Inclusive capitalism goes global

The global economy is at a broad inflection point. From COVID-19 and increasing levels of inequality to the climate crisis, the changes automation presents to the workforce, we face deep and diverse challenges, and the public’s expectations of both the government and business are changing in the face of these difficulties.

In recent years, there have been low levels of public trust in both government institutions and capitalism in terms of their capacity to effectively address these circumstances. This is an important point for Asia, a region that will experience the emergence of the fourth largest middle class the world has ever seen. This class will have its own expectations about business’ social responsibilities. When making decisions within their organizations, business leaders in Asia and beyond will have no choice but to consider factors beyond the walls: certainly, the impact their choices will have on their employees and customers but also on society and the planet.

This inflection point will span years, and we’re only at the beginning. It is in this context that the Council for Inclusive Capitalism’s mission and work are so vital.

The council is a nonsectarian global collaboration of leaders in business, investment, and public sector organizations who believe there is a moral and market imperative to extend the benefits of our economic system to all people while protecting the planet. Our membership comprises both private and public sector leaders who recognize the importance of good policy and stable regulation for economies and societies to thrive. We find it’s often the private sector that is a first responder and chief innovator to some of the greatest challenges our society has faced. As such, majority of our members make public commitments to inclusive capitalism that are in line with the World Economic Forum’s pillars for sustainable value creation and specifically mapped to the United Nations Sustainable Development Goals. It is free to be part of the council, and we invite CEOs, leading companies of all sizes, from all regions, and all industries to join us and make their own commitments for fairer, more dynamic economies and societies.

The ideas, ingenuity, openness to try new things, pressure of being responsive to our customers and to our stakeholders, and the speed with which business leaders need to respond to the changes in markets— a ll of these are traits that are critical in the way that we practice capitalism. It ensures we’re addressing the needs of society and doing so profitably as we work through this inflection point.

Ultimately, the council’s goal is to harness the power of the private sector to create a more inclusive, sustainable, and trusted economic system through the actions of our members, such as Ayala Corp., which was among the first businesses to join us when we launched in December 2020. Ayala Corp. made a number of commitments, such as improving access to health care and vaccines and ensuring access to quality and affordable education. Through its energy company ACEN, it has pioneered reforms to contribute to a just energy transition that focuses on workers, communities, and consumers. These are powerful examples of how companies can be critical actors in cultivating the kind of economy toward which the council and its members are working.

However, vast inequality, the climate crisis, and other social and economic issues have contributed to a lack of trust between the private sector and the government. The 2021 Edelman Trust Barometer shines a light on how the broader public sees both the private sector and governing institutions, and we see signs of hope for the good that business can do. In 18 of 27 countries, business is more trusted than the government. This figure is striking. While there is social discontent with capitalism, 66 percent of survey respondents believe CEOs should take the lead in fostering change rather than waiting for the government to act. Sixty-eight percent of respondents believe CEOs should step in when the government does not fix a societal problem, while 65 percent think CEOs should hold themselves accountable to the public and not just to stockholders or their boards. What’s more, 86 percent believe CEOs should publicly speak to the impact of key issues affecting civil society. We’re seeing a remarkable shift—indeed, an inflection point — in public attitudes toward what business can and must do. This moment is one of both challenge and opportunity: It is an invitation to private sector leaders to lead on behalf of all people and our shared planet and to try new things to do so.

At this time of declining trust in institutions and threats to democratic governance, the leadership, ideas, and solutions of business matter. They matter a great deal.

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Meredith Sumpter is the CEO of the Council for Inclusive Capitalism. This column is based on her remarks in MBC’s Global Freedom and Democracy series in November 2021.

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Business Matters is a project of the Makati Business Club (makatibusinessclub@mbc.com.ph).