Business and Economy: Management Priorities

 

Business is not just a central component of the global economy, it is a leading driver of societies, cultures, and even the human imagination. And while today business is primarily shaping a cultural vision centered on consumerism, this vision could as readily be centered on sustainability—given new management priorities.

Priority number one will be to gain a better understanding of what the economy is for and whether perpetual growth is possible or even desirable. As environmentalist and entrepreneur Paul Hawken explains, “At present we are stealing the future, selling it in the present, and calling it gross domestic product. We can just as easily have an economy that is based on healing the future instead of stealing it.”

In this section, Robert Costanza, Joshua Farley, and Ida Kubiszewski of the Gund Institute for Ecological Economics first describe how redirecting the global economy is possible through a variety of means such as creating new sustainable economic metrics, expanding the commons sector, and mobilizing leading economic and governmental institutions.

Another key economic shift will be the better distribution of work and working hours among the global workforce, as Juliet Schor of Boston College describes. Right now, many people work excessive hours earning more money and converting that income into increased consumption—even as others search for work. Dividing work hours in a better way will not only address unemployment and provide more people with the means for a basic standard of living, it will free up time to enjoy life outside of the workplace. And it will reduce the amount of discretionary income people have, which at the moment encourages them to consume more than necessary.

Another priority will be to reassess the role of corporations. Consider their vast power and reach: in 2006, the largest 100 transnational corporations employed 15.4 million people and had sales of $7 trillion—the equivalent of 15 percent of the gross world product. A sustainable economic system will depend on convincing corporations, through an array of strategies, that conducting business sustainably is their primary fiduciary responsibility.

Ray Anderson of Interface, Inc., Mona Amodeo of idgroup, and Jim Hartzfeld of InterfaceRAISE note that some corporations have already figured out the importance of a thriving Earth to their business and are working to put sustainability at the heart of their corporate cultures. Understanding how to shift business cultures and finding the resolve to do so will be an essential step in creating a sustainable economic model.

Beyond the corporate system, there are opportunities to completely reinvent the purpose and design of business, also a key priority. Johanna Mair and Kate Ganly of IESE Business School describe social enterprises that are turning the mission of business upside down. Business does not have to be only or even primarily about profit, but profit can provide a means to finance a broader social mission. Social enterprises worldwide are addressing pressing social problems, from poverty to ecological decline, and are doing so profitably.

Local businesses are also starting to crop up, like pioneer species in disturbed ecosystems. As most corporations fail to respond to increasing concern for social and environmental injustices, people are creating local alternatives— from grocery stores and restaurants to farms and renewable energy utilities. Michael Shuman of the Business Alliance for Living Local Economies notes that these local enterprises can have improved environmental performance, treat workers better, provide healthier and more diverse products, and—in worst-case scenarios—provide a layer of resilience to global disruptions by being rooted locally. Moreover, the rise of social enterprises and local businesses should provide additional pressure to stimulate change within corporate cultures.

Throughout the section, Boxes describe other sustainable business innovations, such as redesigning manufacturing to be “cradle to cradle,” a new corporate charter that integrates social responsibility directly into the legal code, and a carbon index for the financial market. There is also a Box that examines the absurdity of the concept of infinite economic growth.

Business is a powerful institution that will play a central role in our future—whether that future is an era of sustainability or an age of reacting to accelerating ecological decline. With a combination of reform of current interests and the growth of new socially oriented business models, the global economy can help avert catastrophe and instead usher in a sustainable golden age.

—Erik Assadourian

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