The Essence of Inclusive Capitalism with Lynn Forester de Rothschild
What is it? Why does it matter? And could it really be the answer to the problems we face on our planet today?
Ms. Rothschild is the founder of the Coalition for Inclusive Capitalism, which seeks to address growing wealth inequality
As part of our upcoming film,
The Purpose of Capitalism: Lessons from Japan, we spoke to Ms. Rothschild about what inclusive capitalism is, why it matters, and whether it could really be the answer to the problems we face on our planet today.
This interview was condensed and edited for clarity.
TBT: What is inclusive capitalism?
Lynn Rothschild: Given what capitalism has done to workers, society, and the planet in the last 30 or 40 years, inclusive capitalism might sound like an oxymoron.
But inclusive capitalism is an aspiration; an aspiration to reform the capital markets so that our economic system becomes inclusive, sustainable, dynamic, and trusted. It’s about creating what I call the virtuous cycle, where companies that are doing the best with respect to their people, society, and planet are rewarded.
“It’s about creating what I call the virtuous cycle, where companies that are doing the best with respect to their people, society, and planet are rewarded.”
As Colin Meyer—the academic lead for the Future of the Corporation puts it—
the purpose of business is to profitably solve the problems of people and the planet. We, as investors, need to stand behind the companies that are doing that work. This is the essence of inclusive capitalism.
TBT: When did you first start thinking about inclusive capitalism?
Lynn Rothschild: It was around 2007 and 2008, when the underpinnings of the financial system started collapsing. On a day that I will never forget, the market froze altogether.
There was a lot of despair and anger at the time—the feeling of not being included, that the system was rigged against the ordinary person—only good for those who have capital. The government stepped in, but their programs left many feeling desperate. People were losing their homes because they had been given a mortgage beyond their means, putting debt on people who never should have had it.
Around this time, I was asked to co-chair a task force with Dominic Barton [then Chairman of McKinsey in Asia], to look at capitalism under siege. We produced a report, ‘The Journey Toward Inclusive Capitalism’, and after holding several conferences, we set up the
Coalition for Inclusive Capitalism.TBT: What is the coalition? What does it do?
Lynn Rothschild: The coalition is a group of asset owners, asset managers, alongside leaders in philanthropy, academia, policy, and business that is dedicated to making capitalism work for everyone.
One initiative was the
Embankment Project for Inclusive Capitalism. We had the CEOs of $32 trillion of assets put together metrics that companies could use on a standardised basis to tell investors, employees, and customers what they were doing to create more inclusive and sustainable capitalism.
