1. © GSaME, Universität Stuttgart 1 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium The Ecological Allowance of Enterprise Dr. André Reichel Scientific Coordinator GSaME Associate Cluster Director Barbara Seeberg Doctoral Student GSaME

2. © GSaME, Universität Stuttgart 2 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium The Ecological Allowance of Enterprise – Backup slides for Workshop–

3. © GSaME, Universität Stuttgart 3 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium Ecology and Economy Money Goods and services (outputs) Labor (inputs) Money Firms Producers Households Consumers Sources DepletableRenewable Sinks Low-entropy solar energy High-entropy heat radiation AssimilationAccumulation

4. © GSaME, Universität Stuttgart 4 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium Models Source: Daly, H.E.; Farley, J. 2003. Ecological Economics: Principles and Applications. Washington DC: Island Press The Entropy Hourglass Source: Daly, H.E.; Farley, J. 2003. Ecological Economics: Principles and Applications. Washington DC: Island Press Strategies for integrating ecology and economy An economy with constant stocks of people and artifacts, maintained at some desired, sufficient levels by low rates of maintenance ‘throughput’, that is, by the lowest feasible flows of matter and energy from the first stage of production to the last stage of consumption. Herman Daly 1991 Sustainable scale is the key characteristic of a steady state economy. Scale is simply a measure of the size of one object relative to another. In this case, we are concerned with the size of the human economy relative to the ecosystems that contain it. Sustainability is achieved when the human economy fits within the capacity provided by Earth’s ecosystems.

5. © GSaME, Universität Stuttgart 5 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium Implications Ecological construction of economic reality Starting from the basics of the ecological household Formulation of economic policies aiming to achieve a sustainable scale i.e. the transition towards a sustainable steady state economy The economy is a subsystem of the Earth’s ecosystems Entropy is a relevant economic concept Absolute limits of economic activities are taken into account

6. © GSaME, Universität Stuttgart 6 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium The need for a new economic paradigm In fact degrowth is not a concrete project but a keyword. Society has been locked into thought dominated by progressivist growth economics; the tyranny of these has made imaginative thinking outside the box impossible. The idea of a contraction-based society is just a way to provoke thought about alternatives... Proponents of contraction want to create integrated, self-sufficient and materially responsible societies in both the North and the South. It might be more accurate and less alarming if we replaced the word degrowth with "non-growth". We could then start talking about "a-growthism", as in "a-theism". After all, rejecting the current economic orthodoxy means abandoning a faith system, a religion. Serge Latouche (http://mondediplo.com/2004/11/14latouche) In fact degrowth is not a concrete project but a keyword. Society has been locked into thought dominated by progressivist growth economics; the tyranny of these has made imaginative thinking outside the box impossible. The idea of a contraction-based society is just a way to provoke thought about alternatives... Proponents of contraction want to create integrated, self-sufficient and materially responsible societies in both the North and the South. It might be more accurate and less alarming if we replaced the word degrowth with "non-growth". We could then start talking about "a-growthism", as in "a-theism". After all, rejecting the current economic orthodoxy means abandoning a faith system, a religion. Serge Latouche (http://mondediplo.com/2004/11/14latouche) 1950195519601965197019751980198519901995200020052010 Real GDP Financial Capital Ecological Footprint * * Everthing that matters Maximum yield of social-ecological systems

7. © GSaME, Universität Stuttgart 7 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium Degrowth and the Steady State Downsizing the economy towards a sustainable scale Less products and other physical assets as well as less monetary assets Degrowth “Axiom”: Too much stuff will kill you! Technological reduction cannot suffice due to Jevons’ paradox Degrowth consensus: Deepening democracy and equal rights, redistribution of wealth, strict regulation of banking system, conservation of resources and ecosystems Open dissent on: Market economy, technological innovation, the role of firms

8. © GSaME, Universität Stuttgart 8 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium Corporate Sustainability Framework Business Case Natural Case Societal Case Eco-Efficiency Socio-Efficiency Eco-Effectiveness Socio-Effectiveness SufficiencyEcological Equity Source: Dyllick, T., & Hockerts, K. 2002. Beyond the business case for corporate sustainability. Business Strategy and the Environment, 11(2): 130–141. Business Idea

9. © GSaME, Universität Stuttgart 9 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium Sustainable Production System Use Services Gross profit Sustainable Product Time Higher payments throughout the entire lifecycle Re-Design Reduction Eco-friendly products and production processes Resource efficiency during use Circular flow (Throughput) Design Production Design Use Traditional Product Production Involvement of customers and other stakeholders Focus shift Lifecycle Sustainable Management

10. © GSaME, Universität Stuttgart 10 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium Alternative business (models) For traditional industries, the shift towards a sustainable steady state economy demands Impact > Allowance: Fundamental shift in business logic, from product to product-service-systems Impact < Allowance: Connect to economic and societal stakeholders in order to lobby for the steady state! Normative injunction: Be the Steve Jobs of Sustainability!

11. © GSaME, Universität Stuttgart 11 Research Cluster H Sustainability in Manufacturing Seventh International Environmental Management Leadership Symposium Group 1 What kind of industries and firms might embrace this “injunction”? Under what circumstances (political, economic, personal) do steady state innovations occur in firms? Imagine yourself as an ecological economics entrepreneur! Group 3 What would these findings and policies mean for your personal life? Try to give a personal case for being a consumer in a degrowth economy based on your everyday life experiences. What would be better or worse, what would be different? Group 2 Assume and argue for barriers for steady state transition of firms. What kind of industries and firms are least likely to make the jump into the degrowth economy? If this transition occurs, what would that mean for these firms and their employees? Discussion