Business Ethics, Environment, & The B-Corporation

by Karin C. Holstein, PhD


Ethics, environment, and the economy are interdependent. Their interaction affects social, economic, and political developments, and the lack of paying attention to this development is at the root of current global economic failures and upheavals.

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Although the problem is global, the solution will arise through the collective actions of individuals. Each of us — by reexamining old values and systems — can bring about a collective change to our health, economy, and security.

Although ethics cannot be taught or dictated solely by rules, we need a new economic system based on ethical principles with regulations that take into account the effect on the environment and humankind.

Ethics normally is experienced from within and becomes an integral part of us, but sometimes a shift of consciousness is provoked through a crisis. We are in this crisis now and must use the momentum to create change.

Our Earth and its environment are suffering in an unprecedented way from the destruction caused by humans. This crisis is caused not just by pollution, but also by larger issues regarding our whole life system and values. We no longer can afford to follow in the old footsteps of doing “business as usual” and at “any cost,” but instead must take action for change before we destroy ourselves.

In short, the time has come for a new kind of economy — one that works together with the environment in the twenty-first century and embraces social goals as well as ecological ones. This new economy must embrace ethical values to correct the “short cut” choices we have made in the past out of ignorance and greed.

Ethical principles are becoming the foundation of the modern concept of business and they go far beyond the aim of profit. They include issues such as sustainability, corporate social responsibility (CSR), ethical leadership, and management. Studies have shown that companies with a clearly defined commitment to ethical values do better financially.

Our economy has to be transformed and aligned with the needs of the planet. This needed change is demonstrating itself already in a new kind of corporation, the Benefit Corporation, or “B-Corp.” The B-Corp is a new way of doing business based on ethical principles that harness the power of private enterprise to create public benefit.

The goal of the B-Lab, a nonprofit organization that certifies the Benefit Corporations, is to help companies develop a new business model that simultaneously creates social value and redefines success in business.

It is an alternative to traditional corporations, which are focused only on maximizing profits for shareholders. The B-Corp is a new kind of corporation that uses the power of business to solve environmental and social problems. It is a legal corporate structure with higher standards of accountability and transparency. This new way of doing business is the first systemic response to address the underlying problems of our financial crisis.

All business should be conducted in an ethical manner, and business leaders should be held accountable for their business activities. The world becomes a better place when we act responsibly and elevate one another to higher standards of ethics and corporate performance. The end result: a healthier and more stable economy.

Social development means that we, as global citizens, have come to understand that interdependence is the driving force of our time and that shared interests must override our individual ones.

With globalization, all of the environmental and humanitarian problems in countries far away have become our problems also. We have created them and must face the reality that we need to not simply fix them temporarily but rather solve them at their root. We have created them through doing business “at all cost” and without considering the consequences of our actions and thus have harmed others. We need a new economic system –one that is more sustainable than our old, failing one.

The answer must lie in long-term courageous planning to make the right social, economic, and political choices based on a shared framework of ethical values.

We have a common interest to cooperate for the survival of mankind. As Albert Einstein noted, “The world has enough for everyone’s need, but not enough for everyone’s greed.”


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