Planting the seed
How to reimagine business success
within ecological limits
In a world of finite natural resources, unchecked economic growth is simply unsustainable. Researchers from UQ Business School and KPMG identify how organisations can thrive in a world with a fixed ecological budget.
In March 2021, Australia had already overshot its ecological budget. This ‘budget’ covers the quantity of natural resources that Australians need to survive for one year. In effect, we are now in debt, using resources that cannot be replenished and overdrawing what we should be saving for the future.
As a society, we are dependent on natural resources and ecosystem services to live a thriving, healthy and successful existence. Yet, current consumption levels are causing businesses – from SMEs to large corporations across all sectors – to take more than they give back.
How do we define what success looks like so we don’t overshoot our ecological ‘budget’?
It’s a question sustainability expert Dr Cle-Anne Gabriel, a senior lecturer at The University of Queensland (UQ) Business School, is investigating through her research into future-forward, responsible business models.
Dr Cle-Anne Gabriel
Dr Cle-Anne Gabriel
“Organisations need to work towards balancing their ecological ledgers in the same way they balance budgets to build a thriving business within ecological limits,” says Cle-Anne.
Strategic planning that considers the use of natural resources is gaining traction in the C-suite. Innovative organisations are adopting new business models, industry partnerships and collaborations to redefine what success looks like beyond economic profits.
KPMG Associate Director of Climate Change & Sustainability, Cameron Reid, says organisations need to move away from putting challenges like climate change in a separate 'environmental' or 'sustainability' bucket.
Cameron Reid
Cameron Reid
“Organisations need to ask: how will climate change affect my people, my business and the society we work within? Thinking broader about impact helps you to make better choices – that’s when you move from climate risk to climate strategy.”
Cle-Anne says it’s an investment organisations cannot afford to ignore, citing research that demonstrates climate inaction and the associated costs from reactive responses to bushfires and floods are more expensive than implementing proactive climate-proof strategies.
“There is the issue of climate risk for large fossil fuel and mining companies that have invested billions of dollars in infrastructure and now have stranded assets that are no longer viable. But it’s even riskier to do nothing,” she says.
Cameron agrees. “The recent Responsible Investment Association Australia Benchmark Report shows responsible investment is making sense. Organisations that embrace ESG are the ones showing positive returns relative to the market, are more consistent ad more resilient to challenges over time.
“Climate change isn’t just affecting the environment, it is shaping the fabric of society, and that means you need to do what you do as a board member and enable your business to prepare for that.
“The United Kingdom is already bringing in climate-based investor reporting (the TCFD), and New Zealand is following suit. These sorts of decisions will create a momentum that will impact our country and organisations.
"There are global forces that are going to push us forward whether we like it or not,” says Cameron.
Balancing the budget
As a lead on the newly launched Carbon Literacy Program, an Australian-first, globally recognised training program, Cle-Anne is assisting organisations to reduce emissions at a corporate and personal level.
“The Carbon Literacy Program offers a starting point for businesses to understand the actual science of the dynamics of resource extraction and regeneration, two core concepts of taking and giving back, and the viability of new economic models,” she explains.
Dr Cle-Anne Gabriel presenting
Dr Cle-Anne Gabriel presenting
Dr Cle-Anne Gabriel and students
Dr Cle-Anne Gabriel and students
“From there, businesses can look at metrics to quantify their environmental impact by accounting for the natural resources used within a specific timeframe and measure success to give more back.”
Using science-based emission reduction targets, businesses can take action on climate change and drive sustainable growth at scale.
Large companies across a variety of sectors, such as Shell, PwC, Deloitte, Brisbane Airport Corporation and Woolworths, have already adopted a science-based target methodology to define their impact and set metrics for wellbeing and success within those limits.
Factors such as staff wellbeing, resilience-building and finite resource planning are integral for long-term business success. Profit can no longer be the sole metric of success in a future-forward approach.
“Instead of looking at growth in terms of profit, we are trending towards measuring success as employee and shareholder satisfaction. It’s a balancing act between ecological limits and social foundations within organisations and society as a whole,” Cle-Anne explains.
Top tips for building a climate change business strategy
Cle-Anne and Cameron share their top tips for building and actioning a meaningful plan to tackle an organisational sustainability strategy.
UQ Business School Top Tips:
Cle-Anne suggests her interpretation of the three principles set out by The Post-Growth Institute as key orienting values for wellbeing within ecological limits.
- Reimagine – Look at the wider economy in which your business operates. Calculate your impact, define a budget within ecological limits, quantify what you already give back and find a balance. The aim is to give back at least as much as you take. For your business to operate successfully within a limited economy, you must contribute to the equitable circulation of money.
- Reorient – Use tools such as the Carbon Literacy Program to advance a new purpose-driven initiative and direction for your organisation within science-based targets. It is important to learn and implement the skills that will build resilience and ambition within your business to scale and sustain purpose-driven projects that will create change.
- Revitalise – Businesses need to readjust KPIs to embrace ‘shared thriving’ within ecological limits with the community. It’s also important that they communicate their climate change action, to inspire others to make enriching contributions that strive for sustainable futures.
KPMG top tips:
- Lean into it – Organisations will find the positives outweigh the negatives. If they don’t, organisations need to address the negatives urgently to survive.
- Have an honest and robust materiality assessment – Understand what is and isn’t important to the business and decide what is challenging and necessary when building a climate change strategy.
- It’s about the journey – Rather than rushing in and feeling overwhelmed to make a lot of changes all at once, plan a strategy that starts slowly and scaffolds. Have confidence in your approach and then take another step. If it’s a journey, it gives you time to create a better outcome.
“Sustainability has to be a verb, not a noun,” says Cameron, “It’s great to have stretch targets, but equally, you have to change your habits and break it down into achievable steps to grow into being a sustainable organisation.”
Dr Cle-Anne Gabriel
Dr Cle-Anne Gabriel
Dr Cle-Anne Gabriel is strategy lecturer and researcher, and the Business School's Director for the United Nations Principles for Responsible Management Education (UN PRME). Cle-Anne is part of the Business Sustainability Initiative Research Hub, and researches in the areas of post-growth futures, renewable energy enterprise and business models for sustainability.
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