According to Northeastern University School of Business, which offers an MBA in Sustainability, conscious capitalism emphasizes profits with purpose, and takes into consideration the interests of all key stakeholders, recognizing that some stakeholders like the environment cannot speak for themselves but are necessary considerations for sustainable business. Conscious capitalism is rooted in four main tenets: Higher Purpose, Stakeholder Orientation, Conscious Leadership and Conscious Culture.
Amplifying the point, Gretchen Fox writing in Forbes suggests the current paradigm of capitalism – business and industry controlled by owners for profit – is unsustainable, and has manifested in our current state of affairs:
- 42 people hold the same wealth as 3.7 billion of the world’s poorest (Oxfam International)
- 192 million people are unemployed or underemployed (International Labour Organization)
- An estimated 1.6 billion people are homeless worldwide (Habitat for Humanity)
- 815 million people in the world (one out of 10) are malnourished (United Nations Food and Agriculture Organization)
- 1.3 billion tons of food produced (30% globally) gets lost or wasted (United Nations Food and Agriculture Organization)
- One in nine people lack access to clean water and one in three people lack access to a toilet (Water.org)
A rapidly growing impact investing movement, as exemplified by Jenna Anita Nicholas of One Planet VC, aligns with this direction as well. Impact investing is estimated to be $715 billion globally. Last year Eva Yazhari launched Conscious Investor, a weekly online magazine born out The Good Yor Money Can Do. Eva is the Co-founder of Beyond Capital, an impact investment fund that invests in seed-stage, for-profit social enterprises serving impoverished communities throughout India and East Africa.
In April, the U.S. Impact Investing Alliance, B Lab and a coalition of 50 impact-oriented organizations called for the creation of a White House Initiative on Inclusive Economic Growth to reform capital markets.
Here are a few examples of companies practicing conscious capitalism:
Whole Foods Market – The CEO-to-worker pay ratio at Whole Foods is capped at 20-to-1, which means that executives earn a maximum salary of about $600,000 annually. According to Bloomberg media, that ratio averages over 200-to-1 for companies on the Standard & Poors 500 Index.
The Container Store – consistently ranked a Fortune Best 100 Company to Work For, The Container Store’s employees are highly valued and respected with events such as “National We Love Our Employees Day,” and retail sales staff earning close to $50,000 annually. The company is also deeply involved with local communities through a high volume of events and fundraisers.
Panera Bread – At the end of each business day, Panera Bread donates all leftover bread and baked goods to food banks and similar local charities. Panera also operates community cafes, which let customers pay only what they can afford or wish to pay. The community cafes operate as nonprofits, separate from their traditional restaurants.
Southwest Airlines – Following the triple bottom line approach, through its Evolve Program, Southwest replaced leather seat covers and interior materials with environmentally friendly products. As a result, the weight of each aircraft was reduced by more than 600 pounds. In addition, the leather from seat covers was donated to social enterprises to create soccer balls and used to spread HIV/AIDS awareness through sports.
Patagonia – a Benefit Corporation, the company donates millions of dollars to grassroots nonprofits, hosts annual training for activists, builds global supply chains around better-quality raw ingredients, and provides on-site childcare at its key corporate offices.