Give and Take: How a Regenerative Economy Could Make Consumption a Force for Environmental Good
Each of Us Has a Role to Play in Creating Sustainable Systems
About 40 billion tons of carbon dioxide are pumped into the atmosphere every year; its impact on the global ecosphere is well documented. Lesser known is the fact that you are responsible for roughly 24 billion of those tons.
Well, not you personally of course, but “you” the average consumer in aggregate with all the other average consumers. According to a somewhat startling study from Norwegian University of Science and Technology, consumers account for 60% of global greenhouse gas emissions and 80% of the world’s water use. And it’s not because the collective “you” drives a gas-guzzling SUV or doesn’t own a low-flush toilet — it’s actually because they own a car or toilet in the first place.
According to the study, only 20% of a consumer’s environmental impact comes from their direct actions, like heating a home or leaving the lights on in an empty room. The remaining 80% is the consumer’s “secondary impact,” which refers to the energy and resources that go into producing the goods a person buys or uses.
It’s an eye-opening concept to internalize. Everything we own — including the bike someone rides to avoid driving — comes at some environmental cost. Metals are mined, fossil fuels are transmuted into plastics, and nearly 13,000 total liters of water are consumed to make the devices we’re all reading this on.
Faced with these facts, it might appear there is only one option: to give all one’s possessions away. Become a monk. Live an ascetic life in a mountain cave somewhere, subsisting on honey and locusts.
Thankfully, another more practical and hopeful option exists: As consumers, we can demand those who produce the goods we consume do so in a more ethical and environmentally just way. Because when we look to identify the root cause, the so-called “secondary impacts” of consumers are really the primary impacts of producers. If we want a more ecologically sound economy, doesn’t it make the most sense to go straight to the source?
Luckily, some producers are already adjusting their own consumption habits, aligning their actions with a simple but profound equation: In order for any system to be sustainable, every individual actor in that system must give back more than it takes.
Who’s Paying the Bill?
Before looking to the hopeful future, it’s worth taking a moment to consider the past and present. Of course, no consumer demands that brands make their products in the most devastating way possible. It’s precisely the opposite: Time and again, surveys show that people would prefer to buy things from companies that make a positive impact on the world.
So why is the production process for the average consumer good still not living up to a healthy standard? As with many of our economically driven ills, the problem boils down to one word: profit. For most companies, it’s sadly cheaper to pollute than not.
This is where the common corporate practice of externalizing costs comes in. A business externalizes costs when it doesn’t pay the full price for extracting or producing some commodity, usually by pushing the burden of those costs onto some other entity.
Take coal as an example. A coal-mining operation will pay for the equipment necessary to mine coal. It will pay wages to its workers, who mine the coal. It will even pay to refine the coal into a more readily usable form. But the mining operation probably won’t pay for the pollution, the health risks, or the destruction of natural habitats. All of these are part of the cost of mining coal, but the company externalizes these costs, leaving society at large to deal with these problems.
Shareholder capitalism, which values the maximization of profit above all else, incentivizes the externalization of costs. It is, to some extent, a calculated risk. Companies may have to pay fines, settle class-action lawsuits, or fund cleanup operations if they’re caught polluting. As long as the costs of these penalties are lower than the profits they accrue from continuing to pollute, they’ll keep externalizing costs. A 2010 United Nations study of the 3,000 largest public companies set the price of their environmental damage at $2.2 trillion. If the companies were actually made to pay for this damage, it would slash their profits by a third.
Shareholder capitalism, which values the maximization of profit above all else, incentivizes the externalization of costs.
We know the will already exists at the popular level to see environmentally and socially ethical production become the norm. Looking ahead, the question is: How can we help change the way our economies and companies function so as to create beneficial outcomes instead?
There Is No Outside
The very notion that a company can externalize costs is built on a false mental perception that economic activity occurs in a sphere separate from the rest of the world. But of course, it doesn’t. There is no outside to externalize the costs to. Every inch of this planet — and everyone on it — is bound up together in one shared system. The more companies push their costs onto other pieces of the system, the closer the whole comes to collapse.
Increasingly, people are realizing this, and they’re choosing to approach commodity production differently by changing the paradigms in which they operate. Rather than treating the planet and everything that lives on it like freely exploitable resources, these people see that every economic choice we make ripples throughout the world. Building a company within this conceptual framework of intrinsic interconnection leads to a different mode of decision-making, according to which every choice a company makes should have a net positive effect on the system.
It all goes back to that equation we mentioned earlier — and that we’ve written about before: In a healthy, balanced system, the benefit provided by each individual must outweigh the costs that individual imposes on it. Otherwise, the system falls apart. This is what the architect and sustainable design advocate William McDonough, coauthor of Cradle to Cradle: Remaking the Way We Make Things, calls the planet’s “fundamental underlying operating system.”
In a healthy, balanced system, the benefit provided by each individual must outweigh the costs that individual imposes on it.
Even predatory animals like wolves, which may seem to be all cost and no benefit from the deer’s perspective, play by these rules. By keeping deer populations in check, wolves prevent the herbivores from eating all the greenery and leaving a wasteland in the once lush forest’s stead.
Our market economy could function this way, too. It could give back to the world more than it takes. Thankfully, a growing majority of consumers — and new government policy, like emissions targets that heavily incentivize climate-friendly business practices — are starting to shape a new economy. In the midst of this transformation, the companies of tomorrow are imagining ways of doing business that don’t just minimize negative costs but actually create a net benefit for the world at large.
Don’t Externalize — Inset
What might our economy look like if it adhered to the essential equations of balance that govern each ecosystem on the planet? There’s no need to speculate. We already have some examples of truly regenerative economic activity that leaves the world in better shape.
Consider William McDonough’s concept of cradle-to-cradle design, which holds that every product we make should be designed such that it can become a resource in its own right. Under McDonough’s schema, a product should either provide biological nutrients by returning to the earth at the end of its life or provide technical nutrients by being made of components that can be infinitely recycled in closed-loop production processes that do not contaminate the planet with waste.
McDonough’s philosophy is more than a theory; he’s already put it into practice designing infinitely recyclable carpets and shoes. And as McDonough points out, the benefits of cradle-to-cradle design are twofold: It eliminates waste and cuts costs for manufacturers by allowing them to reuse materials. That latter point is especially important, as the drive to keep costs down is a motivating factor behind a lot of corporate pollution.
Another example, which stands in stark contrast to the externalization of costs, is carbon insetting, a practice pioneered by sustainable chocolate makers Alter Eco. Like nearly any production process, Alter Eco’s produces some amount of greenhouse gases. Rather than offloading that cost to the world, Alter Eco plants carbon-capturing trees inside its supply chain, alongside the cacao crops it needs to make chocolate. In 2020, Alter Eco planted 7,000 trees, enough to offset 100% of its emissions.
Reimagining the Past
Even some of the goods responsible for some of the worst environmental havoc can be produced sustainably with the proper regenerative approach. Take palm oil, a widely used raw material for shampoos, soaps, cosmetics, and even biofuels. The traditional cultivation of oil palms has been considered one of the worst culprits behind deforestation and habitat destruction, and palm oil production has been directly responsible for the death of more than 100,000 orangutans since 2004.
It’s not that palm oil is inherently unsustainable — it’s that companies in the palm oil trade have chosen to apply a destructive process. Serendipalm, a sister company of soap company Dr. Bronner’s, has found a way to produce palm oil without clear-cutting forests. Instead, Serendipalm works with small-scale organic farms that use holistic, regenerative techniques like pruning, weeding, intercropping, and strategic harvesting to ensure high yields.
Natural Habitats, another organization in the business of producing sustainable palm oil, has launched the Palm Done Right campaign to educate the broader public about the benefits of organic palm oil sourced in an ethical way. Palm Done Right illustrates the fact that transitioning to a more regenerative economy will involve a cultural transition, too. So many of the products we’ve come to see as harmful — like palm oil — aren’t harmful at all by nature. It’s the processes we use to harvest them that do the damage. By changing those processes, and using regenerative design principles like cradle-to-cradle, we can enjoy all the benefits without the environmental injury.
A Collective Strategy
From the aforementioned examples, one might get the idea that the regenerative economy is a matter of isolated businesses making individual choices. In truth, ethical producers have been linking up to create networks of knowledge exchange, end-to-end sustainable supply chains, and political movements that pressure the government to make social and environmental stewardship a requirement for any business.
In his recently released book, Honor Thy Label, Dr. Bronner’s head of sourcing Gero Leson shares one story of sustainable businesses helping each other out for the greater good. Leson tells of how Philippe Soguel, one of Dr. Bronner’s suppliers, helped another supplier create sustainable distillation units for aromatic herbs. It wasn’t a business transaction but a free transfer of knowledge, with the added effect of helping sustainable business practices proliferate.
“In a sense we’ve all created ‘universities of coconut, palm, or mint oil’ — not simply meeting our sourcing needs but helping to train people in building and operating a professional and responsible business,” Leson writes.
Meanwhile, the Certified B Corporation movement — of which we’re a part! — propagates sustainable, ethical corporate governance practices. B Corps are legally bound to act in ways that make a positive impact on their workers, customers, partners, and the world at large. Many B Corps, and groups like the American Sustainable Business Council, actively advocate for sustainable governance to become a mandate rather than an optional choice made by some organizations.
It Starts with Love
From cradle-to-cradle design to carbon insetting and regenerative farming, all of these practices share a belief that producers have a responsibility to internalize environmental costs. Instead of shunting the blame onto consumers or making the planet itself pay the price for economic growth, companies like Alter Eco and Serendipalm realize that sustainable consumption starts with sustainable production.
In his 2005 TED Talk, McDonough says each of his designs starts with the same question: “How do we love all the children of all species for all time?” What he’s getting at is the notion that everything we make — from palm oil to smartphones, soy milk to record players — should be made in a way that demonstrates love for the planet and for every living thing that shares it.
Everything we buy, make, or use could leave the world in a better place than it was before. Ultimately, that is what it will mean to put in more than we take and become beneficial contributors to this delicate and stunning planet.
A version of this article was originally published at https://www.keapbk.com.
B The Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
