Let’s Talk About Evolving American Capitalism Part 3: Corporate Examples, Praise and Criticism
Following part 2 of the Evolving Capitalism essay series, which identified several frameworks for quantifying societal profit, part 3 is a deeper dive into how companies actually apply these guiding principles to their real world operations. I’ll begin by exploring several themes underscoring how companies are generating profits (either reducing cost or raising revenues) for society’s stakeholders who have historically been disadvantaged compared to shareholders. Then, I’ll draw awareness to some of the biggest criticisms that some of these same companies and others face, which illuminate some of the biggest myopically dollar-profit/shareholder focused operations companies still follow, which must be reconsidered in order to achieve a successful evolution of American Capitalism.
Clarification: the term “profit,” in the sense of “societal profit” refers to the sum outcome from activities which either A) reduce the damage caused to non-shareholder stakeholders by the operations of the company (i.e. externalized cost; a negative value), or increase the tangible benefits to non-shareholder stakeholders (i.e. benefits; a positive value).
Societal Profit Praise
ESG (Environmental, Sustainability and Governance) Reports
Many companies have begun to provide more transparency into how their operations affect their other stakeholders by producing ESG reports, and moreover setting improvement goals against ESG targets, and reporting on company progress to those goals (e.g. current greenhouse gas emissions, and a timeline goal to become carbon neutral).
ESG reports often follow the disclosure recommendations of popular reporting standards, such as the World Economic Forum’s Global Reporting Initiative-informed guidelines, and include data like material recycling rates, regenerative/organic cultivation methods, water usage/conservation rates, carbon emissions/emissions offset/reduced emissions, energy usage as a ratio of profit (called intensity), and corruption/ethics policies/issues.
ESG reports typically also reference initiatives that companies are running, which benefit (or reduce harm to) the company’s societal and environmental stakeholders, such as Uber’s goal to double Black and African American representation in senior leadership or Williams and Sonoma’s efforts to reduce their carbon footprint…