Conscious Capitalism: How Millennials are Shaping the New Economic Paradigm
Capitalism has become a dirty word in our culture, synonymous with cronyism and greed, not consciousness. Since the 2008 financial collapse in the US, we have been inundated with stories of poverty, injustice, corrupt banking institutions and companies that have lied, cheated and stolen to meet their bottom line, often scamming their employees and harming the environment while the bigwigs sit back and cash checks.
What is Conscious Capitalism?
In light of the corporate scandals over the past several years, it is refreshing to hear that the new paradigm of conscious capitalism has emerged. This is due in large part to the evolving spending power of Millennials, the generation of 95 million or-so Americans born between 1982 and 2004. Millennials are more health and socially conscious than other generations, meaning that we put a strong emphasis on healthy living and well-being, and our consumer trends reflect this.
Conscious capitalism refers to businesses that serve the interests of all major stakeholders—customers, employees, investors, communities, suppliers, and the environment. According to Whole Foods Founder and Co-CEO John Mackey, who has built his company’s success using a conscious model and recently co-authored the book Conscious Capitalism, this is a model where business is “grounded in a higher sense of purpose to enhance its positive impact on the world.”
The Energetic Impact of Spending
Many Millennials (myself included!) share an understanding that the way we spend our money will shape our world and our children’s worlds. This is a pretty simple energetic strategy for manifestation: Withdraw energy (money in this case, but it can also be thoughts, attention, ideas, and efforts) from products and companies that are not in line with your core values, and direct your energies/money towards products and companies that are in line with your values, like sustainability, compassion, progress, social consciousness, and so on.
Data compiled over the last several years indicates that the world’s economic paradigm is shifting as consumers are starting to favor conscious-minded business.
Consumer Data Shows Trends Towards Conscious Capitalism
A 2102 NPD and Civic Science poll showed that 74% of consumers today say that the “social consciousness” of a company was either ‘very important’ or ‘somewhat important’ in determining where they shop, and what they buy. According to a 2012 Edelman poll, when quality and price are equal, “social purpose” as a purchase trigger grew 26% between 2008 and 2012.
Nielsen’s Global Survey on Corporate Social Responsibility showed that 43% of all consumers are willing to spend more for a product that supports a good cause. This was highest among the Millennial age groups, with 48% of people aged 21-24 and 52% of people aged 25 to 29 willing to spend more money for product that supports a good cause.
According to the 2012 Edelman Good Purpose Survey, 47% of consumers buy at least one brand that supports a good cause every month, an almost a 50% increase between 2010 and 2012! The most frequent purchasers of socially conscious brands were Millennials, Gen-X’ers, people employed at management positions and above, married people, and moms. Nearly three-fourths of respondents (72%) said that they would also recommend a brand that supports a good cause, an increase of almost 40% in only two years. Given the significant rise in socially conscious spending practices between 2010 and 2012, one can only imagine what the data might look like for 2014!
As Millennials continue to make up a larger and larger chunk of the U.S. economy, consumer attitudes about responsibility for social change are also shifting. For example, 2012 was the first time EVER that U.S. consumers believed that “people like me” are the most responsible for addressing social issues, as opposed to government and corporations. In other words, we are truly waking up as a society and realizing we have the power to make sweeping changes with our dollars.
Conscious Companies: Who are They?
Whole Foods Co-CEO John Mackey says the are “thousands” of companies in the US operating from versions of a conscious capitalism model, including Southwest Airlines, REI, Google, Nordstrom, Patagonia, The Container Store, KIND healthy snacks, The Body Shop, Timberland, Stonyfield, Ben & Jerry’s and more, resulting in “win-wins for customers, employees, suppliers, communities and the environment.”
One great example is Panera Cares, owned by Panera Bread, who have shown that compassion and consciousness can become integral parts of a successful business model. At five Panera Cares locations throughout the US, people are asked to pay only what they can afford while others are willing to pay a little more to help out. The company still makes enough to cover all of its direct operating costs, while also covering the cost of food for those who cannot afford it, and creating programs to job train at-risk kids.
Conscious companies have seen unprecedented success in the last decade. Marketing professor Raj Sisodia reports that conscious brands’ investment returns are 1025% over the past ten years, compared to only 122% for the S&P 500 and 316% for companies selected purely on their ability to deliver superior returns to investors. Furthermore, according to the IEG Sponsorship report, ‘cause-based’ marketing programs in 2012 were worth $1.7 billion in North America alone.
According to a 2013 Forbes Magazine article titled Only Conscious Capitalists Will Survive, conscious capitalism will be “one of the defining mechanisms of profit in the future.” Based on the statistics discussed in this article, we can expect conscious capitalism to continue to rise over the next several decades, as Millennials become a larger and larger percentage of the population and continue having children (have we mentioned that Millennials already have over 10 million children?)
Will the rise of conscious companies be paired with the fall of non-conscious companies? Only time will tell. Forbes cites the interesting dichotomy between Target and Walmart, two huge corporations who seemingly do the same thing, but have very different levels of conscious capitalism. While Walmart leads on sales, it posted three straight quarters of declines in 2013 and is often plagued by strikes by unhappy employees. Even though they are paid roughly the same, Target employees have not been striking because they have high employee happiness ratings and a much better overall work environment. In a future when people continue to speak with their dollars, even huge companies like Walmart may benefit from amending their business practices to become more consciously geared towards consumers, employees and the environment.
Overall, the re-imagination of capitalism as a conscious phenomenon is indicative of a shifting paradigm we are seeing across our world, where Millennial consumers are taking responsibility for using their dollars to improve our planet and promote progress and change. After only a few generations of conscious spending and sustainable business practices, the association between capitalism and crony greed could become a distant memory. This rapid evolution speaks to humanity’s urgent need to reach a state of balance across economy, ecology and society.
If you own a business and you would like to make it more conscious, or if you are thinking about starting a conscious business, check out marketing professor Raj Sisodia’s six tips for conscious success.
Whatever you do, remember that your spending habits have the power to direct energy into creating the world you want. Spend wisely, and spend consciously. Blessings and Love! <3