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The Brown Political Review is a non-partisan political publication that seeks to promote ideological diversity. All of the views reflected in BPR’s content are views held by authors and not reflective of the views held by the wider organization or the Executive Board.

How Do We Save our World? Understanding the Scope and Limitations to Using Business for Change

Doing good is “in” and pure profit is “out”; the world has become increasingly focused on using businesses for good and allowing the market to lead the way in solving complex societal issues. This trend is evident in the astonishing spike of philanthrocapitalism and moral consumerism, the emergence of sustainable and socially responsible investing, and the rise of benefit-corporations and social enterprises. Sustainably invested U.S. funds have reached $11.6 trillion, a sharp increase from 2010 when that amount was close to just $3 trillion. Today, about one in every four dollars of invested assets in the U.S. are designated as “sustainable investments.” Certified B Corporations, which balance profit and social impact, have dramatically expanded since the B Corporation’s inception in 2006 and have received unusually broad bipartisan support from prominent politicians, from Elizabeth Warren to Mike Pence. A recent Deloitte research study confirmed that millennials increasingly want to work for, buy from, and invest in companies that prioritize mission and impact in their business model. To many, this represents a “win-win” scenario, where firms are capable of not only making money and generating lucrative financial returns, but also addressing the world’s most pressing problems, from climate change to economic inequality. Although alluring, this “win-win” mentality can also be deluding, as it tricks consumers into believing they are doing good while obfuscating the potentially negative impacts of their decision to support a historically deleterious financial sector.

An event hosted last semester by the Brown Entrepreneurship Program with Bill Mcglashan of the TPG Rise Fund provided students with a glimpse of what impact investing can accomplish. The Rise Fund, which Bill co-founded with social entrepreneurs Bono and Jeff Skoll, is a global social impact fund that has raised around $2 billion and is “committed to achieving social and environmental impact alongside competitive financial returns.” Bill discussed how the Rise Fund had developed a unique and rigorous process to identify and support companies with socially beneficial products and externalities that are motivated by social impact as well as profit. T college students, this can be an exciting notion, one that holds the key to solving so many of the world’s problems ;. For example, TPG invested in Dodla Dairy, a dairy product company that buys milk from local farmers, connecting them with larger markets and supporting their production capabilities and yields. The story of Dodla Dairy seemed so unequivocally good, even inspiring. 

Thankfully, Brown’s campus has multiple spaces to explore these ideas, with the Brown Socially Responsible Investing Fund–a student-run initiative which manages a small part of Brown’s endowment by investing in accordance with Environmental, Social, and Governance (ESG) standards–being one, and Professor Cary Krosinsky’s Sustainable Investing class being another.. They open a window into  topics and initiatives such as ESG investing, benefit corporations, socially responsible investing, social enterprises, Global Compact investing, divestment strategies, impact investing, conscious capitalism, green bonds, shareholder engagement, and much more. All of these topics exemplify private initiatives to do good in the world (while still making money) and represent how much activity is happening in this space today. 

Scrutiny of these ideas, however, often calls their efficacy into question. Yes, the increased focus on corporate responsibility and the encouragement of businesses to leave a positive footprint on the world is a benevolent force in society; Patagonia, a B corporation, actively supports grassroots environmental advocacy through grants and partnerships and even donated the $10 million it received from Trump’s tax cuts; Root Capital, a social enterprise, has provided $4.5 billion in loans to rural farmers; sustainable finance in China is helping the country attack its horrific environmental problems. But,  despite certain programs’ successes, the general notion that the market can make sufficient change must be questioned and challenged in order to prioritize a deeper, institutional change. 

Anand Giridharadas, an author and former columnist for the New York Times, often writes and speaks about the elite charade of philanthropy. Giridharadas represents a school of thought that critiques efforts such as benefit corporations or philanthrocapitalism, finding them to be a harmful charade to make wealthy people feel good. To Giridharadas, this new breed of community-minded corporations reflects a “faith that more enlightened corporate self-interest—rather than, say, public regulation—is the surest guarantor of the public welfare.” Giridharadas believes that corporate change-makers are trapped in the belief that the market alone can solve the world’s problems and that while “changing the world” or “doing good” seems to be on every business’s lips, corporations are mostly upholding an unacceptable status quo.

Similarly, Nobel Prize-winning economist Joseph Stiglitz argues that this new trend in the business elite to save the world through “social-impact investing, entrepreneurship, sustainable capitalism, philanthrocapitalism, artificial intelligence, market-driven solutions” is disingenuous. “They would fund a million of these buzzwordy programs rather than fundamentally question the rules of the game—or even alter their own behavior to reduce the harm of the existing distorted, inefficient and unfair rules.” 

These two thinkers touch upon sincere problems that must be addressed within the social-corporate world. Even if some impactful businesses succeed at “doing well by doing good,” there remain widespread problems. With little government oversight, “sustainable funds” can claim to be “socially responsible” or “sustainable,” but may fail to apply this lens in a rigorous, responsible, and truthful way. As ESG investing has become mainstream—around 80% of asset managers now consider incorporating a degree of ESG factors into investment decisions—both private funds and government regulators need to abide by more comprehensive transparency. The impact investing area today is crowded, full of ambiguity, lacking standardizations, and failing to provide the requisite transparency.

Cary Krosinsky, an author, lecturer, and co-founder of the Sustainable Finance Institute and the Real Impact Tracker, acknowledges the criticism from Giridharadas and Stiglitz, but disagrees that social capitalism is harmful in and of itself. In a conversation with BPR, he highlighted that critics such as Giridharadas offer many problems, but fail to propose real solutions. Krosinsky highlights that the problems of this world are extremely complex and deeply rooted. While he agrees that sustainable finance is not the complete solution to the world’s problems, he does insist that growing private market solutions offer us hope and signify a step in the right direction in terms of consumers’ and firms’ renewed sense of duty to do good. But, pervasive problems still persist, indicating to Krosinsky that


Solving complex social problems also requires sacrifice. As “moral” consumers and citizens, we must be able to recognize that while some degree of social progress can be made through these social business “win-wins,” it will never be enough to fundamentally disrupt the depth of inequality we see around the world. This deep change would also require political and ownership shifts towards morality that the global elite might not be as prepared to participate in. 

For example, Anand Giridharadas writes: “A Goldman Sachs program to empower the poor: good. Higher taxes on Goldman Sachs executives: ew. A children’s fitness program donated by a fast-food company: great. A government effort to protect children from fast food that harms their health: absolutely not. In other words, if helping others means making a buck or buffing your reputation, it’s fine. But making a sacrifice to help others without getting credit? No way.” Giridharadas’ skepticism and cynicism towards the power of business to do good in an inherently corrupt capitalist system highlights that just relying on corporations to lead the way in solving the world’s problems is insufficient and problematic.

This sinuous journey in understanding the potential breadth and limitations of new movements aiming to use business to spearhead social change represents the complexity inherent in disrupting an engrained status quo. B-corporations and impact investment funds need to improve, but these initiatives are a step in the right direction, and provide real positive externalities. Although the blind enthusiasm for these programs is ill-founded, a belief  that there is good that can come from private investment firms and other corporations is justified. 

However, this private-market approach is certainly not the antidote to the world’s problems. The clash over efficacy of private versus public social change highlights the need for a system of changes, not just one. To solve some of our world’s most urgent problems change must come at a cross-section of sectors: innovative policy, technology, and investment. Our systems approach needs to institute parallel strategies, each with the capacity to be prioritized and monitored. As the world faces a series of increasingly dire societal problems—climate change among the most prominent of these issues—it is all the more important that policy, technology, and business engage in radical forms of collaboration; the 2020s must be a period of dramatic change through innovative systems thinking.

Photo: Someone Needs a Hug

About the Author

Lucia Winton '21 is a Staff Writer for the US Section of the Brown Political Review. Lucia can be reached at