Sustainable Business

Businesses have existed for millennia. People have always come together to trade and soon learned to pool their resources to do so more effectively. But although business in the most general sense is a natural form of activity to emerge in a society that produces and trades, the precise form it takes is not.

Business models are designed to pursue particular commercial goals and their evolution is strongly influenced by the cultural, legal, regulatory and competitive environment in which they are situated. These forces come together to shape the ‘rules of the game’. Over the generations, businesses have made us richer and improved our quality of life. But businesses by definition are profit-creating entities and so one of the key functions of the ‘rules of the game’ is to ensure that the pursuit of profit is not at the expense of other things we value as a society: the natural environment, social justice and so on.

At nef, we believe that growing environmental and social problems are a sign that we are not getting the balance right. We need to get better at aligning the societal interests with the activities of the mainstream business sector. The rules of the game need to change.

Our work focuses on two main areas:

• Getting prices right
  Prices need to reflect real social and environment costs if we are to align the goals of business with those of society. Unless businesses are directly held to account for the social and environmental costs that result from their activities, there will be little incentive to change and it will be only an altruistic few that do.
• New forms of ownership
  Changing the way we think about ownership may open up opportunities for greater accountability and equality. nef recognises that society needs businesses to innovate, create jobs and generate wealth. But we are developing new rules of the game that will enable businesses to do this in a way which is compatible with a sustainable environment, and which promotes equality, social cohesion and well-being.