4 Looking to the future of B&NE research

The future of B&NE research is moving in two directions. The first direction continues the existing streams and expands upon the foundation of research and theories that have been developed over the past two decades. The second direction represents a departure from those streams, challenging their underlying assumptions in recognition of the unprecedented environmental challenges being faced today (such as climate change) and the relative inability of existing models to address them. The marker that denotes the shift between these two streams is the emergence of the concept of the Anthropocene.

B&NE research in the era of environmental management

The roots of B&NE research lie in problem conceptions based on discrete media based concerns such as air pollution, water pollution, energy use and waste management. Solutions, therefore, have focused on approaches such as waste minimization, energy efficiency, pollution control and environmental management. In each case, the general focus of B&NE research has been to merge these existing environmental concerns with considerations for economic competitiveness and the corporate goal of gaining market advantage by making “the business case” for action (Roome, 1998; Russo and Minto, 2012; Sexton et al., 1999; Shrivastava, 1995b; Stead and Stead, 1995). Much of this research has been normative in focus, focusing on improving “eco-efficiency” and understanding and predicting why and how corporations “can take steps forward toward [being] environmentally more sustainable” (Starik and Marcus, 2000: 542).

Within this existing path, the research foci discussed in chapter 3 offer multiple avenues for inquiry, each building on rich literature that plots its course. On the whole, these streams apply existing theories and models as a means to understand the complex relationships between business and the natural environment. B&NE research within the domains of organizational behavior, strategy, marketing and operations will continue on paths set since the mid-1990s and before. We can also expect increased attention in both the disciplinary and topical domains on which this scholarship is built.

As noted earlier, research productivity in the disciplines of accounting, finance and information technology (IT) have been notably low. Why is this so? Are the editors of the journals in these fields uninterested in the topic? Does the empirical domain fail to provide an avenue for theoretical contributions within these disciplines? Presumably not. It is far more likely that other issues or challenges within these literatures have dominated attention as defined research precedent. However, as the salience of environmental concerns continues to grow more broadly, the world economy struggles to recover from its collapse in 2008 (Stiglitz, 2009) and information technology continues its rapid development, we expect that the accounting, finance and IT disciplines will come to address B&NE issues more fully. Emergent research on weather derivatives (Dessai and Hulme, 2004; Randalls, 2010), carbon accounting (Mackenzie, 2009), the role of full reserve banking (Røpke, 2017) and information systems innovation for environmental sustainability (Melville, 2012) indicates that this is, indeed, happening.

Beyond this disciplinary expansion, growth can also be seen in topical domains that have not generally received significant attention within the business literature, despite their environmental and economic importance. New research has begun to focus on eco-tourism (Lee and Moscardo, 2005), agriculture (Weber, Heinze and DeSoucey, 2008) and construction (Henn and Hoffman, 2013). As well, new streams of research include attention to new roles of the firm and Base of the Pyramid strategies (London and Hart, 2004; Nidumolu, Prahalad and Rangaswami, 2009), as well to new kinds of market models, such as regenerative capitalism, collaborative consumption, sharing economy, shared value, conscious capitalism and flourishing (Ehrenfeld, 2004; Fullerton, 2015; Harmari et al., 2016).

Overall, this work leaves unchallenged the underlying tensions of the market economy. It treats environmental issues as standard market or business phenomena, often representing them within the literature as a market shift. Market pressures bring sustainability to business attention through core management channels and functions including: coercive drivers – in the form of domestic and international regulations and the courts; resource drivers – from suppliers, buyers, shareholders, investors, banks and insurance companies; market drivers – from consumers, trade associations, competitors and consultants; and social drivers – from non-profit organizations, activist groups, the press, religious institutions and academia (Hoffman, 2000). Corporate responses continue to require examination in the areas of: organization and culture, framing and discourse, individual and managerial perceptions, disclosure and reporting, multi-national corporations, clean-tech and entrepreneurship, supply chain management and industrial ecology.

Research is geared towards helping companies improve competitive positioning by linking environmental and corporate strategy. This involves translating the issue into the core literatures discussed in this book, including: financial performance, competitive strategy, resource-based view, institutional theory, stakeholder theory, management and critical theory. In each case, we have established models and language that can be used to conceptualize the issue and formulate research. In this way, sustainability becomes much like any other business research issue caused by a market shift. Market expectations change and technological developments advance, leaving certain industries to adapt or face demise while others rise to fill their place in the long-accepted notion of “creative destruction” (Schumpeter, 1994). Efforts in this research direction have an important role in seeking to understand business activities as they relate to the environment in the present context. However, we must also recognize that this context is changing.

The Anthropocene as a discontinuity

There is growing concern that the dominant strands of B&NE research are ill-suited to the emergent environmental problems of the twenty-first century. Indeed, some suggest that the contemporary conceptualization of “sustainability” has been subverted by corporate interests such that it has lost its meaning and does not go far enough as presently envisaged (Sandelands and Hoffman, 2008; Welford, 1997). It has become merely a label for strategies actually driven by standard economic and institutional mechanisms (Delmas and Burbano, 2011; Jacobs, 1993). According to Gladwin (2012: 657), “The past half-century has been marked by an exponential explosion of environmental knowledge, technology, regulation, education, awareness, and organizations. But none of this has served to diminish the flow of terrifying scientific warnings about the fate of the planet.” So, while the ongoing B&NE research into “greening” the market and business is a good thing, it is not enough. We are now facing a suite of environmental challenges that are unlike anything we have ever seen before. We are now living in what some scientists call the Anthropocene, a proposed, post-Holocene geologic epoch – the “age of humans” – that acknowledges people’s effect on the planet (Crutzen, 2002; Crutzen and Stoermer, 2000; Zalasiewicz et al., 2010).

The Anthropocene acknowledges that humans are now a primary operating element in the Earth’s ecosystems (Crutzen and Stoermer, 2000). This idea has created an intellectual furor with a flurry of debates taking place amongst different epistemic communities (Castree, 2015). This era is argued to have started around the industrial revolution of the early 1800s, and has become more acute since the post–World War II “Great Acceleration” of resources use and pollution from around 1950 onwards (Steffen et al., 2015; Steffen, Crutzen and McNeil, 2007). It is marked by the reality that:

Although there is some disagreement amongst Earth Scientists as to whether the Anthropocene has the mark of an epoch or a geological age (Gibbard and Walker, 2014), it is said to represent “a new phase in the history of both humankind and of the Earth, when natural forces and human forces became intertwined, so that the fate of one determines the fate of the other. Geologically, this is a remarkable episode in the history of this planet” (Zalasiewicz et al., 2010).

Whilst much work is being done within the Anthropocene Working Group in ratifying the Anthropocene as a unit in the official geological time scale, another group of environmental scientists have sought to create more clarity on the concept by identifying key biotic and geochemical markers or “planetary boundaries” (Rockström et al., 2009; Steffen et al., 2015) that represent “thresholds below which humanity can safely operate and beyond which the stability of planetary-scale systems cannot be relied upon” (Gillings and Hagan-Lawson, 2014: 2) (see figure 4.1). Nine have been isolated: climate change, ocean acidification, ozone depletion, atmospheric aerosol loading, phosphorous and nitrogen cycles, global freshwater use, land system change, loss of biodiversity and chemical pollution (Rockström et al., 2009). “Unless there is a global catastrophe such as a meteorite impact, world war or pandemic,” these planetary boundaries will continue to be approached as “mankind will remain a major environmental force for many millennia” (Crutzen, 2002: 23). Indeed, scientists believe that three have now been crossed as a result of human activity: Biosphere integrity and biogeochemical flows (nitrogen and phosphorous), climate change and species extinction (Stockholm Resilience Center, 2016).

A group of scientists, using a biotic perspective, emphasize the importance of acknowledging global “tipping points” or global scale state shifts associated with “human population growth and attendant resource consumption, habitat transformation and fragmentation, energy production and consumption, and climate change. All of these far exceed, in both rate and magnitude, the forcings evident at the most recent global-scale state shift, the last glacial-interglacial transition” (Barnosky et al., 2012: 53). This will result in changes in the world’s biological resources as we know them. In order to reduce the detrimental effects of rapid and unpredictable biological transformations, several systems-level shifts will be necessary: population growth and resource-use per capita must be reduced, fossil fuels must be abandoned for renewable energy sources, energy efficiency must be improved in those domains where it is not possible to phase out fossil fuels, food production must become more efficient and divergent, and biodiversity must be protected. All of these are formidable tasks.

Figure 4.1 The planetary boundaries of the Anthropocene

For B&NE researchers, this acknowledgment will have profound implications for the foci and direction of our research. Most importantly, the Anthropocene Era requires us to re-order our conceptualizations of the deep entanglement of the natural and social systems, one which subverts most prior frameworks and presuppositions. Rather than fitting environmental considerations into social and economic systems, the Athropocene forces a re-ordering of B&NE frameworks. It is a statement that social systems are intruding upon natural systems to the point that natural planetary systems are now nested within social systems (Hoffman and Jennings, 2015).

This re-ordering challenges institutionalized concepts, theories and methods of B&NE research that lie within the era of environmental management. The goal of sustainable development as stated in the Rio Accord (World Commission on Environment and Development, 1987) and UN Sustainable Development Goals (2017), while laudable, becomes the wrong goal if primarily addressed within the confines of “business as usual,” the efficiency gamut. Given the epochal nature of the Anthropocene and the degree and type of change it represents, this calls for more radical transformations than those provided through efficiency gains (Ehrenfeld and Hoffman, 2013). Recognition of the Anthropocene signals an urgency and complexity that much of the debate on sustainable development lacks, compelling change deep within the structures of our collective understanding of the social and natural world around us (Nyberg and Wright, 2016).

Some even go so far as to argue that capitalism itself is sowing the seeds of our own destruction (Wright and Nyberg, 2015; 2016).

B&NE research in the era of the Anthropocene

Recognition of the Anthropocene has broad implications for how we think about business sustainability, and whether this, indeed, can be considered in isolation. Rather than fitting sustainability into the existing models of the market, B&NE research must recognize that the ways in which existing markets have been designed have led to an appropriation of natural systems with potentially catastrophic consequences (Hoffman and Jennings, 2015; MacKenzie, 2009). Where the past incarnation of B&NE research incorporated the issue within existing business logics and models, the next iteration focuses on changes within those logics and models themselves, focusing on systemic changes in market architectures (Fligstein, 2001) and prompting a re-examination of the role of the corporation in society (Hoffman, 2017). The dramatic and uncertain futures associated with the Anthropocene – with the reaching of various planetary boundaries – represent a critique of the existing policies and ways of doing business. The B&NE field needs to shift from research focused on reducing unsustainability to that of focusing on creating sustainability (Ehrenfeld, 2008).

This shift represents a profoundly provocative turn. The accompanying tensions that it will create can be vividly observed in the currently polarized debate over climate change in the United States, one of the planetary boundaries of the Anthropocene (Hoffman, 2015, 2011b; Lefsrud and Meyer, 2012; Hulme, 2009). But, it is the issue of climate change, more than any other, that has triggered the shift to the fourth wave of B&NE research shown in figure 2.2. Where the models of prior waves do not challenge the underlying models of B&NE research, the fourth wave forces such an examination. No longer can we treat the environment as a limitless source of materials and a limitless sink for waste (Daly, 1991; 1993) or leave unquestioned the notion that perpetual economic growth based on continued consumption is desirable or even possible. B&NE research in the Anthropocene calls for new models that supplant these old ways of thinking and new metrics to act as guideposts for successful outcomes (Hoffman and Ehrenfeld, 2015). The fourth wave is a departure from the dominant models of economics and management science, recognizing that we are dealing with an impact on the environment that goes far beyond our standard notions of environmental issues as externalities or occasional instances of market failure (Callon, 1998). This departure may yield new forms of research in several domains. Below, we will offer eight domains for further research, but the notion of the Anthropocene is so disruptive as to yield opportunities for many more.

Challenge foundational models of the market economy

Some prior B&NE research has tended to reproduce specific understandings of what are desirable activities and responses to societies’ environmental issues by abstracting or disentangling the environmentally damaging activities from the everyday practices in which they are embedded. In this way, they (inadvertently) overlook what may keep these activities in place. Taken together, these features could provide a possible explanation for why, despite increased knowledge about what needs to be done and how changes can be brought about, many environmental problems continue not only to persist, but to grow.

But, B&NE research within the Anthropocene challenges prior research models that rest on eco-modernistic assumptions (Hajer, 1996). This creates an opportunity to ask deeper questions about some underlying assumptions of the capitalist model, one in which efficiency improvements are generally considered a good thing. In prior B&NE research, there has been little consideration or questioning of whether existing business activities are, indeed, sustainable in the long run. For example, there is a growing need for research that challenges the underlying economic premise of individualism (particularly with regard to consumerism), the purpose of the firm being to make money for shareholders (Stoudt, 2012), and the existence of externalities as a pervasive rather than occasional form of market failure (Callon, 1998; Ehrenfeld, 2008).

Questioning standard models and metrics

As part of this critique of traditional market systems, B&NE research in the era of the Anthropocene prompts a re-examination of the models used to understand and explain the market, particularly neo-classical economics (Beinhocker and Hanauer, 2014) and principal-agent theory (Stoudt, 2012), both of which are built on rather dismal simplifications of human beings as largely untrustworthy and driven by avarice, greed and selfishness. There is an acute need to move beyond text-book economics and finance, and explore the limitations of sacrosanct metrics, such as discount rates (Stern, 2009) and Gross Domestic Product (Stiglitz, Sen and Fitoussi, 2015; Kubiszewski et al, 2013), by considering the ways in which these metrics limit efforts at addressing social and environmental sustainability.

Expand existing management theories and literatures

Beyond a critique of neo-classical economics and agency theory, the Anthropocene creates opportunities to expand existing management disciplines by bringing them more in line with bio-physical realities. For example, most research disproportionately directs attention to those with “voice” in deciding what business can and should do. For example, institutional theory and its depictions of the field tend to bias towards formal structures of power. In other words, it focuses on the elites of society that have the power to project and protect their interests within field level debates. These elites define the issues and develop the solutions. But the impacts of contemporary environmental problems (like climate change) will be felt across the social spectrum, with differential impacts on the poor, disenfranchised and disconnected. Elites of rich countries, for example, will be far more able to adapt to the impacts of climate change than those in the low-lying areas of developing countries (i.e. Bangladesh) or poorer cities (i.e. New Orleans). But a bias towards developed country elites creates a blind spot to considering issues of equity, fairness and environmental justice in institutional outcomes (Bullard, 2005; Taylor, 2000), one that is compounded with its inability to recognize the interests of future generations (Lovbrand et al., 2015). Management theory will only take notice of such groups when they are sufficiently aggrieved and able to amass the requisite power to voice their concerns. But certainly, foresight of such environmentally induced aggrievements is important for understanding the emergence of social instability, social movement mobilization and institutional action.

Additionally, B&NE research ignores the “interests” of a non-social actor – the natural environment – within what are inherently social models. Instead, particularly within the stakeholder and social movement literatures, social actors interpret, assess and represent the interests of the natural environment. In the present context, scientists and environmental NGOs are playing a role in articulating the concerns over climate change and other natural environment problems (Lefsrud and Meyer, 2012; Hoffman, 2015). The contested nature of these debates and the willingness of some to discount or outright reject the results of scientific analyses that contradict their worldview leaves the B&NE field woefully under-theorized by excluding the presence of the natural environment which can destabilize economic systems through systems collapses related to storms, sea-level rise, species extinction and other means.

Foster greater links between natural and business systems

One answer to this tension is to foster more research that links social and environmental systems. While most theories and models of organizational action offer only loose connections between these realms (Gladwin, Kennelly and Krause, 1995), there are examples of B&NE research that has sought to correct this deficiency by depicting the biosphere (including the sinks, sources and drivers of ecosystems health) as the domain that encompasses economic, organizational and social activity (Hawken, 1993; Jennings and Zandbergen, 1995; Latour, 2004; Lovelock, 2000). There are others calling for moves to integrate environmental considerations into human systems in order to avoid the anthropogenic calamities of continued economic growth (Daly, 1977; 1991; 1996; Urhammer and Røpke, 2013). Whiteman et al. (forthcoming) suggest that we reframe the planetary boundaries from the physical sciences into Key Performance Indicators (KPIs) of the planet within the management sciences.

Expanded opportunities in critical theory

The Anthropocene creates an opening for more challenges from critical management and actor network theory approaches, conducting research that is based on the premise that the natural and social systems are constitutively entangled and that ignoring these entanglements would be willful negligence (Latour, 2013). The Anthropocene brings considerations for “sustainability” into a new orientation, one that requires adjustments of socio-economic systems to the limits set by the biosphere in recognition of the planetary boundaries beyond which social systems should not go, but already have (see figure 4.1). Climate change, droughts, wildfires, food insecurity, water scarcity and the social unrest that results: these are all emergent markers of the Anthropocene that point to a fundamental system failure created by our social and economic structures.

Policy development

The complexities of the Earth System’s processes and feedbacks are what underpin the planet’s resilience and at the same time makes it vulnerable to small change “tipping” developments (Barnosky et al., 2012; Rockström et al., 2009), which can transform the very conditions for life as we know it. The potency and uncertainty of these developments call for policies that are far more ecologically attuned than existing environmental and economic policies. For instance, to fully address the global issue of climate change, society and the markets must be designed to go carbon neutral – and then carbon negative. This cannot be done by employing business models that are built upon the single company focus of prior research streams or within the existing market structures. Although some argue that carbon markets are inherently flawed (Lohmann, 2005), it is unlikely that the “market system” will be eliminated in the future. It is, therefore, necessary to address how carbon and other markets can be re-designed with the aim of de-carbonizing the economy, protecting biodiversity, ensuring freshwater provisioning and otherwise stay within the planetary boundaries defined by scientists. The implications of this kind of policy regime for international, national and local governance are far from clear, and implementing these policies is by no means a straightforward endeavor. Future environmental policy must do more than regulate the existing, it must also facilitate transitions to sustainable futures.

Systems framing

Sustainability is a property of the system as a whole; not of just one firm. The notion of an energy company installing a windfarm and calling itself sustainable makes no empirical sense (Ehrenfeld and Hoffman, 2013). A more sustainable energy system incorporates the whole grid, encompassing generation, transmission, distribution, use and mobility. Although there is a substantial body of energy system research documenting that it is technically possible to achieve the necessary low-carbon energy system transformation (European Commission, 2011; Pregger et al., 2013), the organizational and institutional challenges that this kind of systems thinking introduces and the implications it has for policy and business is markedly less researched. Systemic transformations are contentious processes; research needs to document and explain these developments.

One could contend that research on greening of the supply chain seeks to broaden B&NE research on the impact and action of each firm to include its network connections to other organizations, notably suppliers, buyers, customers, regulators, banks and others. Much of this research focuses primarily on optimizing material flows and supply chain logistics, without substantial changes in overall system purposes and foundations. While there is growing research interest in full supply chain accounting involving the use of life-cycle analysis (Zamagni et al., 2012), industrial ecology (Ayres and Ayres, 2002) and circular economy (Bocken, de Pauw, Bakker and van der Grinten, 2016), new research into the models that underlie both production and consumption systems is needed. Without a reduction in consumption and a re-examination of both needs and wants, a human population that is expected to grow from 7.5 billion today to 10 billion by 2050 cannot stay within planetary boundaries.

Expanding the systems approach, B&NE research in the era of the Anthropocene requires a breakdown or even elimination of the dichotomy between humans and nature with consideration for its scientific, social, economic and ethical dimensions (Oldfield et al., 2014). To this end, some behavioral social scientists have worked on specific boundaries of the Anthropocene, others have attempted to link across them, conceptually and empirically, to social systems. Whiteman et al. (2013) reviewed some of these efforts and offered a Planetary Boundaries framework for mapping the nine planetary boundaries. While this framework is important for analyzing the consequences of corporate behavior more work is necessary to link the Planetary Boundaries framework to the market behavior of firms to consider what and how they produce in relation to these boundaries. Such systems modeling will, by nature, have to consider ecological limits in the context of tipping points and regenerative capacity (Baue and McElroy, 2013; Krabbe et al., 2015).

New organizational structures and forms of governance

As corporate activity expands into new domains, with linkages to complex systems of actors through broader networks and supply chains, new forms of organization also emerge. Already, data show that the vertically integrated, shareholder-owned corporation is in rapid decline as a corporate model, with half as many public corporations in 2012 as there were in 1997 as they are superseded by alternative forms of organizing (Davis, 2013). Though not new, other forms, such as Cooperatives, or Employee-Owned Companies are part of a movement that consider more than the shareholder in defining the actions of a corporation (Davis, 2013). Similarly, hybrid organizations are emerging at the intervening space between the for-profit and non-profit sectors and strive to merge the institutional logics of each domain (Battilana and Dorado, 2010). Alternatively described as Fourth Sector, Blended Value, For-Benefit, Values-Driven, Mission-Driven, or B-Corporations (Boyd et al., 2009), hybrid organizations present a bridge between two ends of a dichotomy previously seen as incommensurable; economic profit and social and environmental mission (Hoffman and Haigh, 2011).

This work includes attention to new forms of NGO-business partnerships (Kong et al., 2002), public-private partnerships for the environment (Koppenjan and Enserink, 2009) and local-global associations of heterogeneous actors (Georg and Irwin, 2002). The underlying ambition of much of this work is to examine how new development paths are being created (Karnøe and Garud, 2012). This includes new forms of governance that can enable a move to a low-carbon society (Kolk and Pinske, 2004; Levy and Kolk, 2002), what some authors have dubbed sustainable transition management (Kemp, Schot and Hoogma, 1998; Shove and Walker, 2010; Smith, Stirling and Berkhout, 2005).

And finally, emergent areas of B&NE research include work in positive organizational studies (POS) and positive psychology (Dutton and Glynn, 2008). Both domains are grounded in the core concept of flourishing. Where sustainability holds “the possibility that human and other life will flourish on the planet forever” (Ehrenfeld, 2008: 6), POS holds for the possibility of “conditions that foster flourishing at the individual, work group, and organizational levels” (Dutton and Glynn, 2008). The linkage between social and natural flourishing is clear and the research paths it opens up are many and varied in realizing the fullest human potential (Hoffman and Haigh, 2011).

The fluid future of B&NE research

In sum, these are just eight broad streams in which B&NE research can explore sustainable business in the era of the Anthropocene. As standard business models are questioned, new ones can emerge as possible augmentation or replacement. We are in a period of “revolutionary science” (Kuhn, 1970) where the old models and theories used to explain the connection between business and natural systems are no longer complete. New models, such as regenerative capitalism (Fullerton, 2015), the collaborative economy (Owyang, Tran and Silva, 2013), conflict-free sourcing (Young, 2015) and the sharing economy (Hamari, Sjöklint and Ukkonen, 2016) are emerging as contenders for the next period of “normal science.” The role of B&NE research in this period of flux is to help speed the process of paradigmatic change by conducting research that enlightens our way forward.