Gore and Blood (what a pair of names for a polite discussion of sustainability!) have written “A Manifesto for Sustainable Capitalism.” In it they define sustainable capitalism as “a framework that seeks to maximize long-term economic value by reforming markets to address real needs while integrating environmental, social and governance (ESG) metrics throughout the decision-making process.” This definition seems to presume governmental guidance to the market. Who else would produce a “framework”? Perhaps they are hoping that a framework will ’emerge’ from the complexity of personal choices and corporate interests. If one does, it is unlikely to look like what they wish for. Indeed, it already has in the version of capitalism that we already have.
Governmentality (a faith in the authority of elected officials and their civil service) also shows through in “Mandate integrated reporting”, “End the default practice of issuing quarterly earnings guidance”, Align compensation structures with long-term sustainable performance, and “Incentivize long-term investing with loyalty-driven securities.” These have not yet emerged – indeed what has emerged is current business practice – and likely will not without a push from government to “mandate” what the market cannot provide by iteself. Unsustainability is a market failure that government can correct. Even if we accept the former statement – which is not self-evident – it is doubtful that government can fix it appropriately. Philosopher kings might but Gore and Blood are not of that ilk.
This very conventional approach to sustainability is a reflection of simplistic, reductionist thinking. Do we really know what sustainability is? In my view it is a pathway not a goal, it is a tendency or direction not a specified outcome. As humans change their behaviors, their environment will change both from its own internal processes and our interaction with it. If this is so, humans will have to continually change their behaviors: no silver bullets exist – and likely never will.
What does it mean for humans to change their behaviors? This is about more than corporate governance or profit horizons. It is about how interactions between economy and society change who we are, what we want, and how we behave. Capitalism, as Marx knew, is not only about firms and markets. It is in the end about society and the people within it that society constructs.
Capitalism may become sustainable but in the end it is down to the mass of individuals (some of whom control the decisions of firms) to choose what is both good for them and for the planet. We are a long way from that.