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Towards sustainable business models in line with the concept of degrowth. Theoretical framework development and practical application to certified B Corporations
Economic growth is predominantly seen as a central economic and political goal. Recently, this view has been increasingly criticized and the idea of sustainable degrowth emerged as an alternative paradigm. The faith in technology and the belief that innovation and efficiency will allow unlimited growth without exceeding environmental boundaries is seen critical in the discussion about sustainable degrowth. Instead, the concept of degrowth proposes "equitable downscaling of production and consumption that increases human wellbeing and enhances ecological conditions at the local and global level, in the short and long term” (Schneider et al. 2010, p. 512). The transition towards a degrowth society requires a cultural and political change for a sustainable future. As business activity is a key driving force behind economic growth, the role of companies in this transition and how sustainable business models for degrowth-conform organizations look like is still unclear. Hence, our study aims to elaborate the role and design of organizations and their respective business models within the degrowth context. In this exploratory work, we use a three-step approach: Firstly, based on a systematic literature review we derive elements for a conceptual framework development, which could serve as degrowth-conform business model components. Subsequently, we complement these literature-based elements with a practical perspective using expert interviews with three certified B Corporations (certified social enterprises).In a third step, we test the final framework with an in-depth case study with a multinational certified B Corporation in the personal care industry. Our initial framework is based on 140 screened articles from ScienceDirect and 299 from Web of Science, of which 29 journal articles contained concise insights regarding the role and design of organizations. We derive 12 key elements within eight categories (stakeholder groups: society in general, management, employees, environment, local community, disadvantaged communities, customers, and other organizations) that could serve as foundations for degrowth-conform business models. For each element, we propose means for operationalization. We propose that degrowth-conform organizations are driven by a social mission in the sense of (1) repurposing the business for the environment and society, (2) actively engage in the promotion of degrowth-relevant values and the education of society, focus on (3) democratic governance and leadership commitment, and providing a (4) healthy work-life balance. Moreover, degrowth-conform organization focus on (5) reducing environmental impacts along the life-cycle and employ (6) principles of product design for sustainability. Another key factor is a strong (7) local embeddedness, aiming to generate benefits for the local environment and local communities. In addition, degrowth-conform companies might contribute to (8) enabling autonomy, especially for disadvantaged communities, while (9) encouraging sufficiency and (10) enabling sharing of products. Finally, degrowth-conform organizations might follow business model elements that position the organization as a (11) provider of services, and an enabler for (12) sharing resources, e.g. by providing knowledge to society. Overall, our findings illustrate that degrowth-conform organizations should move beyond their traditional organizational boundaries. Partnerships and close relationships with communities are crucial for many of the elements proposed, in order to identify common goals, to create global and local knowledge networks, to contribute to a social acceptance of degrowth, and to encourage sufficiency.