Bigger is better…… isn’t it? What do Goldilocks and doughnuts have to do with it?
Bigger is better…… isn’t it?
What do Goldilocks and doughnuts have to do with it?
In the last article, we looked at how to maintain or improve profit margins whilst improving our business’ environmentally sustainability and encouraging our customers and clients to do so. The fear is that if we encourage customers to move away from a consumption-based lifestyle our business will lose sales and therefore profit. We showed that there are ways to overcome this and make our businesses more sustainable AND maintain profit. But is maintaining profit enough?
Businesses often chase growth and talk of economies of scale. It is true that a business needs to be big enough to generate enough income to cover all of its costs and have enough left over to provide security for lean times, development costs and provide an incentive to its owners.
But is bigger better? Let’s deal with the thorny issue of unsustainable growth. By requiring continual growth of our business, it follows that we need more people to buy more from us. In the UK we already consume enough resources to require 2.6 Earths1. The fact that we only have one Earth makes it obvious that we should be reducing our consumption.
According to the European Environment Agency publication “Narratives for Change” it is not possible to completely de-couple economic growth from resource consumption. In addition, it states that “100% circularity is impossible”. So, whilst creating a circular supply chain can reduce the impact of our consumption on the environment it does not allow continuous growth in consumption. Therefore, the environmental bottom line is that we must limit economic growth to reduce our consumption.
What does this mean for our businesses? Well, perhaps there is a size for our business that is not too small that we cannot generate adequate income to remain sustainable and not too big that we consume resources unnecessarily. Maybe we should be like Goldilocks* and find a size for our business that is not too big and not too small but is just right!
We need our business to be big enough to provide enough to be sustainable and provide for the needs of the society we live in without overshooting the Earth’s ecological ceiling. This principle is described by Doughnut Economics2. We don’t have space to go into the details of this mindset in the scope of these articles, but we will look at some practical ways of thinking about the implications of this concept on the day-to-day running of our business in the next article.
In the meantime here are some useful links -
You can find out more about alternatives to an unsustainable growth economy here:
* If you don’t know the Goldilocks story try Google