The Evolution of Capitalism in the Age of Climate Change

By ERNESTO VELAZQUEZ

Why are we so driven to take a risk in creating an Enterprise? After all, we are alerted to the potential peril through its basic definition as “a project or undertaking that is especially difficult, complicated, or risky.” In addition, the chance of failure in U.S. enterprises offers the same outcome probability as a game of chance with startups facing a 50% possibility within the first five years of business.

Perhaps it is inherent in our DNA to take risks and dive into the unknown or perhaps our need to create overwhelms our need for predictability and security. Each one of us carries along his/her path a universe of ideas, which can be expressed through acts of creativity. Some of us sculp and some of us feel the need to create through entrepreneurship, as a way to feed our desires for living.

In today's business environment, entrepreneurs have a unique opportunity to not only express their creativity but to do so within a growing movement invested in using business as a tool for good, reversing the traditional business philosophy that the sole purpose of business is the creation and maximization of profit. Within this global movement, business is evolving from a tool of plunder to a force for taking “head on” that which afflicts us as a whole, socially and environmentally.

Social entrepreneurship and its newfound home ̶ the Benefit Corporation ̶ is an exciting global movement that represents a diverse cross-segment of our society. We may not be able to agree on our politics, but we can reason that business practice consciously, guided by the principles of inclusion and equity, can only serve to augment the well being of all segments of society.

No longer beholden to the traditional business economic philosophy of shareholder profit maximization, entrepreneurial talent is driving the transition to this new economic model. Resources, including human resources, are no longer seen as mere elements in the service of corporate profitability, with no regard to social or environmental consequences. This model is taking root, not based on the fallacy that resources are infinite, but in the context of the “hidden” economic costs inherent to all business enterprises. The new generations of social entrepreneurs know that ignoring these costs, which played well in the game of maximizing corporate profits, is a shortsighted vision that brought us our global climate crisis, and increased social upheaval. Social entrepreneurship has been fueled by the internet and the social media phenomenon. Individuals, for the first time since the start of the industrial revolution, have a tool to communicate their ideas to other like-minded individuals. In the process, they are accessing capital and creating markets. A legal structure termed “Benefit Corporation,” developed to provide a home to the growing number of value driven businesses and is now a reality in many parts of the globe. The goal of the Benefit Corporation moves beyond the benchmark of success, as defined only by profit, and incorporates into its mission statement and legal responsibilities the social and environmental impact of the business. To separate marketing from substance, a Benefit Corporation-certifying organization was created called the “B Lab.” The B lab is a nonprofit, based in Pennsylvania, that provides the B Corp

certification to organizations worldwide, which meet specific standards for accountability, transparency, and social and environmental performance. The B Lab uses a range of metrics to determine eligibility. Companies are scored on a scale of 0 to 200. Currently, there are 2,788 organizations that are B Lab certified in 64 countries, representing 150 industries, and the movement is growing.

It is an exciting time to be an entrepreneur; with the tools and legal platforms that now exist, an individual can be engaged in enterprise without compromising their values, exploiting others and plundering the finite resources of our little planet. In fact, pursuing business as a Benefit Corporation provides socially conscious individuals a powerful transformative tool, and in the future, we can only hope that all businesses will become B Corps. As the B Corp global community grows, I can only see hope in the creation of a more equitable society, “built on the principles of inclusion and equity,” as the co-founder of B Lab, Jay Coen Gilbert, has so eloquently stated. We have a moral obligation to tackle the generational challenge that threatens our very existence. Now through the evolution of capitalism via the Benefit Corporation global movement community, we can finally leverage the most powerful tool in human society, the business enterprise, as a force for good.