Sustainable Economy: Brave New World

Economy for the common good

The good life for really everyone? The Common Good Economy (GWÖ) has nothing less in mind. For GWÖ companies, the earth and people are above profit. This means, for example, fair, solidarity-based wages for all employees. Or more specifically: The highest salary in a company, for example of a board member, may be a maximum of 15 times as high as the lowest, of an internship or something like that. For comparison: the board members of the most profitable companies in Germany currently earn an average of 53 times (!) as much as the remaining staff. How do you implement things like this? The most important instrument is no longer just plain sustainability reports, but rather a so-called balance sheet for the common good. Every area of ​​the company is checked for ecological and social aspects. And you get points for achieving it. How great would it be if every product on the supermarket shelf had such common good economic points on the packaging? We continue to dream, while more than 1,000 companies worldwide have already embarked on the GWÖ path – and the trend is rising.

Best practice: Voelkel

Organic alone is not enough: at least when it comes to the Voelkel family business from Wendland. In the fourth generation, organic drinks are produced there for the common good. What does the common good mean here? For example, that every product promotes organic farming. Or that profits are not paid out to investors and owners, but to projects aimed at the common good. They then promote orchards, promote research into non-corporate organic seeds or provide refugee aid. Just the common good. And Voelkel also sets its own standards: companies with which the company cooperates – from banks to small farmers in Peru – must also be committed to the common good. Hats off!

Green capitalism

Can we buy green? Green capitalism says: yes. Well, at least under certain circumstances. The buzz term assumes that environmentally friendly business is possible as long as the value and costs for nature are taken into account. This can happen, for example, through a CO2 tax or through emissions trading. In other words: On the one hand, companies produce greener products, but because they also use electricity and resources, they compensate for the climate damage caused. Growth is therefore linked to more sustainable decisions, while maintaining current prosperity. And that’s the crux of the matter: What does prosperity actually mean?

Dr. Katharina Reuter from the Federal Association for Sustainable Economy is rather skeptical. “We have to get away from this sacred cow, the gross domestic product. It’s not enough to give products a green coat of paint.” So it’s all just greenwashing? Not necessarily: Green capitalism can work if companies act sustainably and make better use of scarce resources such as oil or minerals. And: if the circular economy, recycling and repairs are pursued seriously. Means: growth, yes. But slower and more sustainable.

Best Practice: Refurbished

Grow and cycle is the recipe of the Austrian company Refurbed. It repairs smartphones, tablets, etc. in order to resell them, including the guarantee, for up to 40 percent cheaper. And is that really promising? Oh yeah! Refurbed is one of the fastest (!) growing online marketplaces in the entire German-speaking region. The motto: rapid growth, but please in green. The company has now expanded its business to include sporting goods and new clothing made from recycled fabrics.

Degrowth

Green capitalism is still too much capitalism and not enough green? Then perhaps the degrowth movement is the right thing, i.e.: fewer products, less work, less consumption. The promise of salvation of infinite growth that brings prosperity, prevents unemployment and ensures social stability is to be replaced here. How specifically? Well, through fewer working hours for everyone, which in itself means that less can be produced; by banning advertising in public places that continually encourages new consumption; and through a socio-ecological tax reform that taxes resource consumption higher and labor income lower.

But not for all companies – and this is where it gets interesting: “Conventional companies in particular need degrowth, such as fast fashion giants or well-known electronics providers,” says expert Katharina Reuter. “Sustainable companies, on the other hand, should continue to grow as much as possible so that green products displace conventional competitors.” Of course the market fans will jump in circles because there’s too much interference and stuff like that. The example of Primark shows that this is already happening to some extent on its own: the fast fashion company is making fewer and fewer sales in Germany and is closing branches – also because sustainability is becoming increasingly important for consumers. Experts even suspect that the chain could disappear from Germany completely in the next few years.

Best practice: Patagonia

The outdoor brand from the USA is considered a pioneer for responsible entrepreneurship in the textile industry. In what way? For example, it already relied on organic cotton in the 1990s, when the topic of fair fashion was not even remotely mainstream. Since 2011, the brand has been using so-called sufficiency marketing, which involves encouraging customers to buy less and have it repaired. Yes, even with our own products. In the case of Patagonia, degrowth means that the company does not have to make more profits every year – as is usual – but rather remains stable at current sales. Which is still an estimated $1 billion a year. The next highlight came in September 2022: Owner Yvon Chouinard announced that he was transferring his approximately three billion dollar share in the company to a foundation dedicated to the fight against the climate crisis. The result: From now on, all excess profits flow into the foundation instead of into the founder’s pockets – which is also an economy for the common good.

Purpose economy

The purpose economy goes in a similar direction to degrowth – which means bringing companies into responsible ownership. In short: If a company is responsibly owned, it belongs to itself and its employees and not to any investors or business bosses. And: The company remains unsaleable and free of speculation. This should enable companies to remain independent in the long term and true to their values ​​without having to worry that they will be sold or evaporated if quarterly figures do not perform. Why is that important? This security is essential, especially for brands that are counteracting the climate crisis. An example: The search engine Ecosia is not primarily intended to deliver good click numbers, but rather to plant a lot of trees. If this company were to be sold, it would not be possible to ensure that the search engine technology would continue to be used and that the trees would continue to be planted at the same time. However, since Ecosia is responsibly owned, a sale is not possible. Of course, if the company no longer pays its people, it will be economically difficult – but the point here is to prevent almost unbridled growth and greed for money.

Best practice: unicorn

In 2015, the German founders Waldemar Zeiler and Philip Siefer took the condom out of the sleazy corner through crowdfunding and placed it in the middle of society with their start-up “Einhorn”. The product range has now been expanded to include organic period products – all produced ecologically and fairly. Einhorn established the first organic latex plantation in Malaysia. The company donates 50 percent of profits to charitable projects and reinvests profits in research, product development and sustainability projects. The company has been in responsible ownership since 2019. This means: It cannot be sold, it is impossible to pay out winnings, and all employees decide together about the future of the company.

Sharing economy

As the name suggests, this is about sharing, exchanging, lending, renting or giving. The drill, rented through the neighborhood network; Students who become moving helpers via a platform; Food that is saved and distributed using food sharing. We can consume anything, but we don’t have to own it. Sounds great? In any case. But there are risks if it is too profit-oriented. Digitization expert Sascha Lobo criticizes the market power of individual online platforms in the sharing economy and speaks of “platform capitalism”. Providers like Airbnb or Uber – without their own property – could shake up entire industries and enrich themselves, for example, by providing living space and private vehicles. How can it still work? By providers acting sustainably and – there we have it again – oriented towards the common good.

Best practice: Ljubljana

The capital of Slovenia could easily be called the sharing capital of Europe – at least when it comes to mobility. Car and bike sharing is booming here and both are almost free. The result: the city center has been car-free since 2007. Large main roads are regularly converted into pedestrian zones. If you have tired legs or want to transport a used shelf from A to B, you can call a “Kavalir” – in keeping with the sharing idea. The fully electric taxi looks like an enlarged golf cart and takes people around the car-free city center free of charge at any time. A brave new world that is becoming reality little by little.

Bridget