February 16, 2012 by David K. Sutton
Sustainable Capitalism: Can Long-Term Vision Oust Short-Term Gain?
I’ve written in the past about the core flaw in capitalism, infinite growth. This flaw makes capitalism fundamentally incompatible on a planet of finite resources so long as infinite growth is fueled by consumption of non-renewable natural resources. I recognize that capitalism – and science by the way – is largely responsible for the modern conveniences that we take for granted. I also recognize the path we are on is unsustainable long-term. I’ve suggested in the past that we need to transform capitalism into something sustainable but I don’t have a blueprint for how to make that happen.
Former Vice President Al Gore has a blueprint and he is looking to take on this challenge. He wants to end the short-term thinking that has become the norm with modern capitalism. He wants to end the quarterly profit reports which reinforce this short-term thinking.
From Yahoo/Reuters – Al Gore takes aim at “unsustainable” capitalism:
Together with David Blood, senior partner of ‘green’ fund firm Generation Investment Management, the environmental activist has crafted a blueprint for “sustainable capitalism” he wants the financial industry to adopt to support lasting economic growth.
“While we believe that capitalism is fundamentally superior to any other system for organizing economic activity, it is also clear that some of the ways in which it is now practiced do not incorporate sufficient regard for its impact on people, society and the planet,” Gore said.
Generation Investment Management proposes loyalty-driven securities that would give investors a long-term incentive to hold on to shares of a company they believe in. Another proposal is to link executive compensation to multi-year company performance and not fiscal year performance. They would also like to see financial reporting linked to environmental and social issues so their relationship is more clearly understood, allowing for better decisions for business, society and the environment.