From a post-growth economic perspective, the purpose of the economy is to help people meet their needs within the limits of the planet’s biosphere. Economic growth, inequality, and ecological sustainability are all tightly connected. It appears economic growth cannot be decoupled from environmental impacts. Therefore, economic institutions must be organised (or reorganised) in a way that does not drive constant expansion of production and consumption, as this is unsustainable. The main aim of post-growth research, such as this thesis, is to identify such ways of organising society and the economy.

In short, this study looks to reveal the dynamics of a more sustainable economy, through a post-growth lens. Focusing on the social and ecological implications of how businesses relate to profit, this doctoral thesis posits a new theory: relationship-to-profit theory. Relationship-to-profit theory explains how a business’s relationship-to-profit (the legal difference between for-profit and not-for-profit forms of business) plays a key role in the sustainability of an economy. It points out the trade-offs and synergies between profit and social-ecological sustainability, and questions whether businesses and markets have to be profit-seeking.

The theory clarifies that profit is not inherently sustainable or unsustainable. Rather, it is whether profit is sought as a means or as an end that determines if exploitative strategies are incentivised or not.

It sets out the case for businesses and markets to treat profit as a means rather than an end-in-itself:

• Some forms of business encourage profit-as-an-end more than others. Indeed, the legal purpose, ownership (i.e., private financial rights), and corresponding investment structures of for-profit forms of business all encourage firms to treat profit as an end.
• The pursuit of unlimited financial gain and the private distribution of the surplus by for-profit businesses tend to drive the growth of consumerism, environmental degradation, inequality, market concentration, and political capture.
• In a not-for-profit type of economy, businesses do not have a financial gain purpose or private financial rights. Profit in such a system is used as a means to achieve social benefit. This results in higher levels of equality and opens up the space for more effective sustainability interventions.

Because relationship-to-profit is only one of the dimensions of business important for sustainability, this study offers a framework to structure analyses and wider discussions of post-growth business around five key dimensions of business: (1) relationship-to-profit, (2) incorporation structure, (3) governance, (4) strategy, and (5) size and geographical scope.

Over the course of this research, the overarching question “How does the relationship between business and profit affect social and ecological sustainability?” is addressed in terms of four component questions, the answers to which can also be seen as the key propositions of relationship-to-profit theory:

• What are the necessary and sufficient conditions for socially and ecologically sustainable profit?
• How do businesses relate to profit?
• How does relationship-to-profit affect social and ecological sustainability?
• How can relationship-to-profit be understood in the context of other approaches to sustainable business?

The answers to these questions are also summarised in a table on page 76 of the thesis.

1. Relationship-to-profit (RtP) theory may offer a framework to support sustainable finance decisions – as may the post-growth-transformation and institutional-economics perspectives presented in this thesis.
2. Social and ecological issues are commonly framed as “market failures” in economic analyses. However, RtP theory reframes these issues as direct consequences of exploitative profit-seeking strategies used by companies that are set up with the purpose and right to pursue private financial gain for their owners in a for-profit market. This improved understanding of the problem allows for a better identification of potential interventions.
3. Environmental problems are not simply accidental side-effects of production and consumption, but rather systemic effects of existing dominant institutions (systems of embedded social rules regarding rational behaviour). Post-growth transformation aims to reframe rational behaviour as that which allows for social and ecological justice rather than purely financial self-interest.
4. For-profit business drives the growth of consumerism, environmental degradation, inequality, market concentration and political capture. While it is impossible to change the biosphere to accommodate the endless expansion of economic activity, it is possible to organise our economies in ways that do not require growth. An important starting point for this is to move away from the hegemonic ideology of economic growth as natural, necessary and good.
5. Not only do all businesses have a relationship-to-profit, but entire industries, markets, and economies can also be characterised as predominately for-profit or not-for-profit. The structures and dynamics of a not-for-profit type of economy should provide a more socio-ecologically sustainable alternative to the for-profit type of economy.
6. Systemic problems call for systemic interventions. The world is facing economic recessions, skyrocketing inequality, declining public health and an unprecedented ecological crisis. RtP theory recommends we move away from for-profit business structures in order to protect people and the planet. This implies a shift away from capitalism, but it does not necessarily imply a shift away from business and markets. Changing businesses and markets in a not-for-profit direction has the potential to transform the economy as a whole.
7. As an aim of post-growth transformation, alignment with sustainability-oriented objectives and actions should be sought along all five dimensions of a business firm: (1) relationship-to-profit, (2) incorporation structure, (3) governance, (4) strategy, and (5) size and geographical scope.
8. Other post-growth principles are also necessary for economic, social and ecological sustainability: laws that ensure social and ecological justice; democratic and collaborative decision-making; wellbeing-based measures of prosperity rather than monetary or consumption-based measures; material sufficiency or minimalism; local production and consumption; sharing of resources; and circular production and consumption (e.g., reuse, repair, refurbish, and repurpose).