How Multi-Stakeholder Capitalism Can Pay Off For Investors And America

Forbes, 24 November, 2020

Can America take the lead in accelerating the green economy to power new green infrastructure, support local communities, create new jobs and re-skill our work force – not just here at home, but globally? Or at the very least is there a pathway for us to take a more influential seat at the table? I will leave the political punditry about the prospects of a Green New Deal or similar legislation under a Biden administration for others more familiar with that arena. But from where I sit as an asset manager who spends my days advancing solutions that can turn back the tide on ocean plastic pollution, I believe strongly that we’re going to need more than just new legislation to solve our society’s biggest environmental and social challenges.

It’s time for a mindset shift and I welcome the opportunity to have an urgent and realistic conversation about how we might move forward to address these global challenges. Who are the parties that need to be at the table and what might be a framework that can get us there faster?

I am working with a number of colleagues in the sustainable finance sector on such a framework. It’s based on an idea that has started to take hold in the US and around the globe based on moving beyond the traditional shareholder primacy model towards what we call multi-stakeholder capitalism (MSC) — so that we can accomplish all of these goals faster.

The idea is fairly simple. Our starting point is that our current investment model that emphasizes shareholder primacy ignores the complete picture of risk and opportunity; and is woefully inadequate to solve our biggest global challenges. The idea of MSC is to create a more holistic system in which business, government and society work together via capitalist pursuits to address climate change, systemic racism, and inequality in opportunity, education and healthcare. As one of my colleagues involved in the project, Howard Fisher, CEO of Basso Capital likes to say, an economy which benefits all stakeholders - workers, consumers, suppliers, the environment, communities – and rejects the concept of shareholder primacy - will be stronger and more vibrant.

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