AHC Group, Inc.
156 Stone Church Road, Ballston Spa, NY 12020 , U.S.A.
The Future of Capitalism: A new world view of success
Corporations are in a position to transform the world into one of unlimited possibilities through the adoption of social response business policies and practices, according to international management consultant Bruce Piasecki, PhD.
In his latest book, NEW WORLD COMPANIES: The Future Of Capitalism – Learning From The Best Companies In Our Growing Global Economy, Piasecki outlines a new form of capitalism, which he terms “social response capitalism,” by which firms compete not only on price and quality, but also on environmental, social, and governance (ESG) issues. This is all the more timely in light of the new Paris Climate Accord which raises the issue of how corporations can remain competitive in a carbon and capital restrained world.
Social response capitalism is based on a commitment by companies to broaden their exclusive focus on the bottom line to include quality, social response, and price. Piasecki, who is president and founder of AHC Group, Inc., has helped international companies such as Toyota, Suncor, Siemens, and FedEx transform themselves into new world companies – companies that have embraced social response capitalism.
NEW WORLD COMPANIES explores how capitalism has changed in response to corporate needs for water, land, energy, and innovation. New world companies are much more likely to prosper and grow than firms that ignore them. “Although still in an early stage of development, this new world manner of doing business is on its way to becoming a permanent force for good,” says Piasecki, who advises companies on corporate governance, energy, environmental strategy, product innovation, and sustainability strategy.
New world companies share three important characteristics:
- They incorporate socially responsible values into their business models.
- They bring customers, employees, and key stakeholders at every level into the decision-making process, effectively democratizing the way they conduct thei
- They are committed to long-term growth and sustainability.
Businesses must focus on ESG metrics if they are to succeed in the global business community. Since 1981, more than 60 percent of Fortune 500 companies have either gone out of business or have been significantly downgraded in size, influence, and / or governance structures. The reason these corporations failed is because they did not adapt to the global corporate culture that was becoming more aligned with ESG principles and practices. “The fact that the majority of these once vibrant Fortune 500 companies have lost so much ground clearly demonstrates that the critical elements of social response capitalism impact the people who work for and patronize these companies,” Piasecki says.
With the emergence of MSCI and Bloomberg as leading ratings agencies in the ESG sector, investors can now answer the question: “Is investing in companies based on ESG metrics less risky than investments based on speculative capitalism?” The answer is yes.
Assessing a company’s value on the basis of ESG metrics provides a better measure of its worth and prospects for success than focusing exclusively on its short-term balance sheet. ESG metrics are not simply the keys to sustainability with regard to environmental, social, and governance measures, but to financial sustainability as well. They provide a critical lens through which to calibrate the value and success of investments by:
- Analyzing ESG risks across asset classes and integrating the results into the evaluation of portfolios.
- Understanding the physical risks to infrastructure, real estate, and supply chains based on forecast environmental impacts.
- Preparing for new regulatory frameworks that may impact traditional industries and energize new emerging industries.
“The popularity of ESG metrics – the growing awareness of what they stand for and what they mean to investors, customers, and clients – has widened what was once a narrow avenue into what is fast becoming a superhighway,” says Piasecki.
NEW WORLD COMPANIES provides executives, investors, analysts, and consumers with the knowledge needed to identify companies that can, and will, deliver sustainable value.