Mölsheim, Germany, photo by Karsten Wurth.

Changing businesses and entrepreneurship

In this section we look at the work of businesses and entrepreneurship in tacking climate change and initiating change and transformation.

Approaching climate change as a symptom of the growth imperative and the for-profit system [1], we can turn to alternative models and structures of business and entrepreneurship. A growing field of research has addressed the narrative of green growth, which at first look can seem a promising path for economic systems and businesses to steer away from projected increased global warming. Nevertheless, the concept has been challenged, with experts pointing out that there is no empirical evidence that supports green growth, as decoupling of resource use from GDP is an extremely unlikely outcome [2].

Another strategy that is often heard when it comes to businesses addressing climate change and sustainability issues is Corporate Social Responsibility (CSR), in which businesses are voluntarily liable for their externalities. Once more though, the proposed strategy falls short, as research points to “the close connection between CSR and capitalism inherently limits the potential of the former to address the problematic implications of the latter” [3].

An introduction to not-for-profit business models

In this short video, Jennifer Hinton, a researcher for post-growth economic models, introduces a not-for-profit-world model, where the key purpose of business would shift from profit-seeking to meeting the needs of people and the planet.

Planetary boundary assessment by Houdini Sportswear

A concrete case of “business other than usual” is that of the outdoor gear company Houdini Sportswear. In 2017 they stipulated a manifesto for the company that includes language such as:

“We acknowledge that human activities have created a dire situation for the planet we live on. Companies have a big part in this, and therefore a big responsibility. The current system, where products are produced, used and discarded at an ever increasing pace, is not working. Our mission is to transform into a circular system in harmony with our world. Nature itself is the blueprint. […] We will fight overconsumption. […] We will keep working to minimize our negative footprint, move beyond zero, and leave an entirely positive impact on the world” [4].

Their sustainability initiatives include rental, reuse, and repair programs, as well as publishing sustainability status reports, and launching the first ever corporate sustainability report, based on the Planetary Boundaries framework.

Global Alliance for Banking on Values

Another example of an alternative to mainstream business practice brings us to take a look to the financial system. The vast majority of banking institutions has as sole goal the maximization of profits, with no regards for their environmental and social impacts [5]. This is evident when noting the trillions of dollars that the banks have continued to invest in fossil fuel programs over the last years.

The Global Alliance for Banking on Values (GABV) is a network of banking institutions that have social and environmental impact as well as sustainability at the core of their business model. The following passage is an excerpt from GABV’s position paper on climate action and the role of finance, published in September 2021, ahead of COP26.

There is an increasing consensus about the critical role finance must play to address climate change. Yet commitments to act across the financial sector while growing are not universal and where they do exist there remains a profound disconnect between commitments and action. Enormous quantities of finance continue to flow to unsustainable activities exacerbating the problem of climate change, and inadequate flows of finance are directed to activities that offer a solution. This must stop. The IPCC’s recent report is unequivocal. Climate change is widespread, rapid and intensifying. Without financial institutions playing their part, addressing both environmental challenges and their consequences for people and ecosystems, we will not be possible. [6]

References

1. Hinton, J., and Maclurcan, D. (2016). How on Earth: flourishing in a not-for-profit world by 2050.

2. Hickel, J., and Kallis, G. (2020). “Is green growth possible?” in New Political Economy, 25(4), pp. 469-486.

3. Schneider, A. (2020). “Bound to fail? Exploring the systemic pathologies of CSR and their implications for CSR research” in Business & Society, 59(7), pp. 1303-1338.

4. Houdini. (2017). The Houdini Manifesto. Available at: https://houdinisportswear.com/en-se/explore/houdini-manifesto. Accessed 17 December 2022.

5. Global Alliance for Banking Values. (n.d). Principles of values-based banking.

6. Global Alliance for Banking Values. (2021). GABV position paper: climate action and the role of finance.

© CEMUS and Uppsala University