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Why short-term growth mindset can put business at risk
This episode explores the hidden costs of extractivism and the tension between long-term sustainability goals, short-term performance pressures, market expectations and economic uncertainty.
Related topics
In this episode of the Sustainability Matters podcast, host Nadia Woodhouse from the EY New Economy Unit explores the notion of the extractivist economy. As companies work to meet sustainability goals, a critical question emerges: is our focus on short-term extraction quietly undermining long-term resilience?
Nadia is joined by economist and writer Professor Tim Jackson and Kiara Konti, Climate Change and Sustainability Services Leader for Ernst & Young (Hellas) Certified Auditors Accountants SA (EY Greece). Together, they reveal how overusing natural resources and ignoring systemic degradation may directly threaten global supply chains and day-to-day business stability.
The conversation confronts major structural challenges — from prioritizing short-term investor returns and overlooking unpriced environmental costs, to an over-reliance on the current metrics of economic growth. Tim and Kiara explain why simply "doing less harm" through superficial sustainability isn't enough, warning that ignoring core dependencies on nature creates severe systemic risks.
However, they also highlight practical solutions for businesses, such as rethinking value chains around circular models, net-positive impacts and choosing "care over growth," to safeguard both society and long-term business viability.
Read more about the EY New Economy Unit and their research here.
Key takeaways:
- Long-term success could mean redesigning supply chains around circularity, human well-being and the restoration of the natural assets businesses rely on.
- Regenerative businesses create value by restoring the natural and social systems they depend on, moving beyond harm reduction to build long-term resilience and growth.
You can also listen to this podcast on Apple, Spotify and Libsyn.
For your convenience, the full text transcript of this podcast is also available.
Tim Jackson
If you don't look after the nation's health as well as the health of the ecosystems, you don't have a society, you don't have an economy, you have nothing to build business from. And so, that question of dependency is really important.Most companies ask, “How do we reduce our environmental risks?” Very few ask, “What happens to our business if nature fails?”
Nadia Woodhouse
For years, sustainability has been positioned as a win-win. Good for business, good for society, good for the planet. But what if that story isn't playing out as expected?Hello, I'm Nadia Woodhouse, and I'm delighted to welcome you to a special episode from EY New Economy Unit.
We're a dedicated research team within EY Global Climate Change and Sustainability Services practice.
Our mission is to champion the deep systemic changes needed for a truly regenerative economy — one where the well-being of both people and planet are inseparably connected.
Through our research and reports, we've provided foundations for businesses and society to engage meaningfully with the new economy.
Despite progress, we're seeing a growing tension between long-term sustainability ambitions and the realities of short-term performance, market expectations, economic uncertainty, all in the context of an evolving and worsening polycrisis. We see patterns of extraction cropping up in many aspects of our lives: extraction of resources, undermining ecological stability; extraction of labor without the exchange of a living wage; and extraction, even of our attention, undermining social cohesion.
Are we trying to make sustainability work within a system that wasn't designed for it? Is the logic of extraction for short-term returns hollowing out long-term resilience? Is it causing systemic risk for communities, the planet and the future of business and markets?
Today, we're diving into these questions, what all this means in practice and how we might think differently about value, performance and the future of a more regenerative economy. I'm really pleased to be joined by Professor Tim Jackson, an ecological economist and writer. He's pioneered economic and social research into the foundations for living well on a finite planet and has worked for more than three decades with business, government and civil society to bring that research into practice. His books have been translated into over 20 languages worldwide and include Prosperity without Growth, Post Growth, and most recently, The Care Economy.
Jackson
Thanks, Nadia, great to be here.Woodhouse
I'm also joined by Kiara Konti. She's a partner at EY, leading Climate Change and Sustainability services for EY Greece. Kiara has 20 years of experience in sustainability consulting and assurance services, in sustainability strategy and target setting, sustainability governance, reporting and management systems.Kiara specializes in decarbonization, the circular economy, social impact and sustainable finance. So, I couldn't think of two better people to dive into a conversation about the current state of our economic system, what has hindered the scaling of sustainability efforts, and the impacts on and for business. Welcome, Tim and Kiara.
Kiara Konti
Thank you, Nadia.Woodhouse
So, Tim, let's start with you. I'd love to explore a little bit deeper on this logic of extraction. And before we get into it, it's important to talk about the difference between natural extraction, which we know is a feature of nature and what we need to produce goods and services, and perhaps, excessive extraction. For ease of this discussion, maybe we call that extractivism. So, tell me, how do you define extractivism? And is this a new phenomenon or has it been around for a while?Jackson
Yeah, it really is important to use that word extractivism rather than extraction. You see, extraction is a part of nature. It's part of business. It's a part of the market. It's part of producing the goods and services that we need to live. You can't really get by without extraction of something — of energy, of materials and of resources. Extractivism is, as you suggested, an excessive process. It's a process in which that extraction goes to extremes.And the benefits of the extraction go to one set of people and the costs of it go to another set of people. Specifically, I would say extractivism is about the privatization of the benefits of that process of extraction, and the socialization of the costs. So, one set of people runs away with all the goodies and everyone else is left picking up the damage and the damage costs. That's extractivism.
Woodhouse
That's a really good way of putting it, Tim. Is it a new phenomenon, do you think? Is this something that has just happened, say, in the 21st century or have we been seeing this for a while?Jackson
No, we've seen it for quite a while. And in a sense, you could say that extractivism is what defined colonialism. It was the mechanism that made colonialism work. It was the mechanism through which the rich and the powerful extract the resources from the poor and the defenseless and impose on them the costs. And that process that we saw through colonialism embedded itself in capitalism from 200 years ago, probably a little bit longer. And it's found new and different forms in the 21st century for sure. We're not just extracting physical resources, we're extracting from people's health, we're extracting from their working conditions, we're extracting intellectual property. And the same process is going on; we're privatizing the benefits of that, and we're socializing the costs of it.Just to give you a health-related example, if you like. Big food companies can make a lot of profit by selling foods which are really not very healthy. In fact, they're making us sick — ultra processed food, too much sugar, too many refined carbohydrates, too much saturated fat. It's a big business. And it's built its structure as something which systematically mines the human species; it mines our own neuropsychology because we are, to some extent, easily addicted to sugar and saturated fat. So, we are willing victims of this process, but the profits go to the companies. The costs fall on ordinary people. And in particular, of course, the health costs fall on governments as well. So, you have these long-term health costs associated with chronic diseases, which are delivered because we're eating unhealthy diets which profit food companies and the shareholders who own those food companies. That's a really clear example of extractivism in process.
Woodhouse
Tim, that's a really pertinent example. I love the way you explained how extractivism is not only affecting people, it's affecting governments. And at the New Economy Unit. you and I and others also did a bit of research into this concept and this phenomenon of extractivism. I'd love to talk a little bit with you about the research that we did together, which is perhaps the first attempt to map extractivism at the international level. I'd love to hear your thoughts on how we progressed on that.Jackson
It's really important to note that we're always, as in my last example, willing victims of this extractivism. Sometimes it's a dynamic of power. And that was very definitely the case during the colonial era. It was the power of one set of people over the power of another set of people. And it imposed on those people not just social costs but also environmental costs, ecological costs and damage to their living environment.We take it for granted that we're not as bad as civilization was back in the colonial day. But the question is, given that that process of extractivism is somehow embodied in the DNA of our business models and our market systems and our governmental regulations and of capitalism itself to some extent, can we see ourselves getting better? Or are we actually getting worse? Is extractivism increasing or is it diminishing? And that was what we were trying to do in this piece of work. And of course, the first thing to do is to define the parameters that we're looking at. So, what does it mean to measure the privatization of gains? Well, one of the things you could ask is, do the shareholders of private companies increase their income at the same rate as, for example, the taxes they're paying to government? Do they increase those incomes faster or slower than the workers’ wages are increasing? So that very simple comparison, who is getting most out of this process of extractivism?
And, we did a piece of work which looked at the last 20-something years. So, from the turn of the millennium to more or less the present day. And we asked that question first of the G7 economies. And the answer was not very comforting. Actually, it turned out that there's three times faster growth in dividends paid to private shareholders compared to the wages of ordinary workers. In other words, shareholders are taking the big slice of the pie. They are extracting the benefits from the process of production and consumption, and they're not necessarily fairly rewarding their workers.
We looked at the same question in relation to the taxes they're paying. And across the G7, we found that the growth in dividends is twice the growth in corporation taxes paid to the government. In other words, that's a process of the privatization of gains. It's a process of extraction. And as that process is going on, and we know this, there are costs. There are social and there are ecological costs. And we found that those costs are increasing, even across the G7, which likes to pride itself on having a modern form of capitalism that is improving as inclusive, improving the lives of people across not just their own country, but other countries as well. And yet it's failing to keep track of the ecological costs associated with that. Climate change losses have increased. Biodiversity losses have increased and the social losses associated with an unequal distribution of income have also increased. So what we see actually is a widening gap. The privatization of gains is increasing. The costs of social and ecological losses are also increasing. That is not good news for a society that likes to think it has evolved past the mode of extractivism. This is an extractivist economy.
Woodhouse
Tim, the research also showed and we looked at the emerging economies as well, and the results there were also similarly staggering. There was such an accelerated increase in the costs of ecological loss and the costs of inequality as well. So, this isn't just limited to the advanced economies, this is also happening in emerging economies.Jackson
Yeah, that's absolutely right. It's fascinating that the process of privatization, that vast runaway in shareholder value, is not happening so much in the emerging economies, in the economies outside the G7. It's happening a lot in the G7 economies; it's happening less in economies outside the G7. But what is happening to those economies outside the G7 is an increase in ecological and social costs and that increase is even bigger than the increase in the G7 countries. And a part of that is the dynamic that goes right back to colonialism. It goes right back to that, to the North-South divide, to the fact that some of those processes and some of international trade is benefiting the G7 at the cost of people who live outside the G7. And again, that's not a comforting dynamic for a society that likes to think that it's progressing in social terms.Woodhouse
Indeed, this is something that we believe, fundamentally, that capitalism has solved a lot of our problems; that we are benefiting from a lot of this kind of dynamic. And you'd be forgiven for thinking, in your explanation of the research and our findings, that business really does stand to gain. But I'd like to come to you now, Kiara, about this dynamic between extractivism and business. And is it really good for business? Is it impacting on business resilience? What are your thoughts?Konti
So, well, I think that the simplest way to think about this is that extractivism is a resilience problem disguised at best as an environmental problem. As Tim mentioned already, it's a dominant business model we've used for over a century. We take resources from nature, turn them into products, and dispose of the waste. That model has been incredibly efficient for what we define as growth and I'm choosing my words carefully here, but it has a built-in flaw. It depletes the systems it relies on. And importantly, the current economic system actively reinforces this behavior and we're seeing this all the time — it rewards short-term financial gains while undervaluing environmental and social costs, creating incentives for over-extraction and most importantly, unpriced externalities.And that's where resilience comes in. Business resilience depends on stable inputs. Every business model depends on stable inputs from beyond financial capital, natural capital, social capital, human capital, etc. So, things like water, raw materials, predictable weather and functioning ecosystems. These are not just abstract environmental issues. They are operational dependencies for every business model. And what we're seeing now is that extractive models are eroding those dependencies — biodiversity loss, water scarcity, soil degradation. These are already disrupting. And again, this is something that we're seeing very often. Most importantly, very lately, supply chains increasing costs and creating volatility. So it's not about ESG or sustainability. This is a systemic issue. And in my view, extractivism is best understood as a structural market failure. It concentrates value in the short term, degrading the economic, social and institutional systems that businesses rely on at the same time. So a really important shift in thinking is that the businesses are now starting to look at two sides. Traditionally, they're used to looking at their impact on nature. Now we're seeing a view on also the dependencies that they have on nature.
And frankly, most companies for many many years are just focusing on the first, the impacts they have on nature, and ignoring the second, how dependent they are, how their business model and value chain depends on natural capital. So, this is the blind spot because you can reduce your emissions, reduce your footprint and still be very highly exposed if the ecosystems you depend on start to fail.
So obviously, one can expand the notion of extractivism into additional capitals. We're obviously today speaking primarily for the natural capital. But as I mentioned earlier, as a notion, you can expand it to the human capital, the intellectual capital and the social capital, which are also very important for business models as inputs. So how are businesses used to extracting all these capitals in a way that's not creating value or regenerating them? The relationship is quite direct. Extractivism reduces resilience because it systematically degrades the assets that businesses depend on to function. And this translates directly into business risks. Again, we're seeing this every day, increasing regulatory interventions, supply chain disruption, reputational or license to operate risks. And ultimately, this means that it's not just a risk factor; it's an existential threat to long-term business viability, creating at the same time compounding systemic shocks for companies that ignore this type of thinking.
Woodhouse
Kiara, you raised a really good point about the impacts on nature and the dependency on nature. We hear stats talked about where we know that a percentage of GDP is dependent on nature; but I would counter that all of GDP is dependent on nature. So, you're right to say that this is a blind spot.But I am sure that not every business has this blind spot. And I'm sure that there are businesses that don't follow these extractivist models. Do you have examples of businesses that actively avoid extractivism?
Konti
Well, Nadia, the honest answer here is that there are not many and most of them are still small or emerging to some extent. So, it's important to acknowledge that up front because it shows how fundamental that shift is and the need for that shift. So, what really distinguishes these businesses is not just that they are more sustainable, it's that they operate with a completely different logic. And to be honest, I don't like the term “more sustainable” in any case because you either are sustainable or you're not. So the things I would highlight that we see in these type of models, business models, is that firstly, they redesign how value is created. So instead of maximizing volume, they focus on longevity, circularity, reuse, essentially extracting more value from fewer resources.Secondly, and I think this is very important and often overlooked, is that they internalize externalities. They don't treat environmental or social impacts as someone else's problem. They price them, manage them, and integrate them into decisions. And thirdly, they think systemically. It's a systems game here. So they don't just optimize their own operations, they work across the entire value chain, whether that's suppliers, customers, or communities. And we're starting to see this in practice, again, in a very small scale. For example, in the modular electronic sector, there's the company called Shift, they're using obviously repairable, extending product life, reducing extraction. We have examples in the Mondragon, which is a comparative cooperative, sorry, ownership, long-term orientation, equitable value distribution. There are more known examples, perhaps like Patagonia, where we're seeing circular models, repairing, reusing, reselling, and even ownership redesigned to reinvest profits into environmental causes. But even Patagonia acknowledges that doing less harm remains an extractive approach. And this is a very important point that we should highlight here.
So, avoiding extractivism is not about incremental improvements. It's about rethinking what the business is optimizing for in the first place. And this is why most of these models remain niche because they challenge a system that is still fundamentally wired for short-term returns.
Woodhouse
If an organization was listening to this, and you could point out some key elements or key principles that differentiate regenerative businesses rather than this superficiality or this sense of sustainability tinkering at the margins, what would make a genuinely regenerative company in your view?Konti
I will call it a fantasy. It's more about how business models themselves can truly change and work in a more systemic way. And the reason I'm calling it a fantasy is we're seeing examples, obviously, but the main aspect we're looking for here is to differentiate between reducing harm and creating positive systems.For example, at EY, part of our strategic positioning toward our clients is, to a large extent, buyer based. So for example, what does the chief strategy officer need? What does the chief risk officer need? So in the same way, if the business models of companies were more aligned to what are the different stakeholder groups needing and how can they create value for them, and how would that reflect in bringing down the silos of departments that are doing different functional things for different stakeholders? I think it would really be a change that is needed. Most companies today are getting better at managing environmental risk, reducing emissions, improving efficiency, minimizing waste, but it's still defensive.
So, a regenerative business would need to go further in three ways. First, aim for net-positive outcomes. And again, I bring back the stakeholder-led value proposition, organizational structure here, because the net-positive outcomes for your customer or client are different from the net-positive outcomes for your local communities or nature itself, for example. So, you need to have this view on creating a net-positive impact for someone. And creating impact means, ‘I'm changing something’. So not just reducing damage, but actively restoring ecosystems, rebuilding soil and enhancing biodiversity. Secondly, and this is crucial, they focus on both impact and dependency. We covered this a bit earlier, but most companies ask, ‘‘How do we reduce our footprint? How do we reduce our risks, our environmental risks?’’ Very few ask, ‘’What happens to our business if nature fails?’’ That question is what drives real resilience thinking. And third, we're seeing these companies, these leading case studies, investing in growing natural capital, not just protecting it. So all these net-positive types of business activities and the changes that this brings to stakeholder relationships and value chains are very important. So instead of seeing nature as a constraint, they treat it as an asset to be maintained, enhanced, regenerated, just like financial capital or manufactured capital. So, a good example is regenerative agriculture where improving soil health can increase or maintain yields, reduce the costs, and strengthen resilience to climate shocks.
So the distinction, just to summarize, is very clear. Superficial, quote unquote, sustainability is about doing less harm. Regeneration is about making the system better over time. And there are obviously more structural deeper characteristics behind this, like the long-term system-aware decisions, the alignment of ability with positive outcomes, stakeholders engaged and embedded into governance and value creation and fundamentally redesign against extraction. These models reflect what a regenerative economy could look like, but they remain difficult to scale within a system that still rewards extraction to a very large extent.
Woodhouse
I totally agree. This system is continually rewarding extraction. I really like the example of regenerative agriculture, and I want to come back to you, Tim, because actually you mentioned the food system and how that is deeply extractive as well and can be an extractive of our health. I'm curious Tim, your reflections on this concept before we dive into the next chapter.Jackson
All of those examples that Kiara has mentioned are really important. They might be small scale, but they are demonstrating different kinds of principles and the principles of recognizing dependency, not just on nature, but also on people. If you don't look after the nation's health as well as the health of the ecosystems, you don't have a society, you don't have an economy, you have nothing to build business from. And so that question of dependency is really important.I wanted to come back to something else that Kiara said though, which is this question of growth. Now, you might expect this from me because I wrote a book called Prosperity Without Growth some time ago. But I do think that the point that Kiara was almost making but didn't quite make is that it really depends on what you call growth.
If you have a narrow measure of a narrow kind of growth reflected, for example, in growth in the GDP, then you can go badly wrong. And we see all sorts of examples of that. Food is one of those examples. What is it that allows governments to turn a blind eye to the practices of a food industry that systematically undermines our health and costs the government hundreds of billions of dollars every year in a health system that's failing to catch up with the impacts of chronic disease? Why do we allow that to happen? It is partly, I'm afraid, because we believe that those industries contribute to what we call economic growth.
And you could make the same case about the tech industry. The tech industry is bringing billions and billions of dollars. It is pretty much the primary contributor to economic growth in the Western world at the moment. And yet, it is also undermining the mental health of our kids. Why do we not see that that dependency on the generation that is to come afterward, that is to provide the basis for economic activity in the future? And, of course, I'm putting this in business terms, but it's important in its own right: the health of our kids. What more could you want as an important goal in society?
And yet, we seem to be prepared to risk undermining that, because of the promise, the lure, the holy grail of economic growth that the tech industry is going to bring to us. Now, here's the irony that when you do the sums, when you actually look at the economics of these situations, what you find is that it's something that Herman Daly once called uneconomic growth. It's a false economy. The costs that are associated with the damage you’re inflicting on people and on planet far outweighs that benefit that you think you're getting by narrowly measuring the increase in GDP. And it shows in a way that the problem goes right to the heart: not just of the way we conceive business, but also the way that we conceive the economy itself and national success itself and political success. A narrow fixation on a very constrained measure of economic output is undermining our health.
Woodhouse
Tim, you alluded to a fundamental redesign, the need to redesign our economic system. Growth aside, that is a very important conversation that, I think, we could have an entire multiple episode on. Why are these organizations being able to continue in the way that they have? What are the mechanisms or structures that enable the continuing extraction of business today?Jackson
Well, there are all sorts of reasons. I think many of them flow from that idea that government, society and business is prioritizing a very narrow measure of growth. And when I criticize that measure of growth, let me be quite clear, I'm not saying that social progress isn't possible. It's absolutely essential that some things are grown, for example, some of those examples that Kiara was talking about, we want more of them and we want them to be bigger and we want them to be more influential in society and we want them to deliver the goods and services that improve our lives.But while we have this narrow measure, what it does is it legitimizes a market structure that favors shareholder primacy over the rights of workers, over the impact on the environment, over the health of the population. And those mechanisms are embedded down in institutions. They're not trivial things to change. Shareholder primacy, for example, is embedded in the idea of fiduciary duty, the duty that managers have to their shareholders to maximize or to increase or to protect or to provide for the security of their returns. That is privileging one set of people over the people that that activity has an impact on.
So, it's exactly the opposite of what Kiara is describing in terms of internalizing externalities. It's exactly the opposite of taking into account the dependency that we have on nature and on the health of the population and the working capacity of the people who are engaged in producing goods and services. All of those things are, if you like, hardwired into institutions, into the rules of the market, into the regulatory frameworks, into the legislative articles that frame those regulatory frameworks. And that's the context in which business is operating. It's not trivial to change, but it's really important to see how structurally embedded we are in extractivism.
Woodhouse
You're right, it's not trivial. I think that the work the New Economy Unit has been looking to understand - what are the structural barriers, what are these mechanisms that are so pervasive and perhaps accepted in the economy — this economic narrative that it has to be that way. But you allude to the fact that it probably doesn't, and I think we're all in this conversation and can agree that things need to change. Tim, this transitioning to something that is regenerative rather than extractive is going to require the efforts of many actors, many economic actors. What are you seeing at this sort of systemic level that challenges some of the systemic embeddedness that you talk about? What brings you hope?Jackson
To be perfectly honest, it's not very easy to find hope, especially when you see dynamics, which are about powerful people protecting narrow interests, which are causing immense harm around the world in all sorts of ways. But I do think that, at the small level, the kinds of examples that Kiara was talking about, those regenerative agriculture examples, you could talk about regeneration generally as a principle across business. You can talk about the idea of purpose, business having a purpose and that purpose being defined in social ways. So, big corporations, for example, explicitly incorporate purpose into their own DNA. And that purpose has to sit alongside any maximization or protection of shareholder interest. It has to design the way that the industry operates, and it changes that design from the inside out. They're all very good examples. They're not enough at the general level. So, looking for hope at the wider level, looking for hope at the level of systemic change, I think, we are closer to understanding.One of the things that gives me hope is the exercise that you and I have been engaged in with the New Economy Unit, because it is exposing that DNA, it's exposing the dysfunctionality of extractivism. And it's not exposing it from the perspective of an environmental lobby or a protest group or people on the streets making their voices known. It's exposing it right inside the business model itself.
Now, businesses are built from well-meaning people; well-meaning people who understand the dynamics of what's going on and have no incentive whatsoever to destroy either the future of the planet or indeed the working lives of ordinary people or the health of the population. They are, broadly speaking, well-motivated people and I have seen that from the inside. That's a source of hope. But they require, and this is really important, they require governmental leadership. They require an institutional architecture which privileges; what I would say, care over growth. Care and growth have very different dynamics. Growth implies accumulation. It implies always more and more. If you focus that more and more on the wrong indicator, you go badly wrong very fast.
Care is about balance. Health is about balance. It's about retaining the balance between the ecological world and the human economy. It's about retaining the balance between shareholders and people who work in the company. It's about retaining the balance between the private sector and the public sector. It's about maintaining health, broadly speaking. And in order to maintain health, you need processes of care. You could call them regeneration. I think care is a very similar word. It's about bringing things back into balance.
And the big implication of that is that you do not put all your investment in things which simply accumulate wealth and expand activity. You put some of that investment and you regard it as a critical investment in institutional and physical architecture. You put some of that investment in care itself. And without that, it would be very, very difficult for those seeds of hope that Kiara's talked about to blossom and flourish.
Woodhouse
Thank you, Tim. The institutional architecture for care over growth really resonated. And I think this is a really nice point to tell the listeners about your book, The Care Economy. Because that goes into a really wonderful deep dive into what this balance means for people and why we need to embed more balance into the economy, into the way that we talk about growth and into the way that we talk about prosperity.You mentioned the well-meaning, the intent of businesspeople, and many people will be listening to this wondering, “what can I do from a business perspective, given this sort of institutional embeddedness and what we need from governments and what we need from civil society?” There is now a question for business. What is the role, Kiara, you think of business? What are you hearing from your clients and what could change?
Konti
So, Tim said it, it's a systems change game. And what we're seeing is three layers of what businesses can do. The first one is within the system of their business model themselves, meaning partly what I said before. What's the potential of the existing business model to be redesigned with regeneration in mind and less extractivism? So that's the first system.The second system for that company, for example, is its value chain. So, throughout the value chain, both upstream and downstream, and obviously connected with a business model itself, what are the inputs per business activity? Just to give you a short example here; it was very weird for me that for the past two, three years when all these reporting directives are out in Europe, there was a specific requirement asking for a value chain description. And we work with hundreds of companies. The percentage of those that had an actual, either narrative description or a visual of their value chain or a common understanding of their value chain was very, very small.
So, in this second layer of the value chain system, it's important for everyone to sit down, the C-suite executives and whoever else is needed, and truly map that value chain. And truly map the inputs, the different capitals, whether that's natural capital, human capital, social capital, et cetera, that the main business activities of their own and, of course, third parties’ business activities are dependent upon. I don't think there are very few companies. I wouldn't say zero, but very few that have this view. And it's a very critical view to have because it connects also to the business model system, and the business model system connects to the value chain system.
And then the third layer is the system among all those different value chains. In essence, the market itself. So, it's a systems change discussion. And if we start seeing these layers, both separately, but also as a system themselves, it points out to the right direction of where you need to move, where you are highly dependent and where your regeneration potential is higher. That's a low-hanging fruit that you can start with. And thankfully, we're seeing that stakeholders like investors to start asking these questions: Where are your dependencies? Where in your value chain, not just your own operations, how exposed are you? What is your transition plan? So, the role of business is not just to comply, obviously, but to translate the systemic challenge into operational change.
And of course, this means an active reaction. So, reflecting honestly on the role in extractivism, quantify those risks, whether these are climate, nature, or social risks, stress- test their strategy against a regenerative future. And using the word future here is very important because we keep working in different time horizons. The vast majority of companies are working on a very short time horizon. But coming back to Tim's “care” term that he uses so often, and I love it, it is all about looking in the mid and long term as well. It's all about caring for the next generations. And this forward-looking perspective is very important in this systemic-change type of travel that corporates need to make.
And last but not least, collaboration. It's a systems change game. As I said many times, no one can work on this system alone because they are part of the system. So, advocating new incentives, working cross-sectorally within sectors, with competitors even, to address common challenges are all very, very important aspects of the role that businesses can play in this transition.
Woodhouse
You're right. That point on collaboration is really key. And we talked a little bit about the different actors. I want to come back to that, in closing, to ask you, Kiara, what are the roles of all the other economic actors? How do you see governments and policymakers and individuals and business collaborating on these challenges?Konti
Well, the tools are more or less the same as they are for everything, but the content is what matters here. So for policymakers, removing incentives that drive extraction is a very relatively easy, at least, directionally thing to do. Setting clear transition expectations, we're seeing a lot of commitments, for example, in the European Union that cascade and are transposed to national laws for specific aspects, whether that's water, nature, climate or whatever. But to some extent, policymakers need to be more specific on the transition expectations.And I think what's worked well with the climate transition is that we have specific dates that are make or break. So, we have 2030, 2040 and 2050. These milestone dates means something for how the climate is changing and what we need to do by then for mitigating and adapting to the changes. We need more or less the same for other aspects of nature. In the concept of the planetary boundaries, we do have these sort of thresholds, but I think what people and corporations work really well with are deadlines. So, if you set a very strong deadline as a policymaker, and whether that's a target that some sectors need to achieve something or whether that's a milestone year where at national or continental level there are specific commitments to be achieved, these work well with humans. Deadlines work well. And also, make risks visible through disclosures.
So from a policy making perspective, I think although companies and the market have spent a lot of money on disclosure types of work, I think what is missing is a better transparency from a policy point of view on what all these disclosures actually mean as an objective lens, a transparent lens, of where does the corporate world sit within this transition. And now, if we go down to individuals, it's more or less things that are very common as titles or suggestions, but I think looking into them from this extractivism lens can make it more specific. So, for example, consumption choices. This is not new, obviously. It's been decades that it's been talked about and various initiatives are taking place, but you don't really get there unless you go back to the educational system, the academic system, the family system and the neighborhood system. Everything that has to do with how we choose, what we buy and how we consume. It's also for individuals; it is about investment decisions. In any form of what that investment might be, but it's truly important to see that from a mid-to long-term lens again.
Where are we investing and what's the outcome over time across impacted aspects, including obviously our individual self, but what are the other domino effects of these investments? And last, but not the least for individuals, I would also mention how they can influence corporations themselves from inside out. Meaning, what do they expect from their corporate environment or how do they expect the products that this business is producing to be more regenerative or based solely on extraction and so forth. It's a transition obviously, and it cannot be driven by consumers or individuals alone, but everyone has a role to play. And as with everything that is so systemic, it's important not to overlook even the smallest role that each of us has to play in this transition.
To conclude, at least from my end, Nadia, I'm happy to hear more thoughts from Tim and you. We often talk about resilience as the ability to withstand shocks. But I think the deeper question is, are we weakening the systems that keep us stable in the first place? That's what extractivism does in essence. It's shaking the ground down on our face. And the only way is shifting to regeneration. It's not just about sustainability as we know it, it's about ensuring the business remains viable as the systems they depend on truly begin to change.
Woodhouse
A wonderful way to close, Kiara, but I want to just leave 30 seconds to Tim. You have any final thoughts Tim before we wrap?Jackson
Yeah, I do. I do, Nadia. I want to make what I think is a really important point that extractivism is not just an abstract concept. It has implications across our lives. And in particular, it's really important to think about the end game of extractivism, because I think that's what we're seeing at the moment across the world in geopolitical terms. We're seeing a world that, through its expansionary logic and its privileging of one set of people over another, has led us inexorably toward conflict. And instead of seeing that, in some way, as a mirror in which we can look at ourselves and ask, “what should we change,” we see it as the site for yet another activity of extractivism. The extractivism of peace and of security in the name of the prophets of an expanding militarism. And we cannot look that in the face. We cannot look our kids in the face and say we did nothing about that. The underlying model drives us toward conflict. It drives us toward violence. That violence is the very antithesis of care. It's the absolute opposite of a regenerative outlook. Every shift that any single person or any small business makes toward regeneration is a way of rebalancing that fundamental conflict-driven process of extractivism. This is probably one of the most important conversations that we could possibly have at this point in time.Woodhouse
Thank you, Tim, well said. We will leave it there. Thank you, Tim Jackson, Kiara Konti, for joining me for one of the most important conversations that we can have today.Jackson
Thanks, Nadia.Konti
Thank you.Nadia
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