Gaya Herrington: From Growth to Well-Being - A New Economic Paradigm | Reboot Business

Description

In a world where perpetual economic growth is the default objective, what happens when we reach the limits of our planet’s capacity? Gaya Herrington, econometrician and sustainability researcher, has dedicated her research to answering this question. Her update to the famous Limits to Growth study—originally published by MIT in 1972—went viral for its stark conclusion: we are on track for a steep economic and social decline unless we radically rethink our approach.

In this episode, Gaya discusses the transition from a growth-centric to a well-being economy, one that prioritizes human welfare and sustainability over GDP. She explains why degrowth is not about collapse, but about rebalancing our economy within planetary boundaries. She also delves into the corporate challenges of navigating this shift, the limitations of current economic metrics, and the role of resilience over efficiency in business strategy.

As someone who operates within the corporate sector while challenging its mainstream economic assumptions, Gaya offers a unique perspective. This is a conversation about rethinking our economic future—before it's too late.

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Transcription

Speaker #0
The context in which businesses operate is undergoing a radical transformation. New social, energy and environmental demands, in particular, require all economic players to rethink their approach. This means reinventing their purpose, minimizing their negative impact on resources and the living world, balancing the imperative of long-term goals with short-term constraints, doing things differently and inventing new solutions. But what exactly? And how can it be done in practice? I am Julien De Vorex. Reboot Business is a podcast by Impact Labs about an economic world in transition. Today, we are diving into one of the most crucial questions facing businesses. How do we navigate the transition to a sustainable economy when our current system demands perpetual growth? Our guest is Gaia Harrington, a unique voice in this conversation. As an economist working with a major corporation sustainability think tank, she brings both theoretical insight and practical experience to this challenge. But what makes her perspective particularly valuable is her work updating the famous Limits to Growth study, originally published by MIT researchers in 1972, the infamous Meadows Report. Fifty years after that landmark study warned about the consequences of unlimited growth in a finite world, Gaia's research confirmed we are tracking closely with their business-as-usual scenario, which predicted significant decline beginning around our present day. Her findings went viral, perhaps because they validated what many are already feeling. Our current economic system is approaching its limits. What makes Gaia's voice so compelling is that she isn't speaking as an outside critic, but as someone working within the corporate world to bridge the gap between degrowth economics and business reality. Today, we will explore this tension and discuss practical ways companies can prepare for and potentially lead the transition to a more sustainable economic model. Okay, let's go. Hi, Gaia. How are you?
Speaker #1
I'm good. How are you?
Speaker #0
Good, good. Well, thanks a lot for spending 45 minutes, one hour with me on this podcast. Happy to be here. Yeah, thanks. We're going to go through a lot of topics. Where are you based now? Where are you now?
Speaker #1
I am now based on the West Coast in Seattle.
Speaker #0
Okay, in the US.
Speaker #1
Yeah. And in the US before this, I also lived on the East Coast, New York City, but Washington, DC. And then I've also lived in Los Angeles, so I've seen both coasts.
Speaker #0
Okay, okay. But, okay, so can you briefly introduce yourself? You know, tell me about what you do, what you've been doing, and yeah, what you spend your time focusing on.
Speaker #1
Yeah, of course. Yeah, so I was born in Europe, actually, in the Netherlands. So I'm now a dual citizen. And it's interesting because I was born and raised in the Netherlands, which is a capitalist economy, but of course has a... much bigger social welfare system and so it's it's been really interesting to see that juxtaposition to going to this like big firm capitalist country like the US and see the differences and see how it impacts people in how they you know how they work how companies work but also just how people live their lives and it's and how it shapes their lives it's very interesting to see but I Very briefly, I started as an economist in neoclassical economics. I've worked at the Dutch Central Bank. I've made international financial regulation. I started my career in a bank. I even worked on those securitizations that instigated the global financial crisis in 2007. And then I made a switch. And long story short, I started in New York City as a consultant at KPMG, a big consulting firm. I went... back to school there. I got my second master's at Harvard in sustainability. And at that point, I still kind of believed in this green growth stuff. And, you know, we have to price in externalities and of course, but the reputation, no forces, you know, and reduced legal risk that will make the companies that do better by doing, being good, right? All that stuff. And then at a certain point in my career, I... I realized to my dismay that I was back to being an economist in the sense that I had to conclude that all these things are part of the solution, but they will never be enough to avoid ecosystem collapse. And we will never be truly sustainable unless we change the underlying economic system that shapes all of our behavior. And so now I'm back to being an economist, but this time in well-being economics.
Speaker #0
Well-being economics, okay. So you will explain to me what that means.
Speaker #1
Maybe I should add that I'm still actually working in the US corporate sector. So I'm a researcher, I work at their small think tank that we have, the Sustainability Research Institute, which does pure research. But I am still very much working at the practical level of implementing that at a big multinational. And so what am I doing there as a well-being economist? It's really this notion of what we currently have. We don't always talk about this very explicitly, but what we have is an economy where the ultimate goal is growth. So we also always have to have every quarter we have to have profit growth. We measure growth at the macroeconomic level in GDP and it always has to grow. And the well-being economics says, hey. that growth sometimes does indeed, as people often claim, bring social benefits. Sometimes, but not always. And it also sometimes comes with, well, often comes with a lot of environmental damage to the point where it actually becomes socially degenerative as well. So maybe growth in and of itself, we don't have to hate it. We don't have to be anti, but it shouldn't be the ultimate goal. The ultimate goal should be... well-being and it should be strictly above it and so that's uh what does that economy look like that's the kind of stuff i'm working on well and maybe we can start there um and then we'll talk about what's going on today but you know we have this limits to growth report um prediction
Speaker #0
from 1972 well when i talked to denis middle he didn't like the term predictions but the kind of simulations and uh in these simulations have kind of largely materialized even though we are not going down yet somehow um why do you think there is still a lot of resistance you know in to accepting that infinite growth in the finite world is
Speaker #1
impossible yeah uh yeah so maybe just for the listeners who were not that familiar with limited growth maybe even haven't listened to that podcast yet But yes, so I first, my research first went viral with my update to the limits to growth. And Dennis Meadows was one of the authors. This was published in 1972. And so for my thesis at Harvard, I didn't update. I was like, because as you say, they did simulations. Several, they had built the first model of the world using a new technique called system dynamics. And with that, they produced several scenarios. And so at best, you can call them forecasts, given the assumptions they put in the model. And there was a business as usual scenario, which had no additional assumptions. So it ran on historical averages. And that showed a peak setting in around present day, and then a steep decline, which they called collapse. I typically just say steep decline, because when I say collapse, people often interpret that as we're all going to die. That is not what collapse means. It doesn't mean... steep decline from a previous peak, which is not enjoyable. So given that unappealing prospect, I thought, okay, well, we have several years of empirical data. Let's see how those scenarios ended up. So there were more scenarios, not just a business as usual scenario. But unfortunately, I did find that empirical data aligns really closely with the business as usual scenario, and that we are heading for a collapse. So at the time, my research went viral. which to me was quite surprising because, you know, I got these interview requests from people and they're like, oh, so you're saying that we're close to a breaking point? I'm like, yeah, you didn't know that? Because I was hardly the first to say that, right? We had at this point in the 70s, Danos and his team, they were very, they were in the minority. But at this point, most scientists agreed that... Climate change is happening and we're nearing a tipping point. And then there's the biodiversity and the water scarcity and all those things. So I was like, this is, yeah, it just all lines up with that forecast or those scenarios that were already done in the 70s. And at the time, it was actually a bestseller. But then there was the pushback and it was very effectively buried. And so that's why I think by that time that I did my research, people were like, oh, really? They already did this at MIT? That's where they did it? MIT did this, like yeah, and that's how it went then. But it just, you can see that people realize this. I think that's why it went viral, because again, it wasn't new. But I think it was where people already are feeling that the current system is just not working and we're nearing a breaking point, not just environmentally, but also socially and economically. We see growth rates go down around the world. So environmentally, it's clearly not sustainable because we've been above our ecological footprint has been above one earth for since the 70s, actually. It's also becoming increasingly clear now that it's just... At some point, it doesn't add any happiness anymore. And it just actually detracts from it because it frays our social cohesion and that sort of thing. But it's also even economically not sustainable. And that's what we see as well. We haven't created a system that's entirely dependent on growth. Yet, we're running out of it. You see this in the richer countries. their growth rates, they're just keep going down. There's a downward trend. And so in every way, it's unsustainable.
Speaker #0
Well, you have written extensively about the limitations of GDP, you know, as a metric. You know, maybe you can talk to me a little bit about that, about the issue that we have, because it's kind of the only score of the game that we're playing, or at least the main score, you know, what we're trying to compete for, you know. and that growth measured in GDP. So in short, you know, what's the problem with GDP? And do we have alternatives, you know, indicators that, you know, we should adapt?
Speaker #1
Oh, there are plenty of alternatives. Yeah, I would say, I mean, I mentioned, I critique GDP, but I'm not the expert on beyond GDP. There's a big GDP, beyond GDP movement. And therefore, Flint, there's no shortage of alternatives because it's not that hard. Actually, it's very often people say, well, but well-being is hard to measure. I'm like, the economy is also hard to measure. OK, GDP is also. That's why I say it. It's only because I want to make the argument like, yes, but the economy is also a social system, by the way. It's not a beta science. It's not an exact science. So it's that's also hard to measure. And GDP is clearly not measuring it very well. So. So, yes, well-being would also, we would need indicators. We would need much more than just a single number. But it's not harder to measure necessarily than the economy in itself. So that's one thing. Herman Daly, a former World Bank economist, for example, came up with the genuine progress indicator. So that also does take economic factors, but then it subtracts from that, for example, pollution. Which makes sense, right? Because that also goes to... genuine progress. If you have a lot of pollution, air pollution, water pollution, that's not good economically, let alone societally. Things like social cohesion, a sense of community and trust in one another, that adds to it. And so if you look at the genuine progress indicator, that has decoupled from GDP, again, since the 70s. If you look at countries like the US, so rich countries, the genuine progress indicator hasn't peaked also. in the 70s. The 70s was really kind of, it seems like a turning point where we could have gone a different direction and it might have been better, but we didn't go there. So, you know, there's plenty of alternatives to it.
Speaker #0
Well, I mean, we can spend the hour talking about macroeconomics and degrowth and I want to get into what we do at a business level also, but maybe we can spend a couple of minutes, you know, talking about... what the growth means, you know, at a macro level and this idea that decoupling, you know, may not be possible, meaning that we cannot continue growing and solve the climate issues and other environmental issues that we have. You know, what's your analysis on that?
Speaker #1
Yeah, I mean, listen, I would love for decoupling to be happening to a sufficient extent, right? I mean, it's a lot easier. Economic system changes a lot of effort. But dealing with the aftermath of ecosystem collapse is also a lot of effort. And that's basically the two real options we have. This idea of, well, we can decouple, we can keep growing without our ecological footprint growing along with it. It's just nowhere in the data. So if you look at our material footprint, that has just stayed the same. It has never shown a decline. Water use, biodiversity loss, those are all accelerating. There is one exception to that, which is carbon emissions. That's why we're focusing sometimes so much. And there's, I think, a quite intentional push to conflate true sustainability with just avoiding climate change, which, by the way, is also not happening. But at least there is a little progress there. So we've seen some decoupling. But even in the countries that have shown the biggest decoupling, it is not anywhere near sufficient. to stay within the Paris Agreement. So, and that just means at the global level, where climate change is happening, our global carbon emissions have never been higher.
Speaker #0
Well, yeah, you're right to mention the fact that we are conflicting often, you know, the climate crisis with the overall ecological crisis. It's like a funnel, you know, if you focus on that also, because I guess this is the easiest part in a sense. And even that easiest objective, which is, you know, energy transition, we're far from doing it. And I would like to understand, you know, how does it work for companies? Because we have recent studies that show that... suggest at least that 85% of companies' net zero trajectories are viewed as unrealistic. And often, you know, banking on last minute technological breakthrough rather than fundamental business model changes. So what's your perspective on the balance between technological innovation and systemic changes like sharing economy models or resource reduction? And, you know, how do you see the conversation being? framed in companies? Are we simply really far away from what should be done and what should be understood?
Speaker #1
Well, we're definitely far away. As you said, climate change is the best in class, but it's still not a passing grade. So if you look at companies' carbon pledges and performance, that's even often still the best. They're not decoupling in any other. waste, like again, water, biodiversity and all those things. So that's the first thing. And then, of course, that's not sufficient. I would say right now is a very interesting time. And I think it's because we're at that peak, right? We haven't gone too steeply into decline yet. And I think now is really the time like, oh, we can make the decision to maintain what we have or have it. be on the decline with futile attempts to grow further. And if I may, that was also a scenario in the limits to growth. So it wasn't a prediction of doom. There was actually one scenario with very much additional assumptions where the authors assumed that humanity itself chose to let go of growth instead of having it forced upon them with a collapse. And they... consciously, purposefully redirected resources away from industrial output growth towards basically what it came down to meeting human needs and protecting the environment. And in that scenario, you see also that it peaks around now, but then the human welfare variable remains the same for the rest of the century. So that's the choice that we have. We either go down or we hold on to what we have. We cannot continue to grow. There was no scenario where things grew further. And I think that's really what you see, where humanity... has to it's mask off right now either we go down or we hold on to what we have by doing this together pulling together and you see different companies doing different things you see different people doing different things but still
Speaker #0
you know at least in big corporations you have the feeling that everyone is lost because we have even for the people who understand that We have these big plans and big ambitions, and also now they have laws to abide by. But there is this tension between the system that requires every company to grow and to be more profitable year on year, and this kind of willingness to do things differently. So I want to go a little bit more into that. And maybe as you're working with a major corporation, while carrying a message and understanding all that, a message that challenges mainstream economic thinking. How to navigate? How do you navigate yourself, you know, this apparent contradiction and what are the conversations that you, tough conversations that you have?
Speaker #1
Yeah, I think, yeah, like I said, I do think we live in a very historical, historic moment in time. And so in that sense, it's full of contradictions and uncertainties. So that's... That's yes, that's very much the case. I think, you know, it's a little bit hard to answer in general because there's no such thing as really as the business community because you see businesses behave very differently. You saw this during COVID too. Like some companies just completely laid off people and were like, okay, bye. And then others were like, oh, well, we actually, we used to produce this stuff, a completely different product. But. it looks like there's a need in society for masks and then they just started producing masks um you know so it's it really depends on the company and there are a lot of a lot of different aspects around it um i think it's also very different based on the structure and the size that you have for example if you are um they're there i think there are plenty of examples of these sort of what I would call well-being businesses. They're pretty small and they basically do things kind of right from the start. But they don't have the whole lot of impact because they're relatively small. And then you have these big multinationals, such as one where I work. And then you're right. You bump up way more into all these legacy systems that you're part of and that shape your options, which aren't always... exactly how you would want them to be sometimes. So there are really different pathways towards that. Speaking of pathways, I think you mentioned degrowth in your previous question. And that is, I think, if you talk about the pathways, I think degrowth is really for companies in countries where you and I live, so the richer countries, that is really the way to... towards this well-being economy. A well-being economy meets all human needs, definitely firstly the basic needs, and then a little bit above that, so for the well-being, within planetary boundaries. And right now, all these rich nations are way above their fair share of the Earth's carrying capacity. So there, that pathway really needs to be deliberately reducing the ecological footprint significantly while maintaining well-being levels. That probably... will reduce overall GDP? It might not, but because it's impossible really to predict. And certain sectors will still grow, right? Care sectors, for example, the renewable energy sector. But degrowth is really the pathway towards that more of a destination framework of a well-being economy. And that pathway, the degrowth path, will look very differently for different kind of companies.
Speaker #0
Well, maybe we can go into that because I would like to get a sense for the people listening and working in the industry. in different sorts of companies of what does it mean, you know, how organizations could practically implement some degrowth principles. And in your book, you discuss the concept of managed descent, I believe. And is this, so how can businesses prepare for it? Is it all businesses that can do that? Some types of businesses, like if you're on the stock market, I guess you have different metrics, different type of reporting, but what could potentially lead to this transition while remaining viable organization? Because that's the fear that we have. Like if I degrowth, if I plan degrowth, I will simply disappear.
Speaker #1
Yes, and I think that is a legitimate fear, by the way, which is also why we see a... a proper role for government. Regulation is necessary for this too, because there is the fear of the first mover disadvantage in a competitive market. I think in that sense, the government's role is absolutely crucial. But like you said, it depends very much on the kind of company. The products that you or services that you provide obviously makes a huge difference too. For example, a cigarette company, I don't see how that... can ever be, right? A degrowth business. You could still be a business, but you would have to just start making a different product, I think. And so it really depends. If you're a solar panel company, it's easier in that sense. And then you just don't focus on the ultimate goal on growth. But yeah, so it also very much depends on your product. Let's be very clear about that. The company I work for works in the energy transition, for example. So in that sense, it's easy. But then also we are talking about how do we make that just and what does a just transition mean? So it is obviously not just the local community, definitely that, but also internationally. Where do all these minerals come from and the metals that go into the solar panels? And is that compatible with... lifting everybody up to the current energy consumption that we see in the West? The answer is no. So those are all questions that you need to have. But it is possible if you want to have one example, for example, that is quite often referenced in this sense, is the Danish energy company that used to be a fossil fuel company. And then at some point, I think, had internal discussions about, well, what is our future? And decided, well, it can't be fossil fuels. It just can't be if we really mean what we say in our vision statement. And so then they switched completely to fossil fuels. Let me... Let me pause real quick because of course now I don't remember the name of this Danish company. It's easy to find. Orsted is a Danish company.
Speaker #0
And fossil fuel to renewable, basically.
Speaker #1
Yes. And they did that, I assume. I wasn't privy on the conversation. But I assume they had some internal discussions about what is a future fit company. And then they ended up with... So it's only possible to completely switch your product in that sense.
Speaker #0
yeah i guess it's uh you have to manage different stakeholders you have to manage uh yeah but that's that's a good example that that means that that's feasible you know it's moving from something that's kind of uh going away or destroying everything to something that needs to grow basically something
Speaker #1
that needs to grow from something that needs to grow yeah and of course an often uh heard misunderstanding about degrowth is that it's anti-growth which it is, but it's more selective about it. And how I typically reframe, try to reframe the discussion sometimes, in general and within companies, is also, listen, this is not a question of, okay, but do we do this whole effort of revamping or completely reinventing our company or continue as we did? Because the latter is not an option. So either you are prepared for upcoming major changes around the world, or you're not. That's the question we're really dealing with.
Speaker #0
Well, in that sense, can we talk about resilience? Because your work also emphasizes the importance of resilience over efficiency. And actually, many businesses, if not all businesses, are optimized or optimize their operations for maximum efficiency through just-in-time production or lean management, etc. How can they shift toward resilience without losing competitiveness? Because again, that's a fear.
Speaker #1
Yeah, so if you don't have a lot of resilience in future upcoming upheavals, you're also not going to be competitive. So that's really this reframing of, I think there's... a lot of the short term and long term i guess like really understanding that things are changing but listen this is what management is i i sometimes i'm like okay what is it now are you like the best guys out there that's why you deserve all these high bonuses and stuff and you don't need to be regulated because you know it better than the government or are you having trouble understanding the basics one-on-one of investment in the future because you can't have both it's not a difficult concept so you know Sometimes I say that in nicer wording.
Speaker #0
So you do have this conversation. And what is the argument about? Is it about really, yes, but we need to show that we're profitable, you know, for the next two or three years. So then we'll see later. And anyway, you know, we'll find solutions. Or is it, I just want to understand where we're stuck. Is it in the processes that exist that force us, force the companies to think short term? Is it in the minds of the people? You know, where do you see really the things happening?
Speaker #1
Yeah, good question. The question to some, the answer to some extent is, of course, all of the above. But I do like how you mentioned the mindset, because I do think that, you know, there's this, many people have made this point, by the way, but there's this one MIT professor, Otto Scharmer, who also says, it doesn't matter really what you do. It doesn't. even matter how you do it. It matters from the energy and your mindset from within, from which it's coming. And I think that, so ultimately it does come down to that, I think. But, you know, it is also, I think, a little bit of an iterative process because you are limited by the system that you're in. You have limited influence. The vast majority of us have limited influence and we are influenced by it massively. And I think that is something to acknowledge too, that I think the business sector as a whole has a crucial role to play and its participation of at least some of them is indispensable in this transition and at the same time um i'm not necessarily sure it it really had it will come from them again all of us have to do our part but i do think there's a crucial role for government and we should also not forget the the power of the citizens when they bind together and ask for change do you find it useful within
Speaker #0
corporations to talk about risks more than ethics, you know, on this matters?
Speaker #1
Yeah, that's a good question. And by now, my answer is no. I actually used to be in risk management at KPMG. So I very much talked about, these are all the risks, you know, and then I pointed to activists and I used that as being sort of an entrepreneur to help bring these things about. So, and... Like there is that, but at the same time using that thing. And ultimately what you're saying is this is going to be bad for profit. So we better do this sustainability thing. And you're reinforcing the system, right? So in a way, yeah. So in a way, I'm now I'm like, listen, can we also talk about how you as a human being feels, including everybody at the executive level, feel like your values are often at odds with what you feel this company. just the system that you're part of as well, are just caught in. And then you actually see that you get very different conversations about what might be possible. I was at a finance conference in Denmark, and I was interviewed by a financial paper, and they asked me, so what do you advise people in finance? And I said, I think there's some really front-running people there. But having worked in finance myself, I don't think the real change is going to start there. I think they're smart. They know what's going on. They're just not the kind of activistic type. So I said the real message is stand ready because changes are coming. You know that. You know this is not sustainable. And so stand ready for when this change comes to just jump along with us when it's safer for you.
Speaker #0
Yeah, I wanted to talk about stakeholder. capitalism and um you mentioned also in your work the the need for a more inclusive you know economic model like how do you see the role again of what we call stakeholder capitalism evolving and uh and also like to be concrete you know what what concrete changes should company make in their governance and decision making process and
Speaker #1
how do you work it out yeah uh so here's why i'm like The stakeholder and this whole inclusion in general for me is, it's still ultimately, I think, maintaining old structures. It basically says, well, we have this economy that needs to grow all the time, but, you know, just more people need to benefit from it. And I'm like, listen, that, first of all, that will never happen, but also to the extent where it's all equal. But I think more importantly, this still comes from a place of the ultimate underlying story. So we're going to go at the deepest level now of what we tell ourselves about who we are. That's where these mindsets come from. And it's the story of separation. We're all separate beings that obviously have our own interests, right? And what happens to others are just externalities apparently that we discount. We're selfish, we have selfish genes, and kindness is just a tactic to propagate that. So, you know, we are just maximizing our own utility, we all know that. We live in a dead planet, and, you know, ultimately in a dead universe. And so that's then the story, and so you're like, okay, but we have to make it more inclusive. So to make it tolerable, I guess, for more people, we just have to include more people in the decision-making. But it's still the story of separation to me. And I think ultimately what really needs to change is this underlying narrative, which has been more prevalent in history, to be clear. And I think that's maybe good to touch upon as well, that we've all grown up with this growth narrative, that growth is always progress. But for most, even of human history, let alone the rest of nature, the idea that growth, perpetual growth was good, was not there. It was most of the time the opposite, even in human history, where it was considered immoral. Because we know from experience that anything that grows perpetually is dangerous. It can kill us. And the economy is no exception, despite what many economists will tell you. And so what is this different story then? And that's the story of interdependence, where all thriving is mutual. And as soon as our... We can be selfish, but that's when our most basic needs are unmet. And as soon as you see that we're not hungry, we're not feeling unsafe. we become much more altruistic and curious and playful than this homo economicus ever could be. And we actually... need to feel at that point, we need to feel that what we do matters, that it actually leaves, that we are leaving, what we do every day leaves the world a little bit better than we found it. That is a need that is often unmet in this current economy, and which is also why a well-being economy would suit the needs better for people even in the West. We would have less stuff, but we would have much more of what we really need, which is connection.
Speaker #0
Well, I'm personally very familiar with what you're saying and the work of Otto Scharmer also. Actually, I had a conversation with him on my other podcast. And I'm personally fully aligned with that vision and with the diagnostic. This is the diagnostic and therefore this is the kind of economy we should be creating. But what are the middle steps? How do we go from what we have today to... something that's more sustainable like really sustainable and um and especially at a you've got the conversation at a macro level that you can have on the economic models and and the way we we define our metrics etc but do you have a point of view on what should be done at a at a company level what what does it mean when you are stuck in the big system and how the economy works. Do you simply, because a lot of people are asking these questions, like, do I simply quit and do something totally different? Or as a, yeah.
Speaker #1
Yeah, I feel like that was more something that my parents did. Like you just quit and then you start a little company that of, I don't know, solar batteries for your phone and dryer balls and that kind of thing. Basically, products that will help you simpler lifestyle, but it doesn't do anything. It's also not nearly enough. It doesn't change the system ultimately. So the reason I start about these narratives is because I do think it needs to come from there. I'm often asked about solutions and technology is obviously a key and crucial solution to it. But what you see right now is often that we have this rebound effect. probably people listening to this have heard of that before, where you have increased efficiencies that you talked about in technology, and we've seen massive increases in technological advances. Humans are innovative, there's no denying that. But why then hasn't that decreased our ecological footprint in any meaningful way at a global level? And it's because a lot of times those efficiencies are used to just produce more, even renewable energy. Yes, we have seen a lot more renewable energy capacity. It's gone wholly on top of the fossil fuels. Our fossil fuel use, in absolute terms, is also at an all-time high. It has not even come down. Because all the renewable energy capacity has come on top of it, which is completely unsurprising in a system where the ultimate goal is growth. The Jeffords Paradox,
Speaker #0
right?
Speaker #1
Right. Jeffords Paradox. So my proposition is this wouldn't happen in a well-being economy where it is to reduce our ecological footprint. back to within planetary boundaries, those same efficiencies would still be very useful tools. They would be solutions because the underlying, the overall goal has changed. And that has changed because of the underlying narrative that has changed. And this goes for everything. So that's why I can't really say what people can do because what we can do very much depends on your specific role in the system. So that's the good news. As the bad news is that you can't control a system. But the good news is that there's always something you can do, even if you feel like in the hierarchy terms you have low power. You always have some influence. So you start by changing that narrative, firstly within yourself, which is a very personal work, which is very counterintuitive maybe, because we're talking about these big global systems. And then at the same time, changing that everything, it can feel so overwhelming. But actually where you start is... with yourself, within yourself. And then from there, of course, it cannot stay there. I always say it starts at the personal level, but it shouldn't stay there. And then you make connections with others and you weave that new story. So in a company, for example, you start connecting with other people in your company. Companies these days, they kind of function like tribes. If you get an email from someone and it's from within a company, there's an immediate level often that you don't realize of trust. Oh, I'll email them back. We don't do random people who email us. So companies function like tribes. And so you use that to find people who share your narrative. And you build that out. And together you co-create what could be that new narrative within the company.
Speaker #0
Yes, that's the idea of theory, you know, co-creation. It's true that people always want ready-made solutions and to be able to make the first steps. Yeah, exactly, a fix. And you want to see what's going to happen. And what you're saying, what a lot of people are saying, is that it's so complex and it's so much in the unknown that the goal is to start making new things in new ways and...
Speaker #1
then you'll find you know along the way but is that right um yes and i would say nobody really knows but i would say that once you start to work from that new narrative you you might be surprised at how many things can stay the same right um once health insurance companies for example truly work towards their vision which is make health care more accessible to americans for example i i say this because we just had the you person, the CEO being shot of United Healthcare, because I would argue they didn't really live their vision statement. And then you see that maybe that can just stay, right? If you become, if that's really your vision statement, and some insurance companies have that, by the way, there are not-for-profit insurance companies that are able, because of their legal structure, to do much more work towards that and work for their members. But so maybe a lot can actually, more can stay the same than we thought could.
Speaker #0
And how should business approach innovation in R&D in this context? You know, we talk a lot about AI and thoughts of innovations, but what should be prioritized? And maybe you have also like an idea on AI since everybody's talking about this.
Speaker #1
Not as much as some. I am not nearly as impressed with it as some other people think to be, think that it's going to be the disruptor. I think it's just another tool. I think it's a new technology. It can do a lot of things. It has a lot of potential. And it's an excellent example of the Jevons paradox right now. It has only increased energy demand. Well, of course, it has the potential to really bring it down and distribute resources much more efficiently among people. So... But it has been deployed for ultimately mostly for profit making. And so it hasn't done those things. So the AI is the same as any other technology for me. It's a tool which will ultimately serve the overall purpose of the system it's part of.
Speaker #0
Yeah, I want to go back to part of my question, which is, what do we do as an individual in the company? You know, do we stay? Do we leave? A lot of people are really wondering, you know, what's the way?
Speaker #1
Yeah. Yeah, no, it's a very good question because I do think there are sometimes moments or situations where you're like, I can't stay here. But it is important to stay plugged into the system. You can't change the system without being part of it. And I do want to recognize that there are some real, that's some real stuff because we have created an economy where... of course our livelihoods are dependent on growth. So let's acknowledge that. Again, that hasn't always been the case. And to be clear, economies have existed way before we made our lives so dependent on having a job. So this financial precarity that you see is a policy choice. But that is, of course, and that's a very legitimate fear, the fear of losing your job. When I spoke at... I don't know why I speak to a lot of bankers, but I do. And, you know, in London. And afterwards, one came towards me and he said, listen, I think that you are right in everything you say, but like, what do you actually, what do I do with this? Because if I do what I think you're telling me I should do, I will lose my job. And that's a legitimate fear. The fear of being placed outside of the system. And so that's why I sometimes say, listen, Find other people because you have more power, but also their safety in numbers. And also why I said earlier, you know, sometimes that absolutely means that you can't go as fast as you wanted to because you place yourself out of the system. And that is frustrating. And I would say get comfortable with that frustration. I do believe that changes are going to happen. because what we're doing is simply unsustainable. And I would say stand ready for them to accelerate rolling out the narrative within your company, for example. And then a second fear is also the fear that government is feeling and politicians, which is the fear of social unrest. So if a lot of people lose their jobs in the absence of growth, then... you're going to have social unrest. And I think this is why also politicians and government feel so trapped in this growthism pursuit. And I think that's also, like I said, getting the system to keep working and keep churning out growth is proving harder and harder. And I think that's also why you're seeing this polarization right now around the world, but also definitely in the US where I currently live.
Speaker #0
Last question. I mean, I wish I had, you know, 30 minutes more to talk about also what's going on right now and all the forces that go against, you know, all the progress that we're trying to make regarding the topics that we speak, but it's a bigger topic. Last question. If you had a reboot button, you know, for any aspect of how we approach, you know, these topics that we discuss, sustainability and economic system. what would you choose to reset?
Speaker #1
Oh, yeah. Well, I will say that this whole button thing is part of this control idea, right? Like, oh, we're going to fix it with this button. No, sorry. You're going to have to talk to people and confront some inner biases and all that stuff. Sorry. But honestly, if it's any kind of magic button, as I alluded to before, The 70s, to me, this was before I was born, but it seemed to me like there were a lot of these ideas that we're talking about right now, right? Safeguarding people's livelihoods and the options of growth with universal basic incomes or job guarantees, that sort of thing. All of those things were already experimented with, a lot of them in the US, by the way. This book also was US authors in the 70s. And so after that, we got Reagan and we went a whole different direction. But I feel like that... if we could go back in time and just tilt a couple of points in the playing field, I think we could have seen a very different world.
Speaker #0
Yeah, we can't, but we're going to find out, you know, the way forward. Thanks a lot for your time, Gaia, and thanks a lot for sharing these insights.
Speaker #1
My pleasure.
Speaker #0
Reboot.

About Reboot Business

Reboot Business is an exploration of the urgent transformation businesses must undergo to address the ecological crisis and the broader societal shift in mindset.

What are the key challenges? What strategies can drive change? What obstacles stand in the way, and what levers can help overcome them? And most importantly, which businesses are leading the way?

Join us as we investigate the future of business in a world that demands regeneration.
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Reboot Business est une enquête sur la nécessaire transformation des entreprises pour répondre à l’urgence écologique et au changement de paradigme sociétal.
Quels sont les défis ? Quelles sont les stratégies ? Quels sont les freins et les leviers de changements ? Quels sont les exemples à suivre ?

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About Reboot Business

Reboot Business is an exploration of the urgent transformation businesses must undergo to address the ecological crisis and the broader societal shift in mindset.

What are the key challenges? What strategies can drive change? What obstacles stand in the way, and what levers can help overcome them? And most importantly, which businesses are leading the way?

Hosted on Ausha. See ausha.co/privacy-policy for more information.

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Hosted on Ausha. See ausha.co/privacy-policy for more information.

Transcription

Speaker #0
The context in which businesses operate is undergoing a radical transformation. New social, energy and environmental demands, in particular, require all economic players to rethink their approach. This means reinventing their purpose, minimizing their negative impact on resources and the living world, balancing the imperative of long-term goals with short-term constraints, doing things differently and inventing new solutions. But what exactly? And how can it be done in practice? I am Julien De Vorex. Reboot Business is a podcast by Impact Labs about an economic world in transition. Today, we are diving into one of the most crucial questions facing businesses. How do we navigate the transition to a sustainable economy when our current system demands perpetual growth? Our guest is Gaia Harrington, a unique voice in this conversation. As an economist working with a major corporation sustainability think tank, she brings both theoretical insight and practical experience to this challenge. But what makes her perspective particularly valuable is her work updating the famous Limits to Growth study, originally published by MIT researchers in 1972, the infamous Meadows Report. Fifty years after that landmark study warned about the consequences of unlimited growth in a finite world, Gaia's research confirmed we are tracking closely with their business-as-usual scenario, which predicted significant decline beginning around our present day. Her findings went viral, perhaps because they validated what many are already feeling. Our current economic system is approaching its limits. What makes Gaia's voice so compelling is that she isn't speaking as an outside critic, but as someone working within the corporate world to bridge the gap between degrowth economics and business reality. Today, we will explore this tension and discuss practical ways companies can prepare for and potentially lead the transition to a more sustainable economic model. Okay, let's go. Hi, Gaia. How are you?
Speaker #1
I'm good. How are you?
Speaker #0
Good, good. Well, thanks a lot for spending 45 minutes, one hour with me on this podcast. Happy to be here. Yeah, thanks. We're going to go through a lot of topics. Where are you based now? Where are you now?
Speaker #1
I am now based on the West Coast in Seattle.
Speaker #0
Okay, in the US.
Speaker #1
Yeah. And in the US before this, I also lived on the East Coast, New York City, but Washington, DC. And then I've also lived in Los Angeles, so I've seen both coasts.
Speaker #0
Okay, okay. But, okay, so can you briefly introduce yourself? You know, tell me about what you do, what you've been doing, and yeah, what you spend your time focusing on.
Speaker #1
Yeah, of course. Yeah, so I was born in Europe, actually, in the Netherlands. So I'm now a dual citizen. And it's interesting because I was born and raised in the Netherlands, which is a capitalist economy, but of course has a... much bigger social welfare system and so it's it's been really interesting to see that juxtaposition to going to this like big firm capitalist country like the US and see the differences and see how it impacts people in how they you know how they work how companies work but also just how people live their lives and it's and how it shapes their lives it's very interesting to see but I Very briefly, I started as an economist in neoclassical economics. I've worked at the Dutch Central Bank. I've made international financial regulation. I started my career in a bank. I even worked on those securitizations that instigated the global financial crisis in 2007. And then I made a switch. And long story short, I started in New York City as a consultant at KPMG, a big consulting firm. I went... back to school there. I got my second master's at Harvard in sustainability. And at that point, I still kind of believed in this green growth stuff. And, you know, we have to price in externalities and of course, but the reputation, no forces, you know, and reduced legal risk that will make the companies that do better by doing, being good, right? All that stuff. And then at a certain point in my career, I... I realized to my dismay that I was back to being an economist in the sense that I had to conclude that all these things are part of the solution, but they will never be enough to avoid ecosystem collapse. And we will never be truly sustainable unless we change the underlying economic system that shapes all of our behavior. And so now I'm back to being an economist, but this time in well-being economics.
Speaker #0
Well-being economics, okay. So you will explain to me what that means.
Speaker #1
Maybe I should add that I'm still actually working in the US corporate sector. So I'm a researcher, I work at their small think tank that we have, the Sustainability Research Institute, which does pure research. But I am still very much working at the practical level of implementing that at a big multinational. And so what am I doing there as a well-being economist? It's really this notion of what we currently have. We don't always talk about this very explicitly, but what we have is an economy where the ultimate goal is growth. So we also always have to have every quarter we have to have profit growth. We measure growth at the macroeconomic level in GDP and it always has to grow. And the well-being economics says, hey. that growth sometimes does indeed, as people often claim, bring social benefits. Sometimes, but not always. And it also sometimes comes with, well, often comes with a lot of environmental damage to the point where it actually becomes socially degenerative as well. So maybe growth in and of itself, we don't have to hate it. We don't have to be anti, but it shouldn't be the ultimate goal. The ultimate goal should be... well-being and it should be strictly above it and so that's uh what does that economy look like that's the kind of stuff i'm working on well and maybe we can start there um and then we'll talk about what's going on today but you know we have this limits to growth report um prediction
Speaker #0
from 1972 well when i talked to denis middle he didn't like the term predictions but the kind of simulations and uh in these simulations have kind of largely materialized even though we are not going down yet somehow um why do you think there is still a lot of resistance you know in to accepting that infinite growth in the finite world is
Speaker #1
impossible yeah uh yeah so maybe just for the listeners who were not that familiar with limited growth maybe even haven't listened to that podcast yet But yes, so I first, my research first went viral with my update to the limits to growth. And Dennis Meadows was one of the authors. This was published in 1972. And so for my thesis at Harvard, I didn't update. I was like, because as you say, they did simulations. Several, they had built the first model of the world using a new technique called system dynamics. And with that, they produced several scenarios. And so at best, you can call them forecasts, given the assumptions they put in the model. And there was a business as usual scenario, which had no additional assumptions. So it ran on historical averages. And that showed a peak setting in around present day, and then a steep decline, which they called collapse. I typically just say steep decline, because when I say collapse, people often interpret that as we're all going to die. That is not what collapse means. It doesn't mean... steep decline from a previous peak, which is not enjoyable. So given that unappealing prospect, I thought, okay, well, we have several years of empirical data. Let's see how those scenarios ended up. So there were more scenarios, not just a business as usual scenario. But unfortunately, I did find that empirical data aligns really closely with the business as usual scenario, and that we are heading for a collapse. So at the time, my research went viral. which to me was quite surprising because, you know, I got these interview requests from people and they're like, oh, so you're saying that we're close to a breaking point? I'm like, yeah, you didn't know that? Because I was hardly the first to say that, right? We had at this point in the 70s, Danos and his team, they were very, they were in the minority. But at this point, most scientists agreed that... Climate change is happening and we're nearing a tipping point. And then there's the biodiversity and the water scarcity and all those things. So I was like, this is, yeah, it just all lines up with that forecast or those scenarios that were already done in the 70s. And at the time, it was actually a bestseller. But then there was the pushback and it was very effectively buried. And so that's why I think by that time that I did my research, people were like, oh, really? They already did this at MIT? That's where they did it? MIT did this, like yeah, and that's how it went then. But it just, you can see that people realize this. I think that's why it went viral, because again, it wasn't new. But I think it was where people already are feeling that the current system is just not working and we're nearing a breaking point, not just environmentally, but also socially and economically. We see growth rates go down around the world. So environmentally, it's clearly not sustainable because we've been above our ecological footprint has been above one earth for since the 70s, actually. It's also becoming increasingly clear now that it's just... At some point, it doesn't add any happiness anymore. And it just actually detracts from it because it frays our social cohesion and that sort of thing. But it's also even economically not sustainable. And that's what we see as well. We haven't created a system that's entirely dependent on growth. Yet, we're running out of it. You see this in the richer countries. their growth rates, they're just keep going down. There's a downward trend. And so in every way, it's unsustainable.
Speaker #0
Well, you have written extensively about the limitations of GDP, you know, as a metric. You know, maybe you can talk to me a little bit about that, about the issue that we have, because it's kind of the only score of the game that we're playing, or at least the main score, you know, what we're trying to compete for, you know. and that growth measured in GDP. So in short, you know, what's the problem with GDP? And do we have alternatives, you know, indicators that, you know, we should adapt?
Speaker #1
Oh, there are plenty of alternatives. Yeah, I would say, I mean, I mentioned, I critique GDP, but I'm not the expert on beyond GDP. There's a big GDP, beyond GDP movement. And therefore, Flint, there's no shortage of alternatives because it's not that hard. Actually, it's very often people say, well, but well-being is hard to measure. I'm like, the economy is also hard to measure. OK, GDP is also. That's why I say it. It's only because I want to make the argument like, yes, but the economy is also a social system, by the way. It's not a beta science. It's not an exact science. So it's that's also hard to measure. And GDP is clearly not measuring it very well. So. So, yes, well-being would also, we would need indicators. We would need much more than just a single number. But it's not harder to measure necessarily than the economy in itself. So that's one thing. Herman Daly, a former World Bank economist, for example, came up with the genuine progress indicator. So that also does take economic factors, but then it subtracts from that, for example, pollution. Which makes sense, right? Because that also goes to... genuine progress. If you have a lot of pollution, air pollution, water pollution, that's not good economically, let alone societally. Things like social cohesion, a sense of community and trust in one another, that adds to it. And so if you look at the genuine progress indicator, that has decoupled from GDP, again, since the 70s. If you look at countries like the US, so rich countries, the genuine progress indicator hasn't peaked also. in the 70s. The 70s was really kind of, it seems like a turning point where we could have gone a different direction and it might have been better, but we didn't go there. So, you know, there's plenty of alternatives to it.
Speaker #0
Well, I mean, we can spend the hour talking about macroeconomics and degrowth and I want to get into what we do at a business level also, but maybe we can spend a couple of minutes, you know, talking about... what the growth means, you know, at a macro level and this idea that decoupling, you know, may not be possible, meaning that we cannot continue growing and solve the climate issues and other environmental issues that we have. You know, what's your analysis on that?
Speaker #1
Yeah, I mean, listen, I would love for decoupling to be happening to a sufficient extent, right? I mean, it's a lot easier. Economic system changes a lot of effort. But dealing with the aftermath of ecosystem collapse is also a lot of effort. And that's basically the two real options we have. This idea of, well, we can decouple, we can keep growing without our ecological footprint growing along with it. It's just nowhere in the data. So if you look at our material footprint, that has just stayed the same. It has never shown a decline. Water use, biodiversity loss, those are all accelerating. There is one exception to that, which is carbon emissions. That's why we're focusing sometimes so much. And there's, I think, a quite intentional push to conflate true sustainability with just avoiding climate change, which, by the way, is also not happening. But at least there is a little progress there. So we've seen some decoupling. But even in the countries that have shown the biggest decoupling, it is not anywhere near sufficient. to stay within the Paris Agreement. So, and that just means at the global level, where climate change is happening, our global carbon emissions have never been higher.
Speaker #0
Well, yeah, you're right to mention the fact that we are conflicting often, you know, the climate crisis with the overall ecological crisis. It's like a funnel, you know, if you focus on that also, because I guess this is the easiest part in a sense. And even that easiest objective, which is, you know, energy transition, we're far from doing it. And I would like to understand, you know, how does it work for companies? Because we have recent studies that show that... suggest at least that 85% of companies' net zero trajectories are viewed as unrealistic. And often, you know, banking on last minute technological breakthrough rather than fundamental business model changes. So what's your perspective on the balance between technological innovation and systemic changes like sharing economy models or resource reduction? And, you know, how do you see the conversation being? framed in companies? Are we simply really far away from what should be done and what should be understood?
Speaker #1
Well, we're definitely far away. As you said, climate change is the best in class, but it's still not a passing grade. So if you look at companies' carbon pledges and performance, that's even often still the best. They're not decoupling in any other. waste, like again, water, biodiversity and all those things. So that's the first thing. And then, of course, that's not sufficient. I would say right now is a very interesting time. And I think it's because we're at that peak, right? We haven't gone too steeply into decline yet. And I think now is really the time like, oh, we can make the decision to maintain what we have or have it. be on the decline with futile attempts to grow further. And if I may, that was also a scenario in the limits to growth. So it wasn't a prediction of doom. There was actually one scenario with very much additional assumptions where the authors assumed that humanity itself chose to let go of growth instead of having it forced upon them with a collapse. And they... consciously, purposefully redirected resources away from industrial output growth towards basically what it came down to meeting human needs and protecting the environment. And in that scenario, you see also that it peaks around now, but then the human welfare variable remains the same for the rest of the century. So that's the choice that we have. We either go down or we hold on to what we have. We cannot continue to grow. There was no scenario where things grew further. And I think that's really what you see, where humanity... has to it's mask off right now either we go down or we hold on to what we have by doing this together pulling together and you see different companies doing different things you see different people doing different things but still
Speaker #0
you know at least in big corporations you have the feeling that everyone is lost because we have even for the people who understand that We have these big plans and big ambitions, and also now they have laws to abide by. But there is this tension between the system that requires every company to grow and to be more profitable year on year, and this kind of willingness to do things differently. So I want to go a little bit more into that. And maybe as you're working with a major corporation, while carrying a message and understanding all that, a message that challenges mainstream economic thinking. How to navigate? How do you navigate yourself, you know, this apparent contradiction and what are the conversations that you, tough conversations that you have?
Speaker #1
Yeah, I think, yeah, like I said, I do think we live in a very historical, historic moment in time. And so in that sense, it's full of contradictions and uncertainties. So that's... That's yes, that's very much the case. I think, you know, it's a little bit hard to answer in general because there's no such thing as really as the business community because you see businesses behave very differently. You saw this during COVID too. Like some companies just completely laid off people and were like, okay, bye. And then others were like, oh, well, we actually, we used to produce this stuff, a completely different product. But. it looks like there's a need in society for masks and then they just started producing masks um you know so it's it really depends on the company and there are a lot of a lot of different aspects around it um i think it's also very different based on the structure and the size that you have for example if you are um they're there i think there are plenty of examples of these sort of what I would call well-being businesses. They're pretty small and they basically do things kind of right from the start. But they don't have the whole lot of impact because they're relatively small. And then you have these big multinationals, such as one where I work. And then you're right. You bump up way more into all these legacy systems that you're part of and that shape your options, which aren't always... exactly how you would want them to be sometimes. So there are really different pathways towards that. Speaking of pathways, I think you mentioned degrowth in your previous question. And that is, I think, if you talk about the pathways, I think degrowth is really for companies in countries where you and I live, so the richer countries, that is really the way to... towards this well-being economy. A well-being economy meets all human needs, definitely firstly the basic needs, and then a little bit above that, so for the well-being, within planetary boundaries. And right now, all these rich nations are way above their fair share of the Earth's carrying capacity. So there, that pathway really needs to be deliberately reducing the ecological footprint significantly while maintaining well-being levels. That probably... will reduce overall GDP? It might not, but because it's impossible really to predict. And certain sectors will still grow, right? Care sectors, for example, the renewable energy sector. But degrowth is really the pathway towards that more of a destination framework of a well-being economy. And that pathway, the degrowth path, will look very differently for different kind of companies.
Speaker #0
Well, maybe we can go into that because I would like to get a sense for the people listening and working in the industry. in different sorts of companies of what does it mean, you know, how organizations could practically implement some degrowth principles. And in your book, you discuss the concept of managed descent, I believe. And is this, so how can businesses prepare for it? Is it all businesses that can do that? Some types of businesses, like if you're on the stock market, I guess you have different metrics, different type of reporting, but what could potentially lead to this transition while remaining viable organization? Because that's the fear that we have. Like if I degrowth, if I plan degrowth, I will simply disappear.
Speaker #1
Yes, and I think that is a legitimate fear, by the way, which is also why we see a... a proper role for government. Regulation is necessary for this too, because there is the fear of the first mover disadvantage in a competitive market. I think in that sense, the government's role is absolutely crucial. But like you said, it depends very much on the kind of company. The products that you or services that you provide obviously makes a huge difference too. For example, a cigarette company, I don't see how that... can ever be, right? A degrowth business. You could still be a business, but you would have to just start making a different product, I think. And so it really depends. If you're a solar panel company, it's easier in that sense. And then you just don't focus on the ultimate goal on growth. But yeah, so it also very much depends on your product. Let's be very clear about that. The company I work for works in the energy transition, for example. So in that sense, it's easy. But then also we are talking about how do we make that just and what does a just transition mean? So it is obviously not just the local community, definitely that, but also internationally. Where do all these minerals come from and the metals that go into the solar panels? And is that compatible with... lifting everybody up to the current energy consumption that we see in the West? The answer is no. So those are all questions that you need to have. But it is possible if you want to have one example, for example, that is quite often referenced in this sense, is the Danish energy company that used to be a fossil fuel company. And then at some point, I think, had internal discussions about, well, what is our future? And decided, well, it can't be fossil fuels. It just can't be if we really mean what we say in our vision statement. And so then they switched completely to fossil fuels. Let me... Let me pause real quick because of course now I don't remember the name of this Danish company. It's easy to find. Orsted is a Danish company.
Speaker #0
And fossil fuel to renewable, basically.
Speaker #1
Yes. And they did that, I assume. I wasn't privy on the conversation. But I assume they had some internal discussions about what is a future fit company. And then they ended up with... So it's only possible to completely switch your product in that sense.
Speaker #0
yeah i guess it's uh you have to manage different stakeholders you have to manage uh yeah but that's that's a good example that that means that that's feasible you know it's moving from something that's kind of uh going away or destroying everything to something that needs to grow basically something
Speaker #1
that needs to grow from something that needs to grow yeah and of course an often uh heard misunderstanding about degrowth is that it's anti-growth which it is, but it's more selective about it. And how I typically reframe, try to reframe the discussion sometimes, in general and within companies, is also, listen, this is not a question of, okay, but do we do this whole effort of revamping or completely reinventing our company or continue as we did? Because the latter is not an option. So either you are prepared for upcoming major changes around the world, or you're not. That's the question we're really dealing with.
Speaker #0
Well, in that sense, can we talk about resilience? Because your work also emphasizes the importance of resilience over efficiency. And actually, many businesses, if not all businesses, are optimized or optimize their operations for maximum efficiency through just-in-time production or lean management, etc. How can they shift toward resilience without losing competitiveness? Because again, that's a fear.
Speaker #1
Yeah, so if you don't have a lot of resilience in future upcoming upheavals, you're also not going to be competitive. So that's really this reframing of, I think there's... a lot of the short term and long term i guess like really understanding that things are changing but listen this is what management is i i sometimes i'm like okay what is it now are you like the best guys out there that's why you deserve all these high bonuses and stuff and you don't need to be regulated because you know it better than the government or are you having trouble understanding the basics one-on-one of investment in the future because you can't have both it's not a difficult concept so you know Sometimes I say that in nicer wording.
Speaker #0
So you do have this conversation. And what is the argument about? Is it about really, yes, but we need to show that we're profitable, you know, for the next two or three years. So then we'll see later. And anyway, you know, we'll find solutions. Or is it, I just want to understand where we're stuck. Is it in the processes that exist that force us, force the companies to think short term? Is it in the minds of the people? You know, where do you see really the things happening?
Speaker #1
Yeah, good question. The question to some, the answer to some extent is, of course, all of the above. But I do like how you mentioned the mindset, because I do think that, you know, there's this, many people have made this point, by the way, but there's this one MIT professor, Otto Scharmer, who also says, it doesn't matter really what you do. It doesn't. even matter how you do it. It matters from the energy and your mindset from within, from which it's coming. And I think that, so ultimately it does come down to that, I think. But, you know, it is also, I think, a little bit of an iterative process because you are limited by the system that you're in. You have limited influence. The vast majority of us have limited influence and we are influenced by it massively. And I think that is something to acknowledge too, that I think the business sector as a whole has a crucial role to play and its participation of at least some of them is indispensable in this transition and at the same time um i'm not necessarily sure it it really had it will come from them again all of us have to do our part but i do think there's a crucial role for government and we should also not forget the the power of the citizens when they bind together and ask for change do you find it useful within
Speaker #0
corporations to talk about risks more than ethics, you know, on this matters?
Speaker #1
Yeah, that's a good question. And by now, my answer is no. I actually used to be in risk management at KPMG. So I very much talked about, these are all the risks, you know, and then I pointed to activists and I used that as being sort of an entrepreneur to help bring these things about. So, and... Like there is that, but at the same time using that thing. And ultimately what you're saying is this is going to be bad for profit. So we better do this sustainability thing. And you're reinforcing the system, right? So in a way, yeah. So in a way, I'm now I'm like, listen, can we also talk about how you as a human being feels, including everybody at the executive level, feel like your values are often at odds with what you feel this company. just the system that you're part of as well, are just caught in. And then you actually see that you get very different conversations about what might be possible. I was at a finance conference in Denmark, and I was interviewed by a financial paper, and they asked me, so what do you advise people in finance? And I said, I think there's some really front-running people there. But having worked in finance myself, I don't think the real change is going to start there. I think they're smart. They know what's going on. They're just not the kind of activistic type. So I said the real message is stand ready because changes are coming. You know that. You know this is not sustainable. And so stand ready for when this change comes to just jump along with us when it's safer for you.
Speaker #0
Yeah, I wanted to talk about stakeholder. capitalism and um you mentioned also in your work the the need for a more inclusive you know economic model like how do you see the role again of what we call stakeholder capitalism evolving and uh and also like to be concrete you know what what concrete changes should company make in their governance and decision making process and
Speaker #1
how do you work it out yeah uh so here's why i'm like The stakeholder and this whole inclusion in general for me is, it's still ultimately, I think, maintaining old structures. It basically says, well, we have this economy that needs to grow all the time, but, you know, just more people need to benefit from it. And I'm like, listen, that, first of all, that will never happen, but also to the extent where it's all equal. But I think more importantly, this still comes from a place of the ultimate underlying story. So we're going to go at the deepest level now of what we tell ourselves about who we are. That's where these mindsets come from. And it's the story of separation. We're all separate beings that obviously have our own interests, right? And what happens to others are just externalities apparently that we discount. We're selfish, we have selfish genes, and kindness is just a tactic to propagate that. So, you know, we are just maximizing our own utility, we all know that. We live in a dead planet, and, you know, ultimately in a dead universe. And so that's then the story, and so you're like, okay, but we have to make it more inclusive. So to make it tolerable, I guess, for more people, we just have to include more people in the decision-making. But it's still the story of separation to me. And I think ultimately what really needs to change is this underlying narrative, which has been more prevalent in history, to be clear. And I think that's maybe good to touch upon as well, that we've all grown up with this growth narrative, that growth is always progress. But for most, even of human history, let alone the rest of nature, the idea that growth, perpetual growth was good, was not there. It was most of the time the opposite, even in human history, where it was considered immoral. Because we know from experience that anything that grows perpetually is dangerous. It can kill us. And the economy is no exception, despite what many economists will tell you. And so what is this different story then? And that's the story of interdependence, where all thriving is mutual. And as soon as our... We can be selfish, but that's when our most basic needs are unmet. And as soon as you see that we're not hungry, we're not feeling unsafe. we become much more altruistic and curious and playful than this homo economicus ever could be. And we actually... need to feel at that point, we need to feel that what we do matters, that it actually leaves, that we are leaving, what we do every day leaves the world a little bit better than we found it. That is a need that is often unmet in this current economy, and which is also why a well-being economy would suit the needs better for people even in the West. We would have less stuff, but we would have much more of what we really need, which is connection.
Speaker #0
Well, I'm personally very familiar with what you're saying and the work of Otto Scharmer also. Actually, I had a conversation with him on my other podcast. And I'm personally fully aligned with that vision and with the diagnostic. This is the diagnostic and therefore this is the kind of economy we should be creating. But what are the middle steps? How do we go from what we have today to... something that's more sustainable like really sustainable and um and especially at a you've got the conversation at a macro level that you can have on the economic models and and the way we we define our metrics etc but do you have a point of view on what should be done at a at a company level what what does it mean when you are stuck in the big system and how the economy works. Do you simply, because a lot of people are asking these questions, like, do I simply quit and do something totally different? Or as a, yeah.
Speaker #1
Yeah, I feel like that was more something that my parents did. Like you just quit and then you start a little company that of, I don't know, solar batteries for your phone and dryer balls and that kind of thing. Basically, products that will help you simpler lifestyle, but it doesn't do anything. It's also not nearly enough. It doesn't change the system ultimately. So the reason I start about these narratives is because I do think it needs to come from there. I'm often asked about solutions and technology is obviously a key and crucial solution to it. But what you see right now is often that we have this rebound effect. probably people listening to this have heard of that before, where you have increased efficiencies that you talked about in technology, and we've seen massive increases in technological advances. Humans are innovative, there's no denying that. But why then hasn't that decreased our ecological footprint in any meaningful way at a global level? And it's because a lot of times those efficiencies are used to just produce more, even renewable energy. Yes, we have seen a lot more renewable energy capacity. It's gone wholly on top of the fossil fuels. Our fossil fuel use, in absolute terms, is also at an all-time high. It has not even come down. Because all the renewable energy capacity has come on top of it, which is completely unsurprising in a system where the ultimate goal is growth. The Jeffords Paradox,
Speaker #0
right?
Speaker #1
Right. Jeffords Paradox. So my proposition is this wouldn't happen in a well-being economy where it is to reduce our ecological footprint. back to within planetary boundaries, those same efficiencies would still be very useful tools. They would be solutions because the underlying, the overall goal has changed. And that has changed because of the underlying narrative that has changed. And this goes for everything. So that's why I can't really say what people can do because what we can do very much depends on your specific role in the system. So that's the good news. As the bad news is that you can't control a system. But the good news is that there's always something you can do, even if you feel like in the hierarchy terms you have low power. You always have some influence. So you start by changing that narrative, firstly within yourself, which is a very personal work, which is very counterintuitive maybe, because we're talking about these big global systems. And then at the same time, changing that everything, it can feel so overwhelming. But actually where you start is... with yourself, within yourself. And then from there, of course, it cannot stay there. I always say it starts at the personal level, but it shouldn't stay there. And then you make connections with others and you weave that new story. So in a company, for example, you start connecting with other people in your company. Companies these days, they kind of function like tribes. If you get an email from someone and it's from within a company, there's an immediate level often that you don't realize of trust. Oh, I'll email them back. We don't do random people who email us. So companies function like tribes. And so you use that to find people who share your narrative. And you build that out. And together you co-create what could be that new narrative within the company.
Speaker #0
Yes, that's the idea of theory, you know, co-creation. It's true that people always want ready-made solutions and to be able to make the first steps. Yeah, exactly, a fix. And you want to see what's going to happen. And what you're saying, what a lot of people are saying, is that it's so complex and it's so much in the unknown that the goal is to start making new things in new ways and...
Speaker #1
then you'll find you know along the way but is that right um yes and i would say nobody really knows but i would say that once you start to work from that new narrative you you might be surprised at how many things can stay the same right um once health insurance companies for example truly work towards their vision which is make health care more accessible to americans for example i i say this because we just had the you person, the CEO being shot of United Healthcare, because I would argue they didn't really live their vision statement. And then you see that maybe that can just stay, right? If you become, if that's really your vision statement, and some insurance companies have that, by the way, there are not-for-profit insurance companies that are able, because of their legal structure, to do much more work towards that and work for their members. But so maybe a lot can actually, more can stay the same than we thought could.
Speaker #0
And how should business approach innovation in R&D in this context? You know, we talk a lot about AI and thoughts of innovations, but what should be prioritized? And maybe you have also like an idea on AI since everybody's talking about this.
Speaker #1
Not as much as some. I am not nearly as impressed with it as some other people think to be, think that it's going to be the disruptor. I think it's just another tool. I think it's a new technology. It can do a lot of things. It has a lot of potential. And it's an excellent example of the Jevons paradox right now. It has only increased energy demand. Well, of course, it has the potential to really bring it down and distribute resources much more efficiently among people. So... But it has been deployed for ultimately mostly for profit making. And so it hasn't done those things. So the AI is the same as any other technology for me. It's a tool which will ultimately serve the overall purpose of the system it's part of.
Speaker #0
Yeah, I want to go back to part of my question, which is, what do we do as an individual in the company? You know, do we stay? Do we leave? A lot of people are really wondering, you know, what's the way?
Speaker #1
Yeah. Yeah, no, it's a very good question because I do think there are sometimes moments or situations where you're like, I can't stay here. But it is important to stay plugged into the system. You can't change the system without being part of it. And I do want to recognize that there are some real, that's some real stuff because we have created an economy where... of course our livelihoods are dependent on growth. So let's acknowledge that. Again, that hasn't always been the case. And to be clear, economies have existed way before we made our lives so dependent on having a job. So this financial precarity that you see is a policy choice. But that is, of course, and that's a very legitimate fear, the fear of losing your job. When I spoke at... I don't know why I speak to a lot of bankers, but I do. And, you know, in London. And afterwards, one came towards me and he said, listen, I think that you are right in everything you say, but like, what do you actually, what do I do with this? Because if I do what I think you're telling me I should do, I will lose my job. And that's a legitimate fear. The fear of being placed outside of the system. And so that's why I sometimes say, listen, Find other people because you have more power, but also their safety in numbers. And also why I said earlier, you know, sometimes that absolutely means that you can't go as fast as you wanted to because you place yourself out of the system. And that is frustrating. And I would say get comfortable with that frustration. I do believe that changes are going to happen. because what we're doing is simply unsustainable. And I would say stand ready for them to accelerate rolling out the narrative within your company, for example. And then a second fear is also the fear that government is feeling and politicians, which is the fear of social unrest. So if a lot of people lose their jobs in the absence of growth, then... you're going to have social unrest. And I think this is why also politicians and government feel so trapped in this growthism pursuit. And I think that's also, like I said, getting the system to keep working and keep churning out growth is proving harder and harder. And I think that's also why you're seeing this polarization right now around the world, but also definitely in the US where I currently live.
Speaker #0
Last question. I mean, I wish I had, you know, 30 minutes more to talk about also what's going on right now and all the forces that go against, you know, all the progress that we're trying to make regarding the topics that we speak, but it's a bigger topic. Last question. If you had a reboot button, you know, for any aspect of how we approach, you know, these topics that we discuss, sustainability and economic system. what would you choose to reset?
Speaker #1
Oh, yeah. Well, I will say that this whole button thing is part of this control idea, right? Like, oh, we're going to fix it with this button. No, sorry. You're going to have to talk to people and confront some inner biases and all that stuff. Sorry. But honestly, if it's any kind of magic button, as I alluded to before, The 70s, to me, this was before I was born, but it seemed to me like there were a lot of these ideas that we're talking about right now, right? Safeguarding people's livelihoods and the options of growth with universal basic incomes or job guarantees, that sort of thing. All of those things were already experimented with, a lot of them in the US, by the way. This book also was US authors in the 70s. And so after that, we got Reagan and we went a whole different direction. But I feel like that... if we could go back in time and just tilt a couple of points in the playing field, I think we could have seen a very different world.
Speaker #0
Yeah, we can't, but we're going to find out, you know, the way forward. Thanks a lot for your time, Gaia, and thanks a lot for sharing these insights.
Speaker #1
My pleasure.
Speaker #0
Reboot.

About Reboot Business

Reboot Business is an exploration of the urgent transformation businesses must undergo to address the ecological crisis and the broader societal shift in mindset.

What are the key challenges? What strategies can drive change? What obstacles stand in the way, and what levers can help overcome them? And most importantly, which businesses are leading the way?

Hosted on Ausha. See ausha.co/privacy-policy for more information.

About Reboot Business

Reboot Business is an exploration of the urgent transformation businesses must undergo to address the ecological crisis and the broader societal shift in mindset.

What are the key challenges? What strategies can drive change? What obstacles stand in the way, and what levers can help overcome them? And most importantly, which businesses are leading the way?

Hosted on Ausha. See ausha.co/privacy-policy for more information.

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Hosted on Ausha. See ausha.co/privacy-policy for more information.

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Speaker #0
The context in which businesses operate is undergoing a radical transformation. New social, energy and environmental demands, in particular, require all economic players to rethink their approach. This means reinventing their purpose, minimizing their negative impact on resources and the living world, balancing the imperative of long-term goals with short-term constraints, doing things differently and inventing new solutions. But what exactly? And how can it be done in practice? I am Julien De Vorex. Reboot Business is a podcast by Impact Labs about an economic world in transition. Today, we are diving into one of the most crucial questions facing businesses. How do we navigate the transition to a sustainable economy when our current system demands perpetual growth? Our guest is Gaia Harrington, a unique voice in this conversation. As an economist working with a major corporation sustainability think tank, she brings both theoretical insight and practical experience to this challenge. But what makes her perspective particularly valuable is her work updating the famous Limits to Growth study, originally published by MIT researchers in 1972, the infamous Meadows Report. Fifty years after that landmark study warned about the consequences of unlimited growth in a finite world, Gaia's research confirmed we are tracking closely with their business-as-usual scenario, which predicted significant decline beginning around our present day. Her findings went viral, perhaps because they validated what many are already feeling. Our current economic system is approaching its limits. What makes Gaia's voice so compelling is that she isn't speaking as an outside critic, but as someone working within the corporate world to bridge the gap between degrowth economics and business reality. Today, we will explore this tension and discuss practical ways companies can prepare for and potentially lead the transition to a more sustainable economic model. Okay, let's go. Hi, Gaia. How are you?
Speaker #1
I'm good. How are you?
Speaker #0
Good, good. Well, thanks a lot for spending 45 minutes, one hour with me on this podcast. Happy to be here. Yeah, thanks. We're going to go through a lot of topics. Where are you based now? Where are you now?
Speaker #1
I am now based on the West Coast in Seattle.
Speaker #0
Okay, in the US.
Speaker #1
Yeah. And in the US before this, I also lived on the East Coast, New York City, but Washington, DC. And then I've also lived in Los Angeles, so I've seen both coasts.
Speaker #0
Okay, okay. But, okay, so can you briefly introduce yourself? You know, tell me about what you do, what you've been doing, and yeah, what you spend your time focusing on.
Speaker #1
Yeah, of course. Yeah, so I was born in Europe, actually, in the Netherlands. So I'm now a dual citizen. And it's interesting because I was born and raised in the Netherlands, which is a capitalist economy, but of course has a... much bigger social welfare system and so it's it's been really interesting to see that juxtaposition to going to this like big firm capitalist country like the US and see the differences and see how it impacts people in how they you know how they work how companies work but also just how people live their lives and it's and how it shapes their lives it's very interesting to see but I Very briefly, I started as an economist in neoclassical economics. I've worked at the Dutch Central Bank. I've made international financial regulation. I started my career in a bank. I even worked on those securitizations that instigated the global financial crisis in 2007. And then I made a switch. And long story short, I started in New York City as a consultant at KPMG, a big consulting firm. I went... back to school there. I got my second master's at Harvard in sustainability. And at that point, I still kind of believed in this green growth stuff. And, you know, we have to price in externalities and of course, but the reputation, no forces, you know, and reduced legal risk that will make the companies that do better by doing, being good, right? All that stuff. And then at a certain point in my career, I... I realized to my dismay that I was back to being an economist in the sense that I had to conclude that all these things are part of the solution, but they will never be enough to avoid ecosystem collapse. And we will never be truly sustainable unless we change the underlying economic system that shapes all of our behavior. And so now I'm back to being an economist, but this time in well-being economics.
Speaker #0
Well-being economics, okay. So you will explain to me what that means.
Speaker #1
Maybe I should add that I'm still actually working in the US corporate sector. So I'm a researcher, I work at their small think tank that we have, the Sustainability Research Institute, which does pure research. But I am still very much working at the practical level of implementing that at a big multinational. And so what am I doing there as a well-being economist? It's really this notion of what we currently have. We don't always talk about this very explicitly, but what we have is an economy where the ultimate goal is growth. So we also always have to have every quarter we have to have profit growth. We measure growth at the macroeconomic level in GDP and it always has to grow. And the well-being economics says, hey. that growth sometimes does indeed, as people often claim, bring social benefits. Sometimes, but not always. And it also sometimes comes with, well, often comes with a lot of environmental damage to the point where it actually becomes socially degenerative as well. So maybe growth in and of itself, we don't have to hate it. We don't have to be anti, but it shouldn't be the ultimate goal. The ultimate goal should be... well-being and it should be strictly above it and so that's uh what does that economy look like that's the kind of stuff i'm working on well and maybe we can start there um and then we'll talk about what's going on today but you know we have this limits to growth report um prediction
Speaker #0
from 1972 well when i talked to denis middle he didn't like the term predictions but the kind of simulations and uh in these simulations have kind of largely materialized even though we are not going down yet somehow um why do you think there is still a lot of resistance you know in to accepting that infinite growth in the finite world is
Speaker #1
impossible yeah uh yeah so maybe just for the listeners who were not that familiar with limited growth maybe even haven't listened to that podcast yet But yes, so I first, my research first went viral with my update to the limits to growth. And Dennis Meadows was one of the authors. This was published in 1972. And so for my thesis at Harvard, I didn't update. I was like, because as you say, they did simulations. Several, they had built the first model of the world using a new technique called system dynamics. And with that, they produced several scenarios. And so at best, you can call them forecasts, given the assumptions they put in the model. And there was a business as usual scenario, which had no additional assumptions. So it ran on historical averages. And that showed a peak setting in around present day, and then a steep decline, which they called collapse. I typically just say steep decline, because when I say collapse, people often interpret that as we're all going to die. That is not what collapse means. It doesn't mean... steep decline from a previous peak, which is not enjoyable. So given that unappealing prospect, I thought, okay, well, we have several years of empirical data. Let's see how those scenarios ended up. So there were more scenarios, not just a business as usual scenario. But unfortunately, I did find that empirical data aligns really closely with the business as usual scenario, and that we are heading for a collapse. So at the time, my research went viral. which to me was quite surprising because, you know, I got these interview requests from people and they're like, oh, so you're saying that we're close to a breaking point? I'm like, yeah, you didn't know that? Because I was hardly the first to say that, right? We had at this point in the 70s, Danos and his team, they were very, they were in the minority. But at this point, most scientists agreed that... Climate change is happening and we're nearing a tipping point. And then there's the biodiversity and the water scarcity and all those things. So I was like, this is, yeah, it just all lines up with that forecast or those scenarios that were already done in the 70s. And at the time, it was actually a bestseller. But then there was the pushback and it was very effectively buried. And so that's why I think by that time that I did my research, people were like, oh, really? They already did this at MIT? That's where they did it? MIT did this, like yeah, and that's how it went then. But it just, you can see that people realize this. I think that's why it went viral, because again, it wasn't new. But I think it was where people already are feeling that the current system is just not working and we're nearing a breaking point, not just environmentally, but also socially and economically. We see growth rates go down around the world. So environmentally, it's clearly not sustainable because we've been above our ecological footprint has been above one earth for since the 70s, actually. It's also becoming increasingly clear now that it's just... At some point, it doesn't add any happiness anymore. And it just actually detracts from it because it frays our social cohesion and that sort of thing. But it's also even economically not sustainable. And that's what we see as well. We haven't created a system that's entirely dependent on growth. Yet, we're running out of it. You see this in the richer countries. their growth rates, they're just keep going down. There's a downward trend. And so in every way, it's unsustainable.
Speaker #0
Well, you have written extensively about the limitations of GDP, you know, as a metric. You know, maybe you can talk to me a little bit about that, about the issue that we have, because it's kind of the only score of the game that we're playing, or at least the main score, you know, what we're trying to compete for, you know. and that growth measured in GDP. So in short, you know, what's the problem with GDP? And do we have alternatives, you know, indicators that, you know, we should adapt?
Speaker #1
Oh, there are plenty of alternatives. Yeah, I would say, I mean, I mentioned, I critique GDP, but I'm not the expert on beyond GDP. There's a big GDP, beyond GDP movement. And therefore, Flint, there's no shortage of alternatives because it's not that hard. Actually, it's very often people say, well, but well-being is hard to measure. I'm like, the economy is also hard to measure. OK, GDP is also. That's why I say it. It's only because I want to make the argument like, yes, but the economy is also a social system, by the way. It's not a beta science. It's not an exact science. So it's that's also hard to measure. And GDP is clearly not measuring it very well. So. So, yes, well-being would also, we would need indicators. We would need much more than just a single number. But it's not harder to measure necessarily than the economy in itself. So that's one thing. Herman Daly, a former World Bank economist, for example, came up with the genuine progress indicator. So that also does take economic factors, but then it subtracts from that, for example, pollution. Which makes sense, right? Because that also goes to... genuine progress. If you have a lot of pollution, air pollution, water pollution, that's not good economically, let alone societally. Things like social cohesion, a sense of community and trust in one another, that adds to it. And so if you look at the genuine progress indicator, that has decoupled from GDP, again, since the 70s. If you look at countries like the US, so rich countries, the genuine progress indicator hasn't peaked also. in the 70s. The 70s was really kind of, it seems like a turning point where we could have gone a different direction and it might have been better, but we didn't go there. So, you know, there's plenty of alternatives to it.
Speaker #0
Well, I mean, we can spend the hour talking about macroeconomics and degrowth and I want to get into what we do at a business level also, but maybe we can spend a couple of minutes, you know, talking about... what the growth means, you know, at a macro level and this idea that decoupling, you know, may not be possible, meaning that we cannot continue growing and solve the climate issues and other environmental issues that we have. You know, what's your analysis on that?
Speaker #1
Yeah, I mean, listen, I would love for decoupling to be happening to a sufficient extent, right? I mean, it's a lot easier. Economic system changes a lot of effort. But dealing with the aftermath of ecosystem collapse is also a lot of effort. And that's basically the two real options we have. This idea of, well, we can decouple, we can keep growing without our ecological footprint growing along with it. It's just nowhere in the data. So if you look at our material footprint, that has just stayed the same. It has never shown a decline. Water use, biodiversity loss, those are all accelerating. There is one exception to that, which is carbon emissions. That's why we're focusing sometimes so much. And there's, I think, a quite intentional push to conflate true sustainability with just avoiding climate change, which, by the way, is also not happening. But at least there is a little progress there. So we've seen some decoupling. But even in the countries that have shown the biggest decoupling, it is not anywhere near sufficient. to stay within the Paris Agreement. So, and that just means at the global level, where climate change is happening, our global carbon emissions have never been higher.
Speaker #0
Well, yeah, you're right to mention the fact that we are conflicting often, you know, the climate crisis with the overall ecological crisis. It's like a funnel, you know, if you focus on that also, because I guess this is the easiest part in a sense. And even that easiest objective, which is, you know, energy transition, we're far from doing it. And I would like to understand, you know, how does it work for companies? Because we have recent studies that show that... suggest at least that 85% of companies' net zero trajectories are viewed as unrealistic. And often, you know, banking on last minute technological breakthrough rather than fundamental business model changes. So what's your perspective on the balance between technological innovation and systemic changes like sharing economy models or resource reduction? And, you know, how do you see the conversation being? framed in companies? Are we simply really far away from what should be done and what should be understood?
Speaker #1
Well, we're definitely far away. As you said, climate change is the best in class, but it's still not a passing grade. So if you look at companies' carbon pledges and performance, that's even often still the best. They're not decoupling in any other. waste, like again, water, biodiversity and all those things. So that's the first thing. And then, of course, that's not sufficient. I would say right now is a very interesting time. And I think it's because we're at that peak, right? We haven't gone too steeply into decline yet. And I think now is really the time like, oh, we can make the decision to maintain what we have or have it. be on the decline with futile attempts to grow further. And if I may, that was also a scenario in the limits to growth. So it wasn't a prediction of doom. There was actually one scenario with very much additional assumptions where the authors assumed that humanity itself chose to let go of growth instead of having it forced upon them with a collapse. And they... consciously, purposefully redirected resources away from industrial output growth towards basically what it came down to meeting human needs and protecting the environment. And in that scenario, you see also that it peaks around now, but then the human welfare variable remains the same for the rest of the century. So that's the choice that we have. We either go down or we hold on to what we have. We cannot continue to grow. There was no scenario where things grew further. And I think that's really what you see, where humanity... has to it's mask off right now either we go down or we hold on to what we have by doing this together pulling together and you see different companies doing different things you see different people doing different things but still
Speaker #0
you know at least in big corporations you have the feeling that everyone is lost because we have even for the people who understand that We have these big plans and big ambitions, and also now they have laws to abide by. But there is this tension between the system that requires every company to grow and to be more profitable year on year, and this kind of willingness to do things differently. So I want to go a little bit more into that. And maybe as you're working with a major corporation, while carrying a message and understanding all that, a message that challenges mainstream economic thinking. How to navigate? How do you navigate yourself, you know, this apparent contradiction and what are the conversations that you, tough conversations that you have?
Speaker #1
Yeah, I think, yeah, like I said, I do think we live in a very historical, historic moment in time. And so in that sense, it's full of contradictions and uncertainties. So that's... That's yes, that's very much the case. I think, you know, it's a little bit hard to answer in general because there's no such thing as really as the business community because you see businesses behave very differently. You saw this during COVID too. Like some companies just completely laid off people and were like, okay, bye. And then others were like, oh, well, we actually, we used to produce this stuff, a completely different product. But. it looks like there's a need in society for masks and then they just started producing masks um you know so it's it really depends on the company and there are a lot of a lot of different aspects around it um i think it's also very different based on the structure and the size that you have for example if you are um they're there i think there are plenty of examples of these sort of what I would call well-being businesses. They're pretty small and they basically do things kind of right from the start. But they don't have the whole lot of impact because they're relatively small. And then you have these big multinationals, such as one where I work. And then you're right. You bump up way more into all these legacy systems that you're part of and that shape your options, which aren't always... exactly how you would want them to be sometimes. So there are really different pathways towards that. Speaking of pathways, I think you mentioned degrowth in your previous question. And that is, I think, if you talk about the pathways, I think degrowth is really for companies in countries where you and I live, so the richer countries, that is really the way to... towards this well-being economy. A well-being economy meets all human needs, definitely firstly the basic needs, and then a little bit above that, so for the well-being, within planetary boundaries. And right now, all these rich nations are way above their fair share of the Earth's carrying capacity. So there, that pathway really needs to be deliberately reducing the ecological footprint significantly while maintaining well-being levels. That probably... will reduce overall GDP? It might not, but because it's impossible really to predict. And certain sectors will still grow, right? Care sectors, for example, the renewable energy sector. But degrowth is really the pathway towards that more of a destination framework of a well-being economy. And that pathway, the degrowth path, will look very differently for different kind of companies.
Speaker #0
Well, maybe we can go into that because I would like to get a sense for the people listening and working in the industry. in different sorts of companies of what does it mean, you know, how organizations could practically implement some degrowth principles. And in your book, you discuss the concept of managed descent, I believe. And is this, so how can businesses prepare for it? Is it all businesses that can do that? Some types of businesses, like if you're on the stock market, I guess you have different metrics, different type of reporting, but what could potentially lead to this transition while remaining viable organization? Because that's the fear that we have. Like if I degrowth, if I plan degrowth, I will simply disappear.
Speaker #1
Yes, and I think that is a legitimate fear, by the way, which is also why we see a... a proper role for government. Regulation is necessary for this too, because there is the fear of the first mover disadvantage in a competitive market. I think in that sense, the government's role is absolutely crucial. But like you said, it depends very much on the kind of company. The products that you or services that you provide obviously makes a huge difference too. For example, a cigarette company, I don't see how that... can ever be, right? A degrowth business. You could still be a business, but you would have to just start making a different product, I think. And so it really depends. If you're a solar panel company, it's easier in that sense. And then you just don't focus on the ultimate goal on growth. But yeah, so it also very much depends on your product. Let's be very clear about that. The company I work for works in the energy transition, for example. So in that sense, it's easy. But then also we are talking about how do we make that just and what does a just transition mean? So it is obviously not just the local community, definitely that, but also internationally. Where do all these minerals come from and the metals that go into the solar panels? And is that compatible with... lifting everybody up to the current energy consumption that we see in the West? The answer is no. So those are all questions that you need to have. But it is possible if you want to have one example, for example, that is quite often referenced in this sense, is the Danish energy company that used to be a fossil fuel company. And then at some point, I think, had internal discussions about, well, what is our future? And decided, well, it can't be fossil fuels. It just can't be if we really mean what we say in our vision statement. And so then they switched completely to fossil fuels. Let me... Let me pause real quick because of course now I don't remember the name of this Danish company. It's easy to find. Orsted is a Danish company.
Speaker #0
And fossil fuel to renewable, basically.
Speaker #1
Yes. And they did that, I assume. I wasn't privy on the conversation. But I assume they had some internal discussions about what is a future fit company. And then they ended up with... So it's only possible to completely switch your product in that sense.
Speaker #0
yeah i guess it's uh you have to manage different stakeholders you have to manage uh yeah but that's that's a good example that that means that that's feasible you know it's moving from something that's kind of uh going away or destroying everything to something that needs to grow basically something
Speaker #1
that needs to grow from something that needs to grow yeah and of course an often uh heard misunderstanding about degrowth is that it's anti-growth which it is, but it's more selective about it. And how I typically reframe, try to reframe the discussion sometimes, in general and within companies, is also, listen, this is not a question of, okay, but do we do this whole effort of revamping or completely reinventing our company or continue as we did? Because the latter is not an option. So either you are prepared for upcoming major changes around the world, or you're not. That's the question we're really dealing with.
Speaker #0
Well, in that sense, can we talk about resilience? Because your work also emphasizes the importance of resilience over efficiency. And actually, many businesses, if not all businesses, are optimized or optimize their operations for maximum efficiency through just-in-time production or lean management, etc. How can they shift toward resilience without losing competitiveness? Because again, that's a fear.
Speaker #1
Yeah, so if you don't have a lot of resilience in future upcoming upheavals, you're also not going to be competitive. So that's really this reframing of, I think there's... a lot of the short term and long term i guess like really understanding that things are changing but listen this is what management is i i sometimes i'm like okay what is it now are you like the best guys out there that's why you deserve all these high bonuses and stuff and you don't need to be regulated because you know it better than the government or are you having trouble understanding the basics one-on-one of investment in the future because you can't have both it's not a difficult concept so you know Sometimes I say that in nicer wording.
Speaker #0
So you do have this conversation. And what is the argument about? Is it about really, yes, but we need to show that we're profitable, you know, for the next two or three years. So then we'll see later. And anyway, you know, we'll find solutions. Or is it, I just want to understand where we're stuck. Is it in the processes that exist that force us, force the companies to think short term? Is it in the minds of the people? You know, where do you see really the things happening?
Speaker #1
Yeah, good question. The question to some, the answer to some extent is, of course, all of the above. But I do like how you mentioned the mindset, because I do think that, you know, there's this, many people have made this point, by the way, but there's this one MIT professor, Otto Scharmer, who also says, it doesn't matter really what you do. It doesn't. even matter how you do it. It matters from the energy and your mindset from within, from which it's coming. And I think that, so ultimately it does come down to that, I think. But, you know, it is also, I think, a little bit of an iterative process because you are limited by the system that you're in. You have limited influence. The vast majority of us have limited influence and we are influenced by it massively. And I think that is something to acknowledge too, that I think the business sector as a whole has a crucial role to play and its participation of at least some of them is indispensable in this transition and at the same time um i'm not necessarily sure it it really had it will come from them again all of us have to do our part but i do think there's a crucial role for government and we should also not forget the the power of the citizens when they bind together and ask for change do you find it useful within
Speaker #0
corporations to talk about risks more than ethics, you know, on this matters?
Speaker #1
Yeah, that's a good question. And by now, my answer is no. I actually used to be in risk management at KPMG. So I very much talked about, these are all the risks, you know, and then I pointed to activists and I used that as being sort of an entrepreneur to help bring these things about. So, and... Like there is that, but at the same time using that thing. And ultimately what you're saying is this is going to be bad for profit. So we better do this sustainability thing. And you're reinforcing the system, right? So in a way, yeah. So in a way, I'm now I'm like, listen, can we also talk about how you as a human being feels, including everybody at the executive level, feel like your values are often at odds with what you feel this company. just the system that you're part of as well, are just caught in. And then you actually see that you get very different conversations about what might be possible. I was at a finance conference in Denmark, and I was interviewed by a financial paper, and they asked me, so what do you advise people in finance? And I said, I think there's some really front-running people there. But having worked in finance myself, I don't think the real change is going to start there. I think they're smart. They know what's going on. They're just not the kind of activistic type. So I said the real message is stand ready because changes are coming. You know that. You know this is not sustainable. And so stand ready for when this change comes to just jump along with us when it's safer for you.
Speaker #0
Yeah, I wanted to talk about stakeholder. capitalism and um you mentioned also in your work the the need for a more inclusive you know economic model like how do you see the role again of what we call stakeholder capitalism evolving and uh and also like to be concrete you know what what concrete changes should company make in their governance and decision making process and
Speaker #1
how do you work it out yeah uh so here's why i'm like The stakeholder and this whole inclusion in general for me is, it's still ultimately, I think, maintaining old structures. It basically says, well, we have this economy that needs to grow all the time, but, you know, just more people need to benefit from it. And I'm like, listen, that, first of all, that will never happen, but also to the extent where it's all equal. But I think more importantly, this still comes from a place of the ultimate underlying story. So we're going to go at the deepest level now of what we tell ourselves about who we are. That's where these mindsets come from. And it's the story of separation. We're all separate beings that obviously have our own interests, right? And what happens to others are just externalities apparently that we discount. We're selfish, we have selfish genes, and kindness is just a tactic to propagate that. So, you know, we are just maximizing our own utility, we all know that. We live in a dead planet, and, you know, ultimately in a dead universe. And so that's then the story, and so you're like, okay, but we have to make it more inclusive. So to make it tolerable, I guess, for more people, we just have to include more people in the decision-making. But it's still the story of separation to me. And I think ultimately what really needs to change is this underlying narrative, which has been more prevalent in history, to be clear. And I think that's maybe good to touch upon as well, that we've all grown up with this growth narrative, that growth is always progress. But for most, even of human history, let alone the rest of nature, the idea that growth, perpetual growth was good, was not there. It was most of the time the opposite, even in human history, where it was considered immoral. Because we know from experience that anything that grows perpetually is dangerous. It can kill us. And the economy is no exception, despite what many economists will tell you. And so what is this different story then? And that's the story of interdependence, where all thriving is mutual. And as soon as our... We can be selfish, but that's when our most basic needs are unmet. And as soon as you see that we're not hungry, we're not feeling unsafe. we become much more altruistic and curious and playful than this homo economicus ever could be. And we actually... need to feel at that point, we need to feel that what we do matters, that it actually leaves, that we are leaving, what we do every day leaves the world a little bit better than we found it. That is a need that is often unmet in this current economy, and which is also why a well-being economy would suit the needs better for people even in the West. We would have less stuff, but we would have much more of what we really need, which is connection.
Speaker #0
Well, I'm personally very familiar with what you're saying and the work of Otto Scharmer also. Actually, I had a conversation with him on my other podcast. And I'm personally fully aligned with that vision and with the diagnostic. This is the diagnostic and therefore this is the kind of economy we should be creating. But what are the middle steps? How do we go from what we have today to... something that's more sustainable like really sustainable and um and especially at a you've got the conversation at a macro level that you can have on the economic models and and the way we we define our metrics etc but do you have a point of view on what should be done at a at a company level what what does it mean when you are stuck in the big system and how the economy works. Do you simply, because a lot of people are asking these questions, like, do I simply quit and do something totally different? Or as a, yeah.
Speaker #1
Yeah, I feel like that was more something that my parents did. Like you just quit and then you start a little company that of, I don't know, solar batteries for your phone and dryer balls and that kind of thing. Basically, products that will help you simpler lifestyle, but it doesn't do anything. It's also not nearly enough. It doesn't change the system ultimately. So the reason I start about these narratives is because I do think it needs to come from there. I'm often asked about solutions and technology is obviously a key and crucial solution to it. But what you see right now is often that we have this rebound effect. probably people listening to this have heard of that before, where you have increased efficiencies that you talked about in technology, and we've seen massive increases in technological advances. Humans are innovative, there's no denying that. But why then hasn't that decreased our ecological footprint in any meaningful way at a global level? And it's because a lot of times those efficiencies are used to just produce more, even renewable energy. Yes, we have seen a lot more renewable energy capacity. It's gone wholly on top of the fossil fuels. Our fossil fuel use, in absolute terms, is also at an all-time high. It has not even come down. Because all the renewable energy capacity has come on top of it, which is completely unsurprising in a system where the ultimate goal is growth. The Jeffords Paradox,
Speaker #0
right?
Speaker #1
Right. Jeffords Paradox. So my proposition is this wouldn't happen in a well-being economy where it is to reduce our ecological footprint. back to within planetary boundaries, those same efficiencies would still be very useful tools. They would be solutions because the underlying, the overall goal has changed. And that has changed because of the underlying narrative that has changed. And this goes for everything. So that's why I can't really say what people can do because what we can do very much depends on your specific role in the system. So that's the good news. As the bad news is that you can't control a system. But the good news is that there's always something you can do, even if you feel like in the hierarchy terms you have low power. You always have some influence. So you start by changing that narrative, firstly within yourself, which is a very personal work, which is very counterintuitive maybe, because we're talking about these big global systems. And then at the same time, changing that everything, it can feel so overwhelming. But actually where you start is... with yourself, within yourself. And then from there, of course, it cannot stay there. I always say it starts at the personal level, but it shouldn't stay there. And then you make connections with others and you weave that new story. So in a company, for example, you start connecting with other people in your company. Companies these days, they kind of function like tribes. If you get an email from someone and it's from within a company, there's an immediate level often that you don't realize of trust. Oh, I'll email them back. We don't do random people who email us. So companies function like tribes. And so you use that to find people who share your narrative. And you build that out. And together you co-create what could be that new narrative within the company.
Speaker #0
Yes, that's the idea of theory, you know, co-creation. It's true that people always want ready-made solutions and to be able to make the first steps. Yeah, exactly, a fix. And you want to see what's going to happen. And what you're saying, what a lot of people are saying, is that it's so complex and it's so much in the unknown that the goal is to start making new things in new ways and...
Speaker #1
then you'll find you know along the way but is that right um yes and i would say nobody really knows but i would say that once you start to work from that new narrative you you might be surprised at how many things can stay the same right um once health insurance companies for example truly work towards their vision which is make health care more accessible to americans for example i i say this because we just had the you person, the CEO being shot of United Healthcare, because I would argue they didn't really live their vision statement. And then you see that maybe that can just stay, right? If you become, if that's really your vision statement, and some insurance companies have that, by the way, there are not-for-profit insurance companies that are able, because of their legal structure, to do much more work towards that and work for their members. But so maybe a lot can actually, more can stay the same than we thought could.
Speaker #0
And how should business approach innovation in R&D in this context? You know, we talk a lot about AI and thoughts of innovations, but what should be prioritized? And maybe you have also like an idea on AI since everybody's talking about this.
Speaker #1
Not as much as some. I am not nearly as impressed with it as some other people think to be, think that it's going to be the disruptor. I think it's just another tool. I think it's a new technology. It can do a lot of things. It has a lot of potential. And it's an excellent example of the Jevons paradox right now. It has only increased energy demand. Well, of course, it has the potential to really bring it down and distribute resources much more efficiently among people. So... But it has been deployed for ultimately mostly for profit making. And so it hasn't done those things. So the AI is the same as any other technology for me. It's a tool which will ultimately serve the overall purpose of the system it's part of.
Speaker #0
Yeah, I want to go back to part of my question, which is, what do we do as an individual in the company? You know, do we stay? Do we leave? A lot of people are really wondering, you know, what's the way?
Speaker #1
Yeah. Yeah, no, it's a very good question because I do think there are sometimes moments or situations where you're like, I can't stay here. But it is important to stay plugged into the system. You can't change the system without being part of it. And I do want to recognize that there are some real, that's some real stuff because we have created an economy where... of course our livelihoods are dependent on growth. So let's acknowledge that. Again, that hasn't always been the case. And to be clear, economies have existed way before we made our lives so dependent on having a job. So this financial precarity that you see is a policy choice. But that is, of course, and that's a very legitimate fear, the fear of losing your job. When I spoke at... I don't know why I speak to a lot of bankers, but I do. And, you know, in London. And afterwards, one came towards me and he said, listen, I think that you are right in everything you say, but like, what do you actually, what do I do with this? Because if I do what I think you're telling me I should do, I will lose my job. And that's a legitimate fear. The fear of being placed outside of the system. And so that's why I sometimes say, listen, Find other people because you have more power, but also their safety in numbers. And also why I said earlier, you know, sometimes that absolutely means that you can't go as fast as you wanted to because you place yourself out of the system. And that is frustrating. And I would say get comfortable with that frustration. I do believe that changes are going to happen. because what we're doing is simply unsustainable. And I would say stand ready for them to accelerate rolling out the narrative within your company, for example. And then a second fear is also the fear that government is feeling and politicians, which is the fear of social unrest. So if a lot of people lose their jobs in the absence of growth, then... you're going to have social unrest. And I think this is why also politicians and government feel so trapped in this growthism pursuit. And I think that's also, like I said, getting the system to keep working and keep churning out growth is proving harder and harder. And I think that's also why you're seeing this polarization right now around the world, but also definitely in the US where I currently live.
Speaker #0
Last question. I mean, I wish I had, you know, 30 minutes more to talk about also what's going on right now and all the forces that go against, you know, all the progress that we're trying to make regarding the topics that we speak, but it's a bigger topic. Last question. If you had a reboot button, you know, for any aspect of how we approach, you know, these topics that we discuss, sustainability and economic system. what would you choose to reset?
Speaker #1
Oh, yeah. Well, I will say that this whole button thing is part of this control idea, right? Like, oh, we're going to fix it with this button. No, sorry. You're going to have to talk to people and confront some inner biases and all that stuff. Sorry. But honestly, if it's any kind of magic button, as I alluded to before, The 70s, to me, this was before I was born, but it seemed to me like there were a lot of these ideas that we're talking about right now, right? Safeguarding people's livelihoods and the options of growth with universal basic incomes or job guarantees, that sort of thing. All of those things were already experimented with, a lot of them in the US, by the way. This book also was US authors in the 70s. And so after that, we got Reagan and we went a whole different direction. But I feel like that... if we could go back in time and just tilt a couple of points in the playing field, I think we could have seen a very different world.
Speaker #0
Yeah, we can't, but we're going to find out, you know, the way forward. Thanks a lot for your time, Gaia, and thanks a lot for sharing these insights.
Speaker #1
My pleasure.
Speaker #0
Reboot.

About Reboot Business

Reboot Business is an exploration of the urgent transformation businesses must undergo to address the ecological crisis and the broader societal shift in mindset.

What are the key challenges? What strategies can drive change? What obstacles stand in the way, and what levers can help overcome them? And most importantly, which businesses are leading the way?

Hosted on Ausha. See ausha.co/privacy-policy for more information.

About Reboot Business

Reboot Business is an exploration of the urgent transformation businesses must undergo to address the ecological crisis and the broader societal shift in mindset.

What are the key challenges? What strategies can drive change? What obstacles stand in the way, and what levers can help overcome them? And most importantly, which businesses are leading the way?

Hosted on Ausha. See ausha.co/privacy-policy for more information.

Description

Hosted on Ausha. See ausha.co/privacy-policy for more information.

Transcription

Speaker #0
The context in which businesses operate is undergoing a radical transformation. New social, energy and environmental demands, in particular, require all economic players to rethink their approach. This means reinventing their purpose, minimizing their negative impact on resources and the living world, balancing the imperative of long-term goals with short-term constraints, doing things differently and inventing new solutions. But what exactly? And how can it be done in practice? I am Julien De Vorex. Reboot Business is a podcast by Impact Labs about an economic world in transition. Today, we are diving into one of the most crucial questions facing businesses. How do we navigate the transition to a sustainable economy when our current system demands perpetual growth? Our guest is Gaia Harrington, a unique voice in this conversation. As an economist working with a major corporation sustainability think tank, she brings both theoretical insight and practical experience to this challenge. But what makes her perspective particularly valuable is her work updating the famous Limits to Growth study, originally published by MIT researchers in 1972, the infamous Meadows Report. Fifty years after that landmark study warned about the consequences of unlimited growth in a finite world, Gaia's research confirmed we are tracking closely with their business-as-usual scenario, which predicted significant decline beginning around our present day. Her findings went viral, perhaps because they validated what many are already feeling. Our current economic system is approaching its limits. What makes Gaia's voice so compelling is that she isn't speaking as an outside critic, but as someone working within the corporate world to bridge the gap between degrowth economics and business reality. Today, we will explore this tension and discuss practical ways companies can prepare for and potentially lead the transition to a more sustainable economic model. Okay, let's go. Hi, Gaia. How are you?
Speaker #1
I'm good. How are you?
Speaker #0
Good, good. Well, thanks a lot for spending 45 minutes, one hour with me on this podcast. Happy to be here. Yeah, thanks. We're going to go through a lot of topics. Where are you based now? Where are you now?
Speaker #1
I am now based on the West Coast in Seattle.
Speaker #0
Okay, in the US.
Speaker #1
Yeah. And in the US before this, I also lived on the East Coast, New York City, but Washington, DC. And then I've also lived in Los Angeles, so I've seen both coasts.
Speaker #0
Okay, okay. But, okay, so can you briefly introduce yourself? You know, tell me about what you do, what you've been doing, and yeah, what you spend your time focusing on.
Speaker #1
Yeah, of course. Yeah, so I was born in Europe, actually, in the Netherlands. So I'm now a dual citizen. And it's interesting because I was born and raised in the Netherlands, which is a capitalist economy, but of course has a... much bigger social welfare system and so it's it's been really interesting to see that juxtaposition to going to this like big firm capitalist country like the US and see the differences and see how it impacts people in how they you know how they work how companies work but also just how people live their lives and it's and how it shapes their lives it's very interesting to see but I Very briefly, I started as an economist in neoclassical economics. I've worked at the Dutch Central Bank. I've made international financial regulation. I started my career in a bank. I even worked on those securitizations that instigated the global financial crisis in 2007. And then I made a switch. And long story short, I started in New York City as a consultant at KPMG, a big consulting firm. I went... back to school there. I got my second master's at Harvard in sustainability. And at that point, I still kind of believed in this green growth stuff. And, you know, we have to price in externalities and of course, but the reputation, no forces, you know, and reduced legal risk that will make the companies that do better by doing, being good, right? All that stuff. And then at a certain point in my career, I... I realized to my dismay that I was back to being an economist in the sense that I had to conclude that all these things are part of the solution, but they will never be enough to avoid ecosystem collapse. And we will never be truly sustainable unless we change the underlying economic system that shapes all of our behavior. And so now I'm back to being an economist, but this time in well-being economics.
Speaker #0
Well-being economics, okay. So you will explain to me what that means.
Speaker #1
Maybe I should add that I'm still actually working in the US corporate sector. So I'm a researcher, I work at their small think tank that we have, the Sustainability Research Institute, which does pure research. But I am still very much working at the practical level of implementing that at a big multinational. And so what am I doing there as a well-being economist? It's really this notion of what we currently have. We don't always talk about this very explicitly, but what we have is an economy where the ultimate goal is growth. So we also always have to have every quarter we have to have profit growth. We measure growth at the macroeconomic level in GDP and it always has to grow. And the well-being economics says, hey. that growth sometimes does indeed, as people often claim, bring social benefits. Sometimes, but not always. And it also sometimes comes with, well, often comes with a lot of environmental damage to the point where it actually becomes socially degenerative as well. So maybe growth in and of itself, we don't have to hate it. We don't have to be anti, but it shouldn't be the ultimate goal. The ultimate goal should be... well-being and it should be strictly above it and so that's uh what does that economy look like that's the kind of stuff i'm working on well and maybe we can start there um and then we'll talk about what's going on today but you know we have this limits to growth report um prediction
Speaker #0
from 1972 well when i talked to denis middle he didn't like the term predictions but the kind of simulations and uh in these simulations have kind of largely materialized even though we are not going down yet somehow um why do you think there is still a lot of resistance you know in to accepting that infinite growth in the finite world is
Speaker #1
impossible yeah uh yeah so maybe just for the listeners who were not that familiar with limited growth maybe even haven't listened to that podcast yet But yes, so I first, my research first went viral with my update to the limits to growth. And Dennis Meadows was one of the authors. This was published in 1972. And so for my thesis at Harvard, I didn't update. I was like, because as you say, they did simulations. Several, they had built the first model of the world using a new technique called system dynamics. And with that, they produced several scenarios. And so at best, you can call them forecasts, given the assumptions they put in the model. And there was a business as usual scenario, which had no additional assumptions. So it ran on historical averages. And that showed a peak setting in around present day, and then a steep decline, which they called collapse. I typically just say steep decline, because when I say collapse, people often interpret that as we're all going to die. That is not what collapse means. It doesn't mean... steep decline from a previous peak, which is not enjoyable. So given that unappealing prospect, I thought, okay, well, we have several years of empirical data. Let's see how those scenarios ended up. So there were more scenarios, not just a business as usual scenario. But unfortunately, I did find that empirical data aligns really closely with the business as usual scenario, and that we are heading for a collapse. So at the time, my research went viral. which to me was quite surprising because, you know, I got these interview requests from people and they're like, oh, so you're saying that we're close to a breaking point? I'm like, yeah, you didn't know that? Because I was hardly the first to say that, right? We had at this point in the 70s, Danos and his team, they were very, they were in the minority. But at this point, most scientists agreed that... Climate change is happening and we're nearing a tipping point. And then there's the biodiversity and the water scarcity and all those things. So I was like, this is, yeah, it just all lines up with that forecast or those scenarios that were already done in the 70s. And at the time, it was actually a bestseller. But then there was the pushback and it was very effectively buried. And so that's why I think by that time that I did my research, people were like, oh, really? They already did this at MIT? That's where they did it? MIT did this, like yeah, and that's how it went then. But it just, you can see that people realize this. I think that's why it went viral, because again, it wasn't new. But I think it was where people already are feeling that the current system is just not working and we're nearing a breaking point, not just environmentally, but also socially and economically. We see growth rates go down around the world. So environmentally, it's clearly not sustainable because we've been above our ecological footprint has been above one earth for since the 70s, actually. It's also becoming increasingly clear now that it's just... At some point, it doesn't add any happiness anymore. And it just actually detracts from it because it frays our social cohesion and that sort of thing. But it's also even economically not sustainable. And that's what we see as well. We haven't created a system that's entirely dependent on growth. Yet, we're running out of it. You see this in the richer countries. their growth rates, they're just keep going down. There's a downward trend. And so in every way, it's unsustainable.
Speaker #0
Well, you have written extensively about the limitations of GDP, you know, as a metric. You know, maybe you can talk to me a little bit about that, about the issue that we have, because it's kind of the only score of the game that we're playing, or at least the main score, you know, what we're trying to compete for, you know. and that growth measured in GDP. So in short, you know, what's the problem with GDP? And do we have alternatives, you know, indicators that, you know, we should adapt?
Speaker #1
Oh, there are plenty of alternatives. Yeah, I would say, I mean, I mentioned, I critique GDP, but I'm not the expert on beyond GDP. There's a big GDP, beyond GDP movement. And therefore, Flint, there's no shortage of alternatives because it's not that hard. Actually, it's very often people say, well, but well-being is hard to measure. I'm like, the economy is also hard to measure. OK, GDP is also. That's why I say it. It's only because I want to make the argument like, yes, but the economy is also a social system, by the way. It's not a beta science. It's not an exact science. So it's that's also hard to measure. And GDP is clearly not measuring it very well. So. So, yes, well-being would also, we would need indicators. We would need much more than just a single number. But it's not harder to measure necessarily than the economy in itself. So that's one thing. Herman Daly, a former World Bank economist, for example, came up with the genuine progress indicator. So that also does take economic factors, but then it subtracts from that, for example, pollution. Which makes sense, right? Because that also goes to... genuine progress. If you have a lot of pollution, air pollution, water pollution, that's not good economically, let alone societally. Things like social cohesion, a sense of community and trust in one another, that adds to it. And so if you look at the genuine progress indicator, that has decoupled from GDP, again, since the 70s. If you look at countries like the US, so rich countries, the genuine progress indicator hasn't peaked also. in the 70s. The 70s was really kind of, it seems like a turning point where we could have gone a different direction and it might have been better, but we didn't go there. So, you know, there's plenty of alternatives to it.
Speaker #0
Well, I mean, we can spend the hour talking about macroeconomics and degrowth and I want to get into what we do at a business level also, but maybe we can spend a couple of minutes, you know, talking about... what the growth means, you know, at a macro level and this idea that decoupling, you know, may not be possible, meaning that we cannot continue growing and solve the climate issues and other environmental issues that we have. You know, what's your analysis on that?
Speaker #1
Yeah, I mean, listen, I would love for decoupling to be happening to a sufficient extent, right? I mean, it's a lot easier. Economic system changes a lot of effort. But dealing with the aftermath of ecosystem collapse is also a lot of effort. And that's basically the two real options we have. This idea of, well, we can decouple, we can keep growing without our ecological footprint growing along with it. It's just nowhere in the data. So if you look at our material footprint, that has just stayed the same. It has never shown a decline. Water use, biodiversity loss, those are all accelerating. There is one exception to that, which is carbon emissions. That's why we're focusing sometimes so much. And there's, I think, a quite intentional push to conflate true sustainability with just avoiding climate change, which, by the way, is also not happening. But at least there is a little progress there. So we've seen some decoupling. But even in the countries that have shown the biggest decoupling, it is not anywhere near sufficient. to stay within the Paris Agreement. So, and that just means at the global level, where climate change is happening, our global carbon emissions have never been higher.
Speaker #0
Well, yeah, you're right to mention the fact that we are conflicting often, you know, the climate crisis with the overall ecological crisis. It's like a funnel, you know, if you focus on that also, because I guess this is the easiest part in a sense. And even that easiest objective, which is, you know, energy transition, we're far from doing it. And I would like to understand, you know, how does it work for companies? Because we have recent studies that show that... suggest at least that 85% of companies' net zero trajectories are viewed as unrealistic. And often, you know, banking on last minute technological breakthrough rather than fundamental business model changes. So what's your perspective on the balance between technological innovation and systemic changes like sharing economy models or resource reduction? And, you know, how do you see the conversation being? framed in companies? Are we simply really far away from what should be done and what should be understood?
Speaker #1
Well, we're definitely far away. As you said, climate change is the best in class, but it's still not a passing grade. So if you look at companies' carbon pledges and performance, that's even often still the best. They're not decoupling in any other. waste, like again, water, biodiversity and all those things. So that's the first thing. And then, of course, that's not sufficient. I would say right now is a very interesting time. And I think it's because we're at that peak, right? We haven't gone too steeply into decline yet. And I think now is really the time like, oh, we can make the decision to maintain what we have or have it. be on the decline with futile attempts to grow further. And if I may, that was also a scenario in the limits to growth. So it wasn't a prediction of doom. There was actually one scenario with very much additional assumptions where the authors assumed that humanity itself chose to let go of growth instead of having it forced upon them with a collapse. And they... consciously, purposefully redirected resources away from industrial output growth towards basically what it came down to meeting human needs and protecting the environment. And in that scenario, you see also that it peaks around now, but then the human welfare variable remains the same for the rest of the century. So that's the choice that we have. We either go down or we hold on to what we have. We cannot continue to grow. There was no scenario where things grew further. And I think that's really what you see, where humanity... has to it's mask off right now either we go down or we hold on to what we have by doing this together pulling together and you see different companies doing different things you see different people doing different things but still
Speaker #0
you know at least in big corporations you have the feeling that everyone is lost because we have even for the people who understand that We have these big plans and big ambitions, and also now they have laws to abide by. But there is this tension between the system that requires every company to grow and to be more profitable year on year, and this kind of willingness to do things differently. So I want to go a little bit more into that. And maybe as you're working with a major corporation, while carrying a message and understanding all that, a message that challenges mainstream economic thinking. How to navigate? How do you navigate yourself, you know, this apparent contradiction and what are the conversations that you, tough conversations that you have?
Speaker #1
Yeah, I think, yeah, like I said, I do think we live in a very historical, historic moment in time. And so in that sense, it's full of contradictions and uncertainties. So that's... That's yes, that's very much the case. I think, you know, it's a little bit hard to answer in general because there's no such thing as really as the business community because you see businesses behave very differently. You saw this during COVID too. Like some companies just completely laid off people and were like, okay, bye. And then others were like, oh, well, we actually, we used to produce this stuff, a completely different product. But. it looks like there's a need in society for masks and then they just started producing masks um you know so it's it really depends on the company and there are a lot of a lot of different aspects around it um i think it's also very different based on the structure and the size that you have for example if you are um they're there i think there are plenty of examples of these sort of what I would call well-being businesses. They're pretty small and they basically do things kind of right from the start. But they don't have the whole lot of impact because they're relatively small. And then you have these big multinationals, such as one where I work. And then you're right. You bump up way more into all these legacy systems that you're part of and that shape your options, which aren't always... exactly how you would want them to be sometimes. So there are really different pathways towards that. Speaking of pathways, I think you mentioned degrowth in your previous question. And that is, I think, if you talk about the pathways, I think degrowth is really for companies in countries where you and I live, so the richer countries, that is really the way to... towards this well-being economy. A well-being economy meets all human needs, definitely firstly the basic needs, and then a little bit above that, so for the well-being, within planetary boundaries. And right now, all these rich nations are way above their fair share of the Earth's carrying capacity. So there, that pathway really needs to be deliberately reducing the ecological footprint significantly while maintaining well-being levels. That probably... will reduce overall GDP? It might not, but because it's impossible really to predict. And certain sectors will still grow, right? Care sectors, for example, the renewable energy sector. But degrowth is really the pathway towards that more of a destination framework of a well-being economy. And that pathway, the degrowth path, will look very differently for different kind of companies.
Speaker #0
Well, maybe we can go into that because I would like to get a sense for the people listening and working in the industry. in different sorts of companies of what does it mean, you know, how organizations could practically implement some degrowth principles. And in your book, you discuss the concept of managed descent, I believe. And is this, so how can businesses prepare for it? Is it all businesses that can do that? Some types of businesses, like if you're on the stock market, I guess you have different metrics, different type of reporting, but what could potentially lead to this transition while remaining viable organization? Because that's the fear that we have. Like if I degrowth, if I plan degrowth, I will simply disappear.
Speaker #1
Yes, and I think that is a legitimate fear, by the way, which is also why we see a... a proper role for government. Regulation is necessary for this too, because there is the fear of the first mover disadvantage in a competitive market. I think in that sense, the government's role is absolutely crucial. But like you said, it depends very much on the kind of company. The products that you or services that you provide obviously makes a huge difference too. For example, a cigarette company, I don't see how that... can ever be, right? A degrowth business. You could still be a business, but you would have to just start making a different product, I think. And so it really depends. If you're a solar panel company, it's easier in that sense. And then you just don't focus on the ultimate goal on growth. But yeah, so it also very much depends on your product. Let's be very clear about that. The company I work for works in the energy transition, for example. So in that sense, it's easy. But then also we are talking about how do we make that just and what does a just transition mean? So it is obviously not just the local community, definitely that, but also internationally. Where do all these minerals come from and the metals that go into the solar panels? And is that compatible with... lifting everybody up to the current energy consumption that we see in the West? The answer is no. So those are all questions that you need to have. But it is possible if you want to have one example, for example, that is quite often referenced in this sense, is the Danish energy company that used to be a fossil fuel company. And then at some point, I think, had internal discussions about, well, what is our future? And decided, well, it can't be fossil fuels. It just can't be if we really mean what we say in our vision statement. And so then they switched completely to fossil fuels. Let me... Let me pause real quick because of course now I don't remember the name of this Danish company. It's easy to find. Orsted is a Danish company.
Speaker #0
And fossil fuel to renewable, basically.
Speaker #1
Yes. And they did that, I assume. I wasn't privy on the conversation. But I assume they had some internal discussions about what is a future fit company. And then they ended up with... So it's only possible to completely switch your product in that sense.
Speaker #0
yeah i guess it's uh you have to manage different stakeholders you have to manage uh yeah but that's that's a good example that that means that that's feasible you know it's moving from something that's kind of uh going away or destroying everything to something that needs to grow basically something
Speaker #1
that needs to grow from something that needs to grow yeah and of course an often uh heard misunderstanding about degrowth is that it's anti-growth which it is, but it's more selective about it. And how I typically reframe, try to reframe the discussion sometimes, in general and within companies, is also, listen, this is not a question of, okay, but do we do this whole effort of revamping or completely reinventing our company or continue as we did? Because the latter is not an option. So either you are prepared for upcoming major changes around the world, or you're not. That's the question we're really dealing with.
Speaker #0
Well, in that sense, can we talk about resilience? Because your work also emphasizes the importance of resilience over efficiency. And actually, many businesses, if not all businesses, are optimized or optimize their operations for maximum efficiency through just-in-time production or lean management, etc. How can they shift toward resilience without losing competitiveness? Because again, that's a fear.
Speaker #1
Yeah, so if you don't have a lot of resilience in future upcoming upheavals, you're also not going to be competitive. So that's really this reframing of, I think there's... a lot of the short term and long term i guess like really understanding that things are changing but listen this is what management is i i sometimes i'm like okay what is it now are you like the best guys out there that's why you deserve all these high bonuses and stuff and you don't need to be regulated because you know it better than the government or are you having trouble understanding the basics one-on-one of investment in the future because you can't have both it's not a difficult concept so you know Sometimes I say that in nicer wording.
Speaker #0
So you do have this conversation. And what is the argument about? Is it about really, yes, but we need to show that we're profitable, you know, for the next two or three years. So then we'll see later. And anyway, you know, we'll find solutions. Or is it, I just want to understand where we're stuck. Is it in the processes that exist that force us, force the companies to think short term? Is it in the minds of the people? You know, where do you see really the things happening?
Speaker #1
Yeah, good question. The question to some, the answer to some extent is, of course, all of the above. But I do like how you mentioned the mindset, because I do think that, you know, there's this, many people have made this point, by the way, but there's this one MIT professor, Otto Scharmer, who also says, it doesn't matter really what you do. It doesn't. even matter how you do it. It matters from the energy and your mindset from within, from which it's coming. And I think that, so ultimately it does come down to that, I think. But, you know, it is also, I think, a little bit of an iterative process because you are limited by the system that you're in. You have limited influence. The vast majority of us have limited influence and we are influenced by it massively. And I think that is something to acknowledge too, that I think the business sector as a whole has a crucial role to play and its participation of at least some of them is indispensable in this transition and at the same time um i'm not necessarily sure it it really had it will come from them again all of us have to do our part but i do think there's a crucial role for government and we should also not forget the the power of the citizens when they bind together and ask for change do you find it useful within
Speaker #0
corporations to talk about risks more than ethics, you know, on this matters?
Speaker #1
Yeah, that's a good question. And by now, my answer is no. I actually used to be in risk management at KPMG. So I very much talked about, these are all the risks, you know, and then I pointed to activists and I used that as being sort of an entrepreneur to help bring these things about. So, and... Like there is that, but at the same time using that thing. And ultimately what you're saying is this is going to be bad for profit. So we better do this sustainability thing. And you're reinforcing the system, right? So in a way, yeah. So in a way, I'm now I'm like, listen, can we also talk about how you as a human being feels, including everybody at the executive level, feel like your values are often at odds with what you feel this company. just the system that you're part of as well, are just caught in. And then you actually see that you get very different conversations about what might be possible. I was at a finance conference in Denmark, and I was interviewed by a financial paper, and they asked me, so what do you advise people in finance? And I said, I think there's some really front-running people there. But having worked in finance myself, I don't think the real change is going to start there. I think they're smart. They know what's going on. They're just not the kind of activistic type. So I said the real message is stand ready because changes are coming. You know that. You know this is not sustainable. And so stand ready for when this change comes to just jump along with us when it's safer for you.
Speaker #0
Yeah, I wanted to talk about stakeholder. capitalism and um you mentioned also in your work the the need for a more inclusive you know economic model like how do you see the role again of what we call stakeholder capitalism evolving and uh and also like to be concrete you know what what concrete changes should company make in their governance and decision making process and
Speaker #1
how do you work it out yeah uh so here's why i'm like The stakeholder and this whole inclusion in general for me is, it's still ultimately, I think, maintaining old structures. It basically says, well, we have this economy that needs to grow all the time, but, you know, just more people need to benefit from it. And I'm like, listen, that, first of all, that will never happen, but also to the extent where it's all equal. But I think more importantly, this still comes from a place of the ultimate underlying story. So we're going to go at the deepest level now of what we tell ourselves about who we are. That's where these mindsets come from. And it's the story of separation. We're all separate beings that obviously have our own interests, right? And what happens to others are just externalities apparently that we discount. We're selfish, we have selfish genes, and kindness is just a tactic to propagate that. So, you know, we are just maximizing our own utility, we all know that. We live in a dead planet, and, you know, ultimately in a dead universe. And so that's then the story, and so you're like, okay, but we have to make it more inclusive. So to make it tolerable, I guess, for more people, we just have to include more people in the decision-making. But it's still the story of separation to me. And I think ultimately what really needs to change is this underlying narrative, which has been more prevalent in history, to be clear. And I think that's maybe good to touch upon as well, that we've all grown up with this growth narrative, that growth is always progress. But for most, even of human history, let alone the rest of nature, the idea that growth, perpetual growth was good, was not there. It was most of the time the opposite, even in human history, where it was considered immoral. Because we know from experience that anything that grows perpetually is dangerous. It can kill us. And the economy is no exception, despite what many economists will tell you. And so what is this different story then? And that's the story of interdependence, where all thriving is mutual. And as soon as our... We can be selfish, but that's when our most basic needs are unmet. And as soon as you see that we're not hungry, we're not feeling unsafe. we become much more altruistic and curious and playful than this homo economicus ever could be. And we actually... need to feel at that point, we need to feel that what we do matters, that it actually leaves, that we are leaving, what we do every day leaves the world a little bit better than we found it. That is a need that is often unmet in this current economy, and which is also why a well-being economy would suit the needs better for people even in the West. We would have less stuff, but we would have much more of what we really need, which is connection.
Speaker #0
Well, I'm personally very familiar with what you're saying and the work of Otto Scharmer also. Actually, I had a conversation with him on my other podcast. And I'm personally fully aligned with that vision and with the diagnostic. This is the diagnostic and therefore this is the kind of economy we should be creating. But what are the middle steps? How do we go from what we have today to... something that's more sustainable like really sustainable and um and especially at a you've got the conversation at a macro level that you can have on the economic models and and the way we we define our metrics etc but do you have a point of view on what should be done at a at a company level what what does it mean when you are stuck in the big system and how the economy works. Do you simply, because a lot of people are asking these questions, like, do I simply quit and do something totally different? Or as a, yeah.
Speaker #1
Yeah, I feel like that was more something that my parents did. Like you just quit and then you start a little company that of, I don't know, solar batteries for your phone and dryer balls and that kind of thing. Basically, products that will help you simpler lifestyle, but it doesn't do anything. It's also not nearly enough. It doesn't change the system ultimately. So the reason I start about these narratives is because I do think it needs to come from there. I'm often asked about solutions and technology is obviously a key and crucial solution to it. But what you see right now is often that we have this rebound effect. probably people listening to this have heard of that before, where you have increased efficiencies that you talked about in technology, and we've seen massive increases in technological advances. Humans are innovative, there's no denying that. But why then hasn't that decreased our ecological footprint in any meaningful way at a global level? And it's because a lot of times those efficiencies are used to just produce more, even renewable energy. Yes, we have seen a lot more renewable energy capacity. It's gone wholly on top of the fossil fuels. Our fossil fuel use, in absolute terms, is also at an all-time high. It has not even come down. Because all the renewable energy capacity has come on top of it, which is completely unsurprising in a system where the ultimate goal is growth. The Jeffords Paradox,
Speaker #0
right?
Speaker #1
Right. Jeffords Paradox. So my proposition is this wouldn't happen in a well-being economy where it is to reduce our ecological footprint. back to within planetary boundaries, those same efficiencies would still be very useful tools. They would be solutions because the underlying, the overall goal has changed. And that has changed because of the underlying narrative that has changed. And this goes for everything. So that's why I can't really say what people can do because what we can do very much depends on your specific role in the system. So that's the good news. As the bad news is that you can't control a system. But the good news is that there's always something you can do, even if you feel like in the hierarchy terms you have low power. You always have some influence. So you start by changing that narrative, firstly within yourself, which is a very personal work, which is very counterintuitive maybe, because we're talking about these big global systems. And then at the same time, changing that everything, it can feel so overwhelming. But actually where you start is... with yourself, within yourself. And then from there, of course, it cannot stay there. I always say it starts at the personal level, but it shouldn't stay there. And then you make connections with others and you weave that new story. So in a company, for example, you start connecting with other people in your company. Companies these days, they kind of function like tribes. If you get an email from someone and it's from within a company, there's an immediate level often that you don't realize of trust. Oh, I'll email them back. We don't do random people who email us. So companies function like tribes. And so you use that to find people who share your narrative. And you build that out. And together you co-create what could be that new narrative within the company.
Speaker #0
Yes, that's the idea of theory, you know, co-creation. It's true that people always want ready-made solutions and to be able to make the first steps. Yeah, exactly, a fix. And you want to see what's going to happen. And what you're saying, what a lot of people are saying, is that it's so complex and it's so much in the unknown that the goal is to start making new things in new ways and...
Speaker #1
then you'll find you know along the way but is that right um yes and i would say nobody really knows but i would say that once you start to work from that new narrative you you might be surprised at how many things can stay the same right um once health insurance companies for example truly work towards their vision which is make health care more accessible to americans for example i i say this because we just had the you person, the CEO being shot of United Healthcare, because I would argue they didn't really live their vision statement. And then you see that maybe that can just stay, right? If you become, if that's really your vision statement, and some insurance companies have that, by the way, there are not-for-profit insurance companies that are able, because of their legal structure, to do much more work towards that and work for their members. But so maybe a lot can actually, more can stay the same than we thought could.
Speaker #0
And how should business approach innovation in R&D in this context? You know, we talk a lot about AI and thoughts of innovations, but what should be prioritized? And maybe you have also like an idea on AI since everybody's talking about this.
Speaker #1
Not as much as some. I am not nearly as impressed with it as some other people think to be, think that it's going to be the disruptor. I think it's just another tool. I think it's a new technology. It can do a lot of things. It has a lot of potential. And it's an excellent example of the Jevons paradox right now. It has only increased energy demand. Well, of course, it has the potential to really bring it down and distribute resources much more efficiently among people. So... But it has been deployed for ultimately mostly for profit making. And so it hasn't done those things. So the AI is the same as any other technology for me. It's a tool which will ultimately serve the overall purpose of the system it's part of.
Speaker #0
Yeah, I want to go back to part of my question, which is, what do we do as an individual in the company? You know, do we stay? Do we leave? A lot of people are really wondering, you know, what's the way?
Speaker #1
Yeah. Yeah, no, it's a very good question because I do think there are sometimes moments or situations where you're like, I can't stay here. But it is important to stay plugged into the system. You can't change the system without being part of it. And I do want to recognize that there are some real, that's some real stuff because we have created an economy where... of course our livelihoods are dependent on growth. So let's acknowledge that. Again, that hasn't always been the case. And to be clear, economies have existed way before we made our lives so dependent on having a job. So this financial precarity that you see is a policy choice. But that is, of course, and that's a very legitimate fear, the fear of losing your job. When I spoke at... I don't know why I speak to a lot of bankers, but I do. And, you know, in London. And afterwards, one came towards me and he said, listen, I think that you are right in everything you say, but like, what do you actually, what do I do with this? Because if I do what I think you're telling me I should do, I will lose my job. And that's a legitimate fear. The fear of being placed outside of the system. And so that's why I sometimes say, listen, Find other people because you have more power, but also their safety in numbers. And also why I said earlier, you know, sometimes that absolutely means that you can't go as fast as you wanted to because you place yourself out of the system. And that is frustrating. And I would say get comfortable with that frustration. I do believe that changes are going to happen. because what we're doing is simply unsustainable. And I would say stand ready for them to accelerate rolling out the narrative within your company, for example. And then a second fear is also the fear that government is feeling and politicians, which is the fear of social unrest. So if a lot of people lose their jobs in the absence of growth, then... you're going to have social unrest. And I think this is why also politicians and government feel so trapped in this growthism pursuit. And I think that's also, like I said, getting the system to keep working and keep churning out growth is proving harder and harder. And I think that's also why you're seeing this polarization right now around the world, but also definitely in the US where I currently live.
Speaker #0
Last question. I mean, I wish I had, you know, 30 minutes more to talk about also what's going on right now and all the forces that go against, you know, all the progress that we're trying to make regarding the topics that we speak, but it's a bigger topic. Last question. If you had a reboot button, you know, for any aspect of how we approach, you know, these topics that we discuss, sustainability and economic system. what would you choose to reset?
Speaker #1
Oh, yeah. Well, I will say that this whole button thing is part of this control idea, right? Like, oh, we're going to fix it with this button. No, sorry. You're going to have to talk to people and confront some inner biases and all that stuff. Sorry. But honestly, if it's any kind of magic button, as I alluded to before, The 70s, to me, this was before I was born, but it seemed to me like there were a lot of these ideas that we're talking about right now, right? Safeguarding people's livelihoods and the options of growth with universal basic incomes or job guarantees, that sort of thing. All of those things were already experimented with, a lot of them in the US, by the way. This book also was US authors in the 70s. And so after that, we got Reagan and we went a whole different direction. But I feel like that... if we could go back in time and just tilt a couple of points in the playing field, I think we could have seen a very different world.
Speaker #0
Yeah, we can't, but we're going to find out, you know, the way forward. Thanks a lot for your time, Gaia, and thanks a lot for sharing these insights.
Speaker #1
My pleasure.
Speaker #0
Reboot.

About Reboot Business

Reboot Business is an exploration of the urgent transformation businesses must undergo to address the ecological crisis and the broader societal shift in mindset.

What are the key challenges? What strategies can drive change? What obstacles stand in the way, and what levers can help overcome them? And most importantly, which businesses are leading the way?

Hosted on Ausha. See ausha.co/privacy-policy for more information.

About Reboot Business

Reboot Business is an exploration of the urgent transformation businesses must undergo to address the ecological crisis and the broader societal shift in mindset.

What are the key challenges? What strategies can drive change? What obstacles stand in the way, and what levers can help overcome them? And most importantly, which businesses are leading the way?

Hosted on Ausha. See ausha.co/privacy-policy for more information.

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