Traditional corporate charters require fiduciaries to advance stakeholder benefit in terms of financial capital alone. We believe that such concepts are antiquated and out of touch with the realities of our time.
The world was a much different place when the first assembly lines fired up a century ago. Our population was a fraction of its current size, natural resources were plentiful, and the living systems that had sustained them for millennia were diverse and healthy. Our resource draws were insignificant by comparison to the planet’s accumulated reserves and annualized output. Circumstances have since reversed. Our numbers have quintupled, and we are using twice as much as the planet produces every year, seemingly oblivious to our spend and the consequences of our burn.
Humanity has achieved wonders with free-market capitalism. We take great pride in our accomplishments – in the capital we create and profit we make, and yet we have somehow built a culture of excess in a world of less and call it success. Our conception of profit is clearly wrong. By framing, measuring, and advancing stakeholder benefits in terms of financial capital alone, we somehow failed to consider, mitigate, and properly account for the largest costs and most important risks of producing that capital.
We do not stand apart from nature. We are but a tree in a forest, and it has needs and limits. It is a living system that produces and maintains the biological resources that we require for our food, health, and conveniences. It sustains the fertile soil, clean air, fresh water, and biodiversity it relies upon to meet evolved production quotas. It contributes in balance to and with many other interconnected natural systems worldwide to regulate the climate upon which everything depends. Our system of commerce only has value because that balance sustains the forest, and yet our generally accepted accounting principles make no attempt to book the deficit and impossible debt that we’ve been accruing for decades by taking more than the forest produces every year.
Contemporary definitions of profit, wealth, and benefit do not account for the natural and human capital that gives financial capital its value. Economists define utility in increments of human satisfaction and happiness that decrease marginally as consumption increases. However, consumption is limited by the availability of natural resources, and our schoolbooks say nothing of the inevitable escalation of human discontent and suffering as resources become increasingly scarce, or the futility of our financial capital when there’s nothing left to consume. That oversight is embedded in our entire way of life. It is universal amongst our many cultures. Our global economy, financial markets, and consumption behaviors are all built on a false presumption of limitless supply. Markets require liquidity to stay rational, and we are liquidating our most valuable sources of capital at rates that would bankrupt every company on Earth.
The Earth’s key performance indicators are unmistakable, regardless of your politics or beliefs. Temperatures in Siberia soared to more than 100 degrees Fahrenheit during the summer of 2020, as wildfires north of the Arctic Circle blazed through tundra, releasing an astonishing 244 megatonnes of carbon dioxide into the atmosphere. California lost over four million acres to wildfires in 2020, robbing families of lives and homes. Australia burned for months in early 2020, incinerating quarter of the continent’s forests and more than a billion animals in a single season. In February 2020, the temperature on Antarctica reached 69 degrees Fahrenheit – the warmest ever, and hotter than it was at the time in San Diego and Delhi. The next day, the West Antarctic ice sheet lost a 130 square mile chunk of ice. A few days after that, scientists working at the University of New South Wales published research showing that, about 100,000 years ago, the melting of the West Antarctic ice sheet alone produced six feet of sea-level rise – and that it took less than two degrees Celsius of warming to melt it. We are at about 1.1 degrees of warming today, and we are closing in on 2 degrees. Simultaneously, an unthinkable pestilence escalated as the novel coronavirus pandemic started crashing through humanity, putting untold millions of us at risk world-wide. Fire, flood, disease, and death. All in just the first nine months of 2020. As extreme as such seemingly Biblical events are, the frequency of such events has increased dramatically in recent years. An impossible debt is clearly coming due, and as with any troubled debt, we need a workout plan.
The rules of engagement have changed. The idyllic world of a hundred years ago that gave birth to our way of life is long gone. We live in a new age, with a new math. Traditional corporate practices are no longer competitive. Our public benefit charter is a competitive advantage in that it enables us to define, seek, and account for benefits in ways that align the interests of all stakeholders with sustainability objectives that are designed to rise to the realities of our time; where benefit is defined in terms of three different interdependent forms of capital: financial, natural, and human – where we make money by offering adaptive products and services that produce more than they cost, that contribute more than they take, and that help more than they don’t; where everything we use, make, and sell helps us all to adapt to and rise above the greatest challenge our species has ever faced.