Topic: Drivers
PP23

Market mechanisms are strengthened in pursuit of future-fitness

Every company can take steps to improve its own future-fitness, but some barriers are exceedingly difficult to overcome by any one business alone, because they exist at a market level. Here we consider actions which contribute to this.

About this Positive Pursuit

Every company can take steps to improve its own future-fitness, but some barriers exist at a market level which are exceedingly difficult to overcome by any one business alone. Such barriers may hinder the efforts of even the most committed company, but any action to remove one could potentially enable the company – as well as its peers and other market actors – to make much-needed progress.

There are four types of market mechanisms which can combine to overcome these barriers:

  • Economic: Aligning economic incentives to reward Future-Fit behaviours (e.g. conditional financing, thematic investment funds, subsidies).
  • Regulatory: Using legal requirements to enforce Future-Fit behaviours or to ban behaviours that impede progress (e.g. legislation).
  • Cooperative: Using voluntary agreements to encourage partners (other organizations, governments or individuals) to exhibit Future-Fit behaviours (e.g. industry standards, pre-competitive partnerships).
  • Informational: Equipping individuals and organizations with the information necessary to pursue Future-Fit behaviours (e.g. product certification schemes, reporting mechanisms, information technologies).

This Positive Pursuit encompasses any action which achieves such an outcome.

Why it’s needed

SDGs this will contribute to