How to tell if a company really protects the global commons
By Kate Raworth, author of Doughnut Economics
What in the world have we inherited? Thanks to the 20th century’s degenerative industrial design, our economies are systematically running down this extraordinary planet. We take Earth’s materials, turn them into stuff which we use for a while, then throw away. This take-make-use-lose industry cuts against the very cycles of life, logging ancient forests and fracking the land, filling the atmosphere with greenhouse gases and the oceans with plastic – all in the name of turning a profit. We seem set to go down in history as the “era of reckless overshoot” – to be remembered as the generation that pushed the global commons, Earth’s life-supporting systems, towards collapse.
Do we have the vision to turn this legacy around – and what role could business play in that? Over the past five years, I have discussed this with a wide range of business leaders, from FTSE 100 executives to the founders of community-based cooperatives – and have been fascinated by the wide array of their responses.
The first and oldest response is simple: do nothing. Why change the business model when it is delivering strong returns? The aim is to maximise profits and this is mostly done entirely legally – so, until regulation hits a business’ costs, many will carry on as before. For decades, most companies worldwide took this tack, treating sustainability as something they didn’t need as it did not increase their share prices. But times have changed, along with the climate, and many now recognise that doing nothing no longer seems so smart, for people, planet or profit.
That’s why the next response has become the most common: do what pays by adopting eco-efficiency measures that cut costs or boost the brand. Cutting greenhouse gas emissions and reducing industrial water use are classic efficiency measures that tend to lower company bills. Other businesses pursue “green” labelling to appeal to customers willing to pay a premium for eco-friendly products. This looks like a good start, but it is a long way off the scale of what is needed.
The third, more serious response is: do our fair share in promoting sustainability. To their credit, companies taking this approach at least adopt science-based targets for reducing resource use, from fertiliser and water to greenhouse gas emissions. But – as anyone who has been left holding the restaurant bill once fellow diners have chipped in with what they think is their fair share knows – it never quite adds up.
Worse, “doing our fair share” can quickly flip into “taking our fair share”. When some companies first learn about planetary boundaries – and the limits of pressure that can be put on Earth’s systems – they behave as if they are looking at a cake to be sliced up and handed out. Trapped in the old mindset of degenerative industry, the first question that occurs to many of them is: how big a slice of that ecological cake is ours? How many tonnes of carbon dioxide can we emit? How much forest can we log? Calling for fair shares risks perpetuating the idea that running down the living world is still a corporate right worth fighting for.
The fourth response – a true step-change in outlook – is to do no harm, an ambition often known as “mission zero”: designing products, services, buildings and businesses that aim for zero environmental impact. Examples include zero-energy buildings that generate as much electricity as they use, and net-zero-water factories that continually recycle their internal water supply instead of extracting ever more water from stressed underground reservoirs.
Aiming for net-zero impact is an impressive departure from last century’s degenerative industrial design – even more so if it includes not just energy and water but all resource-related aspects of a company’s operations. It’s a sign of impressive efficiency – but an avid pursuit of resource efficiency is simply not enough. As the architect and designer William McDonough said: “Being less bad is not being good. It is being bad, just less so.”
And, once you think about it, pursuing mission zero’s do-no-harm goal seems to almost intentionally stop short of something far more transformative. After all, if your factory can generate as much energy as it uses from the sun, why not aim to generate more? Instead of seeking merely to “do less bad”, industrial design can do good by continually replenishing, rather than more slowly depleting, the living world. Why simply take nothing, when you can give something instead?
That’s the essence of the fifth business response: be generous and create an enterprise that is regenerative by design, giving back to the global commons that we all rely on. More than a task on a to-do list, it is a way of operating that embraces biosphere stewardship. Think of farms that sequester carbon and restore the soil as they grow food; buildings that put cleaner air back out into the surrounding city; plastics companies that turn methane into textiles to be used again and again rather than thrown away. Such enterprises serve to reconnect human activity with nature’s cycles – and hence regenerate the living world.
Every company can ask itself: what are we currently set up to do? And, crucially, what changes in our company’s design – from its values and purpose to how it is owned and financed – are needed to make the leap to regenerative industrial design possible? Once these questions are answered, business can play a key part in transforming our future and our reputation. We still have a chance to reinvent our legacy and – instead of reckless overshoot – be remembered as the era of generous turnaround. So what is business going to do?
Doughnut Economics: Seven Ways to Think Like a 21st-century Economist by Kate Raworth is published in hardback and eBook by Random House Business Books