What is a Sustainable Market?

What is a Sustainable Market?

We use markets every day in our lives—they are places where buyers and sellers meet to exchange goods and services. A neighborhood farmers’ market is a market, as is Amazon or Alibaba. It is through that interaction between buyers and sellers that prices are determined for goods and services which, in turn, impacts the forces of supply and demand. While we most often come in touch with the endpoint of a market (the grocery store or a shopping mall), supply and demand are what drives how goods and services are invented, made, priced, and mass-produced throughout the world.

While markets have been around since the earliest days of mankind, today’s markets do not reflect the reality of our world—nearly eight billion people living on a planet with resources nowhere near able to provide the decent quality of life that all of us want and deserve. Thus, we need to reimagine how markets work and how they foster the creation of goods and services consumed by each of us. 

As I noted in my book, Transformative Markets, this new type of market must be sustainable. That means markets must produce goods and services in a way that respects the natural, human, financial, and social capital that goes into production so that it provides a net positive to society rather than being a drag on precious resources.

A sustainable market can range in size and scope from food grown and sold in a community cooperative all the way to those established by Fortune 500 corporations such as Unilever and Tesla that have supply chains and consumers all over the world.

A company that makes a highly pollutive product containing chemicals that pose harm to consumers while paying its employees the lowest possible wages is not a sustainable company, nor are the products it sells on the market.

Examples of Sustainable and Unsustainable Markets

Small-scale Sustainable Markets

Small-scale Unsustainable Markets

  • Local farming that respects the environment and provides locally sourced, healthy, and affordable food to consumers
  • Local farming that respects the environment, provides locally sourced, healthy food but is too expensive for consumers because of price-fixing and government corruption 
  • Community-based and operated solar, geothermal, and wind projects that provide clean, affordable energy to residents
  • Women in Africa spending their days collecting firewood from native forests to be sold for heating and cooking but not earning a meaningful income for their work
  • Home-based artisans in the “hand worker economy” who provide goods to retailers under strictly adhered codes of conduct to ensure a fair wage and appropriate working conditions
  • “Ghost workers” who make clothes outside the factories managed by retail organizations for substandard wages and no legal protections

Large-scale Sustainable Markets

Large-scale Unsustainable Markets

  • Energy generated from wind turbines in Germany, China, and Texas
  • Energy generated from coal-fired power plants in India, China, and Kentucky
  • Allbirds shoes, which are made from sustainable materials such as sugar cane and wool 
  • Clothing made from yarn sourced from the Uighur slave camps in China manufactured and sold by fashion companies
  • Financial capital applied to investments in education, ecosystem restoration, and clean energy projects
  • Financial capital applied to esoteric investments such as Collateral Debt Obligations designed solely to generate a quick profit for investors

In looking at the products made in sustainable markets, we can see that they meet the most commonly accepted definition of sustainability was established in 1987 in the World Commission on Environment and Development’s Brundtland Report: “Meeting the needs of the present without compromising the ability of future generations to meet their own needs.” The production of goods and services in the sustainable markets are not hurting our ability to meet the needs of future generations.

Conversely – the production practices of the unsustainable markets are detrimental to our future. Yet, those markets still flourish. Future blog posts on SystemChangr will explore that perplexing – and unfortunate – reality.

Bob Ludke, Co-founder/CSO, systemCHANGR

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