What if a company’s ability to profit was tied to its ability to create well-being? (CAP2 Webinar now available)

Capitalism drives companies to increase profits: No issues there, but let’s tweak the rules to ensure more well-being

New-Rules-Of-The-Game

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Last week TSSS and CSRwire launched a New Webinar Series, “Capitalism 2.0: A Deeper Dive”, designed to explore the future of Capitalism. Judging by the huge turnout, it would appear that people are hungry for a conversation about meaningful change towards a sustainable economy.

The webinar was a deeper exploration of ideas introduced at a live TSSS event that took place in Toronto on March 4, 2014: The Future of Capitalism: New Metrics, New Models, New Outcomes” (click here for the event summary).  Both the live event and the webinar showcased Mark Anielski, author of The Economics of Happiness and a leading expert on the emerging metric of well-being.

The goal of the webinar was to better understand:

* How GDP misses the mark on measuring success
* Why companies should embed well-being into their corporate strategy
* What metrics we could use to measure well-being
* What roles business, government, and society can play to move towards greater well-being

Discussion1How to join the discussion.

  1. Read the event summary of our March 4th live event
  2. Download our White Paper, A Journey in Search of Capitalism 2.0 and learn about the 9 design principles of a sustainable economy
  3. Reflect on the ideas in this article and share your comments below

How can we engage the spirit of capitalism so that a company’s ability to generate profits is directly tied to its ability to create well-being? 

Some ideas to consider:

1) Eliminate government subsidies to companies that cause social and environmental harms such as:

  • contributing to climate change
  • advancing ecosystem degradation
  • adding to environmental toxicity
  • paying employees poverty wages
  • contributing to wealth concentration rather than inclusive prosperity
  • disrupting or eliminating the social fabric of communities

2) Ensure that companies that cause harm experience disincentives such as higher taxation, borrowing and insurance costs

3) Increase the costs or deny permits outright to companies that cause harm while those that create well-being would be fast tracked

4) Re-commit to existing environmental regulations with a dramatic increases in both external inspectors and fines for offenders

5) Establish clear metrics that allow consumers to understand how companies are performing on well-being so that people can drive change through their purchasing and investment decisions

money running from risk

Unleash Capitalism to work towards the goals of well-being

Companies that cause harm would find that their profits are limited and that their business is yielding a lower return, if any.  The incentives embedded within the capitalist system would encourage new companies to emerge and seize opportunities that developed when companies lost their ability to cheaply or freely externalize harm. Investment dollars would naturally be re-directed towards less risky and more profitable investments, ensuring greater bottom line success for companies with a proven track record of creating well-being.

It’s not complicated…we just have a system that has embedded obstacles towards real change.  We can overcome those obstacles but business can’t do it alone – we all have a role to play.

  • JeffMowatt

    As a business which set out to apply profit to social objectives we were on the ground in Crimea during 2002/3 investing our profit to make the case for this approach to be deployed in the prevention of conflict.

    “The mere fact that the Crimean Tatar community has been through so much
    abuse and tragedy and still manages to maintain a focused, democratic,
    respectful and civilized demeanor speaks volumes. They were stripped of
    their homes and property, deported, lost half their population in less
    than a year, were harassed, tortured, and finally were grudgingly
    allowed to return to Crimea, and to nothing for most of them. They are
    now stuck in a governmental system which they did not create, over which
    they have very little influence. They receive, and will likely continue
    to receive, small token payments and gestures from the government in
    the hope of continuing to pacify them. The UNDP program appears to
    fulfill the same function: to pacify the Crimean community, keep them in
    check, without any clear game plan as to how, exactly, the program will
    actually improve the lives of most Crimeans. No doubt that any and all
    assistance, regardless of its real purpose and even in pitifully small
    amounts, is somewhat encouraging. Very little is better than nothing at
    all, though not by much. Such encouragement is essential, but it should
    and must also be honest: no programs currently underway have any
    possibility of making a significant difference in the lives of most
    Crimean Tatars, nor for most of the population of Crimea. The resources
    in these programs do not come close to matching the needs of half a
    million people of the Crimean Tatar community – much less the entire
    population of Crimea — and I have no doubt that most of Crimean Tatar
    community does not understand this. On the other hand, those who are
    homeless, 120,000 or more, understand their reality very well. Again, it
    is unrealistic to think or hope that the community can and will remain
    patient forever. Cold, hunger, and disease are powerful internal
    motivations for change, regardless of what must be done for change.
    Seeds of unrest are planted and real. And, as we have seen again and
    again, such unrest can and does breed greater catastrophes, up to and
    including war and terrorism.”

    http://www.p-ced.com/1/projects/ukraine/crimea

    Surely one of the easiest ways to propagate capitalism for well being is to support the practitioner and the pioneer. If the desire for conversation trumps action, we may well be doomed.