Gloomy financial news from Europe and the US, protests on Wall Street, in London and around the world, and the near-collapse of the Greek economy have made many people question the way we do business today. They believe that our society has lost its way, encouraging greed and short-term thinking at the expense of investments in our future.
We should not lose sight of the fact that capitalism has improved our world by creating jobs and spurring innovation, lifting many people out of poverty. However, as the global population increases, so does demand for goods and services, which further depletes the planet’s natural resources. At the same time, economic inequality is on the rise.
Business as usual is no longer an option. People all over the world are realizing that we must find a way to harness the power of the free market in ways that directly address concerns for our society and the planet.
The good news is that this is a great opportunity. Business can change the world—it can be a genuine force for good. There are many great examples out there today. Some of these are profit-making, such as Participant Media, a company devoted to making movies that entertain and inspire the world, and Barefoot Power, an enterprise that has reportedly brought electricity to one million people for the first time through solar power. Rather than providing profits for shareholders, some such companies put their earnings back into growing their enterprises: Consider The Big Issue, a magazine publisher that provides work for homeless people, and the Khan Academy, which uses online learning tools to transform math education all over the world.
At Virgin, our efforts arose from our connection with customers and our focus on customer service, as we began to try to combine the creation of profitable companies with support for our community and the environment. The second Virgin enterprise we launched, after we founded the mail order record company, was a student advisory centre that provided information on sexual health issues. (Later, in 1987, we set up Mates Condoms as part of our work to help combat the spread of AIDS.)
Such efforts can be found across the Virgin Group, and seven years ago, we established our own non-profit foundation, Virgin Unite, to help harness that entrepreneurial energy. Unite works with all of our businesses to help them to focus on driving positive change. More recently, Virgin Money founded Virgin Money Giving, an online donations hub that has generated more than £65 million for charities in the UK. In the US, Virgin Mobile has reached out to customers and the public for help with the fight to end youth homelessness. This campaign has already impacted the lives of more than 35,000 young people.
Virgin Unite also brings together partners to launch independent initiatives focused on new approaches to global leadership, such as the Carbon War Room, which works to deliver market-driven solutions to climate change. The Carbon War Room aims to unlock around $650 million of investment into energy efficiency retrofits in Florida and California, which could eventually create more than 17,000 jobs.
We call this new approach to business Capitalism 24902, and we are now focused on getting business leaders around the world (24,902 miles in circumference) to look at how we can all do what’s right for people and the planet. It’s not really a case of choosing social good over profits; it’s about social and environmental good becoming the driving forces of capitalism.
Many new businesses are embedding these core values from the start, but we are also seeing lots of existing businesses overhaul their operations and reap the benefits. Interface Global, the carpet manufacturer, is a good example of how this new approach can work. In an industry where companies typically have a large and toxic environmental impact, Interface Global has transformed the way it sources raw materials, makes carpets and disposes of its waste—and it has created a more profitable business.
Other success stories: Marks and Spencer launched Plan A in 2007, and as a result, the company reports that it now recycles 94% of the waste generated by their stores, has reduced carbon emissions by 13%, and saved more than £70 million in 2010. General Electric launched Ecomagination to create new products and services that help solve energy, efficiency and water challenges. They invested $5 billion in research and development over five years and say they have generated more than $70 billion in revenue. As entrepreneurs and business leaders, we can follow their lead and realize the benefits.
How is your company uniquely positioned to contribute to your community? For ideas, listen to, learn from and empower everyone in your company to do what is right for people and the planet. Because ultimately, Capitalism 24902 is all about people. Give your team the chance to make a difference, and they will tackle the project with enthusiasm and true engagement.
By NYT Syndicate
©2011/The New York Times
Richard Branson is the founder of the Virgin Group and companies such as Virgin Atlantic, Virgin America, Virgin Mobile and Virgin Active. He maintains a blog at www.virgin.com/richard-branson/blog. You can follow him on Twitter at twitter.com/richardbranson
Your comments and queries to this column, which runs every week, are welcome at firstname.lastname@example.org