There is a narrative that no growth is good growth. The planet’s resources and resilience are just too limited. For the sake of the environment, enough is enough.
I reject that. Economic growth has powered a radical improvement in the quality of life for billions of people. Driven largely by business, growth remains the engine of progress and common prosperity, without which there cannot be true sustainability of any kind. We abandon it at our peril.
Growth can mean doing better, it doesn’t have to mean producing more. In this respect it is crucial for bringing about the structural changes that the world so desperately needs.
Take the climate crisis. Solving this requires system-wide transformation, investing not only to decarbonise but also to make that decarbonisation tolerable to consumers. Shrinking companies will not be the ones to take these monumental projects on.
Green growth powering the UK’s fastest-growing companies
The Growth Index is a ranking of the fastest-growing companies in the UK, based on a rigorous financial analysis of the compound annual growth of 32,000 companies.
According to the 2024 list, three of the UK’s 10 fastest-growing companies are focused directly or indirectly on decarbonisation. These are InstaVolt (electric vehicle charging), VPI (low-carbon and carbon-reducing energy services) and CCL (renewable energy equipment).
Two more of the top 10 – cycling retailer Balfe’s Bikes and fleet management software business Ram Tracking – also contribute to reducing fossil fuel consumption through their primary business activities.
Green growth can be seen even in those industries not normally linked to sustainability. Nine energy and utilities companies made it into Growth Index’s list of the top 100 fastest-growing companies. Of these, eight are deeply involved with clean energy.
Good growth is intentional and effective
You might argue that profiting from the green transition is not noble, but rather the rational pursuit of commercial opportunities created by political decisions. Well, so what? Even if firms deliver positive social or environmental impact purely because it benefits them financially, it’s still better than them pursuing harmful activities.
More importantly, it is further proof that financial performance and positive impact are not mutually exclusive goals.
In fact, there are strong reasons to believe that they actively support each other. Growth Index has a significant number of B Corps – businesses that have made an externally audited, ongoing commitment to considering people and planet as well as profit.
This year, three of the top 100 were certified B Corps: Wolf & Badger, Octopus Energy and AgilityEco. Last year there were five; the year before two. That means the UK’s fastest-growing businesses are, on average, around 40 times more likely to be a B Corp.
Taking a wider view, over a quarter of businesses in the Growth Index had a public purpose that went beyond operational execution (think ‘we aspire to improve the health of the nation by providing quality nutrition at reasonable prices’ vs ‘we make the best ready meals in Britain’).
Balancing purpose and performance
The relationship between performance and purpose is a complex one. I was recently speaking with the leader of a high-growth business in the leisure and hospitality sector who was looking to take his business on the B Corp journey.
He was legitimately concerned that switching to green energy would layer on cost and reduce profits. But the more firms do it, the more the market will respond. Volumes will increase, and green energy unit costs will start to come down. Going green is both getting ahead of the change, and bringing it about.
It’s the same with investing in employees’ working conditions. It might cost you more today, but treating your people well will increase retention and decrease the costs of people leaving tomorrow.
Similarly, instituting an extra layer of governance may seem burdensome now, but it means you’re less likely to face governance issues – and expensive legal bills – further down the line.
In the long run, doing the decent thing usually benefits the organisation. It’s a model of enlightened self-interest that harkens back to Victorian industrialists like the Cadburys and the Rowntrees, who actively sought to enrich society and their local communities as well as seeking profit, because they knew that they could never truly have one without the other.
That’s what good growth means to me. It’s balancing multiple objectives – growth, shareholder return, sustainability, paying your taxes, providing good work – in the belief that they are all worthwhile and, ultimately, complementary.
Why business leaders need a reality check
Doing so requires a degree of honesty about how much good you can really do and how those different objectives sit with each other.
Charlotte Harrington is CEO of Belu Water, one of the companies listed in the Growth Index. “We’re aiming for a zero-carbon future,” she says. “We don’t know how we’re going to get there yet, but we’re doing everything we can to figure it out.”
Those aren’t just words. Belu is a social enterprise that gives all its profits to Water Aid, but Harrington is under no illusions about what that means for Belu’s role. “We can’t deliver social and environmental impact without making a profit: we are a business, not a charity. It’s just what we do with the profits that is different.”
However a company chooses to pursue good growth, it is essential to remain grounded in this way. We will never be able to do everything we want to do. Sometimes we will have to choose between different objectives.
That’s just business. But if we hold onto the idea that we can leave the world a better place for having been there, even in a small way, then between us there’s no telling what we can achieve.
Orlando Martins is a leading board advisor, organisational strategist and headhunter. He founded ORESA Executive Search (which now has B-corp certification) in 2008 and GrowthIndex.com which ranks and celebrates the fastest-growing UK companies in 2022.
