Expert Essay in Beyond the Roadmap

We are often asked to share our perspective on a topic—how things would look through a Post Growth lens! We love that, whether through keynotes, articles, or, in this case, an essay.

The essay is a part of the Reduction Roadmap, Beyond the Roadmap Report, that addresses the question of how the building industry can operate within planetary limits. The approach is grounded in a dual strategy: Mitigating carbon emissions within the Reduction Roadmap reduction curve while simultaneously fostering the regeneration of the natural world.

Here is our view:

What is a post-growth business?

A post-growth business stays within ecological and social limits, moving away from the traditional growth-driven business models that currently dominate how businesses are run. One of the core principles of such a business is to be growth-independent. In other words, to create value, offer decent jobs, and survive without relying on infinite growth, aligning with the planet's limited resources.

In this way of seeing a business, after reaching a steady state, it focuses on development (increase in quality), not growth (increase in quantity). It doesn't focus on increasing production but on improving social equity and restoring the environment. Instead of blindly pursuing continuous growth, a post-growth business navigates after a level of resilience and stability that allows it to choose regeneration consistently.

The concept of "limits to growth" is fundamental to the definition of a post-growth business. A post-growth business is often structured as a not-for-profit business that generates revenue by selling a product or service but where profits are redistributed towards social and ecological goals instead of going exclusively to shareholders. And that's a legally binding arrangement.

By moving away from a model that seeks to only maximize profit, a post-growth business can reduce the need for short-sighted continuous growth, making long-term goals a business reality. A more equitable power distribution also prevents unchecked growth driven by personal wealth or influence.

What can post-growth businesses do?

Post-growth businesses can, for many years to come, grow revenue streams within the sectors needed if we want to transition into an economy where we operate within planetary boundaries—while noting that even the new required sectors will have to "grow up" at some point and reach a steady state where focus again will be on development, not growth.

Understanding these categories is crucial for investors who want to contribute to a future where we stay within planetary boundaries. The majority of capital needs to be diverted into these areas. These sectors represent the industries that will sustain us within ecological limits and those that actively contribute to regenerating our ecosystems while serving fundamental human needs.

With their long-term investments, pension funds are particularly well-suited to lead this shift. By reallocating capital from new construction to renovation and other post-growth-aligned sectors, they can protect their portfolios from climate-related risks while contributing to broader societal goals of regeneration and equity.

For the building industry, this includes areas like retrofitting and upgrading existing buildings that focus on adaptive reuse projects, emphasizing low-impact and biogenic materials like straw and hemp. Companies that work with local materials are equally suited to ensure eco-friendly practices in construction and can, to a higher degree, ensure that all materials are sourced free from exploitative labor practices. Ultimately, it is about creating affordable and cooperative housing that meets social needs with community-based solutions.

Besides working with products or services that are sufficient, regenerative, and equitable, businesses must embrace structural shifts that ensure long-term resilience. One of these mechanisms is establishing wage caps to help limit personal incentives, prioritizing business goals over meaningful long-term social and environmental value. Wage caps are, therefore, a simple mechanism to direct focus toward long-term viability instead of company growth.

How can post-growth businesses adapt?

In addition to these limits, a post-growth business must be able to stay stable in a volatile market with increasing crises and political turmoil. Establishing economic buffers is a way to absorb fluctuations in the market and the environment. With reasonable resource reserves, companies are more likely to make good decisions, prioritizing ecological and social commitments while navigating unforeseen challenges.

An economic buffer ensures leaders are not pressured to make short-term decisions. Buffers are, therefore, essential for a post-growth business to maintain stability, ensuring that it not only survives but thrives while staying within planetary boundaries.

Scenario planning will become an essential tool for leaders in a post-growth business as it will help them create relevant strategies and the best way to use buffers that can ensure resilience, even in the hardest times.

Key advantages of post-growth businesses

Hyper-growth often leads to bad decisions with significant ecological and social costs. It is, therefore, critical for a post-growth business to slow down, allowing time to make thoughtful and informed decisions. Accounting for delays and feedback loops will force the business to slow down and adjust to the market and environmental conditions. Corrective feedback loops ensure that the company adjusts its operations to avoid exceeding resource limits. These corrective measures should, therefore, be implemented in the day-to-day business operations.

We can’t produce our way out of the crisis. To scale impact, a post-growth business can use donations and investments in local communities or open-source parts of its solution. This way, growth can be linked to community projects or regenerative practices that create long-term ecological and social value instead of relying on material resources.

To make these decisions, a post-growth business needs transparent information. Ensuring that decision-makers have the right information to make sufficient and timely responses is essential. Accurate information is not only a nice-to-have for compliance reasons; it is the very foundation that ensures a business can be held accountable and adjust actions accordingly.

Rules and governance structures must also change to support the new objectives, prioritizing ecological and social well-being over profit maximization. This means fundamental changes to company policies with mechanisms to keep them in place. Governance structures should support a culture centered around decentralization and self-organization. A lot of attention, time, and resources should be spent on encouraging employees to participate in decision-making, strengthening the company's ecological and social commitments beyond a few select individuals.

Finally, the fundamental goals within the business must be changed or at least updated. Short-term revenue goals and KPIs must be replaced with long-term goals centered around regeneration and equity. Otherwise, individual behavior won't follow. By replacing growth with development, a business can not only survive but thrive within planetary boundaries.

We need to rethink growth, embrace the natural limits, and adopt regenerative practices that are sufficient and equitable. It's a business model that creates a financially stable business that, through sufficient, regenerative, and equitable strategies, can adapt to the needs of the 21st century.