By Alison Duffy, Group Head of Marketing & Communications
I’ve been giving conscious capitalism a lot of thought recently, not least because it was the theme of our recent IQ-EQ Crossroads event, which took place at the iconic Gherkin building in London. I must admit however that the link between the theme and 17th century Japan was not one I connected the dots on before the event. Our co-hosts for the event, Nomura, made a really interesting link between the historic Japanese phrase ‘Sanpo Yoshi’ and how it feeds into and remains relevant in the conscious world today. Allow me to share this nugget with you.
The 2019 Edelman Trust Barometer survey found that 56% of people worldwide believed that capitalism does more harm than good. Yet recently, “ethical” brands such as Patagonia, whose founder has shared his fortune to help solve the climate emergency, proves that conscious capitalism can – and does – exist. But where does the idea of ‘conscious capitalism’ come from and what does it look like now?
The modern phrase ‘conscious capitalism’ was coined by Whole Foods’ owner John Mackey, and marketing professor Raj Sisodia. However, the idea has been in existence for hundreds of years.
The phrase ‘Sanpo Yoshi’, from the Omi Shonin merchants in the Edo period of Japan, is seen by many as the beginning of modern corporate social responsibility. The saying translates as ‘three way satisfaction’ where any trade must be considered beneficial for the buyer, the seller, and the greater community. The Omi Shonin merchants were highly successful during this period, dominating trade in every part of the country, and to their credit felt a responsibility to give back to the communities that had helped them succeed, which led them to finance the building of bridges and schools, among other social benefits.
The modern idea of ‘conscious capitalism’ is based on these philosophies: that companies should operate ethically whilst pursuing profits. It resembles corporate social responsibility, but differs from our traditional understanding of the term. By focusing on self-awareness within the company leadership, businesses can understand how their practices may affect other stakeholders. It is guided by four key principles:
- Higher purpose: Having a purpose that goes above the desire for returns
- Stakeholder orientation: Concentrating on the entire business ecosystem to make sure that all stakeholders from customers to suppliers to employees are looked after
- Conscious leadership: Showing a ‘we’ rather than a ‘me’ mentality to drive the business and, similar to the above, recognising that everyone in the business matters, not just those at the top or those making the money
- Conscious culture: The policies of conscious capitalism permeate the enterprise, fostering a spirit of trust and cooperation among all stakeholders
I left the room with the clear thought that given the state of the world as it is today, with high levels of poverty across the globe and an environmental crisis that needs solving, conscious capitalism will I’m certain play a vital role in the years to come.