I am in no position to lecture anyone about adapting their lifestyle to fight the climate crisis. I’ve lived in spacious homes and owned unnecessarily powerful cars all my adult life. I’ve travelled to to dozens of countries on five continents and am in the million-mile club of a major international airline.
While an imperfect work in progress, my recent efforts to modify my lifestyle might illustrate a useful point about business adaptation. I’ve foresworn red meat, eliminated other intensively-farmed foods, and am embracing vegetarian cooking. Giving up the cars was made easier by moving to London, where in an average week I take buses, Tubes, overground trains, city bike share, and occasionally the Thames river boat. No longer following Formula 1 was hard for a lifelong petrolhead, but lines must be drawn somewhere. Sometimes “better” choices are selective rather than sacrificial. I will reluctantly accept hybrid for my next car (it’s such a compromise technology!) which will be needed when I leave the city: EV charging in the English provinces is still so hopelessly sporadic it’s like foraging for mushrooms.
In other words, mine is a tale of an affluent global Northerner attempting the elaborate puzzle of lowering their ecological footprint by confronting the sources of unnecessary and externalised costs in their consumption. It’s messy, it challenges long-held assumptions and entitlements, and can be uncomfortable because it introduces inconvenience, search or planning friction that wasn’t there before.
Businesses have a similar journey to undergo if we’re to scale personal efforts such that we have a shot at achieving Net Zero carbon emissions by 2050. Right now, most are doing the minimum: switching to renewable energy and preparing to comply with new non-financial disclosure regulations about the impact of their operations on natural capital. More progressive firms are reducing material content in their products, which saves them cost, so this is an easy sale to profit-minded executives. But what happens when the toilet roll has been narrowed, made entirely of recycled pulp, and had its inner tube removed? The limit to this Green Growthy leaning-out of products is when it can no longer do its original job. Anyone who has wetted their trousers wrestling the cap from a sealed, tissue-thin plastic water bottle knows we’re approaching that point.
More ambitious efforts are impeded by the realisation that deeper change will hurt the current business model, depriving investors of profits as surely as I had to part with my lovely orange sports car. For my MSc research project I went looking for firms attempting more than compliance and Green Growth tokenism: I sought out Post Growth Pioneers, firms willing to forego entitlement levels of profit for larger prosperity outcomes. I found six firms from different sectors pursuing bold Post Growth strategies. Clearly this is too little data from which to identify best practice, but based on detailed conversations with leaders familiar with the internal discussions I identified five common threads across the cases:
- Enlightened growth aspiration setting: all 6 Post Growth Pioneers defined successful growth in terms beyond scale and profit growth, whether towards a larger social or climate impact goal or a market-shaping goal;
- Post growth capital structure and investor relations: the PGPs took active measures to reduce the pressure to grow and protect a larger non-financial mission. Measures included reducing commercial borrowing, granting employees a veto over potential acquisitions, and in one case separating capital-raising from equity ownership via a charitable foundation;
- Non-financial employee remuneration: the PGPs took various steps to reduce growth-promoting behaviour by tempering financial incentives. A bank I studied went so far as to outlaw the payment of bonuses against predetermined targets, to avoid risky investing behaviour by bank employees;
- Stakeholder partnership orientation: PGPs all look actively beyond their own boundaries to build larger coalitions around issues too large to solve alone, such as raising wages to a liveable level in all markets. These are often matters of competitive equilibrium, of course: encouraging others to do the right thing reduces the risk of putting oneself at a cost disadvantage;
- Mission-/morals-informed innovation: consumer materialism is a critical front in the battle to reduce emissions. This is often driven by “new flavours and colours”-style innovation, often called novelty-seeking innovation to distinguish it from needs-based innovation such as life saving medical technology. PGPs actively consider the social value of innovation opportunities, sufficiently agnostic to growth to be content to avoid purely novelty-seeking projects.
I’ll cover these in more detail in future posts, but I believe these five themes represent the plausible outlines of an approach to Post Growth business strategy.
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Links to my earlier posts:
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Links to my earlier posts: