Earth to get a Seat at the Table as “Missing Stakeholder”

This article was originally published on on April 20, 2020.

When Business Roundtable published its now-famous statement of August 19, 2019, on the purpose of the corporation, it was hailed by many as an inflection point in modern business. Here were 184 leading CEOs advocating for corporations to take a broader societal role and responsibility. Instead of just shareholders, these industry leaders said they would shape their companies’ strategies for a full array of “stakeholders,” including customers, employees, suppliers, partners, communities, and civil society.

Now, this terrible pandemic is reminding us that our economy, our society, and our species is part of something bigger, more holistic, and more powerful. In some ways, the convergence of the 50th anniversary of Earth Day with this daunting pandemic crisis puts a spotlight on the ongoing challenges we face in our relationship with the physical world, both natural and human-made.

Today, as the attitude of business leaders grows more holistic, I urge us to go further—toward integrating environmental sustainability and geospatial consciousness into our strategies. Economists refer to this as “integrating the costs of externalities in optimizing business” and today it is abundantly clear that this means the planet itself needs to be seen as a critical stakeholder.

Throughout human history, our relationship with the Earth has largely involved extracting its materials and harvesting its energy. In the process, we dramatically propelled our standard of living, fueled global economic growth, and increased human lifespan. But we also created an economy and society that are not sustainable. They are dangerously vulnerable to global warming, loss of biodiversity, sea-level rise, and cities and regions racing to resist the forces of climate change.

Without a change in mind-set, we cannot prosper in the long term. In addition to working urgently to address the current pandemic, we must work to cut back on carbon emissions; to create more efficient lifestyles; and, over time, to reduce the human impact on nature itself. Critically, we need to consider nature in the way we run our businesses, and view business as a steward of a healthier future.

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