Conscious capitalism departs from an unbridled free market, which exclusively prioritises profit, and encourages businesses to consider beneficial purpose, integration, and ethical leadership in attaining financial success. It sounds like overpromising, so questions naturally arise: can conscious capitalism serve as a guide for businesses dealing with the difficulties of modern business?
In this article, we are going to discuss how conscious capitalism works and why it is so popular by investigating its principles and benefits.
What is conscious capitalism?
The idea of conscious capitalism was developed and popularised by Whole Foods co-founder and CEO John Mackey and marketing professor Raj Sisodia, both of whom use the name of a non-profit organisation that already has branches across the United States.
Conscious capitalism itself sends a message that in carrying out the mission of the free market as a system, it must be balanced with social cooperation and progress so that people can aspire to achieve more.
That means businesses that practise conscious capitalism have the potential to achieve financial success while also having a positive social impact, since they may be committed to environmental sustainability, ethical sourcing, and community involvement.
Is it worth adopting conscious capitalism as a business strategy?
Although it may be difficult to apply conscious capitalism to cutting-edge business strategies, particularly in industries that are ingrained with profit-driven metrics as their purpose-driven approach, doing so can add critical internal and external benefits: reputation, employees, consumers, investment, and corporate social responsibility (CSR).
Environmental issues, which have always been a concern of conscious capitalism, are attracting a lot of public attention right now. Many companies have begun considering customers’ worries regarding issues such as climate change, pollution, and habitat loss. Aside from that, conscious capitalism is also about adopting fair labour practices and fostering a workplace culture that values engagement between employees, which will lead to higher satisfaction.
By caring about the same thing their potential and current customers do, brand reputation will improve, potentially fostering or reinforcing brand loyalty. Companies will be impacted by these changes. And if it’s one of the biggest companies in a particular industry, the latter itself will be affected. This will create societal expectations for businesses, especially big companies. In the long term, it will have an impact on the expanding investment of enterprises that practise conscious capitalism.
What are the companies that have been adopting conscious capitalism?
DBS Bank has been implementing sustainability goals by financing a $178 million sustainability-linked loan to Link Real Estate Investment Trust (Link REIT), where these loans will be eligible for interest savings, and it maintains its listing on global sustainability indices.
Even in 2019, DBS supplied S$5 billion in sustainable financing transactions, representing a 60% year-on-year increase. By 2024, the bank also intends to finance at least S$10 billion in green loans and S$10 billion in renewable financing.
Singtel has been seriously engaged in digital inclusion and environmental sustainability. To lower its electricity use, Singtel has consistently improved its energy efficiency. They upgraded three chillers at our Novena exchange, saving an average of 516.84 MWh per year.
Conscious capitalism can be an ideal business strategy after learning the benefits of adopting it and assessing its external and internal benefits for the company. It can improve brand reputation and employee satisfaction and reap the benefits of environmental sustainability.
This means that conscious capitalism may contribute both in terms of wealth and impact on society. So if you are a newly established business, you can borrow some money as capital from an online money lender in Singapore and adopt these sustainable and humane practices.