how the private sector can lead where the government is not

Melissa Scanlan, a professor at the University of Wisconsin, offers a blueprint for alternative business models that include green practices, paying a living wage, and keeping community jobs in her new book, Thriving in a Fossil-Free Economy. (Photo by UWM / Elora Hennessey)

Countries have debated how to combat climate change since the early 1990s. However, little progress has been made as governments struggle to define and implement emission reduction commitments.

Curious Campus, the new UWM podcast about science, discovery and culture

That’s what prompted Melissa Scanlan to investigate how the private sector can motivate companies to do what governments have yet to do: prioritize environmentally friendly practices. But is it realistic to expect business to increase?

In his new book, Thriving in a Fossil Free Economy: Cooperatives and Sustainable Business Design. (Yale University Press, 2021), Scanlan provides a blueprint for creating cooperatives and alternative business models for companies, nonprofits and nonprofits, incorporating green practices, paying a living wage, and maintaining community jobs.

Scanlan, UW-Milwaukee Professor, Lindy B. Director of the UWM Center for Water Policy. “What type of business structure will allow us to move faster to increase shared prosperity and tackle the climate crisis?”

Scanlan talks more about this in this week’s episode Curious sanctuaryNew UWM podcast about science, discovery and culture.

Triple bottom line returns

Cooperatives aim to generate not only economic, but also social and environmental benefits. The best, says Scanlan, have an audit system to show they are generating triple returns. By definition, cooperatives come together to reduce the costs of doing any type of business.

He added that cooperatives are more common than people think and exist in all sectors: insurance, energy, housing, agriculture and food. It can be owned and operated by workers or consumers, or both. Several well-known brands, such as Organic Valley, Equal Exchange, Vanguard, REI, and Ace Hardware, operate as cooperative units.

Cooperatives can go beyond politics. One example, Scanlan discusses in the book, is Cobb Electric in Georgia, which has become a leader in solar distribution in a state where there are no laws promoting renewable energy. “So the private sector can still progress, even though politicians are slowing down,” he said.

Spain leads

Environmental sustainability is not the only social problem that cooperatives can solve. This book examines important studies from both the United States and Spain, which have very strong labor cooperative sectors.

In 2019, Scanlan spent a semester as a Fulbright scholar in Spain, which has the world’s largest worker-owned cooperative. He investigates “sustainability factors” in the Valencian Community.

After Spain’s economic difficulties during the 2008 financial crisis, the country has enacted legislation to strengthen cooperatives and other businesses, prioritizing the triple bottom line. They highlight the democratic participation of employees in these companies.

Benefits for employees and consumers

One of the Spanish cooperatives that Scanlan analyzes in his book is a large supermarket chain called Consum, which is owned by both its employees and customers.

“If it is structured traditionally, the profits will go directly to shareholders,” said Scanlan. “Instead, profits go to employees and consumers, as well as large funds for the purpose of giving back to society.”

Examples of cooperatives in Wisconsin and Minnesota include Just Coffee in Madison, Outpost Foods in Milwaukee, Land O’Lakes Dairies, and CROPP, which markets products under the Organic Valley brand.

He said the United States could grow more cooperatives and social enterprises if business models were taught more broadly in American universities.

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