By Lucy Findlay MBE, Managing Director of Social Enterprise Mark CIC
What is Degrowth? Is it something you’re familiar with? Keep reading and I’ll explain why it’s important.
During the 10th Anniversary Party for Big Society Capital, I was asked, along with 9 others about my experience of social impact investment for their blog. My answer was ‘I think it is a confusing term as lots of people have different interpretations of what social impact investment actually entails and sometimes that can be a bit of a barrier, especially for women and ethnic minorities who think ‘well why can’t I just go and get this investment from a bank? Why do I need this type of investment and what does it mean, does it mean I get special credit for activities that I am doing?’
Therein lies the problem. Why can’t we just go to a bank, why don’t banks understand our sector, why is there a need for social investment and does social investment solve the root cause? In my view, the root cause is the way, the narrow way, that business has been defined over the years as well as the narrow group of people that define it. Most specifically to the assumptions around the term ‘growth’ and ‘return on investment’.
For this reason, my antennae are being increasingly attuned to the term ‘growth’ and questioning what that means. For most automatic equates to getting bigger financially and greater financial return for shareholders and other investors.
More recently the term ‘green growth’ has gathered momentum – as a more palatable version. The assumption behind this term is that we can invest in green technologies and the green economy and keep on growing the financial bottom line which will help tackle climate change ie we can have it all and wealth will trickle down to the poorest. However, in a week of record summer temperatures in a cost of living crisis this is not the reality that we are seeing. Climate change targets are not going to be hit and social polarisation is getting worse, not better. This largely because profit and financial growth are still the main concern when it comes to growing an economy and aim of business – ie is Green Growth just another wealth creator? I’ll let that question sit with you.
We need to think completely differently about growth to create sustainability – a system change. I was pleasantly surprised to see that some in the investment community are beginning to engage and embrace this idea. I came across an excellent seminar this week on concept of ‘Degrowth’ organised by US Investment Bank, Jeffries.
Degrowth, essentially recognises that we need to put social and environmental concerns before profit and create business that works in harmony with society and the environment, rather than fighting it on the fringes through tick box mitigation measures whilst carrying on with the same financial growth trajectories and assumptions.
This requires a complete rethink of what business is and why discussions in current business communities often feel ‘cross purpose’, even within the specialist social enterprise and investment community. We need to think radically about how we design a different ecosystem led by those that have been marginalised by it rather than adapting the current system incrementally led by those that have ingrained.
Do you feel confident with the investment options available?
Here are some helpful Links
Big Society Capital