Growing a Business on a Finite Planet: Can it ever be good?

What does Green Growth, Degrowth and Alt-Growth mean for you?

If we want to halt the climate crisis we need to be organised, invest lots of money and effort, and we need to do it quickly. Businesses are good at that sort of thing, it's just until now they’ve mostly been pointing in the wrong direction.

Is it possible to run a business in a way that doesn’t make things worse for the planet and its people? Growth is the lifeblood of business, but can we decouple it from greenhouse gas emissions, declining biodiversity and exploitation of the poorest?

The answer depends on who you ask. In today’s post we look at some competing points of view; Green Growth and Degrowth, before sharing a more nuanced and practical idea: Alt-Growth.

In London the crocuses are starting to push their way through the soil and the buds are appearing on the trees, Spring is coming. Growth is a natural process.

But I also know that trees grow until they hit a healthy size and then reach a balanced state in which they can continue for centuries.

Can businesses be more like trees than like cancers; growing endlessly, extracting and emitting with no regard for people and planet?

GREEN GROWTH

The Green Growth movement thinks so. Green Growth is a concept taken from Economics and usually applied at the national level. It’s a mix of GDP, technological optimism in renewable energy and a belief that it is possible to ‘do capitalism differently’ (Mazzucato).

But I’d like to reframe Green Growth as something more local, more practical and something progressive leaders can aim for now, even if more radical change may one day be required. 

Green Growth for a business means running a company that can thrive, give people meaningful jobs and support communities whilst reducing emissions and environmental impact to near zero. In short it’s a business that creates profit AND positive impact, i.e. not acting like a parasite, sucking the life out of its host. Think Benefit Corporations, B Corps. 

Growth doesn’t have to be bad. But it does have to be nuanced. 

For example, it is good for Depop, Vinted, Backmarket and Refurbed to grow at the expense of newly manufactured clothing and electronics firms respectively.

Apple, and even Dyson, are waking-up to the idea that quality products given a new lease of life, represent a resilient, planet and wallet-friendly business model. If what you make and sell isn’t perishable, you’d best have a fast-scaling refurbishment business model.

There are still too few well-evidenced Green Growth case studies going around, Forbes’ Green Growth 50 is a starting point. One example I like is IKEA who have managed to decouple revenue growth from greenhouse gas emissions. 

They’re doing it by thinking about the whole IKEA system, from product design, to standardising components, to reducing waste, creating trade-in schemes and stores, buying plastic waste recycling plants to maintain the value of materials in a circular chain. Now I know that IKEA isn’t the perfect model, having contributed to a throwaway attitude to cheap homewares during the worst excesses of the dying ‘Consumer Age’ but they appear to be changing course.

DEMATERIALISATION

Another way to do business whilst reducing impact on the planet is dematerialisation. 

Simply put, how can you help people meet their needs without having them buy physical stuff that has to be mined out of the ground or physically manufactured? 

As an example:

Whether you like it or not, many people have status needs. And fashion has been fulfilling that. But if you replace real clothes with virtual skins in e.g. in a virtual space like Fortnite, you’ve created a dematerialised value exchange.

Remote and hybrid working is another example of a rapidly dematerialising sector. So what if you could swap things for experiences; anyone for a Foraging, Cookery and Lunch experience?

What other needs might be met in a dematerialised way? 

Growth-driven businesses is what we’ve got. Realistically they aren’t going away in the next five years. So how do we re-work the existing system whilst simultaneously experimenting with new ones? Emphasis on the plural “ones” here, because we are going to have to remain open to a number of competing alternatives that will appear over the next few years.

DEGROWTH

There is a competing point of view; that green growth is a distraction from the real work that needs to be done to reset our relationship with the planet. 

Degrowthers argue for shrinking the economy to a less damaging size and importantly, ensuring redistribution of wealth at the same time so the poorest don’t suffer disproportionately (e.g. from loss of jobs). This is usually accompanied by a call to shift wealth from the Global North, who did all the emitting, to the Global South, who are paying the price.

A degrowth economy would see us shifting into shared and non-motorised transport, plant-based diets, improved energy use in buildings and making the purchase of second-hand products the new normal. It also involves taking housing, food, healthcare, childcare and mobility out of the market turning them into universal basic rights. This isn’t just economics, it’s also of course about politics and power.  

There’s a lot to like but there’s still the question of how long it would take to persuade societies to adopt degrowth?

So far there has been a distinct failure to create a mass movement for degrowth over the last 50 years and I don’t see it happening in the next five either. Precious time we cannot afford to waste.

THE CLEAN SHARE

Whether you believe in growing green or shrinking fairly, for the time being the survival of millions of people depends on replacing dirty, carbon-intensive rivals with clean and green firms. That’s the job EdenLab is here to do. 

The firms that assist the transition rather than resist it - that grow their clean share - will be the ones that are still around in ten years.

I believe you can encourage businesses to pursue successful Green Growth strategies whilst also ‘degrowing’ the worst excesses of consumption.

• What if you bought meat far less often but when you did, you choose the best you can afford?

• What if rather than flying-abroad several times a year for a week’s holiday, you go for six weeks of intense adventure every three years instead?

• What about better meal planning with your supermarket to help you reduce your food waste?

• What about banning heavy SUVs whilst still allowing bigger family cars?

ALT-GROWTH

There is a third way. One that is more nuanced than either the Green Growth or Degrowth schools will allow. It is also more practical and more holistic. I’m calling it Alt-Growth (borrowed from the world of Alt-Protein). 

Alt-Growth accepts that people need things (clothes, shoes, toothpaste) but that this needn’t define them. Critically Alt-Growth puts personal growth rather than depersonalised, happiness-neutral GDP at the heart of the equation. 

Personal growth can come from learning, from connecting with people in your area, from satisfaction in working on a collective mission that is bigger than just work, or shopping. If we could be honest with ourselves, who wouldn’t trade a new pair of flashy sneakers for a more profound sense of meaning and fulfilment?

What I am talking about here is a more future-facing kind of prosperity, one that puts people and planet on a par with profits and in a more harmonious balance.

What sorts of business practices would be consistent with an Alt-Growth agenda?

There are three big principles:

1. When you grow, you grow green and not excessively, new innovations are insistently green and clean, nothing else gets the ‘green light’.

2. You pursue a degrowth agenda on the planet-negative parts of your portfolio. That means shuttering some brands and products. 

3. You think more holistically across the entire value chain - customer, employee, partners, family, community, Nature  - and always put their wellbeing or personal growth ahead of other priorities.

We need to experiment with new models and ideas to find out.  That’s what the ‘lab’ in EdenLab is for, and we’re keen to meet progressive change-makers in businesses keen to explore with us, so drop us a line.

What might that look like? 

• Firms that don’t just enable people to buy things but actually connect them in a hands-on way with the causes they care about? E.g. an outdoor wear company that offers excursions to regenerate the land, tying product, experience and impact together.

• Firms that learn from family businesses and can think about the next generation not just the next quarter? E.g. a dedicated intergenerational board with 50 year objectives.

• What would a business that is more in touch with the seasons look like - one that grows in the spring and hibernates in winter? 

If you liked what you read today, please share and do get in touch with us.

A call to find out more

We’re running an open, free online meet-up on the 28th February to explore these ideas and what you might do about it, please register here.

Thanks,

Leo

PS. If you liked this and want to go deeper, there’s a great critique of Green Growth and Degrowth here.