It seems fashionable for some to blame “capitalism” for all the ills facing our planet and society. Of course, the alternative to capitalism is state planning. I have seen the limitations of central planning. In a tour of a department store in the former Soviet Union after the wall fell, I passed a display case and noticed every lip stick tube under the glass was the same red color. Then I noticed almost every woman I saw on the street wore the same lush red lipstick. I was told it was more efficient for the male planners to produce one color a month.
Here in the states, we now have a tug of war going on between an Environmental, Social, and Governance (ESG) investment movement and politicians ranting that investment funds such as state retirement plans should not invest in corporations and investment funds like Blackrock using “Woke ESG” criteria for where to put the money. Funds and corporations are scored on Environmental, Social, and Governance or ESG criteria rather than just the profit earned by the investment. The goal is to keep investments away from planet harming activities like fossil fuel projects that contribute to climate change and organizations that don’t embrace racial and sexual diversity. As a result, with ESG, the days of boards filled with aging white guys are over. (In full disclosure I am an aging bald white guy.)
Led by an army of consultants this ESG strategy has made progress in altering the investment decisions. States like my state of North Carolina passed a bill requiring state investment decisions to be made on the basis of the “highest financial returns” not social and political “wacktivism” according to Destin Hall, the state treasurer. The governor vetoed the legislation and the House and Senate voted to override the veto.
The Right Wing Strikes Back
As ESG has increasingly made a dent in investment selections powerful groups funded by untraceable dark money are waging a war at the local and state level against this “Woke” strategy. This movement is getting state legislatures, pension fund directors and personal investors to not invest any money in corporations that base investments on ESG criteria like climate change and diversity.
A coalition of Republican governors led by Florida’s Governor Ron DeSantis is pushing executive orders and legislation at the state level to fight “Woke Capitalism” utilizing the resources of their state pension funds that use ESG scoring in their investment decisions. They want the only criteria to be return on investment. So far Florida’s Governor DeSantis has organized 20 other governors to join his fight against the “Woke” ESG movement. State treasurers like North Carolina’s are falling in line and proclaiming they are not risking public employee pensioners’ funds in risky “Woke” ESG companies.
Alternatives to Unbridled Capitalism
To counter the anti-Woke movement, I am intrigued by companies that increasingly organize around doing good as well as running a for profit business.
A popular example is 100% of the profits of Newman’s Own products go to good causes. The mission continues after his death with the Newman’s Own Foundation continuing to give away 100% of profits and royalties from the sale of Newman’s Own products to groups fighting for kids who face adversity. Since 1982 the Newman’s Foundation has donated more than $600 million to this mission.
There is also a 1% movement with private companies pledging to give 1% of profits to charity. You can see 1% on their labels.
Making the Planet a Major Stockholder
The outdoor apparel company Patagonia is going one step further. It’s eccentric CEO Yvon Chouinard, a former climber and founder of Patagonia was famous for his environmental commitment and controversial stances. He has now declared that he wants to transform capitalism by making “the earth the company’s sole shareholder”. Consequently, he has donated 98% of the company’s stock to a new non-profit foundation which aims to save the Planet.
His decision to make the planet the chief shareholder of this three billion dollar company will distribute dividends of around 100 million per year to earth saving causes.
Another Alternative Model — Employee Owned
While developing the electric cars, Tesla launched a program to aggressively deploy high-power, fast-charging stations — “Superchargers” — along major travel corridors throughout the United States. Because so many have already been built, this Tesla supercharger has now become the charging standard replacing rival charging standards.
Tesla awarded the Supercharger’s design and construction contract to the employee owned Black & Veatch company. Tesla’s U.S. charger build-out is the largest project to date for the Black & Veatch team.
Black & Veatch is the eighth largest 100% employee-owned company in the U.S and the company believes it can’t be successful unless its success is shared. The company states, “when the company does well, our professionals should do well, too. Employee-ownership at Black & Veatch typically starts in a professional’s first year with the company. Ownership accounts can grow every year depending on financial results, potentially providing a significant source of long-term wealth; plans are provided at no cost to employee-owners around the globe.”
And then there is Hippy Capitalism
For years I have seen the Dr. Bronner’s soap bottles with tiny print of wild philosophical sayings but never paid any attention to them. At one point I got some sample products from Living Well, a local health food store here in New Bern, NC and it contained samples of Dr. Bronner’s toothpaste and soap. When I tried the products, I was impressed enough to read the labels and do more research about the company.
The book HONOR THY LABEL by Dr. Bronner’s VP of Special Operations, Gero Leson explains the history of the company and has some wonderful stories about developing cooperatives around the world to source their ingredients through Fair Trade that empowers communities.
Dr. Bronner’s main theme is “All One”. The founder Emanuel Bronner was an immigrant from a Jewish-German soapmaking family whose plant was confiscated by the Nazis before World War II. He escaped to America and some of his relatives were killed in Auschwitz. In America he founded a soap company dedicated to a “peace plan for uniting Spaceship Earth”. It became an iconic soap of the countercultural 60s and was embraced by leaders of the organic and fair-trade movement.
He committed his company to the principles of what he called “Constructive Capitalism.” This included sharing “the profits with the workers and the Earth from which you made it!” He believed a constructive capitalist company could be a force for good. He embraced the Benefit Corporation and the Certified B Corp. movement which certifies businesses that “meet high standards of verified performance, accountability, and transparency on factors from employee benefits and charitable giving to supply chain practices and the input of materials.”
After the founder died family members have continued to pursue his principles to help spread his message that we are All-One!
He believed his products should contain “only the purest organic and fair-trade ingredients. Where possible ingredients are vegan and certified to the same organic standards as food! No synthetic preservatives, and no foaming agents. Dr. Bronner committed his products to be the best for human, home, and Earth.”
His philosophy now extends to the creation of an extensive line of body care products that use natural ingredients to take the place of synthetic chemicals.
The company insists on independent certification for all its raw materials to ensure their products meet the highest standards for ecological and social sustainability.
To him the company was a family business, and he considered all workers “family members” within the company. Each has an important role to play and deserve to enjoy the best benefits and compensation programs the company can offer. Employees are provided 100% free health care. They have a 5 to 1 cap on executive salaries and a yearly bonus based on profit-sharing.
The company is also committed to building relationships with organic farmers and producers throughout the world to create equitable supply chains. They insist on fair prices for farmers, living wages and excellent working conditions for workers, and to work with companies that invest in their communities, and respect the land through regenerative agriculture.
Instead of being made from lard, tallow, or other animal fats, Dr. Bronner’s soap is made from vegetable oils — traditionally, olive oil. This makes it a vegan soap.
Industrial agriculture is a major contributor to greenhouse gasses, and the company believes regenerative organic agriculture with healthy soil can help reverse climate change. Their plants use solar panels, and they use 100% post-consumer recycled corrugate, water/materials recycling to bring down their wastewater and energy use. The company financially supports causes such as regenerative agriculture, fair trade, animal advocacy, industrial hemp, drug policy reform, and living wages.
Dr. Bronner’s has created or partnered with coops, fair trade groups and organic projects all over the planet: in Ghana they source cocoa and palm oil, Sri Lanka and Samoa for coconut oil, Palestine and Israel for olive oil, India for mint oil, Ecuador for palm kernel oil, Indonesia for coconut sugar, and Brazil for cane sugar. An estimated 10,000 people around the world and in North America benefit directly from its fair-trade projects.
So how has all this activism and idealism worked out?
In 2022 Dr. Bronner’s generated nearly $140 million in revenue and in 2021 gave away over 40% of its profits, totaling $8.6 million, to approximately 300 organizations whose work advances causes including animal advocacy, drug policy reform, regenerative organic agriculture, fair pay, fair trade, criminal justice reform, and community betterment, among others.
In conclusion where we spend our money can make a difference in the fight over social and environmental issues.