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New business models are needed for a sustainable future

2024-03-18 16:13:00

Researchers at the Corvinus Business Ethics Center are exploring ethical business models that can bring humanity closer to a sustainable future. This was also discussed by the researchers in their presentations at Research Week 2024.

Budapesti Corvinus Egyetem

Barely one and half degrees of warming in 2023, one million species are threatened by mass extinction, and the ecological resources and services available per year are already consumed globally by the beginning of August, and by the end of May in Hungary. 

Humans have now transformed the planet so much that some theories suggest that there is a new era in Earth’s history. This is called „the Anthropocene”, the age of the human-dominated biosphere. The economic and social trends that have become exponential over the last 60-70 years, transgress the planetary boundaries within which human life is still safe. 

We have already crossed six out of nine planetary boundaries, and the future of humanity on the planet is becoming increasingly uncertain. Not only humans, but all living beings are at risk, and new holistic and interdisciplinary economic approaches are needed for humnaity to survive and avoid social and ecological disasters. These are some of the areas of research at the Business Ethics Centre at Corvinus University, which were presented at the University’s Research Week. 

Business ethics in the Anthropocene 

In shaping exponential trends and exploiting the planet, the prevailing economic-business approach play a major role. Conventional business ethics is primarily focusing on avoiding scandals and functions as a management tool for making profit. In the Anthropocene era, this needs to be completely reconsidered, according to Gabor Kovacs, researcher at the Business Ethics Center. 

Mainstream business ethics has so far appeared as a tool to maximise profits. While environmental considerations have now been introduced in many companies, they have so far remained within the current system, and do not led to lasting and sustainable change. A fundamental change would be to make ecological awareness an internal motivation for managers. 

For a sustainable future for humanity, the economy must be transformed into a sustainable system where the protection of ecosystems are strengthened. “This change is also the responsibility of business schools. We need to find ways to change unsustainable systems and mindsets, and we need find new business-economic models to replace the existing ones,” said András Ócsai, researcher at the Business Ethics Center. 

Paradigm shift: new business models needed 

Environmental awareness has so far remained within the framework of the current system, where financial return is the main indicator of success. However, researchers argue that instrumental rationality needs to be replaced by ecological rationality, where humans are not the centre of the earth’s ecosystem but an integral part of it. 

Spirituality and a holistic view of the self, where we do not see ourselves as separate individuals, but accept our interconnectedness with our social and natural environment, can help to broaden this perspective. This can be supported by an ethical system that takes us out of the anthropocentrism that prevails today. 

The researchers also presented specific practical examples. Sustainable food, for example, is a fundamental right, yet globally one third of people are undernourished while unsustainable large-scale agriculture often has a negative impact on the well-being of living organisms and people. Intensive agriculture is the result of profit maximisation and strategies based solely on competition, but there are alternatives to overcome these problems. 

One example is the organic food movement, which aims to produce food without chemicals and fertilisers, and contributes to the health of all concerned. Another example is the regenerative agriculture model, where equity and the restoration of natural ecosystems are also considered.  

A common argument against alternative models, is that they cannot feed every person on the planet, but this is not true. Research shows that up to 10 billion people can be fed with organic food if we shift to a predominantly plant-based diet, reduce food waste, and make the distribution system more equitable. Moreover, in the longer term, this is the only way to avoid further supply problems in the future as soil depletion is casued by intensive agriculture . 

This paradigm shift is being promoted by several movements and businesses, and the Business Ethics Center is also exploring alternative business models. The Slow Food movement aims to make food more than just a commodity, and to raise consumer awareness of the natural inputs and human labour required to create healthy food. Slow Living follows similar principles to transform the way we consume  commodities. Researchers are also looking at the regulatory side, such as the European Union’s Farm to Fork strategy. 

There are also promising initiatives in the business sector. Organic India, which is being studied by the researchers, uses regenerative farming methods to create products made from medicinal plants, and Green Monday is a start-up that makes low-carbon and sustainable living easy. There are also good examples in Hungary, with Pipacs Organic Bakery producing “uncompromising” bread and pastries from healthy and sustainable sources, and the Krishna Valley which is creating an organic farm and eco-community on the outskirts of Somogyvámos, based on a Hindu spiritual foundation. 

The key to success lies in communities 

As the examples show, good practices already exist. The question is how to spread them more widely to bring about systemic change. According to Tamás Veress, researcher at the Business Ethics Center, the biggest problem with today’s mainstream models is that they rely on the “go ahead” principle, expecting to outgrow problems over time. But if this fails and the techno-optimism is not proven, humanity will  face serious problems. 

“Humans are not fundamentally evil, it is social structures that cause the problems,” says Tamás Veress, pointing out that there is hope for change through good examples. Technology is not a problem in itself, and, in fact it is necessary for the transition. The question is whether we put all our efforts on this one force, or whether we address overconsumption and lifestyle through a transformation of our thinking. 

Communities can be the key to spreading good examples, where it is no longer a question of tackling global challenges that are much bigger than ours alone. In Cuba, for example, knowledge-sharing circles have been created where the challenges of being politically isolated have even been a sustainability advantage. As the import of chemicals became impossible after the fall of the Soviet Union, farmers had to switch to chemical-free and organic methods in order to continue to feed people . Local communities played an important role in this, as they provided a stable market for farmers. Organic farming also emerged at the community level and on a larger scale in India, where an experiment was conducted in a whole state, Sikkim, to see if it is feasible to feed the population. 

The key to success lies in communities, which can contribute to sustainable agriculture through knowledge sharing, encouraging each other and providing a stable market, and can also help to make ecologically conscious choices in other areas. 

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GEN.:2024.04.14. - 01:56:03