Summary

Wellbeing has always been a cornerstone of the European project. Since the adoption of the European Green Deal (EGD) and the Just Transition Mechanism, it has also been central to the EU’s sustainability agenda. The 8th Environmental Action Programme explicitly calls for establishing a wellbeing economy within planetary boundaries. Arguably, wellbeing should be part of the EU’s sustainability ambitions, given the strong inequality dimension of climate change and the fact that human wellbeing cannot exist without planetary wellbeing.

But wellbeing is hardly at the forefront of today’s EU policy discourse. The Commission’s main geopolitical concern – competitiveness – has moved beyond economic or trade policy and permeates its current flagship sustainability strategy, the Clean Industrial Deal (CID). In this policy brief, the authors discuss how the CID frames wellbeing considerations and how this has shifted compared to the EGD. While there is continuity in areas like re-skilling workers, there is a narrower focus on providing jobs to support economic growth, rather than protecting people from the negative impacts of the transition. Moving beyond GDP is suggested, measuring competitiveness instead in terms of sustainable and inclusive wellbeing (SIWB).

Introduction

The EU has long prided itself on delivering prosperity, but as housing, energy prices, and the overall cost of living surge, that promise feels hollow for many. These challenges are exacerbated by long-term climate and biodiversity crises. Inequality plays a key role, with overconsumption by the wealthiest driving these crises while poorer households suffer most from their impacts. With the second von der Leyen Commission, the discourse appears to have shifted from ‘green’ to ‘clean’, as seen in the CID strategy. This risk narrowing the sustainability question to the decarbonisation of industrial processes, potentially sidelining the social dimension and wellbeing as policy objectives in their own right.

Why wellbeing belongs on the EU sustainability agenda

The Treaty on European Union (TEU) explicitly states the Union’s aim is to promote peace, its values, and the well-being of its peoples. Societal wellbeing has been linked to the broader sustainability agenda since the adoption of the EGD. The 8th Environmental Action Programme acknowledges the relevance of promoting wellbeing within planetary boundaries, with a long-term objective that by 2050, people live well in a wellbeing economy where growth is regenerative and inequalities are reduced. Wellbeing is understood here as a multidimensional concept encompassing material living standards, access to education, participation in society, and quality of life.

From green and just…

The EGD recognised that sustainability contains both ecological and socio-economic aspects, aiming to protect vulnerable communities through the concept of a ‘just transition’. Instruments like the Just Transition Fund and the Social Climate Fund were established to support regions and sectors most affected by the transition via re-skilling and providing access to energy-efficient housing. However, the Just Transition Mechanism has been criticised for overlooking intersecting inequalities (e.g. gender, ethnicity, disability), acting primarily as a correction mechanism for market externalities rather than providing systemic and pre-emptive protection.

…to clean and competitive

The CID, put forward in February 2025, focuses on improving European competitiveness by increasing industrial production. Its flagship actions aim to create ideal conditions for the transition of energy-intensive and clean-tech sectors. Sustainability has been reduced from a systemic understanding to one focusing on decarbonising industrial production. Social considerations in the CID are largely linked to fostering industrial capacity; the logic suggests that because industry relies on a skilled workforce, it should offer quality jobs. ‘Wellbeing’ itself is absent from the CID legal text, though it may be addressed indirectly via the European Fair Transition Observatory.

Why economic competitiveness isn’t enough

Economic competitiveness is predominantly measured by GDP per capita, yet evidence suggests economic growth supports wellbeing only up to a point. In high-income contexts like the EU, income above a certain threshold does not improve happiness. GDP counts market activity without distinguishing harm from benefit; it can increase due to spending on cleaning up pollution or treating preventable illnesses. Research on OECD countries shows that once a moderate income level is reached, additional GDP brings little improvement in outcomes such as infant mortality or work safety, while social indicators like overcrowding can worsen.

Re-introducing sustainable and inclusive wellbeing

The Joint Research Centre’s (JRC) SIWB framework offers a holistic way to assess development across six dimensions: wellbeing today; social and economic resources for future wellbeing; resilience; nature and planetary boundaries; inclusiveness; and institutional capacity. Findings suggest that while wellbeing usually rises with GDP, patterns are not uniform. Sweden and Finland rank highest due to high income paired with strong performance across all dimensions. Conversely, a comparison to the US shows that while its GDP grew pronouncedly, SIWB declined between 2010 and 2023. In 2024, the EU still faced deep vulnerabilities, with 93.3 million people (21% of the population) at risk of poverty or social exclusion.

How to think beyond the current paradigm

Taking SIWB seriously would require the EU to redefine competitiveness away from GDP growth towards human and planetary wellbeing. The MultiFutures project distinguishes four alternative paradigms: Green Growth, Mission Economy, Post-Growth, and Great Mindshift. The CID currently aligns with Green Growth and Mission Economy, neither of which includes wellbeing as a central ambition. However, more than four in five respondents across six EU countries support beyond-GDP measures for policymaking that focus on wellbeing, sustainability, and inclusion.

Policy recommendations

To re-anchor wellbeing in the sustainability agenda, the EU should:
(1) Introduce eco-social conditionalities for public funding to industry, ensuring support proactively improves working conditions and decreases environmental impacts;
(2) Include wellbeing indicators in the CID’s Fair Transition Observatory to monitor if the transition is socially inclusive; and
(3) Invest in quantitative assessments and modelling of alternative economic futures beyond GDP growth, building on projects like MultiFutures to inform evidence-based policy.

Conclusions

Europe has consistently provided high living standards through public services, but these have not been distributed equally. EU policy should critically evaluate how to pursue wellbeing so it is not achieved at the expense of the most vulnerable or the environment. By ensuring wellbeing is socially inclusive and environmentally sustainable, the EU can pave the way to healthier societies.