Degrowth business framework: Implications for sustainable development

Abstract: Recent years have seen a revival in growth scepticism, yet degrowth in relation to the macroeconomic level has received almost exclusive attention. This resulted in a lack of literature on how post-growth and specifically degrowth visions of economy could be implemented, including from the perspective of firms and other organisations. This paper focuses on degrowth literature and fields of knowledge which share a similar or sympathetic perspective regarding the undesirability of economic growth and desirability of living within planetary boundaries while pursuing wellbeing. It then applies degrowth vision to firms and identifies potential elements of a business for a degrowth economy, here referred to as a degrowth business. These elements comprise a degrowth business framework. The framework is centred around the following groups: (1) environment, (2) people and non-humans, and (3) deviation from profit maximisation imperative. It aims to contribute to an emerging discussion on what firms should be like for a degrowth economy and society to be possible.

Journal of Cleaner Production, Volume 262, 20 July 2020

Fit for purpose? Clarifying the critical role of profit for sustainability

This conceptual article contributes to the post-growth strand of political ecology literature, which seeks to find sustainable ways of organizing the economy that do not require economic growth. It explores the idea that transitioning to post-growth societies requires a transition in the relationship-to-profit of business. I first conceptualize relationship-to-profit as the intersection of purpose, investment, and ownership of firms. Specifically, for-profit business structures entail a financial gain purpose, private ownership, and unlimited returns on investment; whereas not-for-profit business structures have a social benefit purpose, collective ownership, and limited returns on investment. I then outline ideal types of for-profit and not-for-profit economies, based on the differences between these two kinds of relationship-to-profit. The first ideal type shows how the for-profit business structure drives consumerism, economic growth, and ecological harm, as well as inequality and political capture, preventing post-growth transitions. These dynamics might be slowed down by businesses that seek to balance private financial gain with social benefit (known as dual-purpose businesses). The
second ideal type describes the dynamics that might be expected in an economy consisting of not-for-profit businesses, which have a legal mandate to pursue only social benefit. This analysis explains how transitioning from for-profit to not-for-profit forms of business might change some of the most problematic dynamics of the economy, allowing for post-growth transformations. A brief discussion of the possible shortcomings of a not-for-profit economy is also offered
Journal of Political Ecology, vol. 27, 2020

Degrowth Conference Budapest, 2016 – Un-common business sense. Toward a growth-independent transformative management model

Presentation by Jana Gebauer

Empirical studies on firm size and growth show that the larger proportions of companies, especially small and medium-sized enterprises (SME), are voluntary or forced non- and slow growers. Yet, the generally unquestioned postulate is that growth is the entrepreneurial raison d’être and an indispensable (societal) obligation for an economic actor. In this spirit, ‘non-growth’ appears to be a ‘non-issue’ in business and management literature and indicates under-performance. The hence limited knowledge about how to successfully manage a non-growing company represents a major hurdle for a broader acceptance and diffusion of alternative growth and development models. We therefore hold that management approaches which defy one-sided quantitative expectations on growth and success need to be emphasized. In recent years, case studies are on the rise presenting motives, strategies and criteria of SME for leaving the growth-path and reducing their growth-dependencies. Based on our own quantitative and qualitative research in this field, we aim to go further into the development of a qualities-driven, growth-independent and social-ecologically transformative management model. To that end, we conduct a meta-analysis of existing case analyses on SME and also include cases and analyses from the variety of alternative economic approaches with diverse regional, historical, and normative backgrounds. Deriving a general model for strategic and operative decision making at the firm level from case analyses on perceived economic niche phenomena within a critical growth discourse will express a break-out from the common sense business imperative.

Degrowth in business: An oxymoron or a viable business model for sustainability?

Based on a review of literature connecting degrowth and business, we attempt to operationalize degrowth in the context of business activity, and consider what degrowth can add to the business models for sustainability discussed so far. In most discussions on degrowth, economic activity has been reduced to relatively marginal activities. We see a need to connect degrowth to more typical business activities, because business is an essential part of the modern world. We put forward seven criteria which can be used to assess whether a company follows the degrowth paradigm: (1) Alternative understanding of business; (2) From business activity to activism and social movement; (3) Collaborative value creation; (4) Democratic governance; (5) Corporate leaders’ commitment to company values in personal life; (6) Reduction of environmental impacts at all stages of product/service life-cycle; (7) Making products that last and are repairable. We use these criteria to assess the performance of a case study company, Patagonia, which is known for its environmental and social record. Our assessment is not meant to be comprehensive, but to illustrate the relevance of the seven criteria. Our criteria offer guidance for aligning business activity with the broader degrowth objectives, and our analysis complements the recommendations made so far for degrowth in national and local policies.

Dr. Stuart Newman: “It Seems to Me That We Are Headed for A Techno-Eugenic Future”

An interview with Dr. Stuart Newman on the excesses of biotechnology and its ramifications with the world of money. Newman is a professor of cell biology and anatomy at New York Medical College in Valhalla, NY, United States.

Rise of sustainability reporting brings questions of motivation, agenda

The use of sustainability accounting has grown apace with a rising demand from both investors and consumers for information on firms’ environmental, social and governance-related (ESG) impacts to the point where, today, 85 percent of S&P 500 companies report on such matters in some form or another. Yet with this rise have also come concerns that, in some cases, these reports are less for informing stakeholders about accountability and growth, and more for managing public perceptions

Common Good-Oriented Companies: Exploring Corporate Values, Characteristics and Practices That Could Support a Development Towards Degrowth

At present, little is known about the corporate characteristics that support a socio-economic development towards degrowth. Addressing this research gap, we conducted interviews with companies which have joined the Economy for the Common Good, a social movement which identifies the common good as the purpose of economic activity. Our analysis was guided by Latouche’s (2009) eight ‘R’s which, he claims, should trigger a transformation towards degrowth: re-evaluate, reconceptualize, restructure, redistribute, relocalize, reduce, re-use and recycle. Among the companies we studied, we observed a change in values in line with Latouche’s claim. In their management practices, the companies are guided by values such as fairness, cooperation, diversity, independence, democracy, transparency, and ecological sustainability. This is exemplified by democratic ownership and decision-making structures, cooperative trade relations, a preference for local suppliers and the redistribution of surpluses. Furthermore, for these companies, profits are of reduced significance as an indicator of success. Nevertheless, some companies in our sample do still consider further company growth to be necessary. But, as the limitation of the company’s size is just one possible way in which a company can contribute to an overall reduction in economic growth, the companies bear due to their compliance with Latouche´s strategies the potential to contribute to a societal transition towards degrowth.

Framing Social Enterprise as Post-Growth Organising in the Diverse Economy

Organising for post-growth society is called for to enable living on our finite planet. While previous research has suggested that social enterprise could be one form of post-growth organising (PGo), these suggestions might not rely on critical studies of social enterprise (SE) or studies exploring everyday practices of SE. This paper asks to what extent can SE practices be considered to be post-growth organising and examines two empirical examples of self-employment identified as SE and sensitive to the elements attached to PGo. They functioned to develop more sustainable solutions in the field of co-working for social innovation and up-cycling used clothing. The analysis of actors’ everyday ‘sayings’ and ‘doings’ reveals how SE is used to channel social and environmental concerns in working life. Moreover, self-employment was not enough to constantly provide a living wage, but actors sustained themselves by navigating the diverse economy. Subsequently, they had to relate to the economic growth imperative at an organisational level. By making visible the ambivalence of the notion ‘social enterprise’, this study encourages the conducting of research that focuses on the everyday practices perceived as PGo.

Towards Growth-Independent and Post-Growth-Oriented Entrepreneurship in the SME Sector

For a long time the postulate that quantitative growth is the entrepreneurial raison d’être and an indispensable obligation for a company has remained unquestioned. Empirical studies on firm size and growth show, however, that a large fraction of small and medium-sized enterprises (SMEs) are non-growers or slow growers. These SMEs often show a more qualities-driven perspective on the growth question and a higher awareness of diseconomies of scale. Given the rather slow reception of this issue by the management literature, the knowledge about how to successfully manage a qualities-driven but non-growing company is currently limited. This deficit is problematic in its own right but also because such growth-critical companies might become relevant in the context of the degrowth movement. Yet so far, the corresponding societal and academic discourses have largely blocked out market-based actors. Against this background, the paper presents a structured aggregation and meta-interpretation of the few currently available empirical studies on entrepreneurial approaches towards growth independence. Its aims are to provide a starting point for the development of corresponding business practices and to show how growth-critical SMEs can potentially contribute to a transformation towards a post-growth society.

Business Development in Post-Growth Economies: Challenging Assumptions in the Existing Business Growth Literature

Existing literature has not specifically examined individual business growth in post-growth economies. This paper challenges dominant assumptions in the business growth literature by considering post-growth economies as an organisational context characterised by natural resource scarcity and an absence of macro-level economic expansion. We investigate conceptually how such a context impacts business growth theory by seeking to answer three major questions: (1) What is business growth? (2) Why do businesses grow? (3) And how do businesses grow? Accordingly, post-growth contexts pose three major challenges to business growth theorising: (1) business growth as an increase in measurable outcomes, (2) resource competition and dispositive path dependencies, and (3) detrimental growth modes and strategies. Based upon six revised assumptions, we re-define business development in line with forces at work in post-growth economies. We further suggest a multidimensional research agenda that can catalyse future discussions of post-growth organisations. These discussions have the potential to overcome the inertia in business growth theory and its discrepancies with practice.

Standard Oil Co by Pablo Neruda

The discussion of peak oil and the worldwide struggle against oil companies fracking and exploitation brings us back to this poem by Pablo Neruda. Food for thought…

Frugal Value – Designing Business for a Crowded Planet

We live in unprecedented times. Climate change and ecosystem collapse are altering our world beyond recognition, and a growing global population is exacerbating the pressure on the resources that power our economies. How should the private sector respond to the new risks and uncertainties of our Crowded Planet?

Frugal Value contests the notion that companies can rise to the great challenges of our time by adopting so-called ‘sustainable business’ practices. Instead, the acute ecological crisis requires an all-round rethink of what business does, and how it does it. This book explores what business responsibility looks like today, and how it could be put into practice through far-reaching changes to companies, ranging from new approaches to product design and business models to reconfiguration of operations and innovative ownership structures.

Frugal Value provides practitioners and scholars with the perspective and tools they need to design companies that help drive the socio-economic changes so urgently required for a sustainable and just world.
(Description by the publisher)

Un-common business sense

Empirical studies on firm size and growth show that the larger proportions of companies, especially small and medium-sized enterprises (SME), are voluntary or forced non- and slow growers. Yet, the generally unquestioned postulate is that growth is the entrepreneurial raison d’être and an indispensable (societal) obligation for an economic actor. In this spirit, ‘non-growth’ appears to be a ‘non-issue’ in business and management literature and indicates under-performance. The hence limited knowledge about how to successfully manage a non-growing company represents a major hurdle for a broader acceptance and diffusion of alternative growth and development models. We therefore hold that management approaches which defy one-sided quantitative expectations on growth and success need to be emphasized. In recent years, case studies are on the rise presenting motives, strategies and criteria of SME for leaving the growth-path and reducing their growth-dependencies. Based on our own quantitative and qualitative research in this field, we aim to go further into the development of a qualities-driven, growth-independent and social-ecologically transformative management model. To that end, we conduct a meta-analysis of existing case analyses on SME and also include cases and analyses from the variety of alternative economic approaches with diverse regional, historical, and normative backgrounds. Deriving a general model for strategic and operative decision making at the firm level from case analyses on perceived economic niche phenomena within a critical growth discourse will express a break-out from the common sense business imperative.

This media entry was a contribution to the special session „Un-common business sense“ at the 5th International Degrowth Conference in Budapest in 2016.

The Economy for the Common Good: an approach to alternative company practices in accordance with degrowth?

The Economy for the Common Good (ECG) is a social movement as well as an alternative economic model that views the common good as the purpose of economic activity. Monetary profits are seen as a mere means. Enterprises participating in the ECG compile so-called common good balance sheets, which assess to which extent the company acts according to values, such as ecological sustainability and solidarity, in relation to central stakeholders. This paper examines the ECG movement’s conception of company practices and their potential to contribute to the development towards a degrowth society. The analytical framework is based on Latouche’s (2009: 33) “virtuous circles of eight R’s: re-evaluate, reconceptualize, restructure, redistribute, relocalize, reduce, re-use and recycle”. Within this framework, the concept of the ECG is compared to a range of corporate social responsibility instruments (e.g. EMAS). Among other findings, the ECG proves to be the most comprehensive instrument, since it encompasses the whole value chain and almost invariably addresses environmental and social topics. Furthermore, the EGC is the only explicit promoter of sufficiency. In the empirical part of the study, interviews with companies from the ECG movement are analyzed. First results show that company practices oriented to the common good are predominantly consistent with the eight R’s. The enterprises claim their core businesses are clearly managed with an ecological and/or social orientation. Concerning growth, however, they apply different strategies as some are shrinking, while others remain static or grow. To conclude, the ECG exhibits a number of characteristics that link to degrowth.

This media entry was a contribution to the special session „The Economy for the Common Good: an approach to alternative company practices in accordance with degrowth?“ at the 5th International Degrowth Conference in Budapest in 2016.