It's time to RESET
This week is not business as usual. This week business networks representing more than 70,000 businesses will call for a RESET of our global economic system consistent with the Imperatives for Economic System Change: to design for interdependence; to invest for justice; to account for stakeholders.
In the US, the NASDAQ projected key indicators of economic success – including biodiversity, living wages, anti-racism, and shared prosperity – on Nasdaq Tower in New York’s Times Square. These images were compelling watching.
Representing more than 70,000 businesses, 20 million employees, $6.6 trillion in revenue, and $15 trillion in assets under management, Imperative 21 is a new, business-led network driving economic system change. B Lab is a founding partner of this important new network, and is working in collaboration with other organisations who share our drive to change our economic system, to drive better outcomes for people and planet.
We are fortunate to be working with so many passionate and committed people, backed by the community of Certified B Corporations worldwide. In launching the RESET campaign, Halla Tomasdottir, CEO, The B Team and co-chair, Imperative 21 had this to say over the weekend:
“Fifty years of shareholder primacy has left us facing a climate emergency, collapse in our natural system, unjust and unsustainable levels of inequality and low trust across society. It is critical that leaders everywhere come together in a RESET where we account for our impact on all stakeholders and recognize the interdependence of people, planet and our economy. We must remove obstacles to justice and make sure we build back better with the many populations our current system has left behind. It will take radical collaboration between the private sector, public leaders and citizens to successfully create the economy we need.”
The RESET launch date this week is significant, and is no coincidence. Fifty years ago, on September 13th, 1970, the New York Times published an essay by Milton Friedman articulating a doctrine of shareholder primacy. By prioritising the interests of shareholders above all others, including those who are impacted by the activities of a company, shareholder primacy set the trajectory for our current economic system, which rewards maximising wealth over wellbeing and prioritises individualism over interdependence. Driving a new practice of interdependence is at the core of B Lab’s work. One of B Lab’s three founders, and now executive co-chair of Imperative 21, described this alignment between B Lab and Imperative 21:
The imperative of the 21st century is economic system change. Whether we're fighting for worker wellbeing, climate action, racial justice, gender equity, or long term value creation for shareholders, we need to RESET to stakeholder capitalism.
As the global health pandemic, economic crisis, and racial justice uprisings – as well as the accelerating climate emergency – have revealed, the system is broken: While more than 300 million workers are currently unemployed,[ILO, 2020] 26 individuals own more wealth than half of humanity.[Oxfam, 2019]
In response, Imperative 21 has stewarded a co-creation process in collaboration with more than 250 global allies to develop the Imperatives for Economic System Change, which serve as the design objectives for an economic RESET that:
Recognises the interdependence of healthy people, planet, and economies; reimagines the relationships between the private sector, government, and civil society; and ensures that everyone has access to free and fair markets.
Removes structural inequality; ensures leadership and ownership are more representative and investment more accessible; uses technology to advance democratic ideals and human rights; and promotes greater voice, power and opportunity for those currently marginalised.
Measures success based on credible common metrics of value creation for all stakeholders; creates incentives that reward business and investments creating social and environmental value; and enhances standards of fiduciary duty.
The Imperative 21 network works towards a shared vision of shared wellbeing on a healthy planet, and recognises that this vision requires a shift from shareholder primacy to stakeholder capitalism and that the shift is critical to the achievement of the United Nations Sustainable Development Goals. The RESET will be amplified in events at the United Nations General Assembly later in September.
Find out more here.