A useful way of thinking about the complex relationship between virtue
and profits is to view business activities as falling into one of four categories (see
Figure 1):
Cell One represents the “zone of opportunity” for Conscious Capitalism,
corporate social responsibility, and sustainable business practices. Many of the
businesses created by the new, so-called “social entrepreneurs” fall into this category.
These entrepreneurs (profiled regularly in BusinessWeek and Fast Company)
have developed business models that make money by doing good—for example,
by creating an inexpensive product for sale in the developing world that simply
and quickly purifies water, or by marketing healthy, environmentally friendly
products domestically. There are, literally, thousands of examples of business
activities that fall into this first category. Indeed, almost all of virtuous activities
typically associated with the policies and practices heralded by Conscious Capitalists
are found in Cell One. Such activities—running the gamut from recyclable
shopping bags to employee stock ownership programs—are desirable economically,
socially, environmentally, and ethically.
In the increasingly important arena environmental performance, in particular,
many firms are now investing in Cell One green production technologies,
developing greener products, becoming more energy efficient, and reducing
their waste—all practices that have a positive effect on the bottom line. Environmentalist
Amory Lovins argues that corporate measures designed to increase
energy efficiency and encourage the use of renewable resources mostly pay for
themselves within a year: “That’s not a free lunch. It’s a lunch you are paid to
eat.”30 Hence, numerous startups, as well as established multinationals such as
General Electric and Wal-Mart, have learned and demonstrated that “green”
can be “green.” These instances of a positive relationship between CSR and profits
are important. We confidently expect creative, socially or environmentally
motivated entrepreneurs, as well as senior and middle corporate managers, to
discover many more business opportunities that fall into this category.