26 May 2011

Enterprises Should Focus on Wellbeing Rather than Growth

Reposted in full from The Guardian

'When I run sessions with business executives on growth, wellbeing, and innovation, I say that people don't have to buy my analysis of the problem to buy my ideas on the solution. That's because I think we are now living in an era of "uneconomic growth" and we therefore have no choice but to redefine prosperity as being about wellbeing not growth.

But even if, despite all the evidence, growth is still possible or likely, surely it makes sense for our economy to move on to defining prosperity not as more "stuff" and money but more wellbeing? If you disagree with that idea, you won't like what follows, but I hope you will read on.

Why do I talk about "beyond-growth" economics? Here in a short video I give a précis of what I normally take an hour to explain. We're trashing our one and only planet. On many measures like the LPI and Rockstrom, it is clear we are in overshoot and living off the capital as well as the interest. You wouldn't run a company that way would you?

And, despite all the rapid growth causing all that destruction, since the 1970s, wellbeing has flatlined in the developed world. We know that, at a level beyond which most in the developed world have long passed, extra income brings little or no more wellbeing.

So what's the growth for? And how come the new economic foundation's happy planet index shows us that "underdeveloped" countries such as Costa Rica are far more ecologically efficient at delivering long, happy lives than places like the UK? Professor Tim Jackson summarises our growth obession and affluenza in his TED talk, saying "We spend money we don't have, on things we don't need, to make impressions that don't last, on people we don't care about."

The increase in the scale of this consumerist economy is relentless. And this scale is just as important as the intensity of resource use. While some evidence can be found for relative decoupling, absolute decoupling remains fatally elusive.

The numbers are scary. If we want to reach the (far too high) 450 parts per million CO2 level by 2050, we need every global dollar of economic output to drop from its current 768gCO2/dollar to 6gCO2/dollar. That's an 11% per annum reduction every year on every global dollar output. The best we have done in the last 17 years is 0.7%.

So lets get real: either we discover the perpetual-motion machine or the myth of absolute decoupling is just dangerous denial. What's more, if the developing world is to have any chance of continuing to develop, a moral response to these facts would suggest the rich world needs to find a reverse gear very quickly.

That's why there is a rising debate about the need to move beyond growth, with numerous Nobel prizewinners, politicians and business leaders such as Adair Turner, Ian Cheshire, Bernie Bulkin and 77% of the members of Prince Charles's Cambridge programme for sustainability leadership agreeing on the need to question and dethrone growth.

And you don't have to be anti-growth to buy this. For many, including Heinberg and Gilding, it is clear that 2008 was in any case the end of growth at the macro level. You don't need to look too closely at the concatenation of peak – everything from oil, water, food and metals combined with snowballing environmental meltdown and a bust financial system – to see that growth is over once and for all. Yes there may be blips of growth going up, but only at the expense of other countries and sectors. Absolute growth may well be over.

But in any case, macro-economic modelling by people like Professor Tim Jackson and Professor Peter Victor shows that we can deliver everything we expect from a developing world: growth economy, fiscal balance, high employment, high levels of wellbeing and environmental sustainability, with zero growth.

My vision of flourishing enterprise is based on the kinds of changes Victor and Jackson build into these zero-growth models. And it's based on leadership from companies calling for radical changes in the way the market is set up, leadership in the necessary shift for a Citizen Renaissance from extrinsic to intrinsic values, and leadership in integrating wellbeing in business innovation and strategy.

A flourishing enterprise will be one that aims to maximise the wellbeing it delivers to society and minimises the units of planet it uses to deliver that wellbeing. It will shift its focus from seeing products as benefits to seeing production as a cost of maintenance of delivery to societal wellbeing-needs (not created "wants").

And don't just take my word for it. The (hot-bed of anti-capitalism) World Economic Forum looked forward in its 2010 Redesigning Business Value report to a rapid shift to business in which "we are no longer selling 'stuff'; we are enhancing people's wellbeing overall."

And there is support from politicians around the world. In the UK the prime minister acted on a recommendation from the Quality Of Life Commission by calling on the Office for National Statistics to measure and act on wellbeing measures. He has also said that his Every Business Commits initiative "calls for business to work on improving quality of life and wellbeing." As Ian Cheshire, chief executive of B&Q Kingfisher, has said "We need to radically redesign our business models with less emphasis on growth and more on wellbeing." Or as the International Union for the Conservation of Nature has put it "The relevant metric of sustainability is the production of human wellbeing per unit of extraction from or imposition upon nature" and the Stiglitz Commission, looking into way to stop a repeat of the last international financial collapse, has said "measures of wellbeing should be put in a context of sustainability".

In the necessary updating of capitalism that this will entail, business needs to get comfortable with the shift to more porous, collaborative and hybrid value forms. As Botsman and Rogers say in What's Mine Is Yours: "We believe collaborative consumption is part of an even bigger shift from a production-orientated measurement system that just gauges the amount we sell to a multi-dimensional notion of value that also takes into consideration the wellbeing of current and future generations. With the consideration of a more holistic understanding of wellbeing, we see this epoch as a time when we take a leap and recreate a sustainable system built to serve basic human needs for community, individual identity, recognition and meaningful activity."

As well as a radical updating of capitalism, this journey calls for a deep dive into the dynamics of wellbeing and flourishing. It calls for business to think about the real wellbeing-needs that sit behind products and services. And it calls for supporting not undermining "capabilities for flourishing".

These are not concepts that business is overly familiar with, but I'm excited by the interest I am getting from the corporate world in this new approach to business. In a series of blogs to follow, I will be examining what flourishing enterprise might mean for a selection of companies and sectors.

Above all, flourishing enterprise seems to be applealing to the companies I work with because its a 'yes we can' story. For too long sustainability and 'CSR' have been firmly a NO story about stopping doing things. Whats new here is that a focus on maximising the wellbeing of customers and society is a positive vision. That makes it very empowering for companies and more likely to succeed in helping to create the kinds of change we need.

Jules Peck is a partner at Abundancy Partners and chair of Edelman's Sustainability Group. He is also a trustee at the new economics foundation and a fellow of ResPublica'

No comments:

Post a Comment

Please leave your comment here. Please note these stories are posted for information rather than for debate; if you wish to disagree with something posted, no problem, but since I post both things that I do and don't support, it would be appreciated if the criticism was about the issue.