Building the Business case for Sufficiency

Abstract 
 
The mainstream of environmental policies and standards for businesses traditionally focus on the 
efficiency strategy. This approach, acting on factor T of the IPAT equation, aims at reducing the energy, 
resource or emission intensity of products and production processes. Within this framework, sustainable 
consumption is intended as the consumption and production of eco-friendly products, whose promotion have 
given rise to a new wake of ‘green’ consumerism.  
Despite efficiency improvements, evidence from an increasing number of studies suggest that 
environmental gains are more than offset by the unsustainability of our consumption patterns. Experts and 
scholars are therefore directing their attention toward the sufficiency strategy, which focuses on factor A of 
the IPAT equation and aims at reducing the total amount of output produced, or consumers’ final demand. 
For businesses, this strategy entails ‘selling the performance’ or function of the product, combining together 
products and services within the same offer. These innovative business models are known as Product Service 
Systems (PSSs) and in this study drivers and barriers to their implementation are investigated and tested. 
These systems are estimated to be potentially profitable and potentially effective in bringing social and 
environmental benefits. However, they are not without weaknesses: they are subject to ethical issues and the 
rebound effect.   
This study highlights that efficiency and sufficiency entail two different types of economy: one 
based on consuming, the other based on saving. The two strategies can be seen as part of the same continuum 
and to a certain extent efficiency is the pre-condition for sufficiency. In order to trigger change and the 
cultural shift among businesses and consumers, EU institutions will first have to decide which type of 
economy is to be fostered and then put in motion a systemic change supported by the proper infrastructures, 
incentives and coercive measures. 
 
  
 
 
 
 
 
 
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1. Introduction 
 
1.1 Setting the context 
Thanks to the progress of the environmental awareness,  a new wake of ‘green’ consumerism has given 
rise to the production of ‘green’ products with better environmental performances, which represent the 
mainstream of environmental policies and the ‘business case’ for sustainability. While this strategy is 
considered the ‘win-win’ situation, a growing number of reports and studies in the last decade have started to 
recognise that the unsustainability of our current consumption patterns more than offset efficiency gains 
from the improvements of products and production processes in terms of energy, resource use or emission 
intensity. Since then, there has been an effort to embed practices of sustainable consumption and production 
(SCP) into efficiency strategies, which mainly rely on the further promotion of ‘green’ products and resource 
efficiency.  
As these practices prove to be weak in providing tangible benefits for the environment and society, a 
new concept is slowly entering in the sustainable development debate: ‘sufficiency’, corresponding to that 
level of consumption and production sufficient to satisfy human needs (no more, no less). Despite the 
controversial nature associated with this approach, in some niche markets scholars and businesses have 
managed to transform this ‘paradox’ into a new strategy that may allow companies to maintain significant 
benefits and have the potential to improve citizens’ quality of life while reducing consumption levels. 
Product Service Systems (PSSs) are an example of such transformative business models. Their business 
rationale departs from the idea of ‘producing more with less’ and welcomes the idea of producing ‘what is 
necessary with less’, and design it to be more sustainable in accordance with the Triple Bottom Line pillars. 
 
1.2 Research questions 
      The purpose of this research is to explore current efficiency and sufficiency practices in the EU, with a 
particular focus on the new business models of the ‘Performance Economy’(Stahel, 2011) which are a 
valuable example of sufficiency approaches. This analysis aims at identifying what constitutes the main 
drivers for their implementation and what are the major challenges and benefits associated for both 
companies and consumers.  Ultimately, the main goal of this study is to assess their overall potential to bring 
significant economic, social and environmental benefits, hoping to provide valuable evidence for making 
sufficiency a real business, environmental and societal case. This, in turn, would constitute the rationale for 
making this strategy a stronger future commitment in the EU. 
 
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The main objectives are to: 
a. Identify and compare efficiency and sufficiency strategies; 
b. Identify current attempts to embed efficiency and sufficiency into action plans and business 
strategies; 
c. Investigate drivers, enabling factors, main challenges and estimated benefits of the two approaches; 
d. Outline a framework for the ‘business case for sufficiency’; 
e. Evaluate the potential of sufficiency strategies to bring tangible benefits to the natural and social 
environment. 
Coherent with the objectives, the main research questions are: 
1. What are the drivers, barriers and benefits of both efficiency and sufficiency strategies? In what way 
do they differ? 
2. What it the potential of sufficiency strategies to bring tangible economic, environmental and social 
benefits?  
3. Is this potential robust enough to validate a stronger future commitment in the EU, in terms of 
policies or action plans? What will the key enabling factors be for the development of sufficiency 
approaches? 
 
 
1.3 Discussion of the perspective adopted 
 
The change of paradigm from efficiency to sufficiency requires a significant moral, psychological and 
economic system adjustment on behalf of governments, businesses and consumers, usually referred to as the 
“Triangle of Change” (The Roundtable, 2006). To successfully promote such a revolutionary change, these 
actors, businesses in particular, need to be strongly motivated and to be showed that consuming and 
producing differently and less has more benefits than what commonly expected. The Centre for Sustainable 
Design (2007) has recognised the need to continually develop, promote and communicate the ‘business 
case’ because it is the key motivating factor that drives innovation for sustainability. This refers to that set of 
profitability and value-creation opportunities a given strategy entails. According to the WBCSD (2001, p. 2) 
“the business case is an entrepreneurial position: it looks to the point at which businesses can be more 
competitive by being more sustainability driven”. Exploring the business case for sustainability includes the 
investigation of how to achieve medium and long-term gains and ‘prove pay back’.  Businesses and the 
‘business case’  will therefore be the centre of my attention 
The choice of the European Union as the context of my research is related to the fact that the  EU is one 
of the most active regions engaging with sustainability issues and in particular with practices for SCP 
(UNEP, 2010). Furthermore, since it is estimated that the potential of innovation systems for sustainability 
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could be significantly large (EU, 2008), findings of may analysis could be useful for policy makers and 
businesses who seek to approach these revolutionary solutions.  
This dissertation study will first examine the literature in relation to efficiency and sufficiency strategies. 
Within these two contexts, the role played by businesses, drivers and barriers and the business case for 
engaging with SCP will be identified and investigated. Then, the focus will go on to the discussion of the 
research design and methodology implemented. This section will describe the interview structure adopted for 
the research along with an explanation on the sample identified. Next, results from the interviews and 
companies’ reports will be analysed. The dissertation will finally conclude with a discussion of the results, as 
well as suggesting future research patterns in the field of SCP in relation to sufficiency. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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2. Literature Review  
2.1 The challenge of SCP 
  At the heart of our economic system lies the idea that the pursuit of economic ‘prosperity’, alias 
‘growth’, is the main goal of our society. Wealth is typically measured by the GDP indicator: the more  
consumers spend money on goods and services, the more the GDP increases thus signifying that the value 
created by the economic system has increased together with people’s well-being (Jackson, 2009). Within this 
classical perspective, the idea is that consumers are rational individuals who seek to maximize their utility 
(and therefore, satisfaction) and their purchasing actions follow a very structured rational process (Avery et 
al., 2011).  From this same perspective, business’s nature is to meet consumers’ demand by selling new and 
diversified products, which guarantee the profits that allow them to survive in the market. Over time, this 
output-oriented model has resulted in a vicious mechanism defined as a ‘treadmill’ (Shnaiberg, 2002): since 
the world of production necessitates to the constant generation of profits, demand for goods and services is 
persistently raised. This expansion entails more resource exploitation, beyond the earth’s carrying capacity 
(Schnaiberg et al., 2002). 
         As sustainable development has taken centre in the political debate, the concept of ‘growth’ has been 
questioned and companies have been asked to take responsibility for their actions and to deal with the 
negative impact they have on the natural and social environment (Hitchcock et al., 2009). As part of their 
responsibility, companies today are urged to rethink their operations from both the production and 
consumption perspectives with the intent of making  these two areas of interest more ‘sustainable’. In the last 
decade, the concept of SCP has received an increasing attention. With the Marrakech Process in 2003, a 10 
year framework for SCP was elaborated with the intent of promoting and accelerating of global 
unsustainable consumption and production patterns  (UNEP, 2010). In its traditional definition, SCP refers to 
the efficient, less resource-intensive consumption and production of goods and services. Within the EU 
context (2010) the adopted definition of SCP is as follows:  
“Sustainable consumption and production means using natural resources and energy more e fficiently and 
reducing greenhouse gas emissions and other environmental impacts. It is all about producing and using 
products and services in a way that is least harmful to the environment. Consuming sustainably concerns our 
lifestyle, buying behaviour and how we use and dispose of products and services. Sustainable production 
focuses on reducing the environmental impacts of production processes and designing better products” (EU, 
2010, p. 5). 
 
 
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