What is Climate Capitalism?
There is a growing movement in the United States and elsewhere that attempts to merge principles of business with principles of philanthropy, social activism, and environmentalism. Actually, it may be somewhat misleading to refer to this as a "movement." More accurately, it's a set of trends that appear to be spontaneously arising in numerous sectors and for numerous purposes. This set of trends is sometimes called "climate capitalism."
Many new businesses are attempting to move beyond the traditional for-profit operating structure by adopting ideas that have historically been relegated to the world of charity. Similarly, some charitable organizations and other entities working for social change are attempting to take a lesson from the world of business in order to make their ventures more successful.
An example of the business world taking a cue from philanthropy and activism can be seen in the form of the L3C, an up-and-coming type of business entity in the United States. Short for low-profit limited liability company, the L3C designation is available to business that want to enact lasting change for the benefit of the community or the planet while still engaging in profit-generating trade. Other examples might not have structures that are so straightforwardly different from the norm, but the trend remains.
Entrepreneurs and innovators are beginning to focus their attention elsewhere than on the bottom line. The idea is that by paying attention to the effect that business operations have, a company can be more responsible and more sustainable, which will translate to profit when consumers choose to support business that they respect.
Example: Alaffia Sustainable Skin Care
Another business example is Alaffia Sustainable Skin Care, a company that originated in Togo with the primary goal of improving living standards for women and others in the country. By hiring Togoese women to produce shea butter from native shea trees, the company creates skin care products according to fair trade standards. Part of Alaffia's profit goes toward funding community projects that raise the quality of life in the regions where Alaffia's products are created. By taking a capitalist approach to social improvement, Alaffia is providing quality products in markets worldwide while simultaneously having a positive impact on Togo.
Example: The Acumen Fund
On the other side of the issue, organizations with non-profit goals are increasingly adopting strategies learned from the world of business management to efficiently accomplish those goals. One recent example is the Acumen Fund, which is a non-profit organization dedicated to ending global poverty. Instead of providing direct charitable donations to humanitarian operations, the Acumen Fund invests in entrepreneurial ventures that make a lasting contribution to the struggle against poverty. The fund's mission statement emphasizes that charity and for-profit trade are both needed to really address the problem, and that one or the other alone isn't enough.
The Future of Climate Capitalism
Since the ideas that merge business with charity are relatively new, it remains to be seen whether they will be successful in the long term and whether they can achieve the level of change they aim for. The beginning of the 21st century has arguably been characterized by a slowly increasing emphasis on environmental sustainability and social justice in global operations, both for-profit and otherwise. To the extent that this is true, it seems likely that investment in climate capitalist ventures like Alaffia will grow at the expense of investment in the traditional model.
As the new format matures, it could not only become more widespread but also more sophisticated, possibly heralding a new era in global trade, social development, and political progress. On the other hand, if climate capitalism can't display the kind of growth potential and economic return that traditional capitalism has, or if the guardians of traditional capitalism succeed in defending the old ways, climate capitalism may turn out to be a passing trend.