...and I guess we have to be okay with that.
Startups and established companies are encouraged to pursue growth at all costs, but who pays the ultimate price?
After all, reducing our commercial consumption is the most obvious act of sustainability available to individuals like you and me. We need to buy less –– and what we do buy should really be built well enough to last a lifetime.
Why isn’t it that easy? Why are we still cramming landfills with last season’s purchases? Because this kind of sustainability is at odds with fundamental economic principles.
Our society is focused on economic growth and the end goal of the majority of businesses is to make us buy and spend more: the opposite of conscious consumerism.
Most businesses simply aren't set up to be sustainable
When you set up an LTD in the UK, the Model Articles of Association state that company directors have a fiduciary responsibility to create value for their shareholders.
This is why huge companies will be bailed out by the government before anyone would suggest shareholders take a smaller dividend payout. The shareholder is king.
When a company becomes a B Corporation, however, then that’s a totally different ballgame. B Corps have to meet high standards of social and environmental performance, transparency, and accountability. And when I say ‘have to’, I mean legally.
Changing the wording of the Articles of Association is a B Corp requirement, which they call the “mission lock”. All B Corps agree that the company bears equal responsibility to all stakeholders including the environment.
That’s a huge step forward for corporate responsibility. But, as of 2021, there were 4000 B Corps across the world — a move in the right direction, yes, and yet just a drop in the money-making ocean where LTDs, LLCs and INCs rise to the top.
Businesses (and consumers) perceive “value” differently
Unless you’re a B Corp or nonprofit, ‘value’ means building the bottom line. Conversely, value for the consumer, environment, and people behind the brand doesn't necessarily equal value for the business.
Not many stakeholders are willing to risk financial ruin just to be a little more sustainable.
Nike proved this just last year when they canned the Reuse-A-Shoe campaign because accepting old sneakers from customers and putting them to use in a circular economy was costing the business too much in a post-Brexit world.
A business needs to ensure continued financial growth, which is when some turn to planned obsolescence.
Planned obsolescence is the act of deliberately making products that will be out-of-date or unusable within a certain window of time, to ensure a continued demand and revenue stream. Consumers have no other choice but to purchase a replacement in the future.
This is obviously completely at odds with the idea of sustainability –– but that doesn’t matter to these companies focused on infinite growth.
Take smartphones as another example. Even if you buy the newest, most expensive iPhone model, within two or three years it’ll be incredibly dated. Not only is Apple constantly releasing new models, but they’re also slowing down the software on their older phones, making consumers more likely to buy a new one.
Companies that get more ethical or values-driven as they grow are in the minority
Etsy, the online marketplace where shoppers buy ‘handmade’ goods directly from sellers, began as a wonderful platform for artists and craft makers to sell their wares. But now, more than a decade later, Etsy has become just another commercial juggernaut that’s screwing over small sellers in their quest to get even bigger.
A 2020 change in their strategy saw sellers paying a 12% commission to Etsy for automatic advertising they weren’t allowed to opt-out of –– a very high (and unforeseen) cost for an independent business.
In 2019, it banned sellers from using PayPal — mandating their own payment system, where it can also take transaction fees. The year before, Etsy raised its fee on sellers from 3.5 % to 5% and started taking a cut from shipping fees.
Search for ‘handmade’ goods on Etsy today, and you’re likely to see mass-produced ‘fast’ jewellery and homewares shoulder-to-shoulder with the slow and small-scale products that the platform supported originally. And, surprise surprise, mass-produced products can be sold in higher volumes, with less lead time, and at a lower price — so what benefit is there for shoppers to pay more and wait longer? Etsy has, essentially, sold out.
Meanwhile, Crate & Barrel founder Gordon Segal straight up told NPR that he hates when customers tell him they still have the plates they bought in the 70s. It means they never bought anything else again, which he perceives as a lost opportunity for more revenue.
More and more people are waking up to the idea that the corporate world is a dark and scary place –– one of the main reasons Millennials and Gen Z are turning to side hustles and eschewing typical corporate jobs.
And the B Corp logo isn’t a silver bullet here either. Despite its B Corp status, trendy beer company Brewdog was blasted in a 2021 open letter for creating a toxic culture that prioritised “growth at all costs”.
Together, these three examples amount to a compelling cautionary tale — to not always fall for a business’ PR strategy. They may position themselves as fun-loving and environmentally friendly, but behind closed doors, it’s all about money and growth.
Consumers can't be to blame — they are just following what they see
PR is powerful, and it’s everywhere. If a brand presents itself as being sustainable, ethical, or even just “good”, why should we automatically assume they aren’t?
Greenwashing is when an organisation spends more time and money on marketing itself as “environmentally friendly” than on actually minimising its environmental impact. As customers, we’re often deceived into thinking a business’ practices or products are far more environmentally-sound than they are in reality.
At the end of the day, it’s just a marketing ploy to sell more stuff, tapping into a “feelgood factor”. But, as we know, selling more stuff is literally the exact opposite of sustainability.
And to be fair, we can't blame companies for being ambitious, either.
We live in a society centred around economic success. Without enough customers and enough turnover, businesses fail to grow and become “zombie companies”.
So should every business be a “lifestyle business”; making just enough to sustain the owners and their staff and generate a modest profit? No investor wants to hear that — so it’s simply not an option for any business seeking funding.
So what's the solution? Can successful businesses ever be sustainable?
We need to find a happy medium — and that’s something we need to do together
One way or another, society as a whole needs to curb its rate of consumption and waste. In the current ‘cost of living crisis’, however, we can’t expect all consumers to put ethics and sustainability at the top of their priority list. Not when some people are struggling just to put dinner on the table.
Instead, it’s the industries that need to stop over-production — and brands need to stop putting profit above responsible practices, making products that are so cheap they just don’t last.
There’s also something to say about younger generations prioritising brands that have a real purpose and benefit to society and the environment, which we’ve already seen happen.
The future isn’t bleak. When consumers start demanding more from companies, when employees start demanding more from their employers, and when we start demanding more for our planet –– that’s when good change will come.