Things are starting to heat up around the RESI office as preparations are underway for this year’s Economic Outlook Conference (EOC), which will take place at Towson University on November 17. This year’s EOC theme is “Conscious Capitalism: The Economics of Doing Good.” I thought that the blog would be a perfect platform to touch on the topic prior to the event.
What Is Conscious Capitalism?
You may be already wondering, “What exactly is Conscious Capitalism?” The tagline on the Conscious Capitalism website states that “Conscious Capitalism exists to elevate humanity.” Well then, that certainly is a tall order. I think the credo helps to clarify the point a little further:
“Conscious Capitalism is a way of thinking about capitalism and business that better reflects where we are in the human journey, the state of our world today, and the innate potential of business to make a positive impact on the world.”
It goes on further: “Conscious businesses have trusting, authentic, innovative and caring cultures that make working there a source of both personal growth and professional fulfillment.”
I don’t know about you, but it’s rare for business news to focus on personal growth and fulfillment. In a world where the majority of headlines about companies are related to lawsuits, share prices, and profit margins, this certainly is a different way to more holistically value and measure how companies are doing.
Conscious Capitalism Facts
If I understand it correctly, companies that subscribe to Conscious Capital tenets are usually driven by more than just profit margins—they truly commit to the greater good. But, given the fact that profit is not their only driving factor, just how successful can these companies be? Well, according to an article in the Harvard Business Review, these companies are profitable. A business professor by the name of Raj Sisodia recently co-authored a book about these types of companies. The book looks at 28 companies that were identified as being the most conscious. Of those 28, the 18 companies that were publicly traded outperformed (by using the S&P index) by a factor of 10.5 between 1996 and 2011. Other data seem to support this idea. A Global Survey on Corporate Social Responsibility reported that 43 percent of respondents agreed that they spend more on products and services from companies that implemented programs to give back to society. I know that, as a consumer, having the ability to shop with companies that have a greater goal in mind is something that I take into account when purchasing products. In fact, I tend to gravitate toward companies that treat their employees well and have good social and environmental missions.
There are several examples of successful companies “doing good.” I think TOMS is a particularly interesting company to highlight. Just by visiting the TOMS site, you are instantly fully aware of its mission.
This site is not just one where you go and purchase shoes. You can find information about how TOMS gives back and how to get more involved in a variety of ways. As an economist, I think this is another way to examine how we are using our scarce resources and maximizing their potential. In this way, we aren’t just measuring firm inputs and outputs (my student’s favorite lecture in Microeconomics) but measuring a bigger, wider, but sometimes less tangible impact.
I think the topic of conscious capitalism is something that we are just beginning to understand and implement on a larger scale, and I’m glad RESI will spend a whole day spreading the message at the 2015 Economic Outlook Conference. We are looking forward to seeing you there!
About the 2015 Economic Outlook Conference
The 20th Annual Economic Outlook Conference will take place on November 17 at Towson University. To register, please visit our website. Educators and entrepreneurs leading the conversation on Conscious Capitalism in Maryland and at the national level will speak about the benefits of embracing this theory. Speakers include David Utts, Executive Director, Conscious Capitalism Chapter of Central Maryland; R. Edward Freeman, Darden School of Business, UVA; and John Montgomery, author of Great From the Start. View the complete agenda online.