Profit Without Purpose Doesn’t Work — Will We Learn Before It’s Too Late?
Do you listen to “The Daily”? It’s a daily news podcast produced by the New York Times, and it’s among the most subscribed-to podcasts in the country. One episode of “The Daily” this week got me particularly excited. I want to share with you why. The episode focuses on Larry Fink’s recent “Letter to CEOs,” which he publishes every year. Fink heads up Blackrock, the largest asset manager in the world, with over $7,400,000,000,000 in assets. (In case you had a tough time tallying the zeroes, that’s over seven trillion.) In other words — when Fink speaks, people don’t just listen. They act.
The focus of Fink’s message this year was climate change, and he didn’t pull any punches. When it comes to the climate, he argues, we’ve reached a tipping point. He predicts that the climate crisis will drive a “fundamental reshaping of finance”: only companies mindful of environmental impact will endure in this new economy. When someone like Fink makes a prediction like that, it’s a fairly safe bet. He has the ability to “put his money where his mouth is” — as a major (and in some cases, majority) investor in numerous leading corporations, he can single handedly move corporate mountains according to his will.
The rest of the podcast outlines ways in which these major corporations have fallen in line with Fink’s message in the first month since its release in January. Delta Airlines — hailing from an industry many see as at the heart of the climate crisis — pledged carbon neutrality by 2030 and is investing $1 billion over 10 years in reducing its emissions towards that end. Jeff Bezos of Amazon has made a $10 billion pledge towards technologies, like wind and solar, that would offset its massive carbon footprint. Microsoft — who is already carbon neutral — has unveiled an ambitious plan to be carbon negative by 2030. And they’re also investing major resources in a “shoot-the-moon” technology that would remove carbon from the atmosphere and change the game entirely. In other words, when it comes to the planet, corporate America is making moves.
Why does this movement get me so excited? Two reasons:
One, it gives me a glimmer of hope when it comes to the climate crisis. The climate crisis is such an urgent problem on such a cosmic scale that it’s easy to slip into a mood of resignation about the future. Some scientists reckon we’re already too late. What’s certain is that we’re way past the point of minor behavioral changes — it’s clear that we need massive, systemic shifts to make a dent in this crisis. The only institutions capable of enacting change on that level are governments and businesses. I won’t hold my breath on government. But business is another story. To see the well-being of the planet come into alignment with the business interests of the largest companies in the world signals progress and hope. And that’s really something.
But for me, it’s more than that: Fink’s message validates a worldview that is at the very core of my life’s work.
Society has romanticized the idea of the dogged, myopic, uncompromising pursuit of profit. It may not look exactly like Leonardo DiCaprio’s character in “The Wolf of Wall Street.” Rather, it is clothed in the respectable veil of “fiduciary responsibility.” “What can we do? We have a responsibility to the shareholder!” Don’t get me wrong—boards of directors do have fiduciary responsibility to increase profits for their companies. That is real, and important. But focus on profit to the exclusion of all else is an approach that has corporations justify the havoc they wreak on nature in the service of their bottom line. And the irony is tragic: there will be no profits to be had if we don’t save the planet. It represents the ultimate form of short-term thinking.
But what I’ve seen in my work is that this short-term thinking goes beyond climate. It pervades every nook and cranny of our work and lives. We don’t just willfully ignore the planet. We willfully ignore the humans that live on that planet. We dehumanize others in our pursuit of profit and productivity.
Sometimes this is taken to the extreme, as in the sweatshops and unhealthy working conditions that are justified in the name of healthier margins. But it’s often more subtle than that. It seeps into our day-to-day. We don’t treat people well. We distrust. We ignore. We put them in a box. We don’t value them — we view them as a means to an end. We do all of this in the name of “efficiency” and “productivity” and yes, “profit.” But the same irony is at play. This may work for a spike of profits in the short-term, but it isn’t sustainable in the long-term. It leads to resentment, burnout, and turnover. It doesn’t get us to our wildly important, game-changing goals.
There is hope. The tide is turning. Shareholder capitalism is giving way to a more purposeful and sustainable capitalism — an enlightened system that recognizes that for profits to continue to rise, all stakeholders must thrive. Not just shareholders. I have seen this time and again in the work that we do at The Granger Network. When we broaden our view to include all stakeholders (people, planet, and future generations), we unlock possibilities we had not even imagined.
We’ve got a long way to go. But we know what needs to be done. “Making the world a better place” can be more than a non-actionable cliché. It’s something we can do, starting today, in how we do business.
Let’s get to work.
At The Granger Network, helping individuals and organizations see profits rise while all stakeholders thrive isn’t just our job — it’s our whole reason for being. If you’re looking to change the game in your industry, we’d love to have a conversation about supporting you in that journey. Reach out at email@example.com.