The Road to Sustainability — Decoupling Growth from Material Use
Any meaningful progress on sustainability must address the obsession with growth in the capitalist model
The Growth Imperative
While discussing business with an acquaintance, I came across a very often used sentence “We did 200 tons last year & we want to double it in the next 3 years”. This is indeed how most businesses look at growth, and that’s the direction most businesses all over the world are still moving to. However, if we continue to operate like this, we all know we will eventually run out of resources and do irreparable damage to the planet in the process.
If people all over the world adopt the lifestyle & consumption patterns that we currently have in the developed countries (which is the trend) we will soon have a situation where there is a severe shortage of resources, destruction of remaining forests & extinction of most species living on this planet. According to the World Resources Institute almost half the Earth’s original forest cover is gone, much of it destroyed within the past three decades. Forests provide habitat for 80% of plants and animals that live on land. Needless to say, we are interdependent with nature so if other species do not survive, neither will we. You can’t put food on the table if there are no bees to pollinate the plants.
However, we don’t generally think about this as we go about living our busy life. And even if we do, we do not know how we can change the system that we are very much part of.
Are we moving the needle with sustainability initiatives?
Over the last decades, there has been increasing awareness of environmental issues both among the public & in the businesses. Sustainability as a concept has now been adopted by almost all businesses. All companies today talk about sustainability, have dedicated sustainability departments & publish their annual sustainability reports. The question is — is that really going to have the kind of impact that is needed to save the planet?
The data shows that we have not made enough progress. According to the circularity report published by Amsterdam based organization Circle Economy, the world is only 9% circular. That means, 91% of what we mine, harvest, extract & produce every year in our economy to sustain the human society, never comes back — its either lost as waste or stays in the economy as durable items like buildings, automobiles, etc. Further, at an aggregate level, we are actually moving in the wrong direction. According to the latest circularity report, we moved from 9% circularity in 2019 to 8.6% circularity in 2020. This means we are converting large amounts of natural resources at an increasing pace into stuff that can never be recovered back by nature to make use of.
So, although individually we are making progress in terms of embracing sustainability, at a macro level it is still not having the required impact. The good progress on sustainability metrics by companies is often offset by the increase in business volumes in new geographies, as businesses go after growth & capture new markets. In general, the businesses are under ever-increasing pressure by the investors to show growth year after year. Progress in the world is still measured with metrics like GDP and IPI growth. Growth, as measured today, will lead to more pollution, traffic jams, loss of forests & other undesirable consequences. We cannot continue to grow forever like this on a finite planet.
Growing Inequalities
If we couple the above facts of environmental impact with wealth creation which is at the heart of our material-based economy, we find another stark fact. According to the Oxfam report, 82% of all the growth in global wealth in the last year went to the top 1% wealthiest people in the world while the bottom 50% saw no increase at all. The world’s 2,153 billionaires now have more wealth than the 4.6 billion people who make up 60 percent of the planet’s population.
So, in other words, the current model which is assumed to be beneficial for all and is supposed to take masses out of poverty is not amazingly effective. It is concentrating wealth at the hands of a very few and increasing inequalities in society. If we look back at history, increased inequalities have always led to social disruption & breakdown in societies. So, it does make sense to take notice of it and take proactive steps to move to a model that leads to a more sustainable & equitable world.
Thinking Differently
One of the ways to get out of the vicious circle of “consumption drives economy, so we need to boost consumption” is to move from a product focussed model to a solution focussed model. We do need products but the whole premise of business growth or success need not be around products. That is, the focus of business may not be manufacturing and selling more and more products, but rather around meeting the societal needs in a way that is fair, inclusive & positive for the environment.
A good early example of this is a model where architect Thomas Rau worked with Philips Lighting to purchase light as a service. The result was a new ‘pay-per-lux’ model adopted in this collaboration. In such a model the product becomes irrelevant. The consumer need in this case is light and is charged only for the light he/she uses. The product — the light bulb, remains the property of the producer. This incentivizes the producer to make the product as durable and as efficient as possible. The need to sell more light bulbs or fixtures to stay alive in business is no longer there. Neither is there a need to spend large amounts of resources to come up with new models every year & make the old models obsolete to stay ahead of the competition.
Hence, it takes businesses away from the focus on the product to the focus on consumer or societal needs. This can lead to many creative solutions & reduce environmental impact. Similarly, a healthcare company can have a business model around keeping you healthy. The company can help you maintain good health and prevent you from getting sick by incentivizing you to keep fit, eat the right stuff, have regular checks, etc. Again, there is no incentive for the healthcare company to produce & sell more medicines or spend large amount of resources for coming up with solutions for health issues that could have been prevented in the first place. This way we can decouple growth from material use.
Many other fields like fashion, electronics, hardware that inherently depend on perceived or planned obsolescence (explained very effusively in the short movie The Story of Stuff) to drive business growth can adopt new strategies that do not require incessant use of virgin raw materials.
If we really think about it the number of products that we really need to live a satisfying life is relatively small compared to the plethora of products that are out there in the market. Most of the products come with the promise of making our life easy. Conversely, with ever-increasing products at our disposal, we still find ourselves having less time for things we really want to do.
The Road Ahead
So where does one start? For one, we can take a step back and start asking the basic question — what business are we in? If we are in the mobility business, we need not think of cars but rather think of how to get people from point A to point B in the most effective manner without damaging the environment.
The United Nations sustainable development goals (SDGs) provide a good framework of societal challenges along with the needs of the planet. If the businesses can reorient themselves from a product focus to these societal challenges it can go a long way in shaping the future in a much more sustainable way.
The COVID19 crisis has given us an opportunity to re-think and re-shape the economy for future generations to come. It is widely believed that when things come back to normal it is going to be a different world. If there is going to be a big shift anyway & large sums of taxpayer money will be injected in the economy, then why not take this opportunity to make it a positive transition for all life on the planet. After all, this is the only living planet we know of !!
“We do not inherit the Earth from our ancestors — we borrow it from our children.”
-Native American Proverb
