books business circular economy

Five business responses to the environment

This week I’ve been reading Doughnut Economics, by Kate Raworth. It’s a fine piece of work which I shall review shortly, but today I wanted to pass on something that I found useful. In a chapter on regenerative business and the circular economy, Kate describes five different responses that businesses might have to the environment and the idea of planetary boundaries.

  1. Do nothing – this is the standard response and the most obvious thing to do. Unless you’re forced to act, you do nothing at all about it. This may protect profits in the short term, but it makes your business part of the problem rather than the solution. And it may backfire: as climate change and resource depletion affect global supply chains and the way that we produce and consume, your business may be at risk anyway, and you’ll find yourselves left behind by more proactive companies.
  2. Do what pays – plenty of things that are good for the environment are also good for business, such as energy efficiency. So a second response from business might be to adopt the practices that will make them more money. This is even better if you can get your PR team to shout loudly about every incremental improvement, and burnish your reputation in the process. But it doesn’t get to the heart of the matter, and smarter customers will know that ‘less bad’ is not the same thing as doing good.
  3. Do our fair share – Another phrase you might hear from business is that they want to ‘do their bit’ for the environment. A business takes a view on what is a fair and responsible course of action, and commits to that. It asks what is expected, what others are doing. This isn’t tokenism – they are taking responsibility, but no more than the competition and with no effort to lead or fundamentally rethink the business.
  4. Do no harm – getting towards the more serious end of possible responses, some businesses commit to zero harm, or zero carbon. This means taking responsibility for the whole of the business and its supply chain, and working to reduce its environmental impact across the board. It’s fundamentally different from the approaches above, and represents a much more ambitious commitment.
  5. Be generous – finally, a business could choose to give back more to the environment than it takes, through a business model that is restorative and regenerative by design. And it will be by design – this level of response is rarely going to be something that can be retrofitted to an existing business.

You could also apply these five responses to politics. George Osborne gave us a good example of the ‘do what pays’ approach when he was chancellor, insisting that Britain’s carbon reductions shouldn’t move any further or faster than any other country, in case we put ourselves at an economic disadvantage. I also see them in architecture. You can create buildings that are marginally more efficient, or zero carbon standard, or that will give more than they take.

The fifth response here is the most unusual, naturally, but I have written about a few businesses that would fit the bill. Ocean farming, green gas, cactus or seaweed biofuels, or Newlight’s plastics made from waste greenhouse gases would be on that list. These sorts of businesses are vital examples for showing what is possible, so I’ll keep writing about them as I find them.

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