Degrowth: The new corporate sustainability

New research underscores the vital opportunity for partnerships between corporate intrapreneurs and degrowth researchers in reshaping large, complex organisations for a sustainable economy.  

The polycrisis threatens us all, demanding substantive sustainability measures to mitigate harms and adapt society to multiple uncertainties. For decades, large corporations and other MNEs have faced calls to address their significant impacts on climate, nature and inequality. These systemic risks also undermine business performance, destabilising supply chains and disrupting operations. Conscious businesses, recognising risks and rewards, as well as their responsibilities, have deepened their commitment to sustainability, transitioning from CSR gestures to ESG action on material issues and contributing to SDGs through targeted initiatives. 

While resource efficiencies have been low-hanging fruit enabling firms to reduce impacts per unit of output, the current horizon for leading edge corporate sustainability is absolute decoupling – the idea that a firm can grow while reducing overall environmental impact. The buzzwords are renewable, circular and regenerative business, prioritising a high-revenue product mix. 

However, even absolute decoupling may not be sufficient when viewed through the lens of Doughnut Economics, which visualises a sustainable economic activity corridor. Business outputs must contribute to economies meeting universal needs as a minimum within planetary limits as a maximum. This sets a new horizon for corporate sustainability – absolute decoupling as far as possible, while reducing throughput to the necessary. In other words, degrowth.

Degrowth is the concept of transitioning affluent economies to metabolically smaller, wellbeing-focused, post-growth models. Degrowth research aims to elaborate pathways, particularly through policy change, as means to that end. 

A review of more than 500 items of ‘degrowth for business’ literature, included in a forthcoming volume on radical business perspectives, reveals that neither corporations nor the degrowth research community are primed to collaborate on this unfolding imperative. 

The degrowth movement envisages post-growth elements emerging from “cracks in the system” to displace growth-reliant aspects of today’s economy. However, large powerful organisations would not simply disappear; and, while these are poorly advised on a degrowth transition, they would remain obstacles to change. It is in the interests of the degrowth movement to foster a symbiotic relationship with corporate actors and engage with their particular challenges. 

The challenges are indeed substantial, but a likely starting point is the climate action lens. The IPCC, for instance, has already pointed to degrowth as a climate solution. Meanwhile, post-doctoral roles funded by the EU are building post-growth climate mitigation scenarios. Challenges may also come from investors. Triodos is among the first banks to advocate for discourse on a post growth economy. 

The nature of degrowth is experimentation. This fits perfectly with both degrowth researchers, who tend to be activist-academics, and the corporate intrapreneur, the person who continually brings ideas into the organisation, building resilience and value. In this vein, there has been a call to rethink purchasing and supply chain management research through a “business-not-as-usual” lens, including degrowth. A similar idea is to engage insurgent professionals in urban planning on degrowth.

The literature review found limited research directly useful to corporate managers working in areas such as human resources, corporate finance, operations, marketing and even business sustainability. This is somewhat of a catch-22 since degrowth research can provide theories and findings only when empirical data emerges from real-world examples of corporate degrowth experimentation. We must get the ball rolling. The business conference circuit offers potential for matchmaking between corporate intrapreneurs and degrowth researchers to foster a new dialogue for business sustainability and research. Some industry institutions may be able to facilitate pilot studies. Framing research questions to break the pattern of co-optation of sustainability into profit-centrism is a lesson to be learned from the climate movement. 

Ultimately, it is the responsibility of corporate leadership to integrate degrowth principles and values into strategy to identify and protect transitional assets, build new forms of value and shed practices that no longer serve society as the economy reorients around limits to growth. The sooner we collectively learn about degrowth, the smoother the transition would be.