Our economic well-being relies on indefinite growth in a finite system, raising sustainability concerns. But, if we dared to ask: What would the world lose if your company disappeared? Companies might find themselves in a totally novel position on how to justify their existence: Through assessments of their overall impact on society and the planet, or indeed having to advocate how their business case positively contribute to all facets of life.
The finance industry does have its share to play in a ‘just transition’ to a low carbon and more ‘doughnut-ty’ economy. This is a given. I have written repeatedly about it.
In most contexts, the finance industry is characterised and promoted as a ‘driver’ of said transition. But is that really so? After all, the by far and distant most frequent tenor in ESG (the finance industry’s term for all things ‘sustainability’) is predominantly about risk. With that in mind, let's tell it as it is: The finance industry’s ESG discourse is opportunistic. As indeed all it’s actions and views have been, and as indeed the the industry’s clockwork is set out to be and function. Opportunistic.
‘System positive’. The latest term I came a cross in the finance world, and which intends to identify business that are particularly well set up to survive the tribulations to be expected in the decades to come. Immediately the cynic in me asks: Another addition to the sustainability bullshit bingo?
And yet: the 5 questions proposed for scrutinising companies are very sharp, very relevant and very insightful.
They only fall short of one: Will the company thrive within or even thanks to the Doughnut Boundaries?
Overconsumption or ‘simply’ consumption?
Fair resource use, or resource depletion?
Fair share, equal share or acquired share of resources?
Those are questions that pop up when the Planetary Boundaries are being discussed.
“Is Europe living within the limits of our planet?: An assessment of Europe's environmental footprints in relation to planetary boundaries”, published in April 2020 does exactly that: it evaluates and calculates the European performance for planetary boundaries by taking a consumption-based (footprint-based) perspective. This is turn is interesting as it relates environmental pressures to final demands for goods and services.
And the results are ... shall we say: a stark call to action.
There are two approaches on how we can define of what is viable and desirable for our global economy.
In one, the 'soft attributes' and non-physical factors such as consumer desires, lifestyles or distribution of goods are a fixed attribute. In the other, quantifiable, physical attributes - amongst them natural resources - are fixed.
The challenge of boards in this time and age: Recognising that the first - the present - is failing. And outlining the path towards the second.
Over the last 12 months, the Doughnut Economics Action lab developed a methodology – denominated ‘Creating City Portraits’ - , tested in three different cities of the global North. So the question is: Could the methodology work for business too? The answer: Yes in principle. But commitment is at the heart of it.
The world ‘at the other end’ of the Corona tunnel could never be the same as before. It could be so much better than ever – with a real opportunity to put it on the rails that will make it the place we desire it to be.
Or: it could be same, but indeed worse place then ever. Where past misbehaviours is ignored at best, OK’ed at worse.