What Is Conscious Capitalism?

Conscious capitalism can be described as 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.”

In conscious capitalism, we believe that businesses should operate ethically while they pursue profits, and by doing so, consider the interests of all main stakeholders, employees, customers, suppliers, and the community. This philosophy acknowledges that some stakeholders, namely the environment, cannot speak for themselves but are still necessary to consider when making business decisions.

Rather than implementing standalone programs or funding charitable events, conscious capitalism promotes an ongoing, integrated approach to social responsibility, self-awareness, and purposeful decision-making.

The idea of conscious capitalism was developed by John Mackey, co-founder of Whole Foods Market, and Raj Sisodia, Professor Global Business at Babson College, who together wrote a book on the concept and founded the nonprofit Conscious Capitalism, Inc. The organization defines awareness and purposeful decision-making. There are four guiding principles behind the concept:

• Higher Purpose: A business that adheres to the principles of conscious capitalism focuses on a purpose beyond pure profits. In doing so, it inspires and engages its key stakeholders.
• Stakeholder Orientation: Businesses have multiple stakeholders, including customers, employees, suppliers, investors, among others. Some companies focus on returns to their shareholders to the exclusion of everything else. In contrast, a conscious business focuses on the whole business ecosystem to create and optimize value for all of its stakeholders.
• Conscious Leadership: Conscious leaders emphasize a "we" rather than a "me" mentality to drive the business. By doing so, they work to cultivate a culture of conscious capitalism in the firm.
• Conscious Culture: Corporate culture is the sum of the values and principles that constitute the social and moral fabric of a business. A conscious culture is one where the policies of conscious capitalism permeate the enterprise, fostering a spirit of trust and cooperation among all stakeholders.

Benefits of Conscious Capitalism

Although conscious capitalism focuses on doing the greater good for its stakeholders and not just for shareholder profit, firms that adopt this philosophy reap significant rewards. Many consumers and investors consider the impact businesses have on the environment and its inhabitants. These stakeholders seek companies that align moral principles with corporate values.
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As consumers become more environmentally and socially conscious, they're more likely to support companies that demonstrate similar values. Companies that reject conscious capitalism may negatively impact their profits and revenues. According to Nielsen's report entitled “Global Survey on Corporate Social Responsibility”, 43% of consumers said they would prefer to spend more on products and services that support worthwhile causes.

Conscious capitalism examples

Conscious capitalism has become an increasingly popular concept in the business world. A growing number of renown brands demonstrate following conscious capitalism principles, including Whole Foods Market, Starbucks, Trader Joe's, The Container Store, Google, Amazon.com, Patagonia, UPS, Costco and Tata. Southwest Airlines is another example, with its ‘triple bottom line approach’ that attributes equal value to people, the planet, and profit. All these companies have shown that this way of doing business leads to multifaceted success over time.
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Ratan Tata, the former chairman of the Tata group, and Paul Polman, former CEO of Unilever, are examples of conscious capitalist business leaders.

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