Keeping stakeholderism practical

MODERN EXECUTIVES are often told they should worry about a lot more than their balance-sheets. They should be aware of their company’s environmental impact, of how well they treat their employees and suppliers, and whether their workforce is sufficiently diverse in terms of gender and ethnicity.

Sometimes, this pressure comes from customers unhappy with the company’s stance on an issue. Sometimes employees demand that their firms take action, as when Google dropped a contract with the Pentagon after workers complained. But many businesspeople don’t need a push: they are strong believers in what are known as ESG (environmental, social and governance) issues.

During the lockdown your columnist has worked his way through four weighty tomes by managers who argue that companies have a broader purpose than simply making a profit. The books were “Trailblazer” by Marc Benioff, “Green Swans” by John Elkington, “Restoring the Soul of Business” by Rishad Tobaccowala and “Share” by Chris Yates and Linda Jingfang Cai.

The danger is that managers use their books to opine on every social issue of the moment. Mr Elkington is a social entrepreneur who has co-founded groups such as SustainAbility, an environmental consultancy. The idea behind “Green Swans” is to focus on changes in the economy that will lead to environmental...