Sustainable growth?

[DominikTylczyn]

SAP has been classified as one of the most sustainable companies, ranking 15th out of 500 classified companies - impressive indeed. At the same time SAP cloud revenue has grown by 25% - very impressive again. That makes me wonder if growth in general is compatible with sustainability.

Let's start with what sustainability really is. Wikipedia defines sustainability as: 

Sustainability is a social goal for people to co-exist on Earth over a long time.

Sustainability can be defined as the capacity to maintain or improve the state and availability of desirable materials or conditions over the long term.

Sustainability [is] the long-term viability of a community, set of social institutions, or societal practice.

Sustainability means meeting our own needs without compromising the ability of future generations to meet their own needs.

Long-term is the key term here. So what is long-term? For the sake of argument, let's say it is 100 years. It is long enough on individual human being scale, but just a blink of an eye on human species or on evolutionary time scales, not to mention planetary one. It is roughly 1/3 since the industrial revolution started.

So 100 years it is.

Now, let's see what it really means to grow sustainably by 25% a year over the next 100 years.

Brace yourself - it means to grow mind boggling 4.9 billion times! Yes, believe it or not - it is 4.9 and 9 zeros.

The formula is staggeringly simple assuming the current size being one:

 where:

• S is the resulting size
• G is the growth factor expressed in %
• y is the number of years of growth

To better illustrate the point, here is a simple graph showing 25% yearly growth over 100 years. I have used a linear scale here for better visibility although a logarithmic one would be more appropriate.

A gloomy conclusion is that no growth is compatible with sustainability. Gloomy it is, as growth is the prevailing human and business logic. It really does not matter what growth % you take, what company or business is extrapolated - the numbers are in the same ballpark and the conclusion is still valid.

As human beings we really need to reconsider our goals, our ways of living and doing business, if we strive for true sustainability.

Cover image by Skyoverse from Pixabay

[ramkry]

Sir, the growth is compounded exponentially year over year.  

[DominikTylczyn]

@ramkry yes, it is. That how growth works, doesn't it?

[Elodie1]

Indeed, 3% of growth would conduct to double global economy in 25 years (by 2050). Knowing that global economy is already putting too much pressure on the environment, we can tell easily that this is not possible to double it by 2050. Even if growth partially relies on service intangible value, services need physical flows as well in order to be delivered. 

An interesting book on this subject is Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth.