Thinking in Systems: The Long-Term Impacts of Short-Term Business growth

Short-term business growth is the main paradigm governing business activities today. This is important for employing workers, servicing debt and being competitive in a complex world among others. In 1972, the Limits to Growth (LtG) demonstrated how short-term business as usual behaviour could cause long-term global risks, including the possibility of overshoot of the global economy to environmental limits and economic collapse within the twenty-first century. This chapter first gives a definition of complex systems, system thinking and sustainability. Then it explains the nature of financial risk assessment practices and exponential growth. Thus, it reviews the LtG model and compares it to historical data. The major drivers for growth and the state of planetary boundaries are then assessed showing the relationships between risk, economic growth and environmental pressures. Potential leverage solutions to reduce long-term risks and directions for businesses to support a sustainability transition are highlighted.