The Corporate Sustainability Movement

The Shareholder Commons grows out of the work our of our founding partners in creating paths for sustainable business.  There is increasing focus on the imperative for more responsible corporate conduct, as evidenced by the recent Business Roundtable Statement on the Purpose of a Corporation, the Davos Manifesto and BlackRock’s letters to CEOs and clients, all calling in one way or another for companies to be more responsive to the interests of stakeholders other than their investors.

The Problem of the Business Case

Despite the important work being done, however, two related barriers to effective change have become apparent. First, when businesses embrace stakeholder values, they express the idea almost exclusively as a strategy that will create financial value for shareholders. Second, both investors and businesses try to address any cognitive dissonance between pursuing profit and pursuing purpose by denying that a conflict ever exists between caring for society and the environment on the one hand and optimizing long-term shareholder value on the other.

This denial is a potent but dangerous fantasy—markets are far from perfect, especially when common resources, like a healthy ecosystem or social cohesion are involved. As a result, the continued reliance and insistence on a “business case” for sustainability precludes private markets from taking the actions needed to rescue our planet and vulnerable communities from the increasing burdens of environmental damage and a disintegrating social fabric. The Shareholder Commons was born of this insight.

A New Model

We formed the Shareholder Commons to catalyze a movement to break free from the business case paradigm. In order to create a business environment where any company can authentically prioritize our planet and the people who live on it, we must find a way to deploy private capital in a manner that prioritizes vital environmental and social system over individual company profits, while preserving the critical pricing function of free markets.

It is an unpopular truth that responsible corporate action is not always consistent with maximizing a company’s financial returns, even over the long run. But the more potent reality is that investors (or beneficiaries) do not possess only a single interest in one company; they have diversified portfolios; they have lived experiences; and they are human beings with moral compasses who care about the well-being of future generations. This diversity of interests among investors creates an ideal organizing principal for broad and positive impact that can overcome the business case paradigm.

We envision a financial system in which investors isolate and elevate critical elements of social and environmental systemic value, ensuring those values are preserved through collective action. Once the requirements are met, businesses can compete for profits on a level and sustainable playing field.  This model elevates systemic value while preserving competitive markets, thus paving the way for an economic paradigm that realizes the promise of capitalism while rejecting dangerous excesses.