Conscious Capitalism: Can Commerce Save the World?
Cutting through the clutter.
In 2006 an enterprising American named Blake Mycoskie formed an apparel company called TOMS Shoes. The model was simple: for each pair of shoes sold, TOMS would donate a pair to a child in a developing country. The trendy slip-on shoes sold out immediately, prompting a media blitz that anchored TOMS’ One for One business model in the public psyche. The appeal was obvious. While buying something stylish for themselves, consumers could chase the feelings associated with charitable giving, and a bevy of copycat businesses sprang up to capitalize on the growing trend.
Then came the hangover. A 2016 study led by economist Bruce Wydick found that TOMS’ shoe program did not increase school attendance for children (as the company purported it would) or even shoe ownership in the rural El Salvador communities he studied. The for-profit company pulled in $392 million in revenue in 2019 alone. Was the program ever anything more than a clever marketing ploy? Or did it signal a widespread public motivation to adopt more ethical practices?
While the TOMS model is often viewed as well-intentioned giving gone wrong, the one-for-one ethos is here to stay. Warby Parker distributes a free pair of eyeglasses for each pair sold; Two Degrees Food donates a free meal when consumers buy its vegan snack bars; Thinx proffers menstrual products for every purchase of its period underwear. But is this union of capitalism and philanthropy sustainable? Will it merely distract consumers from economic disparities that cannot be remedied by shoes or eyeglasses? The answer is increasingly imperative as “conscious capitalism” takes hold in boardrooms across the world.
Is this union of capitalism and philanthropy sustainable? Will it merely distract consumers from economic disparities that cannot be remedied by shoes or eyeglasses?
Conscious capitalism is more than just a catchphrase—it’s an economic philosophy coined by Whole Foods co-founder John Mackey and Raj Sisodia, professor of global business at Babson College in Wellesley. They founded a nonprofit and wrote a book (both titled Conscious Capitalism) with the goal of enlightening business types to the simultaneous benevolence and profitability made possible by their philosophy. In their words: “We want to improve the health and well-being of everyone on the planet through higher-quality foods and better nutrition, and we can’t fulfill this mission unless we are highly profitable.”
The accompanying nonprofit—which boasts an annual revenue of over $2.5 million —seeks to re-educate the business world through courses with smarmy titles like “Finding Sustainability Through the Hero’s Journey” and “Practicing Business with Kindness and a Masterpiece Mindset.” The profound irony that Mackey’s benevolent business was snapped up by Amazon only four years after the release of his book seems mostly lost on his acolytes. His courses and speaking events still sell out around the world.
Amazon itself is responsible for a notoriously anemic attempt at charity: AmazonSmile. When Amazon users log into a specific URL, a whopping 0.5 per cent of every eligible purchase is donated to a charity of the user’s choosing. Though the margins are small, that fraction of a per cent adds up.
But Smile has numerous critics. For one thing, it puts the responsibility on consumers. If they forget to use the specific URL (and most do), they are somehow complicit in robbing these charitable coffers. By certain estimates, only a small fraction of sales go through this avenue. The oversight is clearly by design. If Amazon intended to donate 0.5 per cent of its profits, it would have automated the process.
Unsurprisingly, corporate behemoths like Amazon are not exemplars of charitable giving—few expect meaningful change to come from companies of their ilk.
Unsurprisingly, corporate behemoths like Amazon are not exemplars of charitable giving—few expect meaningful change to come from companies of their ilk. But a new genus of business has arisen with an ethical mission baked into its very being. Companies like Ecosia, a German-based search engine that donates 80 per cent of profits to planting trees, are specifically driven by sustainability rather than tacking on a platitudinous policy to an inherently wasteful business model.
Founded in 2009, Ecosia seeks to harness an activity that most people do every day—searching the web—and divert capital into reforestation projects around the globe. The company gets a number of things right. First of all, Ecosia partners with local tree-planting initiatives in countries such as Peru, Burkina Faso, and Indonesia. By working with locals to address their needs, Ecosia sidesteps the “white savior industrial complex” that plagues many NGOs and carbon credit programs. It also focuses on deforested landscapes in need of revegetation rather than planting trees haphazardly ito meet a quota. In the interest of transparency, Ecosia offers monthly financial statements and refuses to sell client data.
By far the most common complaint lobbed at Ecosia is its use of Bing search results. The monopolistic Google claims to offset 100 per cent its electricity with purchases of renewable energy, whereas Bing’s data centres are still not 100 per cent sustainable. However, Bing aims to close this gap by 2023, and in the meantime, Ecosia has planted more than 117 million trees.
Reforestation is a powerful tool against climate change, and Ecosia is merely one in an increasingly crowded field of businesses using the one-for-one framework to plant trees. Sapling Spirits plants a tree for each bottle of its small-batch vodka produced; Will & Bear plants 10 trees for every purchase of its designer hats; WeWOOD is taking on the luxury watch industry while simultaneously restocking forests. Ten Tree, a Canadian company, has a similar model for clothing.
Unless these companies fundamentally change their business practices, they may be complicit in the problems they seek to eradicate.
But unless these companies fundamentally change their business practices, they may be complicit in the problems they seek to eradicate. For instance, it requires more than planting a tree to counterbalance such issues as undercompensated workers or reliance on endangered resources.
In their 2013 study The Ethics of Conscious Capitalism, professors Jeremy P. Fyke (Marquette) and Patrice M. Buzzanell (Purdue) explain, “Given the acceptance of capitalism as the way to go, with CC as an alternate form, Conscious Capitalists fail to grapple with its ideological inconsistencies. Ironically, therefore, despite a leadership development program’s best intentions, these programs could actually further reinforce and promote emphasis on ‘traditional capitalism over conscious capitalism.”
However, these methods seem to at least offer a provisional solution. Capitalism is the dominant political and economic force on Earth, and until that changes, ethical business practices are at least a step in the right direction. Of course, it is still possible to operate outside the confines of capitalism. When possible, concerned citizens may opt for more community-based alternatives such as mutual aid, a burgeoning charitable ethos which seeks to remove non-profit organizations entirely and connect donors directly with those in need. Community Supported Agriculture programs are also an option—they build symbiotic relationships between consumers and local farmers with an immediacy that is second only to growing the produce yourself. Certified B Corporations, like Goodee, a company that promotes and sells the work of small-time producers around the world, are also emergent. The “B Corp” designation signifies a rigorous standard that demands companies minimize harm and elevate small-scale producers. These programs don’t necessarily solve the problems posed by large conglomerates using questionable charities as selling points, and no model is a panacea for all social and environmental ills, but they do show that there can be better options when it comes to consuming.