The UN Sustainable Development Agenda 2030 conceptualises economic growth meeting social needs while reversing environmental harms, based on decoupling theory or green growth. This is hugely popular among business people who want to protect the planet and grow their business. The problem is that green growth business strategies aren't working. A feasible alternative is degrowth.

6 min read | Last updated 25 October 2021

Degrowth is an equitable downscaling of material and energy throughput. It is a shift in industrial inputs and outputs to levels that do not exceed environmental and climatic tolerances, redistributing economic output to where it is needed most, and maintaining this overall level of economic activity in a steady state to provide and maintain quality of life for all.

Unlike green growth, which is an idea that has filtered into business top down from a UN-facilitated global sustainability agenda, degrowth changes are happening ground up in opposition to parts of that agenda that do not appear to be effective.

The year 2030 will be a watershed as the SDGs and many firms’ climate goals will simultaneously mature. Asset managers, industry and the business sustainability movement will have to answer to a global public running out of patience. If green growth doesn’t seem to be working, a critical mass of investors, consumers, voters, employees and activists may decide that growth really can’t be green, shun conventional consumption and demand urgent deceleration of production through a variety of means – the power of social networks, lobbying for regulatory change and legal action (all from the climate activism playbook).

All businesses, even those that claim to be sustainable, need to assess the future risk to their social licence from levels of production and consumption that are environmentally and socially intolerable and test their long term strategy against scenarios with much lower business volumes. Thinking about degrowth now as a potential future condition will create the knowledge base for an orderly change to the business model, the development of opportunities and a just transition for workers and communities, rather than having to absorb an imposed crisis and lament missed opportunities.

The aim of degrowth is to reach a post growth, lower metabolism, steady state economy. Degrowth is the transition pathway between the two economic paradigms: from growth to post-growth. A reduction in economic output would cause GDP to fall, but degrowth (moving to a different economy) is not the same as recession (a shrinking economy).

Degrowth is a socioecological sustainability movement that began in France in 2001 around concerns over mounting environmental damage being caused by constant growth in industrial production and consumption (Demaria et al, 2013). There is no single or clear degrowth vision, and there are some quite radical degrowth ideas, but adherents of all stripes tend to agree that in contrast to the inequality, nature loss and climate change that have resulted from two centuries of economic growth, degrowth will lead to abundances that will meet the needs of the many and leave us more time to enjoy life. (Note that the degrowth movement is not the same as the population control movement.)

A suitable model of economic degrowth has not yet been devised because pulling together the various ideas presents many unresolved conundrums. For instance, capitalist societies use economic growth as a stabiliser, so are unlikely to be compatible with degrowth; rapid degrowth would be destabilising; planned degrowth is unlikely as it would require a change in power relations (Kallis et al, 2018). A key imperative, therefore, for the degrowth movement is to elaborate on a stable degrowth pathway.

The pejorative view of degrowth is that it is a colonial, romantic regression toward time-consuming, labour-heavy, self-sufficient homesteading. Its connotations with austerity, frugality and domestic labour are highly off-putting to conservatives, feminists, social progressives and the labour movement alike. Many business people on both sides of the political spectrum are unwilling to see degrowth as anything other than an anarchic, niche notion.

Businesses that prefer to plan ahead need to ignore the hype and problematising around degrowth and move directly to understanding how it is manifesting, and may manifest in the near future, in mainstream life. Whereas green growth is positioned as reformist and existent and degrowth as revolutionary and normative, some degrowth ideas are, in fact, already being adopted inside the growth economy and may represent the beginning of a ground-up transition.

While the UN-led Sustainable Development Agenda (which includes the 17 SDGs) is very clear that its three pillars (environment, society and economy) are co-equal, some sustainable development models and frameworks (such as the 17 SDGs) are being adapted by key influencers to prioritise socioecological outcomes with the economy in a subservient position, and these adaptations are stealthily filtering into the mainstream without any explicit reference to degrowth, although that is surely what they infer.

The ‘wedding cake’ illustration below was presented by the Stockholm Resilience Centre (originators of the Planetary Boundaries framework) as a model that ‘changes our paradigm for development, moving away from the current sectorial approach where social, economic, and ecological development are seen as separate parts. Now, we must transition toward a world logic where the economy serves society so that it evolves within the safe operating space of the planet’.

Stockholm Resilience Centre, 2016

Ideas in practice, or at least in mainstream discourse, include planetary diets (plant-based meals, locavorism, veganism), low energy urban mobility (peak car, rail renaissance, 20-minute cities), the sharing economy (car share services, shared workspaces, fashion rentals) and flexible consumption (as-a-service business models). These new business models exist alongside regular forms of growth agnostic (non-capitalist) economic activity, such as not-for-profits, community trusts, social cooperatives and unpaid care work.

A degrowth transition toward a post growth economy could involve some of the following attributes.

Circular economy
Steady state of production and consumption requires a circular economy for the continual re-use of valuable resources through cradle-to-cradle designs that include both technological and biological solutions, best described by the Ellen MacArthur Foundation.
Environmental boundaries
Working within environmental tolerances means, at a global level, respecting planetary boundaries. At a business level, this means using science-based targets for climate action, contextual water targets and science-based targets for nature.
Changes to richer lifestyles
Richer people (by global standards) generally lead an environmentally-intensive lifestyle. They will become increasingly informed on their GHG and biodiversity footprint and will choose (or feel social pressure) to reduce such consumption. This would not mean deprivation, but switching to new ways of living well, valuing different things and transacting differently, such as through giving to and receiving from collectives.
Changes to poorer lifestyles
Degrowth cannot be evenly spread since some parts of the economy must still grow to reach the new steady state through the redistribution of economic activity to meet their needs. Kate Raworth’s Doughnut Economics is a simple visual model of a growth-agnostic economy operating within a social foundation and ecological ceiling. Poorly provisioned communities need to reach the social foundation, so there will be an ongoing requirement to deliver goods and services and create infrastructures within environmental tolerances to create impactful social change where needed, such as digital equality, access to healthcare and education and resilience to climate change.
Structural change
Infrastructure has a long lead time and a long lifespan, it is expensive and resource/energy intensive. Existing infrastructure and architecture need to be retrofitted for new ways of living. Future infrastructure solutions may be very different to today’s – more local, more nature-based, less physical.
Business sustainability re-set from outcomes to impacts
Business-centric sustainability practices that focus on ESG outcomes will recede, to be replaced by public-centric practices that monitor, measure and manage new impact-conscious metrics of business value-creation, such as cultural stewardship, climate justice, human rights, anti-racism, multiplicity, the commons, sufficiency, ecological regeneration, shared knowledge, scientific advances, downtime and emotional wellbeing.
Policy mechanisms
A central feature of degrowth is a more equal distribution of wealth through democratic means. Potential policy mechanisms could include universal basic income, job guarantee scheme, living wage, maximum income, bans on single use products, right to repair legislation, global carbon pricing, redistribution of subsidies, caps on material use and taxes on resource-intensive goods.
Reframing return
As some throughput limits are set and new metrics of success become established, public-private partnerships are a key opportunity for businesses to negotiate the reshape of their business model in ways that establish dimensions of risk and return that fit with their mulitple stakeholders who provide capitals and who benefit from business outcomes. Some of these stakeholders aren’t born yet.
Fewer working hours
Working hours would be cut as throughput reduces, decreasing the environmental impacts of going to work and increasing the social benefits of increased downtime, including the redistribution of unpaid care work that currently more often burdens women.
Localism
Localism is a foundational concept in degrowth. In business, this could manifest in ‘design global, manufacture local’ approaches requiring the design of products and processes to consider local differences, such as resource availability, as well as downsized and decentralised technologies, such as 3D printing, and a rise in the value of craftsmanship.
Technology
Post growth technologies must avoid driving consumption and inequality, but meet new socio-ecological standards, such as data sovereignty and privacy, democratisation of knowledge, and lifecycle resource and energy minimisation.

Further Reading

Asara, V., Otero, I., Demaria, F. et al. Socially sustainable degrowth as a social–ecological transformation: repoliticizing sustainability. Sustainability Science 10, 375–384, 2015

Jackson, Tim. Prosperity without Growth? The Transition to a Sustainable Economy. Sustainable Development Commission, 2009