Unlike modern capitalism built on an unquenchable thirst for profit alone, sustainable capitalism on the other hand seeks to maximise long term economic value creation by reforming markets to address real needs while considering all costs and stakeholders in the decision-making process. It emphasises the need for companies to weave ethics into the fabrics of their production patterns by ensuring that businesses take responsibility for their negative impacts on the environment and act in good faith in dealings with all stakeholders (internal and external) to advance social and economic progress.
Like fuel on burning flame, Oxfam’s inequality report titled “Reward Work, not Wealth” further fans the flames of growing criticism against capitalism which is defined as an economic system premised on private, not state ownership of businesses for profit. The report revealed that wealth generated by the richest top 1% of global population in 2017 alone is enough to eradicate extreme poverty seven times over while the poorest half of humanity who are about 7.7 billion saw no improvement in their financial status. This Oxfam report was a prominent point of discussion at the 2018 edition of World Economic Forum.
Like many others, Pope Francis, the current Pope of the Catholic Church sees capitalism as a system that “has imposed the mentality of profit at any price, with no concern for social exclusion or the destruction of nature”. In many quarters, capitalism is believed to be the cause of inequality, terrorism, poverty, unemployment, local and trans-border migration, global warming and climate change. The truth is, capitalism as it is being practiced is stretching the limits of social cohesion and pushing our environment into avoidable destruction.
How Sustainable Capitalism can be a Panacea
Since the ideals of communism and undiluted socialism seem to be impracticable in an imperfect world like ours, capitalism still appears to be our best bet although there is an urgent need to tame its wild unbridled nature by making it sustainable.
Sustainable capitalism is not a new concept in its entirety. The legendary businessman, Henry Ford is touted to be cuts above other regular capitalist businessmen of his time because of his unconventional approach to business. Ford, in his role as the CEO of Ford Motor Company used money that should have accrued to shareholders to reduce the price of Model T Ford so average Americans could afford it; he increased the wage of workers above what was obtainable during his time and enforced an 8-hour work day for workers.
A business that makes nothing, but money is a poor business. – Henry Ford
Sustainable capitalism expounds the notion that businesses owe a duty to invest in reducing their negative footprints and replenishing natural resources. At the heart of sustainable capitalism is the circular economy business model that dwells on reducing, reusing and recycling production materials for improved efficiency. It further posits that companies have to treat workers equally and equitably not only in terms of salaries, wages and benefits but also as regards working conditions according to present economic realities. Emphasis is also laid on the need for companies to maintain cordial relationships with their host communities in order to forestall the chaotic rebellion that follows . Transparency and accountability in business practices and dealings with customers is also a core of sustainable capitalism.
Apart from the fact that it is a more responsible business model, organisations that espouse the model of sustainable capitalism tend to earn more profits as they cut down on waste in resources, gain more trust from the public and foster new innovations. Companies like Dell, Coca Cola, PepsiCo, Nike, Procter & Gamble and General Electric are already reaping the rewards of integrating sustainable practices into their business models.
Businesses, governments, intellectuals, civil society groups and individuals have pivotal roles to play in ensuring that sustainable capitalism becomes the new economic norm in our world.
Sustainable capitalism as we can see holds great potentials to bring sustainable development in terms of enduring prosperity, order and equality into our world and by delaying its adoption, we continue to shortchange ourselves and our planet.
- When Capitalists Cared. Hendrick Smith. The New York Times, 2012.
- Sustainable Capitalism. Generation Investment Management LLC, 2015.
- Sustainable Capitalism. Al Gore. Huffington Post, 2012.
- A Manifesto for Sustainable Capitalism. Al Gore and David Blood. Wall Street Journal, 2011.
- Reward Work not Wealth. Diego Alejo Vazquez Pimentel, Inigo Macias Aymar and Max Lawson. Oxfam International, 2018.