Today’s shock headline is that a large UK supermarket’s profits are down by 8.2%. Shareholders will be reeling and heads may have to roll. However they still made a pre-tax profit of £503m, which is still a lot of profit!
The expectation of constant growth is something we really have to rethink, there is nothing on the planet that can keep on growing without becoming limited by e.g. lack of food, lack of space, lack of oxygen, accumulation of waste. There are many examples throughout history of civilisations that have perished because they have exhausted their resources. The only difference now is that the civilisation in question is global.
Acclaimed economist, Kate Raworth, has attempted to address this by proposing the Doughnut Economy. This takes into account the environmental impact of doing business, whilst providing a ‘socially just’ world for everyone.
Another unlikely proponent of similar thinking is the solo round-the-world record holder yachtswoman, Dame Ellen MacArthur. Whilst out at sea, she had to consider very carefully every single thing she needed to get her through her trip and how she used it. She realised the true nature of limited resources and has since set up the Ellen MacArthur Foundation that researches and promotes the Circular Economy. This concept acknowledges that many resources are running out, and her idea sets in place a system of recycling and energy reclamation to address this by reducing resource use and encouraging the use of secondary resources. This is an approach that many large companies are now starting to look at and adopt.
Profit may come at a cost to the environment and people via air pollution, water pollution, greenhouse gas emissions, poor working conditions, low wages, loss of biodiversity, land use change and land degradation. Society and the environment can be collateral damage for the profits on the balance sheet. To this supermarket’s credit they do a lot to mitigate their environmental impact, and this blog is not to single them out, we are all complicit in this in or purchasing and lifestyle behaviours.
Tough competition is blamed for reduced profit but being savvier with the resources you use saves money and is more efficient, making you naturally more competitive. Obviously whilst a supermarket cannot unilaterally overturn an economic system, they are a powerful voice that has the ear of government ministers and policy makers, and they could make a difference.
We need people of influence, leaders and policy makers globally to start to recognise that economic system change is required. It should start with pricing resources adequately. This doesn’t mean more tax per se, as taxes on labour could be reduced to accommodate, but it does mean a challenge to the status quo. Our Industrial Strategy could be a springboard, the flexibility of Brexit giving us mobility, we need business leaders to provide the momentum – then we can generate a new status quo that has real longevity.
If you would like to help with managing your resources more efficiently give us a call on 01746 552423 or email email@example.com.