The scale of the climate crisis has come to put many of our current economic and social standards into question. Can we keep the same pace and decarbonize our economy on time to avoid an irreversible climate catastrophe? Can degrowth be the answer to what it is up ahead? 

A recent study carried out by the BBVA Foundation showed a Spanish population as worried with the climate crisis as with the recent sanitary mayhem. In fact, a vast majority acknowledges human activity as the primary cause of climate change, and similarly, most people believe our current consumption rates to be an accelerating factor of the crisis. 

A bit more discrepancy is seen when asked about climate measures and its effect on economic growth. Although a clear majority (57%) agrees on the need to take on environmental measures even if that means slowing down growth, a third of the people asked (33%) would only approve of measures that did not significantly affect economic growth. 

But are current growth and consumption rates compatible with sustainable development? Can we achieve the Paris Agreement targets if we continue on the same path? 

Greenhouse gas emissions need to fall by 45% within this decade to avoid total and irreversible catastrophe, and current global efforts do not seem to match the urgency of the problem.

Meeting climate targets

 

Going back to the study mentioned above, we can see how 96% of people agree that multilateral and international agreements are necessary for tackling the climate crisis. But what are the prospects of current agreed upon solutions? 

According to the most recent IPCC report we don’t have much time to successfully achieve the Paris Agreement 1.5ºC target, and the prospect of entering a catastrophic climate outcome is ever more likely. Greenhouse gas emissions need to fall by 45% within this decade to avoid total and irreversible catastrophe, and current global efforts do not seem to match the urgency of the problem.

Additionally, the idea that business can slowly and tenderly make everything work out for the environment while maintaining economic growth, is crumbling with every new piece of scientific research. This is where the idea of degrowth comes into play. Although it is not new and has been advocated for since the 1970s, the prospect of our biodiversity and livelihood degradation has put the question of (de)growth on the forefront once again.

Degrowth and capitalism

Degrowth is not necessarily an opposite or polarizing stance against capitalism and productivity. It however touches upon a key and driving feature of our current economic model, and that is the idea of pursuing growth at all costs. As a result, and in light of the human exploitation and environmental destruction of the last decades, many have come to question profit as the main catalyst for our societal organization, and instead have advocated for the pursuit of social and ecological well-being. 

The premise of degrowth requires a radical change and shift in perspectives, as well as a reduction in the material size of the global economy. Overall, it calls for a multifaceted transformation of societies that would ensure and allow environmental justice to thrive and provide a good and just life for all. But most importantly, and perhaps the most complicated change of it all, is to shift our common values of care, solidarity and autonomy to make degrowth a reality we can collectively embrace.

Studies have shown a high quality of life and overall improved well-being can be sustained with less, meaning lower energy levels and smaller GDP.  

Degrowth in practice

Degrowth advocacy is not particularly popular among governments or businesses, but some scholars are already talking about it on a theoretical and practical basis that uncovers political and economic will as the only obstacles for the necessary shift in perspective. 

In a recently published paper, researchers showed several degrowth pathways that intentionally reduced economic output and which appeared to be less risky than a continued GDP growth and geo-engineering practices. Additional studies have shown a high quality of life and overall improved well-being can be sustained with less, meaning lower energy levels and smaller GDP. 

The paper however stresses on a very important fact, and that is a scenario in which degrowth does not affect productivity to fall nor to people to become worse off. Some realities would likely need to disappear, like a new smartphone model every year or a new clothing collection every other week, but would it really make a big difference to our wellbeing? 

At a time of urgency for transformation, it is not difficult to understand how the way out of this crossroad could be based upon the realignment of society and the economy in order to manage growth on a sustainable downward path. 

A plausible solution and just outcome

A change in the scale of what degrowth suggests is difficult, although not impossible. Political will is almost nonexistent, and changing deeply entrenched values, cultures and power structures is a rather complicated task. But the solution might be on the change that grows from the bottom up through social movements and individual initiatives, for example.

The international community is in fact currently at a crossroad deriving from the drastic fall of emissions during the pandemic and the rapid comeback of continuous unprecedented growth that got us into the environmental crisis in the first place. At a time of urgency for transformation, it is not difficult to understand how the way out of this crossroad could be based upon the realignment of society and the economy in order to manage growth on a sustainable downward path

Unrestrained growth and the idea that only increasingly complex technology can take us out of the consequences of growing temperatures and environmental degradation is not only not true, but it is a dangerous assumption. 

Transparency opens the door to new solutions

As the BBVA Foundation study found out, almost 60% of those asked had a high understanding of environmental matters, but what about business practices? Oftentimes people are left in the dark in regards to sustainability initiatives and strategies carried out by the companies they support or even the companies they work for. 

The lack of information and a transparent look into what businesses and other organizations are doing to give an effective response to the climate crisis is perhaps one of the biggest challenges and obstacles our society faces today. People cannot fight for what’s best for the planet, and consequently themselves, if they don’t know what is causing such devastation in the first place. 

Similarly, neither can businesses manage what they don’t measure and understand. Because being transparent is not only an externality to a company, or a given organization, to help build trust and reputation; it is in fact also a great learning and improvement mechanism.

We believe and work for transparency to be one of the key values driving the stakeholder transformation, as it is the only way to understand what we are doing wrong, what we are doing right and what it is that we are not doing yet.

In this regard, it is essential to our work to promote good corporate governance, meaning that the processes of disclosure and transparency are followed so as to provide regulators and shareholders as well as the general public with precise and accurate information about the financial, operational and other aspects of the company, including a more accurate definition of the ESG performance.

We have developed a corporate government tool that helps establish ESG impact objectives for employees in regards to the sustainability strategy of the company. Through our technology we are able to activate and track employees’ impact, creating engagement that translates into improved ESG metrics, reputational value and an overall positive impact for the environment and society.

If you want to know more about how we work to create a positive social and environmental impact, click here.