Marcus Feldthus and Oscar Haumann created the Post Growth Business 101 course to help us explore how businesses can align with the leading science on planetary and social boundaries. It offers explainers, case studies, online courses, books and public talks. We interviewed Marcus Feldhus to better understand what the planetary boundaries mean for business, and why post-growth is not a fad, but rather the very future of business.
What inspired you to focus on aligning businesses with planetary boundaries and creating this landmark class?
The idea for creating Post Growth Business 101 course came from a few frustrations:
- Carbon reduction targets are increasingly either pushed or abandoned altogether.
- That’s disappointing in and of itself, but even more so when you remember that those targets ignore the eight other planetary boundaries and that inequality is rising.
- Despite this, companies continue to pursue conventional strategies, which can be summed up as continuing to grow as per business as usual while relying on new technology to deliver a miracle.
- Employees and directors alike tell us that they don’t know how to question conventional strategies or what to replace them with.
We wanted to help get the basics of sustainability in business right in the 21st century right, and as a start, help those employees and directors start conversations about how they can create genuine and sufficient change in their companies.
Can you explain the concept of “post-growth” and why it’s crucial for businesses today? How does Herman Daly come into the picture?
Post-growth has different definitions, depending on whom you ask. It’s pluralistic.
I can explain it this way. We will start high-level and end in a tangible place:
Today, we are transgressing six of nine planetary boundaries while inequality rises.
No empirical evidence exists that green growth (new technology + business as usual growth) delivers sufficient reductions across all planetary boundaries.
More so, business-as-usual growth, centered around an unequal exchange between the Global North and the Global South, increases inequality.
If you take the consequences of those three insights, what follows is a plan where:
The global economy has to shrink in order for us to get back into a safe operating space (within the planetary boundaries instead of transgressing them).
For that to happen, some sectors must grow, and some sectors have to shrink. Some national economies must shrink to free up ecological budgets for others to have the opportunity to grow. And for those national economies to be able to grow, we must dismantle the unequal exchange between the Global North and the Global South.
At this point, Herman Daly, the founding father of ecological economics, enters the picture. Because something has to grow and something has to shrink, but what goes for everything is that eventually, it must “grow up” and reach what he called a steady state – a state where the system (whether it’s a business or a national economy) is stable without growth. Some also like to call it growth-independent. And this is a different society than we see today because, under Capitalism, a society must grow to remain stable.
In that sense, post-growth is the field that investigates what a business or society looks like when it’s stable and thriving without consistent and endless growth.
Many believe businesses are left out of the equation in the post-growth field, but nothing could be further from the truth. There are discussions about what role businesses should play, but everyone agrees that they do play a role.
I draw on a perspective that sees businesses playing a critical role in the transformation, though they are structured differently than today—one big difference is that most are not-for-profit businesses. They are still businesses generating revenue from selling products or services but can’t extract profits or sell shares for a dividend. Profits either go back into the company or are donated elsewhere.
What challenges do businesses face when transitioning from conventional growth models to post-growth strategies?
The character of the challenges depends on what kind of strategies companies pursue.
One common challenge relates to legal structures. To create a not-for-profit business structure, you have to spend a significant amount of money on lawyers to “hack” the system. We are working on making that easier in Denmark. Melanie Rieback, from Radically Open Security and Post Growth Entrepreneurship School, is working on something similar in the Netherlands.
Another challenge arises in investment and finance. It isn’t easy to find investors willing to go down roads of capped returns, patient capital, and often revenue-based investments instead of classic equity.
A third challenge comes from the transformational aspect. Post-growth strategies often rely on a mix of already known technology plus a change in behaviors to deliver impact fast and sufficiently instead of solely on new technology. This means that a large part of one’s budget goes to educating the market and educating oneself based on the market feedback—a sort of co-evolution. That’s a long-term strategy (though a lot shorter than hoping for a miracle in tech).
How do you define success in a post-growth business framework?
Reaching a steady state. The optimum size – where the company can be profitable, resilient, and impactful without growth, and therefore, from that point, can focus on scaling impact in other ways.
Making the problem smaller without having to make the business bigger.
Because even though growth is essential in some phases, bigger isn’t always better. At some point, it leads to diseconomies of scale in more than one way.
What role do startups play in shaping sustainable business practices?
It’s a bottom-up approach to change. Startups can experiment with solutions on a small scale and thereby teach us (the collective) things that could never come from the larger, more inflexible, and risk-averse corporations.
What are some common misconceptions about post-growth strategies?
The biggest misconception is that one can’t be profitable while pursuing post-growth strategies. That’s not true at all. On the contrary, post-growth strategies focus on profitability, resilience, and independence—something that enables one to make good, long-term decisions, as opposed to burning cash in the pursuit of growth at all costs under the “go big or go home” Silicon Valley Mindset.
The difference between conventional and post-growth, is that under a post-growth strategy, that profit cannot be extracted or lead to owners benefitting from a large exit in the future. The profit serves the company or is donated.
Another misconception is that post-growth strategies “hate” technology. Not true. What comes from post-growth strategies is an awareness that majority of the results should be delivered with the technologies accessible today, instead of relying on a technological miracle. Hope is not a strategy.
Make a strategy based on what can work today (and then you can always hope for a miracle in parallel, but the hoping is reserved for time outside the strategic realm).
How does your course, “Post Growth Business 101,” help businesses make this shift?
In essence, it’s a 16-point checklist that helps one see and remember what works and what doesn’t work at the intersection of business and sustainability in the 21st century.
We’ve designed it around the 16 most commonly misleading assumptions we have found in corporate sustainability in the Global North. Based on (1) our studies of both new and old and theories around sustainability, scale, and systems thinking, (2) talking to hundreds of practitioners, and (3) analyzing hundreds of companies.
It has 16 lessons, and for each lesson, we review:
- One common and misleading business assumption related to sustainability
- Arguments for why it’s misleading when considering planetary and social boundaries
- Examples of how to think differently about the issue, including business cases when possible.
- Suggestions for how to start a conversation about it in your business.
What are the key skills or knowledge gaps you see in companies trying to adopt post-growth models?
It’s not so much skill and knowledge as it is about unlearning old ways, and removing old barriers.
Things to unlearn: Bigger is always better, trickle-down economics, green growth, and much more.
Barriers to be removed: For-profit ownership structures, fossil fuel subsidies, unequal trade agreements and debt conditions between the Global North and the Global South, and much more.
Can you share a success story (or two) of a business that benefited from post-growth principles?
To talk about “post growth” concerning business is still such a new thing, that I can’t name someone who would openly claim that they have benefited from post growth principles. Also, there is no perfect example. It’s difficult to be perfect in an imperfect system.
But I can name many who have benefited from applying one or two mechanisms, which I would say align with post-growth methods.
Ecosia: A web browser and search engine that has remind small, has a not-for-profit business structure, and a donation lock, which means that it must donate its profit to tree planting or forest conversation.
iFixit: A kind of Wikipedia for repair manuals and repair kits, which has helped keep an immense amount of gear and electronics in play, stayed small and profitable for more than 20 years, which has enable it to be both an initiator and an ally in the civil movement for the right to repair in the US and Europe.
Grameen Shakti is a not-for-profit energy supplier in Bangladesh that primarily provides decentral home solar systems at an affordable rate to rural villages that have historically been underserved.
And you can find many more cases on our website.
How can businesses balance profitability with sustainability in a post-growth model?
It’s a complex question, but I will try to answer it briefly.
First, it’s about identifying what sectors need to grow and what sectors need to shrink so that we can return to a safe operating space. Then, choose the sectors that still have room to grow.
Second, it’s about asking oneself the critical but today completely ignored question: What is the right size of this operation? And then knowing that when the company reaches that size, it’s enough. It doesn’t have to burn cash on growth afterward—instead, it can spend the profits on building resilience, educating the market, and so forth.
And there are many more points, and it’s, as I write in the first sentence, a lot more complex than that. But those would be my two main points.
Thanks so much.
Learn more about the Post Growth Business 101 course >>
INTERVIEW by Christian Sarkar