A growing number of employers are embracing the principles of “conscious capitalism.” They are adopting business models built around the idea that shareholders are best served when all stakeholders – workers, customers, vendors, and communities – are best served. They believe profit and purpose, rather than being mutually exclusive, in fact complement and reinforce one another. They believe what they do can be both transactional and transformational.
These businesses are debunking the myths and shattering the false choices we’ve heard for so many years – that higher wages undermine competitiveness, that environmental stewardship is bad for business and more. Instead, they’re paying workers enough to support a family, providing paid leave benefits and offering profit-sharing opportunities. They are also building a culture that engages and empowers their employees, that values worker voice. And they are doing so because it’s makes the company stronger and more successful in the long-term, instead of focusing on short-term returns.
This conscious capitalism movement is growing in numbers and influence. So, earlier this month, we invited a group of these business leaders to the White House to discuss their philosophy, the opportunities for further growth, as well as the barriers to expanding conscious capitalism.
We talked about how to scale and sustain conscious capitalism. We also discussed the ways conscious capitalism aligns with the ethos of millennials, who don’t want to check their values at the door when they spend their consumer dollars, or when they go shopping for a good investment. And we talked about why conscious capitalism is good for the company’s long-term prospects.
The Obama administration is committed to supporting and encouraging these conscious capitalists. As the president said in his State of the Union address: “This year I plan to lift up the many businesses who’ve figured out that doing right by their workers or their customers or their communities ends up being good for their shareholders. And I want to spread those best practices across America.”
The administration continues to pursue policies to ensure more workers benefit from broadly shared prosperity. The president has extended overtime pay to nearly 5 million workers by updating out-of-date rules; pushed to increase the minimum wage; and worked to increase the availability of paid leave by requiring federal contractors to provide at least 7 days of paid sick leave and proposing competitive grants to help states launch their own paid leave programs.
As we continue to work to lift wages, create shared prosperity, and make sure opportunity is available for everyone willing to work hard, smart policymaking will be important. But we also need partnership and leadership from forward-looking employers who understand that the high road is the smart road.
Editor’s note: This has been cross-posted from the White House blog.
Jeff Zients is director of the National Economic Council and assistant to the president for economic policy.