Capitalism has changed the world for the better in so many ways by creating jobs, encouraging invention and connecting people all over the world. But sadly, big business has lost its way. Driven by a short-term focus on profits, taking care of the planet and its people often falls to the bottom of the list of priorities.
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With a world population of 7 billion and increasing levels of demand for goods and services, we are on a rapid path to destroy the very natural resources that keep us alive; this will only perpetuate the growing inequity in the world. Since the Industrial Age, businesses have built their wealth off the use of natural resources. And unless businesses start to value and protect these resources, this cycle will have a devastating impact on the lives of our children and grandchildren. Many people are beginning to realize that business as usual is no longer an option. What is an option is to reinvent capitalism to truly be a force for good in the world. We at Virgin Unite, the non-profit arm of the Virgin Group, call this approach Capitalism 24902 because it’s focused on getting business leaders all over the world — all 24,902 miles of it — to look at how we can do what is right for people and the planet.
This reinvention can come in all sorts of shapes and sizes, from transforming existing businesses to creating whole new business models. The Virgin Group itself isn’t perfect, but we’re learning every day from pioneers who we’ve met who have created new businesses to tackle social and environmental issues. Some of these are profit making, such as Participant Media, which makes movies. Participant’s 2006 documentary An Inconvenient Truth radically changed people’s views on the environmental crisis and got many to take action. Technology company Barefoot Power has brought solar electricity to one million people who never had access to it. The Big Issue, a socially conscious U.K. business, provides work for homeless people and the Khan Academy has radically transformed math education for young people all over the world.
Existing businesses are also tackling social problems with great results for their bottom lines. For example, U.K. retailer Marks & Spencer launched Plan A in 2007 and now recycles 94% of the waste generated by their stores, has reduced carbon emissions by over 13% and saved over $110 million in 2010. General Electric launched Ecomagination to create new products and services that help solve energy, efficiency and water challenges. They invested $5 billion in research and development over five years and generated over $70 billion in revenues.
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One of the keys to success for all of these new approaches is ensuring that we build the right environment for these emerging “good” businesses to thrive and expand their reach. Getting capital to flow in innovative ways from financial institutions, foundations, corporations and other investors will be critical. Embracing unlikely marriages between business, government and the social sector will also be important.
Ultimately doing away with business as usual is all about people: people drive the future of this planet, not capitalism.