“The financial crisis has lifted the veil on capitalism, exposing its inherent frailties, but there is cause for hope,” says Mike Townsend of Earthshine, UK and Brad Zarnett of Toronto Sustainability Speaker Series, Canada.
The duo have developed “A Journey in Search of Capitalism 2.0” from concepts discussed in a number of intellectual papers, books and talks. This timely, 87-page white paper opens the door to a discussion on everything that is currently unsustainable about the economy we have created for ourselves.
Townsend and Zarnett acknowledge that much work has already been done, by individuals and organisations, in the search for a more sustainable economy, a fairer world and better forms of capitalism. They have drawn upon what they feel are the superlative works in this space to demonstrate the issues we are facing and provide a framework for solutions. Work highlighted in this paper includes that of Tim Jackson, David Boyle, Andrew Simms, Umair Haque, David Korten, Mike Guillaume, Jonathon Porritt, John Elkington, Al Gore, Richard Branson, HRH The Prince of Wales, Adam Smith, John Mackey and Raj Sisodia.
Townsend and Zarnett promise this will be a starting point and, while they have tried to capture all of the problems in our current system and explore a range of solutions, it is really over to the audience for input. They are quite clear that the underlying causes need to be addressed and that they have really only captured the symptoms and potential solutions. The problems Townsend and Zarnett have highlighted are directly quoted as follows:
Ignoring the planet
Disregarding environmental issues, and failing to account for the damage done to the planet and to people, such as the loss of rainforest, pollution, crime, dislocation and depression – ie, what we currently refer to as “externalities”. All wealth is created through the planet’s materials, land and people – how can we ignore these things?
Measuring the wrong thing
Our focus on the monetary value of goods and services produced and exchanged each year confuses means and ends, and skews all our activities towards this pursuit, regardless of any harmful activities this singular focus may promote, or indeed the range of other good activities that support our lives.
Encouraging consumption for its own sake
Because of the design of our money systems, with money as debt that must be paid back with interest, this promotes a need for constant growth in order to find the money to repay our debts. This means that consumption becomes the goal for businesses and people, which ultimately proves to be unfulfilling and leads to environmental degradation.
Blind to values
Prices tends to be dominant criterion, regardless of ethics or consequences.
Collusion with short-termism
Our political and economic systems are skewed by the focus on short-term cycles, whether election cycles in government, or quarterly results in business.
Encourages and relies on debt and indenture
Most of the money in circulation was created in the form of debt that must eventually be paid off with interest. This places a huge burden on indebted populations and on the planet’s systems to constantly meet this demand.
Perpetual ownership of companies by investors tends to generate a size and duration of returns, way beyond any initial value added, and therefore tends to undervalue the creativity and work of employees.
Townsend and Zarnett are mindful of the need to turn ideas into practical action and have set out an initial agenda for change. They urge the reader to engage in dialogue and help to co-create a robust agenda. They offer eight ideas for potential change projects, which can be shaped through online collaboration. The ideas are laid out as a series of questions to encourage thinking and discourse around the projects. I’ve summarised the questions from a lengthy narrative and included a diagram of global change projects, from the white paper. Please note that Townsend and Zarnett present these points not as statements but as topics of discussion:
The goals of a sustainable economy
- Holistic and balanced model, based on human happiness and wellbeing
- Alternative to GDP and growth that works for business
- Opportunity and shared prosperity within our finite limits
- Global standard, with learnings from Bhutan’s Gross National Happiness Index, OECD’s Better Life Index, NEF’s Happy Planet Index and Porter’s Health and Happiness Index
Mechanics of a sustainable economy
- Systems to deliver our holistic goals
- Managing without growth, while sustaining shared prosperity
- Rebalancing economies
- Declining consumption
- A sharing economy
- “Greening” all sectors and all activities within our economies
- New view of capital – living wealth within a sustainable economy
- Adopting a circular economy, maximising resources in useful circulation
New models of business success
- New paradigm for business, making the shift from “dumb” to “smart” growth
- Business models based on generosity, creativity and resilience, focusing on doing the right things, adding thick value, based on need, rather than greed
- Organisational and ownership formats to enable shared sustainable wealth
- Guidance from initiatives such as Branson’s B Team
- The age of the co-operative
- Adopting ESG metrics as standard
- Moving away from destructive, short-term thinking
- Getting capital to flow more efficiently and effectively to where it is needed
- Integrating sustainability criteria into our investment decisions in a meaningful way
- Investing for a sustainable future, to create real and shared wealth
- Migrating away from stranded assets
New financial and banking system
- A well-functioning, fair, sustainable money system, directing money to where it is needed, in service of people and planet
- Involvement of organisations like the Global Alliance for Banking on Values and its member organisations
- Migration of mainstream banks towards a fairer and more sustainable model
- Alternative currencies as the new mainstream
Institutions and system resilience
- New tax and regulatory regimes
- New legislation and institutions
- Political refocus to a proactive role in enabling new economic activity
- Trade Union and other group support of the transition
- Adopting The Entrepreneurial State as described by Mariana Mazzucato – Professor and Economist at Sussex University in the UK
Re-localised and resilient economies
- A shift towards more regional and local solutions and economies, with re-localised production, closer to demand
- Regional initiatives like The New Anglia Green Economy Pathfinder in the UK
- A global system of human-scale, interconnected local economies functioning in harmony with local ecosystems, meeting basic needs of all people, catalysing businesses and networks that build strong Local Living Economies, like BALLE (Business Alliance for Local Living Economies) in the US
- Re-shoring/on-shoring of jobs
- Restructuring global businesses to more local, resilient models with shared/local ownership
- Decentralised renewable energy solutions
- Community-based and owned solutions
- Transition managed and scoped by groups like Transition Network
Education for the Sustainable Economy
- Integrating sustainability principles and challenges into the heart of all curricula
- Reinventing business schools, with courses founded on new models for business success
- New teaching paradigm, meeting 21st century challenges and ensuring shared prosperity
- Global online reach, like Ubiquity University, or more local insurgents, like the London School for Financial Activism (perhaps both)
In the absence of an agreed set of solutions, Townsend and Zarnett have outlined “an initial Manifesto – based on a ten point agenda – that businesses can adopt and adapt, in support of their own transition pathways towards the sustainable economy”. The Manifesto, directly quoted below, outlines what business can do to migrate towards a more sustainable economy and is open to input from the reader:
The Sustainable Economy Business Manifesto
We can embrace the challenge and work through what a more responsible and sustainable form of economy could mean. We will examine the risks and opportunities for our business, our customers, and our suppliers, while never losing our focus on how we create and share genuine value and wealth.
In looking at the big picture, we can start developing creative solutions and new business strategies to explore new market possibilities based on truly sustainable value. We can adopt new models of business success, based on outcomes delivered, and real value generated and shared.
We can realise the benefits of the circular economy by optimising resources, reducing waste and costs. And we can collaborate with others – sharing waste and resources – through industrial symbiosis strategies.
In exploring this challenge, we can find the sweet spot of green economy: new jobs, prosperity and reduced environmental impact. These wins are to be found not just in the clean-tech and green sectors but throughout the economy.
In recognising the drivers for more re-localised economies, we can examine opportunities for our business operations and supply chain strategies with the possibility of revitalising regions and communities, further sharing value.
We can review our business models, and seek opportunities to eliminate unnecessary costs. We will maintain our margins by reducing waste and resource expenditures yet spending more money on people thereby emphasising the creation and preservation of good jobs. This will improve the resilience of business and its ability to generate long-term profitability: from waste-to-wages.
We can also take the opportunity to move towards shared forms of business ownership with a fair distribution of rewards for the people that truly enable wealth creation.
We can engage with all stakeholders, including the investment community to help them through the transition. Our integrated business reporting approaches can help spread awareness of the long-term benefits of sustainable approaches to business.
We can use our money wisely, moving it if necessary, to ensure we bank with and invest in appropriate organisations. This is not just an option for disenfranchised individuals – it applies to businesses, too.
We can develop new forms of leadership, with vision and courage, to help us look beyond the current system, beyond present-day difficulties, and to take on the real challenge of transformation. We can – and we will – take our business to a better place, another model we have not seen before.
“A Journey in Search of Capitalism 2.0” was begun to find out what it would take to make capitalism work better. Instead, Townsend and Zarnett conclude that they could never hope to change the current system and, in order to succeed, a new system would need to be cultured alongside the old one. They have created an online forum to generate a focused and positive dialogue around the paper, through events and debates. From these discussions, Townsend and Zarnett hope to create a bottom-up movement to complement existing initiatives in this space.
To read the full paper or join the debate visit: https://sustainableeconomyproject.nationbuilder.com/
Sarah-Jane Sherwood is founder and chief executive of sustainability communications agency Communicate Blue, part of the “be sustainable” group, supporting a vision for The Blue Economy.