How Billionaire Greed Ruined a Perfectly Good Strategy Called Corporate Sustainability. (Part 1)
Where has corporate Sustainability and its cousins; CSR, Impact Investing, Profit with Purpose, and Social Innovation actually taken us? Some may argue that it’s delivering a cultural shift in how we conduct business and some might argue that it’s a slow process and that we just need more time. But the harsh truth is that despite all of the positive inputs that are being added to the capitalist recipe, the end product is becoming more brutal and difficult to swallow.
Environmentally, it’s getting worse; every major ecosystem on the planet is in decline. In 2018 CO2 emissions hit their highest level in recent history, plastic pollution continues to get worse and is now in our food chain, biodiversity loss is accelerating, and at no time (under our watch) has the rate of species loss been greater.
Social impacts are equally worrisome. We’re experiencing the worst inequality in 100 years – take note of this shocking statistic, in 2017, 82% of all wealth created went to the top 1%. Capitalism is becoming more callous with almost 80% of Americans living paycheck to paycheck and most Americans haven’t received a raise (adjusted for inflation) since 1979.
In contrast, the elites are getting richer than ever and they’ve rigged the system to keep it that way. It is this harsh and skewed economic model that is at the core of the problem. Who gets what and how much do they get? Some would describe it as a struggle to retain power and control while others would describe it as simply unfair. Either way, it’s crippled the ability of corporate sustainability to transform the systemic flaws from within a billionaire inspired wealth hoarding system.
Once Upon a Time
There was once a time when our democratically elected leaders looked out for us, the 99%, and not just the corporate elite, wall street, fossil fuel companies and billionaires. A time when those without a strong voice such as children, the environment, the poor, the indigenous and the powerless were protected. A time when unions were strong so that wages made sense and a full time job ensured that you would escape poverty. A time when business actually paid taxes that could help communities rather than act as a vacuum to suck both the labour and resources away from communities. A time when government would keep companies in check to protect vital ecosystems and to prioritize the opportunity for all citizens, rich or poor, to maximize their chance at well-being. A time when the fruits of our collective society were shared more fairly and not hoarded by the elite.
Lately it appears as if big business is driving the boat when it comes to what politicians think about environmental and increasingly social issues. Billionaires have decried that they, not government, have the solutions. They are best equipped to solve the environmental and social problems that their lobbying for low regulation, wage suppression and low taxation, helped to create. Oh the irony.
Plutocrats To the Rescue
Plutocratic problem solvers come with a very specific approach – no government interference. They prefer market based solutions using what they call, social innovation and entrepreneurship that can deliver win-win solutions. They’ve made it clear that the only acceptable forms of social change are the kinds that also kick something back upstairs to them. They use language like “doing well by doing good” which is a dog whistle for the idea that, the only conditions under which they are willing to do good, are conditions under in which they also do well.
When asked why the traditional agent of improving environmental and social issues, the government, should be rejected as a solution provider, they proclaim that, government is wasteful and inefficient and that we, the corporate elite and billionaires, are the best at solving big problems. Quite a boast from a group that has worked tirelessly for decades defunding the very system that has the objectivity and built in scale to make the majority of people’s lives better.
“…the only acceptable forms of social change are the kinds that also kick something back upstairs to them.”
This almost religious “market message” is relentlessly perpetuated by a corporate owned media and “elite owned” politicians that share this narrative. It’s a dangerous form of propaganda that shuts down meaningful conversation about new ideas…as “socialism”. A prime example would be AOC promoting the benefits of the Green New Deal (GND) only to encounter a chorus of detractors labeling her a “socialist” with little or no time being devoted to the actual ideas.
On the rare occasions when GND ideas are discussed, it’s always framed through the capitalist lens of wasteful public spending. The merits of the GND rarely see daylight and conveniently, the status quo remains firmly in place. Billionaires are free to continue to hoard wealth and power, avoid taxes and sprinkle a few philanthropic crumbs on those who would greatly benefit from a system that is based on less greed and more sharing.
This approach has created a shift from a democratically elected government, looking out for all citizens, to the unelected billionaire class choosing whatever pet project that has captured their interest. We then shower them with praise and thank them for being generous philanthropists – another ridiculous narrative. With all of this being said, the big question remains – how is corporate sustainability working for us and was it ever really likely to succeed?
Corporate Sustainability – How’s it Working For Us?
Asking corporations that are by their very nature, interested in profit maximization, to voluntarily look at business from a sustainability do-less-harm perspective is highly problematic. Yes, in some cases there is a business case but in most cases, some environmental and social harm is simply good for the bottom line. To expect business to do the “right thing” which works against their core interests, when doing the “wrong thing” which was never illegal and was more profitable, was a recipe for failure right out of the gate.
Despite what companies say, business executives have little interest in long term risks that are 20-30 years away and difficult to predict. Compensation drives behaviour and with the advent of stock options in the 90’s as the standard tool of executive pay, next quarter thinking became their focus.
The bottom line is that in most cases, giant global corporations will always prioritize profit maximization at the expense of externalities such as environmental and social harm without being compelled to do so. After all, it’s government’s problem to fix those issues – despite the fact that they’ve been vilified and defunded by corporate owned politicians for the last 40 years.
“The win-win business approach or doing well by doing good, does nothing to address the structural problems at the root of the system.”
This is precisely why we need government regulations or, as was popularized by a corporate friendly media in the last decade or two, a new business approach that creates win-win solutions using initiatives like corporate sustainability. But there is one major flaw in this approach.
The win-win business approach or doing well by doing good, does nothing to address the structural problems at the root of the system. In fact, it worsens the problems by dictating that solutions can only be acceptable if they find a way to kick something upstairs to the wealth hoarding, environmental degrading and socially exploiting billionaire class.
Through the Lens of Sharing
Corporate Sustainability is floundering and with good reason. Apparently, billionaires have forgotten the valuable lesson that we all learned in kindergarten – Sharing is a valuable skill that can not only benefit you personally but it’s also good for the wider society.
For those of you who regularly shower praise on corporate sustainability and CSR, let’s take a step back and briefly look at some of the issues that never seem to go anywhere. But this time let’s look at them from a perspective of wealth sharing. Let’s use these four issues as a sample:
- Wage stagnation
- Sweatshop and Child Labour
- Universal Health Care, Day Care and Parental Leave
- Climate Change and Plastic Pollution
Ask yourself:
A) Is sharing occurring with regard to these issues on a scale that distributes a meaningful amount of wealth from the elite class to those with little or no voice?
Or…
B) Are the elites further concentrating wealth while they simultaneously share a few crumbs to sporadically address the problems that were created by their regulatory interference in the first place?
Change is Coming
We live in a plutocratic and crony capitalist society. Our politicians act like puppets for the real leaders; Billionaires, Corporate Elites, Fossil Fuel Companies and Wall Street. Billionaires are the new kings and they have shown no real interest in giving up power or changing the status quo.
But change is coming, people have begun to make it very clear that they will fight back using whatever tiny slice of remaining power they have. Whether it be hiring a slick politician with a suspect resume who fights against the “establishment” or by rallying around a 16 year old girl from Stockholm who is saying what we we’ve been thinking for so long.
We need to wake up and see what’s happening around us. We need to accept that one way or another, either voluntarily or by force, those elite, money and power hoarders will need to relinquish some of their control. To put it in language that a 6 year old can understand – they need to do a better job of sharing.
No More Crumbs
Corporate Sustainability, CSR and the rest of these initiatives are nothing more than a proxy fight for corporate power run amok. For those of you who are doing good work, I applaud your efforts and urge you to continue but please consider that your work, while beneficial to many, remains a small fix after the fact from within a broken system. These efforts rarely challenge the systemic flaws that lay at the foundation of how our business and society operate. This is the real issue, and to fight it we must all be united.
“…change will be forced upon them – most likely at the intersection of climate breakdown and inequality inspired fury.”
The path forward is clear – we need better approaches to sharing our collective wealth. Not crumbs after the fact but rather, dramatic changes from within the very system that causes the problems in the first place. If Billionaires are unwilling to accept this and don’t act in a meaningful way, then change will be forced upon them – most likely at the intersection of climate breakdown and inequality inspired fury. As Nick Hanauer , the host of the podcast, Pitchfork Economics, said in his 2014 article, “the pitchforks are coming…for us plutocrats.”
In my next article I will discuss three options for the path forward. Below is the tip of the iceberg of option 1.
Option 1 – Voluntarily Release Some of their Power
I must admit that I’m not particularly confident that this will be how the future unfolds but nevertheless, this option could very well be the simplest and would likely cause the least amount of disruption. Yes, it would reduce the wealth of the 1% or better yet the .01% but that’s the point – billionaire wealth hoarders need to feel some pain as the system rebalances.
Quick fact – The Walmart family is worth 150 billion – perhaps pain isn’t the right word. I have trouble imagining how one’s life would be impacted with only 125 billion.
Pay Your Taxes
In order for the elites to start sharing more, they need to immediately start paying their fair share of taxes, which raises another question, why do billionaires even exist. Author Umair Haque suggests that there’s nothing intrinsic about them, they’re simply a policy choice, or failure. He states in his article, “Why Billionaires Need Society More Than Society Needs Billionaires”, that, “Nobody is inherently a billionaire. We decide as a society to reward some activities and punish others and treat others with indifference — hence, billionaires.” And when it comes to assessing whether billionaires benefit society, Hague argues:
"…the rise of billionaires didn’t result in prosperity, wealth, riches, fortune. The average American is broke. He lives paycheck to paycheck. He’s crushed by debt he can never repay. He lives a life of psychoeconomic trauma…which is beyond his power to control . It’s a terrible plight. Billionaires didn’t make any of that go away — in fact, they seemed to make it happen."
And at the same time we need to unravel the narrative that those who have succeeded in the marketplace (or their spouse or parents) are worthy of being elevated to god-like status and that they have some special quality to help solve the problems that they created in the first place – when a well financed democracy would do a much better job.
Stay tuned for the rest of option 1, as well as 2 and 3 – coming soon.
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Brad Zarnett is a sustainability strategist, thought leader and speaker. He is also the Founder of the Toronto Sustainability Speaker Series (TSSS). You can follow Brad on twitter at @bradzarnett, LinkedIn or join his email list to stay connected.
