Can growth be the answer to all our sustainability concerns?

I've never really been able to get on that well with most economists.  It's not that I have some deep-rooted distaste for the academic practice itself; nor any elitism from having had (an albeit now far-removed) association with the physical sciences. No, it's more that I've struggled with the broad brush-stroke expectations of the economists' view of markets. It's fair to say that all changed when I recently read Professor Tyler Cowen's book "Stubborn Attachments". Cowen, economics professor at George Mason University, cleanly sets out a vision of economic prosperity that, (I believe) for the first time, addresses concerns over balancing growth with social and environmental sustainability.

I spend a fair amount of my time considering how to help support my clients' corporate strategies in a way that focuses on improving the sustainability of each of the companies' respective business models. It's not been without its challenges, to say the least. Some companies want to pigeon-hole sustainability as corporate philanthropy; others to manage an unbalanced message from their well-educated corporate affairs teams; others still seeking only to better their score from one or other third-party sustainability index. I don't say this to moan, or to belittle the efforts of some of those companies. I say this because I believe it's fundamental to be able to work through an approach which considers the needs of shareholders against the reasonable expectations of society. The common argument for the abandonment of sustainability in corporate strategy is that it jars with the over-riding need for economic returns to shareholders.

And this is where Prof. Cowen's book comes in.

'Stubborn Attachments' establishes a number of theses to consider. I won't cover them here (go buy the book!), but of all of them, I was struck two: that we should seek growth (Growth Plus, as defined); and that the impacts of our actions on future generations cannot be discounted. 

Cowen establishes the business case for the direct and indirect benefits of Growth across a number of social and environmental measures. These are backed up by a history of improved social outcomes from economic development over the last century, of course. What's usual for classic economic models, though, is that the implications and outcomes of an intervention are discounted the further removed they are from the intervention (and the more uncertain they are, of course). Cowen, however, argues that human rights are inalienable and should be counted as equally important for future generations as they are today.

This, as they say, was my lightbulb moment.

The opportunity presented from pursuing growth, cognisant of intergenerational equity, seems to me to be the next logical progression in corporate sustainable development. It allows the integration of long-term (megatrend) thinking with a focus on translating that into innovation; and it supports a strategy that should appeal to even the most hardened corporate pragmatist.

I'll hopefully engage Prof. Cowen on a future 'Let's Talk' Podcast, or at least pick his brain further as we refine our own thinking on this in EY. For now though, I'll just encourage you to order a copy of his book and reflect yourselves. And if this article isn't enough to make you want to do so, know this: all the profits of his book will go to one man he met whilst travelling in Ethiopia who hopes to open a travel business. Specific, yes, but as Cowen describes, an economically sound investment.