isnât war â but running out of power?
Vestas CEO Henrik Andersen bluntly talks about Europeâs energy, leadership courage, and why CEOs must step up in a volatile world....
Sustainability
No more sugar coating: The Doughnut business leaders can no longer afford to ignore
The updated âDoughnutâ of social and planetary boundaries has just been released, and the findings arenât good. Businesses have a role to play to get the planet back on track.
Rarely do pastries have much to teach us about our future. But one âDoughnutâ â namely the sustainable development model developed by economist Kate Raworth â has much to say about humanityâs survival.
The hole in the middle represents things people need, such as food, housing, healthcare, education, or political voice. The outer edge represents the limits of our planet, such as climate, water, forests, and ecosystems that we all depend on for life on Earth. The safe place for humanity is the ring in between. Itâs the space that promises a good life for all.
Since it was introduced over a decade ago, Raworthâs Doughnut model has been adopted far beyond academia as a framework to make sense of our world. It has become a language for policymakers, investors, activists, and businesses who are searching for a comprehensive way to understand sustainability, connecting society and the environment in a single framework. It has been adopted by cities from Amsterdam to Melbourne to redesign planning and strategy around a vision of balance. And it has inspired communities and companies alike to ask a simple question: are we living inside the ring, or not?
This week, the framework received its biggest update yet, published in Nature. The findings are sobering.
Where we stand
The research team tracked 35 indicators across 200 countries between 2000 and 2022. Their aim was to see if humanity was any closer to living inside the safe space of the Doughnut. Overall, the answer is no.
There has been progress worth celebrating, especially on the social side. More children are surviving thanks to vaccinations and improved availability of medicine. Access to sanitation, electricity, clean fuels, and the internet has expanded dramatically. Health coverage reaches more people than ever before. These gains matter. They prove that change is possible when societies choose to invest in human well-being.
But such gains are matched by setbacks. Food insecurity is rising again after years of decline, leaving hundreds of millions unsure where their next meal will come from. Political freedoms are shrinking, meaning more people are losing their ability to influence decisions that shape their lives. Youth unemployment remains high, leaving whole generations struggling to see a path forward. These are not minor issues. They go to the heart of what it means to have a livable and promising future.
On the ecological side, the story is harder still. None of the indicators are moving in the right direction. Greenhouse gas concentrations continue to climb. The impact of fertilizer use has doubled since 2000, polluting rivers and destabilizing soils. Chemical pollution is spreading everywhere, from pesticides in farmlands to microplastics in human blood. Forests are being cleared, species are vanishing, and biodiversity is declining at a pace scientists now call the sixth mass extinction. Freshwater systems, once reliable, are under severe strain from both overuse and climate disruption.
The only boundary that has held steady is the ozone layer, a rare success born from global cooperation in the 1990s. Everywhere else, the Earthâs life-support systems are under mounting pressure, and, as such, are already reshaping economies and societies.
The hardest truth in the report is this: not a single country has managed to give its people a decent life without at the same time breaking the planetâs limits. The optimal balance the Doughnut describes remains out of reach everywhere. Which means the way we have been pursuing growth is not just falling short but is actively pulling us in the wrong direction.
The concentration of power in global markets means companies are not bystanders here; they need to become agents.
Why this matters for your business
For business, the Doughnut should serve as a strategy tool to test whether a company is truly resilient and creates value without eroding the very foundations it depends on.
The temptation is to treat this as a policy problem for governments. But the reality is that business leaders make daily decisions about supply chains, investments, technologies, and norms that shape the future just as much as regulation does. The concentration of power in global markets means companies are not bystanders here; they need to become agents.
And the risks are mounting. Water scarcity, political unrest, biodiversity collapse, and climate shocks are not distant scenarios; they are already disrupting supply chains and eroding trust. The bigger risk (and cost) is not action, but inaction.
What does it mean for a company to work with the Doughnut? Three directions stand out for me:
- Use it to stress-test your business. Ask yourself: where does my business depend on things that are already in overshoot? Water drying up. Forests being cleared faster than they can grow back. Chemicals piling up in soils and bloodstreams. If your model leans on any of these, resilience is already at risk. Better to face that now than wait until the cracks are too big to ignore. Alpiq faced this head-on when it recognized that melting glaciers and shifting water flows put its hydropower business at risk. In response, it began building alliances with governments and industry partners to tackle these systemic challenges in collaboration rather than isolation.
- Use it to redesign value chains. The next step is harder but more rewarding. It means redesigning how value is created. The update makes clear that ecological overshoot and social shortfall are two sides of the same coin. Supply chains are where they meet. You can choose to squeeze farmers for price, or you can incentivize them to regenerate soil and restore ecosystems. You can treat wages as a cost, or as an investment that keeps communities and markets alive. Every link in the chain is either pulling people into the hole or pushing the planet over the edge. For example, Arcos Dorados, the worldâs largest McDonaldâs franchisee, has leaned into this by investing heavily in youth in Latin America, treating its own restaurants as entry points to opportunity. Through structured training, coaching, and career pathways, they are using their scale to build futures for young people who often have the least perspective.
- Use it to set the pace. Waiting for regulation is the slowest strategy of all. The one real planetary success story we have, the recovery of the ozone layer, happened because governments acted decisively. But if you wait for that kind of leadership again, youâre gambling with your future. The companies that stand out now are the ones that donât wait. Ărsted didnât wait when it turned itself from a coal-heavy utility into a renewables leader. Similarly, LindstrĂśm isnât waiting for governments in Asia to legislate circularity, but is setting new standards itself. Leading ahead of policy is not a risk. Itâs an opportunity to shape your industryâs future.
A mirror, not a prophecy
The new Doughnut update is not a doomsday prophecy. It doesnât predict the end. It merely reflects where we stand right now: a species clever enough to map its safe space, yet still choosing to live outside it. It shows children surviving who would not have a generation ago, and at the same time, forests vanishing, soils eroding, freedoms shrinking. It shows that we are capable of progress, as well as destruction.
As we look at the picture it shows us, hereâs the undeniable part: we know how to fix this. We know how to cut emissions. We know how to restore ecosystems. We know how to reduce inequality and give people back their voice. The gap is not in knowledge. Itâs in courage and in leadership.
For business, this is not about polishing sustainability reports. Itâs about whether you will still have a business model in twenty years. Itâs about whether your supply chains hold, whether your customers can afford your products, and whether there is still trust in the societies where you operate. Companies that keep doing the minimum will be overtaken by the costs of instability. Those who act with ambition will shape the markets everyone else will follow. And that is your choice now. Stay outside the Doughnut and watch the circle shrink around us, or step inside and help build the future.
Authors
Related
Benefits by design: Novonesis CEOâs strategy for sustainable growth
Ester Baiget, CEO of Novonesis, discusses how the Danish biosolutions powerhouse leverages modern technology and its 'library of strengths' to transform food production and washing operations....
Inside the Transition: The outlook for COP 30 and the road ahead
Knut Haanaes and Julia Binder explore the front lines of the energy transition with Paul Watkinson, revealing the politics, tech, and strategies shaping a sustainable world....
The US has turned its back on net zero, but all is not lostÂ
The success of the biggest American companies and pension funds depends on international markets. Perhaps this can give the world the leverage it needs to keep the US on board for the...
Audio available
Learn Brain Circuits
Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Go on - they only take five minutes.
Â
Explore Leadership
What makes a great leader? Do you need charisma? How do you inspire your team? Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk.
Â
Join Membership
Log in here to join in the conversation with the I by IMD community. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises.
Â