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By Kenneth Kwok, Founder and CEO, Global Citizen Capital
“Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.” ~ Milton Friedman.2020 has been a monumentally significant year in more ways than one. Our planet is a decade away from the deadline for the Sustainable Development Goals (“SDGs”), yet when they were set in 2015, few would have anticipated a global pandemic affecting almost every country in the world. The predictions are dire, from the projected number of people who will leave behind loved ones from the virus to the impact on food security, well-being and capital markets, to the effect on the social fabric of many communities. I would like to stress that capitalism isn’t moral or immoral when it comes to how it can be best deployed during these challenging times. It is amoral, and the job of capital allocators is to channel it in productive, impactful ways. We collectively need to put out faith behind accountable investing, while advocating for a broader scope of impact. Among the crisis and chaos, there is also a real opportunity to rebuild better following the pandemic, in a way that leaves vulnerable people and communities significantly better off than they were before. Indeed, while not all companies, including startups, are impactful, the impact is imbued in the ethos of many financial communities. It’s the reason that entrepreneurs and investors spout mission statements about changing the world, and it is the reason that workers leave stable jobs for risky ones. Decent jobs must be the top priority as gainful participation becomes a prevailing theme for rebounding from the pandemic. We must embrace other forms of impact: job creation; venture returns generated for endowments and pension funds; wealth creation for employees, which enable a variety of philanthropic organizations. Stakeholder capitalism is taking the place of shareholder capitalism. Meaningful participation has always been a part of our planet’s DNA, and we can take concrete steps to build back better and stronger together. 1. Building Purpose withProfit There is and will be increasing demand from employees, customers, investors, and other stakeholders for ecosystems to more actively articulate and demonstrate their wider societal purpose beyond profits. This means recognizing that firms with purpose also do better financially. Such work should include tackling social inequality, protecting human rights, supporting climate change and acknowledging their carbon footprint, and being better at, and more transparent about, measuring impact.
We collectively need to put out faith behind accountable investing, while advocating for a broader scope of impact