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A political and economic paradox, but a paradox that is currently operating in the UK.

Over 2/3rds of the UK’s GDP depends on household consumption.  Whilst this helps to explain the resilience in the economy to Brexit chaos and most post-war UK recessions, as exports and investments are relatively minor components of current GDP.  It stands against us as a measure of UK future economic sustainable development.

In contrast, what does cause economic recession in the UK? – when we consume less and when we save more!

Both issues raise questions about how business & sustainability professionals address future ‘growth’ strategies.  There are many UK businesses whose leadership have committed their organisations towards responsible leadership practice and the integration of business sustainability within their core strategies.  These actions are to be praised and applauded as they form the keystones of the UK’s commitment to a greener business economy.

However do we truly believe that the next phase in sustainable development is sustainability modelled around continued rises in household consumption?

Increasingly consumers now demonstrate greater awareness and response to what they spend their incomes on, and how they view ethical brands, sustainable goods and services. This is great news and is helping to demonstrate the growth and value benefits to businesses of responsible leadership and sustainability in businesses. However, consumers are also not letting up in their desire to spend and acquire more. We are purchasing smarter but we are still purchasing more than we need, and save less than other European nations.

We are still decades away from getting to grips with a circular economy or one that is sustainably balanced in terms of inputs and outputs.  However, there needs to be a bridging phase during which we embed more sustainable business models into the economy, coupled with policy & societal models that:

• incentivise households to save towards a longer life expectancy
• incentivise household savings towards the purchase and implementation of sustainable household infrastructure – renewable energy, lower carbon construction outcomes, reduced ecosystem service and impacts) that offsets living costs
• offset household consumption on materially unsustainable goods or services that have a higher than desirable impact on ecosystem services or climate change.
• incentivise the UK’s trading balance towards the growth in export of goods and services that promote a greener global economy, and
• address the deep structural cracks that current economic policy will have on tomorrow’s economy.  It was a great model whilst you couldn’t see the forest for the trees, but now that the forest has been cleared to the size of a coppice we need some new economic ideas and practices.

If economic theory is logical, and political economic science rational – how can a society, such as the UK, develop more sustainable economic indicators, be encouraged to pursue these through more stable economic models and to promote household sustainably over  household materialism.   Where is the economic leadership that allows us to switch tracks from GDP Key Performance Indicators based on unsustainable consumerism to those more suited to the realities of the future?

Individuals and businesses are capable of great innovation but future recession beating policies must accept that you cannot enable sustainable development through mass consumption, and that household savings can ultimately contribute to societal sustainability.

At Leading Green, our approach to sustainability in business consulting encourages our clients to look closely at their own internal leadership strengths. Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy.

Contact ross@leading-green.com