For the past 25 years I have consistently claimed that capitalism, as we understand, define, and practice it, is broken beyond repair - at least if we are expecting it to change its strategic raison-d'etre in order to help tackle the climate emergency. Like a photographer observing a home burning down who responds "I don't carry a hose" when asked why he doesn't extinguish the fire, corporations cannot accept responsibility for what happens in society when their attention is on other matters.
Corporations are the primary agents of capitalism and they don't see it as their job to help put out the fire. Indeed it's possible to cast many of them as the arsonist that set the fire in the first place. This should not be an exercise in blame however. Capitalism is designed to fuel greed, and to rule out anything that would decrease value and profits. In truth the two objectives, shareholder returns and societal wellbeing are not compatible, even though they are not necessarily mutually exclusive. It's complicated, as we say on social media.
The mission of business has long been a subject of debate, shaped by evolving societal expectations and needs along with economic realities. In essence, the sole purpose of business is to create value. Usually, this value is interpreted as generating profit for owners or shareholders. This point of view, defended by economists like Milton Friedman and management gurus like Peter Drucker, argues that the prime purpose of a business is to maximize shareholder wealth, while operating within the boundaries of the law. From this traditional viewpoint, success is measured in financial terms—revenue, market share, and return on investment—with social or environmental concerns considered of secondary importance unless, of course, they happen to align with profit motives.
Inevitably, this narrow focus on profitability has come under increasing scrutiny as businesses face growing pressure to address the broader challenges of our time. In a more modern and holistic view, the mission of a business is assumed to extend beyond profit-making, embracing obligations to all stakeholders including employees, customers, suppliers, communities, and even the environment. This perspective, referred to as stakeholder capitalism, recognizes that businesses cannot operate in isolation. They are all part of a larger environmental and societal ecosystem; indeed their licence to operate is intimately connected to the well-being of the people, communities, and planet they impact. Only recently, and tentatively, has this broader role been incorporated into the form of regulatory compliance. It's worth is still very much unclear.
Nevetheless, from this perspective the mission of business is still to deliver value to customers. There are now additional tacit assumptions that goods and services should materially improve lives, that there's an obligation to invest in its employees by offering fair wages and professional development opportunities, and that companies should support the community they serves by generating jobs, paying taxes, and engaging in socially responsible initiatives. Unfortunately the competitive component embedded in capitalism often means that companies feel driven to engage in practises designed to generate market demand unnecessarily, limit product life through planned obsolescence, and even destroy lives.
Equally important of late is an expectation that businesses contribute to protecting the environment, adopting sustainable practices that minimize harm and help address pressing issues like climate change and resource depletion. Modern businesses are also seen as the engines of innovation in society, driving technological advancements and solutions to global challenges. And indeed some of them do just that.
As the world faces mounting crises—climate breakdown, inequality, corruption, political incompetence, and resource scarcity—businesses are increasingly called upon to balance profit with purpose. This shift reflects a recognition that the relentless pursuit of short-term profits, often at the expense of workers, communities, and ecosystems, is no longer tenable. Instead, businesses are being urged to embrace a mission that prioritizes long-term value creation, not just for shareholders but for society as a whole.
Frameworks like John Elkington's Triple Bottom Line, which measures success based on profit, people, and the planet, which led to the notion of Corporate Social Responsibility (CSR), and then the integration of Environmental, Social, and Governance (ESG) principles, reflect this gradual shift toward a more responsible and sustainable business model.
Today, the most forward-thinking businesses have been pressured to articulate a purpose beyond profit. They often strive to advance the common good, recognizing that healthy businesses depend on healthy communities and ecosystems. They lead the transition to sustainability, acknowledging their critical role in addressing existential challenges like climate change. They aim to decouple economic success from harm to the environment, fostering innovation and equity in the process.
By balancing profit with purpose, businesses have the potential to create value not only for shareholders but for all stakeholders, contributing to a more sustainable, equitable, and resilient future. In this vision, the true mission of business transcends wealth creation; it becomes a genuine force for good, resolving problems, driving progress, and supporting the flourishing of people and the planet alike.
But still there's a dark secret and an underlying paradox for which there seems to be no redress: that economic performance, in terms of GDP and unrelenting growth and competition, invariably assumes precedence over health, education, happiness and wellbeing. Moreover, the fact that we produce far too much in the nations of the Global North, throwing much of it away, when there are millions of people living in scarcity across the Global South, is a sickness that capitalism has not yet been willing to treat.
No economic system is perfect. Like every other system invented by humans, capitalism has as many flaws as it has virtues; perhaps more. It is fundamentally deficient in addressing complex challenges posed by the changing climate. While the crises we face demand rapid transformative action, the mechanisms of capitalism are inherently limited in their ability to respond.
Corporations, the key players within this system, are structurally incapable of prioritizing the long-term survival of humanity and the planet over short-term financial profits. It is beyond their capacity and their mission. The most we can expect is that they don't make matters worse. Instead, the scale and urgency of the problem requires bold, government-led initiatives that transcend the profit-driven motives of private entities. To truly address climate change, we must confront the structural flaws of capitalism and pursue paradigmatic transformation. We can do that either by dismantling capitalism, replacing it with a better alternative, or inventing a parallel, higher-order system, that assumes priority over commercial markets that are re-assigned to provide equitable sufficiency.
If the role of corporations is complicated, energy is in another category altogether. The much-needed energy transition—which involves shifting away from fossil fuels toward renewable sources as fast as possible—requires an unprecedented level of coordination, investment, cooperation and planning.
Once again, however, capitalism is ill-equipped to achieve the necessary speed and scale of change we need. Market-driven systems prioritize incremental growth and competition, which inherently slows decision-making and innovation when compared to centralized, government-led efforts. Massive deficit spending, public investment, and strong regulatory frameworks are essential to overcome the inertia of fossil fuel dependency and accelerate the deployment of sustainable technologies. These are actions that corporations, with their fixation on short-term returns and an aversion to risk, are unwilling and unable to undertake - at least without some kind of safety net to ensure against collapse.
Corporations, as the primary drivers of capitalist economies, are structured to maximize profit above all else. It is their addiction as well as their calling. This core function places them in direct conflict with the urgent need to prioritize the climate. For example, Shell, one of the largest oil companies in the world, recently announced its decision to abandon its targets for reducing oil production in favour of higher profits. This decision exemplifies the broader tendency of corporations to prioritize financial performance over environmental responsibility. Even when companies make climate commitments, these are often superficial, designed to appease public scrutiny while preserving business as usual.
The problem lies not just in the actions of individual companies but in the legal structure of corporations themselves. By design, public corporations exist to generate returns for their shareholders. This fiduciary duty creates a powerful disincentive for companies to voluntarily reduce profits, even if doing so would significantly benefit the environment. A corporation that chooses to prioritize decarbonization over profit risks losing investor confidence, experiencing stock price declines, and ultimately being outcompeted by rivals. So the system perpetuates a cycle in which environmental harm is tolerated or ignored in service of financial gain.
In many ways, given these conditions, many corporations behave like sociopaths. They operate without a conscience, driven solely by the pursuit of profit. Time and again, they make decisions that harm people and the planet, showing no remorse. This is not hyperbole but a reflection of the systemic incentives that govern corporate behaviour. Whether it is polluting rivers, exploiting workers, or lobbying against climate regulations, corporations act in ways that prioritize self-interest over collective well-being. This antisocial behaviour is not accidental but a direct consequence of the capitalist system that rewards such actions.
Even as corporations claim to be tackling climate change, their activities can tell a different story. Greenwashing - the practice of misleading the public about the environmental benefits of a product, service, or policy - is rampant, while greenhushing - the equally malevolent practice of staying silent about legitimate sustainability actions or avoiding publicizing environmental goals altogether - is on the increase. Alarmingly, a significant percentage of executives have admitted to engaging in both practices.
Meanwhile, many industries actively lobby against regulations that would hold them accountable for their environmental impacts. For example, fossil fuel companies have spent billions of dollars lobbying to block legislation that would impose carbon taxes or stricter emissions standards. This resistance to meaningful regulation further underscores why corporations cannot be trusted to engage meaningfully in the fight against global heating.
While it is possible to devise strategies where decent profits can accrue from virtuous investments and innovating business models in ways that go directly to the source of the climate problem, few corportions have either the inclination or the inventiveness to interpret regulatory impositions as anything other than a compliance cost. The lack of imagination in this respect is yet another corporate failing in terms of managing systemic risk.
Consequently it's become increasingly clear that tackling global issues such as the climate crisis requires dismantling capitalism itself. Capitalism’s reliance on endless growth is fundamentally incompatible with the finite resources of our planet. The relentless pursuit of perpetual economic expansion not only drives environmental destruction but also exacerbates inequality, placing the burden of climate change disproportionately on the most vulnerable. To avoid catastrophic heating, we must embrace a model that prioritizes ecological sustainability, as well as human well-being and sufficiency, over unending growth.
The path forward probably requires that we decouple societal well-being from economic growth. This can be achieved through policies and frameworks that prioritize human flourishing without relying on endless and excessive production and consumption. Universal basic services—such as healthcare, education, and housing—can ensure that everyone’s basic needs are met, irrespective of economic growth. Reduced working weeks and job guarantees can redistribute labour more equitably while fostering a better quality of life. A minimum basic income, which has been tested in various countries and found to be viable, can provide financial security, allowing people to live sustainably without being trapped in exploitative systems. Collectively, these measures can help create a society that values sustainability, equity, and resilience over profit-driven consumption.
The climate crisis, like other massive crises in the offing, is not just a challenge of technology or policy but a fundamental day of reckoning with the systems that govern every aspect of our lives. Capitalism, with its relentless pursuit of profit and growth, cannot possibly do what is needed to avert climate catastrophe. Corporations, constrained by their structure and incentives, will never voluntarily prioritize the planet over their bottom line. Legally, their directors could be held accountable for negligence should they choose to do so.
Instead, we must advocate for government-led global initiatives that lead to paradigmatic change. I am convinced that only by dismantling capitalism and embracing a new model of shared well-being can we hope to transition to anying approaching a sustainable future. The stakes could not be higher: the survival of humanity and the planet depends on our ability to act boldly and decisively.