Corporate shareholders should demand purer growth
Money is a tool that can do incredible things, and its power should be used to make a world worth living in.
When we buy shares of a company, we usually do it for one simple reason: to come out with more money than we put in. Buy low, sell high, and reap the benefits of earning money we didn’t have to break our backs or strain our eyes for. But not all growth is created equal.
As they say, there’s no such thing as a free lunch, and companies’ growth may come at a real price to the environmental and social systems they touch, even if those costs aren’t reflected on the balance sheet (though they should be). Polluted rivers, pollution-induced asthma, and the costs of reconstruction when climate disasters hit aren’t going to be listed among most companies’ liabilities, but these are some of the things our investments buy. Is this really how we want our money to be working for us?
What we call pure growth is a model for business that revitalizes environmental and social systems instead of plundering them. We know that corruption and greed may never disappear, but shifting the priorities of businesses, their shareholders and their customers can at least move us closer to growth that actually makes the world better. After all, money is a tool that can do incredible things, and its power should be used to make a world worth living in.
According to an EY report, some companies’ shareholders have already started moving in this direction, some even going to far as to tie CEO pay to sustainability goals. Here are three key tenets that pure growth companies should live by, and shareholders can take the lead in demanding measurable social and environmental benefits:
- Power without polluting. Renewable energy is growing fast — faster than even experts could have anticipated. Clean, efficient energy solutions in every part of the world are no longer a sci-fi fantasy, but a real business opportunity which translates to cost savings and cleaner communities. We believe every business, regardless of their place in the energy ecosystem, can and needs to be a part of the change: starting with something as simple as demanding clean electricity from energy providers, all the way to investing in independent renewable energy production.
- Make money, not stuff. For companies that make physical products, making more money = selling more stuff = extracting more natural resources. But it doesn’t have to be this way. Companies can generate new revenues from starting to sell services — bonus points if those services help make their products last longer and serve customers better. Whatever services you offer, just make sure that they are easy to use and address real customer pain points.
- Have an actual impact on society. Pay your taxes. Measure your impact. Don’t slap a philanthropic bandaid over the problems you cause. Take steps to stop causing them. And don’t cherry-pick the problems you want to address. You have a responsibility to your entire ecosystem.
Moving to purer growth will require visionary foresight for companies and their shareholders, along with a willingness to question the status quo. If companies care as much about long-term growth — in a world that will look very different than the one of today — as they do about short term growth, Pure Growth is the way to do it.