Dear friends and supporters of Altiorem,

Business models i.e. how a company makes money drives behaviour. This should be fairly obvious; we will have all seen examples of perverse incentives driving destructive outcomes. Sometimes, rather than business models, they are attributed to market failures, or externalities, but this is only the macro story.

Take the example of fast fashion companies. The business model requires rapid turnover of design, frequent purchases and low prices. It should surprise no one that such a model will produce enormous volumes of waste, low-quality clothing and increased labour rights risks. The repair or return initiatives that companies like H&M create to address these problems will never be enough because the model is fundamentally misaligned with better outcomes.

What if instead the model offered repairs for ten years? Or if it was a subscription service and the producer took back the clothing? Or both. Such a model would incentivise higher quality, longer lasting products and genuine relationships and engagement with customers. It would also drive a healthy secondary market which producers wouldn’t want to debase. Yes, the lack of cost for the waste and damage allows the destructive models to be created, but there are ways to design around it if you are deliberate about it, and companies like Stitch Fix and Citizen Wolf are trying to do just that.

A couple of weeks ago I was at an event on mental health and one of the speakers was the founder of a company that was taking controlling equity stakes in clinics and providing back-office support to clinicians so they can focus on providing better care for patients.

The founder had a personal experience with his son having suffered from mental health challenges and he had impressively studied and travelled for two years to understand what best practice care involves. His commitment to patient outcomes couldn’t be questioned, and stewardship can act as a counterbalancing measure in a market system where margins and revenue growth goals can conflict with quality care (as we have seen in other health settings).

However, his goal was to list the company, exposing it to the market and possibly diluting his stewardship. Building a business for the very long-term means you have to think about how it will be stewarded once you are gone. When I asked him how he would ensure patient outcomes when he was no longer there to enforce it, he argued it would be the culture. That once it is built, it is hard to undo. Maybe. Although I’d argue that is a weak protection. We have seen mutuals and cooperatives listed in the past that over time had their customer centric cultures eroded, and in the worst case the trust they had built weaponised.

Companies like the Tata Group in India and Novo Nordisk manage this by having a controlling shareholder that is a foundation. A mission-led owner and steward that will transcend generations of managers. Mondragon and other cooperatives manage this through employee ownership and sophisticated governance structures for decision making which recognises and manages the potential for conflicts of interests and perverse outcomes.

These choices have consequences. Meta’s recent US$18bn and the prior $567m settlements on the harms caused by their products are (at last) the beginnings of some accountability for poor business model and poor stewardship design choices. Hopefully, not the end and a warning call to AI companies who build models on stolen content and risk the same type of ensh!tification as they try monetising the technology. What if instead of ad revenue (and so addiction) being the model, it had been subscription based where customers didn’t inadvertently become “the product”?

Whether the combination of business model design and deliberate stewardship structures can overcome the short termism and myopic focus on growth and profits that modern markets obsess with is not guaranteed, but they are powerful and there are enough examples to suggest they can. It is why the Altiorem report How can businesses thrive in a sustainable economy? written by the brilliant Sara Anne Fossum remains relevant and one of the things I am most proud that Altiorem produced. It is also why alternate models like Doughnut Economics’ action lab are so important. I have linked to some other relevant resources in Altiorem below.

Separately, we have some very exciting developments in train at Altiorem, some of which I will write more about next week, but we need some volunteer testers and people keen to help us build the next suite of tools on Altiorem. If you are interested, please get in touch.

Until next week,
Pablo

PS: The tragedy in Nepal and how long predicted and clearly connected to climate change it is, is just the latest reminder, after extreme fires, droughts, floods and storms in recent months, of what is at stake if we don’t dramatically cut greenhouse emissions. The backlash/rollback/head-in-the-sand on sustainability is an opportunity for those of us committed to a better future to come back more hardened,  deliberate and wise. The issues are not going away. Disclosure (on its own) is not going to fix it. While misattributed to Gandhi: “First they ignore you, then they laugh at you, then they fight you, then you win.” is nonetheless true. Right now we are in the fight of our lives.

Altiorem Business Model Resources

Doughnut economics for regenerative business design
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An edited volume applying Doughnut Economics to business design, examining how purpose, networks, governance and ownership can be redesigned to operate within ecological and social limits. It uses case studies to show how purpose-led firms shift from shareholder primacy towards broader social and ecological value, and how governance models can move beyond shareholder dominance to include workers and communities. Published 2026.

How can businesses thrive in a sustainable economy?
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Sets out a framework for transitioning business models away from five unsustainable characteristics — linearity, short-termism, growth/profit maximisation, exploitative supply chains, and narrow operational efficiency — towards regenerative and distributive practices. Includes a Sustainable Business Model Canvas for businesses and investors to assess alignment. By Sara Anne Fossum.

A new economy: Exploring the root causes of the polycrisis and the principles to unlock a sustainable future
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Examines systemic flaws in the current economic model (unsustainable growth, overconsumption, linear “take-make-waste” production) and proposes a transition to a regenerative economy built on sufficiency, circularity, systems thinking and equity, drawing on models including Doughnut Economics. Published by Ernst & Young (EY).

Doughnut design for business case studies
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A curated database of case studies of enterprises applying Doughnut Economics principles in practice, covering their design process, outcomes and lessons learned, filterable by sector, location and size. Published by Doughnut Economics Action Lab (DEAL).

Surviving on breadcrumbs: Resourcing radical hope
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Reflects on UK research mapping around 2,000 organisations building alternative economic models, examining the funding challenges they face and arguing for shifts from extractive to regenerative economic systems, and from private ownership towards stewardship and commons-based models. Published by Joseph Rowntree Foundation (JRF).

New in the library

Pablo’s handpicked highlights from Altiorem last week:

Environmental

Social

Governance

To see all of the resources added this week visit Altiorem’s website: Altiorem Articles: Insightful Reads & Expert Knowledge

This week in ESG trends

Africa & Middle East

Australia/NZ

UK/Europe

To see all of the daily trends follow us on LinkedIn: Altiorem on LinkedIn

From the community

Environmental

Social

Governance