Sustainable Organisations: developing solutions and imagining alternatives

Making the transition away from unsustainable ways of organising and doing business is essential if we are to deal with the biggest problems currently facing society.

By Dr Andy Brookes and Professor Matthijs Bal

Climate change, poverty, biodiversity loss, modern slavery and all of the other crises facing contemporary society will not be solved by simply carrying on with business as usual. Many of these problems, particularly climate change, are actually getting worse as shown in the current monsoon floods in Pakistan that have killed more than a 1000 people since June this year⁶. We have a moral duty to prevent harm to humans and the environment and the long term solution lies in making the transition to a genuinely sustainable society. But a sustainable society is more than about preventing harm or avoiding crises it is about rethinking and reshaping our society so that humans and the environment are flourishing. Transitioning to a sustainable economy is essential if the overall transition to a sustainable society is to be achieved⁴. So we will need to imagine what a sustainable economy looks like, how it is structured and how it would function.

To imagine a future sustainable economy we need to recognise the unsustainability of business as usual and the way the current economy is structured. Mark Carney, the former Governor of the Bank of England, has argued that we need to revisit the ideas and values that underpin the contemporary economy where financial value takes precedence over human value⁵. The contemporary global economy is grounded upon fundamentally unsustainable assumptions:

unlimited growth
consumption
exploitation and depletion of natural and human resources
burning of fossil fuels
globalisation
the centrality of markets

These assumptions are not working for the benefit of our whole society. These failed assumptions are the root causes of contemporary problems, inequality and injustices. Unlimited growth is clearly nonsensical when we live on a planet that has finite and rapidly diminishing resources. It is absurd that our contemporary economy produces a surplus of consumer products but still fails to deliver on the basic needs that many humans require.

To achieve long-lasting human and environmental flourishing will require a complete reimaging and restructuring of the economic model. It requires a shift in the core purpose and values of the economy, from the generation of private wealth to the enabling of human and environment wellbeing and flourishing⁹. This has also been described as the post-growth or wellbeing economy². The sustainable economy will have to be grounded on a new set of assumptions that replace the failed and destructive assumptions that underpin the current economy. For example, that there are biophysical limits to the growth and expansion of the economy – limits which have already been breached as evidenced by the change in the climate. This economic transition must be also carried out in a fair and just way where growth is still enabled within low income countries until they reached the point where citizens are also flourishing. The wider institutional infrastructure, such as the law, government regulation, investment etc. also has to be fundamentally rebuilt so that it provides the ecosystem to enable the transition to sustainability.

The challenge for policy makers and decision makers is how bring about the transition to sustainability within their own organisation. This will require imaging how their organisation can fully fit within a future sustainable economy. The starting point has to be acknowledging the extent to which organisations are currently unsustainable. Bocken and Short (2021)¹ have proposed the following unsustainable business model (UBM) archetypes:

Environmental resource exploitation and waste
Human resource exploitation
Economic exploitation
Unhealthy or unsustainable offering
Quantity over quality and value
Addictive consumption pattern
Complex opaque global value chain
Short-term shareholder not stakeholder value
Financing and supporting unsustainable practices

For organisations to become truly sustainable they must make the transition away from present day unsustainability, for example as described in the proposed UBMs above. The transition must be holistic, addressing all aspects of unsustainability and not just cherry-picking particular issues such as net-zero while leaving in place other unsustainable practices (e.g. exploitation of human resources). For example fossil fuel and tobacco companies can never become truly sustainable organisations because their core offering is unsustainable and causes harm to humans and the environment.

We are thinking here about organisations in the broadest sense. This includes individual organisations, or groups of organisations, and their supply chain networks. A truly sustainable organisation does not ‘off-shore’ its carbon emissions to other parts of its global supply chain. The organisational domain also includes the different industrial sectors which will each have to make the transition to sustainability. Some sectors are based on particularly unsustainable business models (e.g. fashion, tourism, construction, retail, farming, transport, energy etc.) and the need for transition is particularly urgent in these areas. Organisational sustainability is also shaped by broader institutions and professions, such as marketing, accountancy, HR and the law. So institutional transition is also required to sustainable accountancy, sustainable HR etc.

Organisations such as the Wellbeing Alliance⁸ are already starting to describe what a sustainable economy would look like in very practical terms, contrasting it with the unsustainable business as usual. Developing solutions that will realise this essential transition will require the creation of genuinely new modes of organising, new practices, and new technologies. Many alternative modes of organising already exist but have yet to be developed at a sufficient scale to make a widespread impact on the economy. Social enterprises and not-for-profit organisations already represent a significant proportion of the economy. For example the cooperative economy employs 280 million people worldwide and has a turnover of more than US$2 Trillion³. Alternatives will involve a greater emphasis on the local and the involvement of the community in the development of sustainable economies. This is not only in terms of creating organisations and services that are more responsive to local needs and local flourishing but also to reduce the carbon footprint of globalised supply chains.

Universities have a key part to play in the generating the new knowledge required to enable and underpin the transition to sustainability. This will require an engaged form of knowledge production where universities work with students, organisations and citizens to create the solutions necessary to bring about sustainable organisations and a sustainable society. We have to embark on this transition with hope because ‘a new macroeconomics for sustainability is not only essential, but possible’⁷– it is our collective responsibility to make it happen.

Interested in finding out more about sustainable organisations? Sign up for the series of free online sessions that we are running in August and September. You might also be interested in checking-out our brand-new Sustainable MBA programme.

Lincoln International Business School

August 30th, 2022

Sustainable Organisations: developing solutions and imagining alternatives

Making the transition away from unsustainable ways of organising and doing business is essential if we are to deal with the biggest problems currently facing society.

Sources