Companies today face an existential choice. Either they wholeheartedly embrace “stakeholder capitalism” and subscribe to the responsibilities that come with it, by actively taking steps to meet social and environmental goals. Or they stick to an outdated “shareholder capitalism” that prioritizes short-term profits over everything else—and wait for employees, clients, and voters to force change on them from the outside.
This assessment may seem harsh coming from someone who has always believed in the pivotal role companies play in the global economy. But there is no alternative. Our ecological footprint has expanded far beyond what the earth can sustain. Our social systems are cracking. Our economies no longer drive inclusive growth.
Today’s younger generations simply do not accept that companies should pursue profits at the expense of broader environmental and social well-being. We know that a free-market economy is essential for producing long-term development and social progress. We