Sustainability for the Savvy Executive: How Doughnut Economics Can Help Your Business Adapt and Thrive
Have you read Kate Raworth’s Doughnut Economics: 7 Ways to Think Like a 21st-Century Economist? No, no time? No worries: I’ve got you covered with a review and five ways you can apply doughnut economics to your business!
I recently finished this book, and wow, it is worth the full read (or listen, if you opted for the audiobook like I did to hear Raworth herself explain it all). Doughnut Economics is a thought-provoking book that challenges traditional economic theories and offers a newer visual model and perspective on creating a sustainable and just economy. Raworth divides the book into seven chapters, sympathetically going over each of the seven steps she believes are critical for equitably shaping the future of our economy.
Now, if you’re anything like me, I know you’re anxious to get to the basics of the seven critical steps and the bonus five ways to apply them in business, but let’s first take a look at Raworth’s visual model to understand it better. This economic model is not just any old economic model; Raworth has quite literally reframed the power of economic visual framing to transform 21st-century thinking – and she did it well!
“Far from being a closed, circular loop, the economy is an open system with constant inflows and outflows of matter and energy. The economy depends upon Earth as a source—extracting finite resources such as oil, clay, cobalt, and copper, and harvesting renewable ones such as timber, crops, fish, and fresh water. The economy likewise depends upon Earth as a sink for its wastes—such as greenhouse gas emissions, fertiliser run-off and throwaway plastics. Earth itself, however, is a closed system because almost no matter leaves or arrives on this planet: energy from the sun may flow through it, but materials can only cycle within it.”
— Kate Raworth, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
As you can see, the doughnut economics model is about putting people first and tackling critical humanitarian issues such as poverty, education, and income inequality. But here’s the best part: this model also recognizes that we must take care of our planet and promote sustainability to achieve long-term progress. Doughnut economics offers a way to create a better world that works for everyone by taking a holistic approach that first and foremost addresses social and environmental issues. Raworth argues that traditional economic theory has failed to account for these outlined boundaries and has focused too much on growth at all costs.
The seven critical steps that Raworth emphasizes and goes over in much greater detail in the book are as follows:
1. Change the goal:
The argument is that economics should primarily aim to ensure that everyone has a decent standard of living rather than focusing solely on growth, for natural growth to occur.
2. See the big picture:
Raworth advocates for an economy that considers the often overlooked economic activities — social and environmental impacts.
3. Nurture human nature:
The importance of recognizing material well-being as well as social and emotional well-being.
4. Get savvy with systems:
Raworth suggests that economists should adopt a systems-thinking approach when identifying and mapping out the feedback loops and interconnections within complex systems. This is needed to achieve sustainable economic growth, since our actual economy doesn’t comply with the traditional supply-demand balance of economics. She also covers how we should rethink our relationship with technology and use it to solve environmental issues rather than exacerbate them.
5. Design to distribute:
The importance of designing economic systems that distribute wealth and resources more fairly is emphasized.
6. Create to regenerate:
Raworth advocates for an economy that promotes regenerative practices, such as circular economies, that minimize waste and promote sustainability.
7. Be agnostic about growth:
This one questions the assumption that endless growth is desirable or even possible, and, instead, how the practicality of creating a sustainable and just economy is the focal point.
Overall, Doughnut Economics is an engaging literary work that prompts us to reconsider our perspectives on the economy. Raworth’s ideas are well-researched, and her arguments are supported by real-world examples. I’d consider this one a must-read for anyone interested in our economic future, how to improve it, and who also cares about our planet.
Now, for adopting Raworth’s approach to business: The Doughnut Economic model shows us how we can create value for shareholders, society, and our environment. By prioritizing social responsibility and sustainability, you can create a more robust and flourishing future for everyone around you. Here are five ways to get started:
1. Put the people first:
Ensure that your employees are paid a living wage, enabling them to cover basic expenses such as housing, food, healthcare, and education, which is a key principle of Doughnut Economics. Review your wage policies to ensure that they are fair and equitable and that your employees are provided with financial security and stability.
2. Provide good working conditions:
People will thrive in optimal working conditions. A safe and healthy workplace focused on genuine care is necessary to promote general well-being and productivity. Review and consider enhancing employee benefits such as health insurance, paid leave, retirement programs, mental health and wellness programs, ergonomic workspaces, and training programs. Ensure these are comprehensive and meet the needs of your employees.
3. Promote diversity, equity, and inclusion:
Make diversity and inclusion work a priority. The smallest effort to start can make a big difference in the long run. Implement policies to ensure all employees have equal career advancement and development opportunities.
4. Encourage sustainability engagement:
Raise awareness, educate employees and colleagues on sustainable practices, and encourage them to adopt sustainable habits in the workplace. Engage employees in company sustainability initiatives to help create a sense of ownership and commitment towards company goals. Provide opportunities for employees to provide feedback and input on sustainability efforts to reduce waste or energy consumption. Research suppliers and vendors that have sustainable practices and certifications.
5. Think carefully about thriving vs. growth:
Last but not least, critically evaluate the downside to pursuing growth. Use careful consideration to assess the risks associated with overextending resources, diminishing returns, market saturation, and increased competition. Consider the potential consequences for the environment, stakeholders, and long-term sustainability with each decision you make for your business – from spending the most for having the best office on the top floor, to hiring a third-party vendor to keep costs low. By incorporating these insights into business decision-making processes, you can approach growth more thoughtfully and strategically, avoiding the pitfalls associated with short-term thriving, for growth’s sake.
Interested in learning more ways to turn the ideas of Doughnut Economics into action? Collabry can help with diversity initiatives, just send us a message! You may also want to check out Raworth’s Doughnut Economics Action Lab.
