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🦉 10x curiosity - Moving out of the Death-Zone Quadrant? Introducing the Sustainable Futures Matrix


🦉 10x curiosity

September 12 · Issue #225 · View online

🦉 A weekly sample of links that made me think 🤔

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TLDR: Over the coming decade there is going to be significant upheaval throughout the global economy. Existing business models will be upended, with new winners taking over as the impacts of changing community standards and exponential technology trends propagate.
The thesis of this post is that companies who find themselves in the “Death-Zone” quadrant with an extractive business model that externalises their global impacts, are rapidly going to find themselves out of business — likely long before the 2050 carbon neutral targets arrive.

A way to characterize a business is to consider how it uses resources and whether or not the costs (or benefits) associated with their use are fully captured on their balance sheet.
This concept can be set up in a 2x2 matrix, which I have dubbed the “Sustainable Futures Matrix” as follows:
Let’s unpack this a bit.
Business Model Impact
On the vertical access we have the source of wealth for a business. At the bottom this comes from extractive and non-renewable sources. This might be include:
  • reliance on fossil fuels,
  • a once through model where all waste generated is disposed of in landfill,
  • a chemical process that produces hazardous by products through the various reactions, including CO2.
  • an obsolescence model where profits come from relying on users of a product to frequently upgrade perfectly functioning items to the new generation, or pay exorbitant fees as users are unable to freely repair “proprietary” products when minor issue occur.
At the other extreme a business might have a regenerative model, one that:
Balance Sheet Cost Accounting
The horizontal axis, plots how the business accounts for its impact on the world. At one extreme, are the companies that fully externalise their costs. Waste products, social impacts, economic risks and benefits are not captured by the business on their books, instead relying on the broader environment and community to ameliorate any impacts. Think here about the tragedy of the commons.
Of course an entity might not just be distributing negative externalities — there are positive externalities as well. Employment, environmental improvements, distributive economic wealth. A business may be happy in allowing positive externalities to be given away without fully monetising them.
On the other extreme, are businesses that fully internalise the impacts they have, capturing costs and benefits on their balance sheet. In the case of non-renewable businesses this might come about in the form of a tax or end of pipe treatment (for example carbon capture on a coal fired power station). In a circular regenerative business this might be a capital investment in new technology that gets away from the negative impact an older technology might have had — think here about the transition car companies are making from internal combustion engines (ICE) to electric vehicles.
The Four Matrix Quadrants
With the parameters of this matrix established we now have 4 zones to investigate:
  1. Ongoing Viability
  2. Wealth to the Commons
  3. Buying time
  4. Death Zone
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More like this from 10x Curiosity
Links that made me think...
The Osborne Effect On The Auto Industry | CleanTechnica
Agile Laws |
How long do people need to work at minimum wage to buy one Big Mac?
Doughnut Economics Action Lab
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