Research suggests that people who support SET business practices (e.g., who usually purchase eco-friendly products and brands, who belong to environmental or conservation organizations) are more likely to visit natural spaces at least once week (e.g., go for a walk) and are more likely to feel connected to nature (e.g., to feel they are part of nature, to find beauty in nature and treat nature with respect). There is also a positive relationship between people feeling connected to nature and their feeling that the things they do in their life are worthwhile, a relationship that is strengthened if they go for a walk at least once a week.
Martin, L., White, M. P., Hunt, A., Richardson, M., Pahl, S., & Burt, J. (2020). Nature contact, nature connectedness and associations with health, wellbeing and pro-environmental behaviours. Journal of Environmental Psychology, 68, 101389: 1-12
Marketing has traditionally focused on stimulating demand and selling as much product as possible. However, in light of the environmental crises associated with this approach, a small but growing number of businesses and scholars are developing a SET approach to marketing that ensures that everyone has enough (not too much, and not too little). Examples include Patagonia’s famous “Don't buy this jacket” ad and its free service to repair damaged clothing, and also the general ideas of “slow food” and "slow fashion" marketing (e.g., where consumers purchase fewer garments that are made locally and from environmentally friendly materials). About half the time sufficiency marketing is prompted by the altruistic principles of business owners, and the other half it is prompted by the recognition of consumer demand for SET oriented products. Researchers emphasize the importance of belonging to larger communities where members share sufficiency values.
For an excellent article that reviews this literature, see:
Gossen, M., Ziesemer, F., & Schrader, U. (2019). Why and how commercial marketing should promote sufficient consumption: a systematic literature review. Journal of Macromarketing, 39(3), 252-269.
What happens when a firm wants to have the positive image that comes from being seen as transparent about its environmental performance, but its environmental performance is unfavourable? Research suggests that such companies issue confusing reports that are difficult for readers to understand (long sentences, technical terms, multi-syllabic jargon). It seems they want the benefit of appearing to be transparent, while avoiding the reputational costs that come from poor actual performance. In contrast, from a SET perspective, it is important to provide clear and transparent communication about environmental and social performance. Moreover, SET firms may invite third parties to help prepare such reports.
Fabrizio, K. R., & Kim, E. H. (2019). Reluctant Disclosure and Transparency: Evidence from Environmental Disclosures. Organization Science, 30(6), 1207-1231.
It’s been another remarkable week of news about climate change and business responding. Headlines tell us about record-breaking fires in Australia and announce that the past decade has been the hottest on record, with a director from NASA saying; “If you think you’ve heard this story before, you haven’t seen anything yet.”
Meanwhile Blackrock, the world’s largest asset manager ($7 trillion), announces that it is changing its focus to climate change. Founder and CEO Laurence Fink believes we are "on the edge of a fundamental reshaping of finance" because of a warming planet. And, based on a survey of 750 key decision makers prior to the World Economic Forum, environmental issues are at the top of the list of concerns for those heading to Davos. The need for an interest in SET management is growing weekly.
Sources: Borenstein, S. (2020 Jan 16). Past decade the hottest on record. Winnipeg Free Press; Pylas, P. (2020 Jan 16). Environmental issues top list of worries for those heading to Davos. Winnipeg Free Press. Associated Press (2020 Jan 14). BlackRock, world’s largest asset management, changing its focus to climate change. https://www.cbc.ca/news/business/blackrock-investment-climate-change-1.5426465?cmp=rss
Pay for performance (P4P) systems—which are “widely used by firms to both motivate employee effort and attract the best talent”—have been linked to increased levels of depression and anxiety. From a SET perspective, it is not surprising that focusing on financial well-being reduces attending to other important forms of well-being.
From the Abstract: This paper provides evidence linking pay-for-performance (P4P) adoption by employers to long-term and serious mental health problems in employees. Matching survey-based data on P4P adoption by 1,309 Danish firms with wage, demographic, and medical prescription data of 318,717 full-time employees, we find a four to six percent increase in the usage of anti-depressant and anti-anxiety medication after firms adopt P4P. This change is strongest in low-performing and older workers.
Dahl, M.S., and Pierce, L. (2019 in press) Pay-for-performance and employee mental health: Large sample evident using employee prescription drug use. Academy of Management Discoveries.
The SET management approach has much in common with the “Cultural Re-Enlightenment” archetype described by leading management scholars Andrew Hoffman and Devereaux Jennings in their recent book “Re-engaging with sustainability in the Anthropocene era.” Both approaches share an emphasis on the need to go beyond sustainable development, to focus on flourishing rather than on materialism and self-interest, to replace reductionist thinking with a sense of transcendent connectedness, and to highlight the role of localized entrepreneurs. And, just like SET management is based on virtue ethics rather than mainstream utilitarian ethics, Hoffman and Devereaux observe that "the logics of science in Cultural Re-Enlightenment will be balanced by new logics of ... religion, philosophy, and others, ones that are congruent with one another.”
A recent study interviewed owners of over twenty SET businesses in Winnipeg, Canada. Preliminary analyses of the data pointed to 5 themes evident in many SET businesses in the sample: 1) rather than compete, SET firms choose to cooperate with other organizations that offer similar goods and services (because they share the goal of improving overall well-being); 2) rather than operate with a traditional corporate culture, SET firms tend to treat employees, customers and even suppliers like family, developing a sense of community within the firm and among its stakeholders; 3) rather than hire people with the “best” resume or skills, SET firms hire employees who understand and support the organization's values and goals, and often hire people who may find it difficult getting a job elsewhere; 4) rather than burdensome and stressful, work in SET firms is typically engaging and energized (e.g, because of shared values); and 5) rather than emphasize globalization and industrialization, SET firms often harken back to times when workers, customers, and suppliers lived in the same community, and technologies were friendlier to the environment.
For a fuller review of the findings, and a list of the organizations in the study, please click here.
There is some agreement that, in addition to sustainable organizations, cities are key to addressing the Sustainable Development Goals of the United Nations regarding things like climate change, poverty, and inequality. Research suggests that cities enjoy lower pollution and higher voluntary environmental standards when they have: 1) more corporate headquarters located in them (consistent with ideas related to place-based organizing), 2) more nonprofit environmental organizations (consistent with the idea that information and action changes structures and system), 3) better educated citizens, and 4) lower economic inequality between rich and poor.
Rousseau, H.E., Berrone, P., & Gelabert, L. (2019 in press). Localizing sustainable development goals: Nonprofit density and city sustainability. Academy of Management Discoveries.
The increase in economic inequality—within and between organizations and countries—reduces overall well-being, societal trust, safety, and mental health. The emphasis on shareholder wealth maximization is an important contributor to economic inequality, because it works to maximize the economic resources distributed to shareholders and executives, and minimize the resources distributed to other stakeholders (e.g., employees, governments, community, suppliers).
In addition to shareholder wealth maximization, this paper highlights "the bidirectional relationship between societal economic inequality and organizations, and eight mechanisms that drive this relationship."
Bapuji, H., Ertug, G., & Shaw, J. D. (2019). Organizations and Societal Economic Inequality: A Review and Way Forward. Academy of Management Annals.
In good news for SET businesses trying to raise funds, a recent experiment rejected the “selfish investor hypothesis.” The study showed that investors are willing to pay a premium for shares in firms that create positive externalities and pay less for shares that create negative externalities. This is true even for people who are making investment decisions on behalf of others.
Bonnefon, Jean-Francois and Landier, Augustin and Sastry, Parinitha and Thesmar, David, Do Investors Care About Corporate Externalities? Experimental Evidence (September 23, 2019). HEC Paris Research Paper No. FIN-2019-1350. Available at SSRN: https://ssrn.com/abstract=3458447 or http://dx.doi.org/10.2139/ssrn.3458447