This year, conscious capitalism has been a buzz word. It is a phrase that is occupying boardrooms, business strategies and marketing teams. The shift is largely generational. Millennials and generation Z are leading the way. We only have to look at the impact of Greta Thunberg and school strikes to see how the youth as challenging the consumption patterns, business models, and how we measure economic growth to build a society that nurtures the planet we live in.
A thought leader contributing to this conversation is Economist Kate Raworth. In her book ‘Doughnut Economics’ she asked economists, policy makers and business leaders to redefine how we measure economic growth. In the book, Raworth quickly makes the case for a clear distinction between ‘economic progress’ in the 20th Century, to the 21st Century. She makes the case that for the 20th century, society placed precedent on growth in terms of capital, and how we saw the environment as a form of capital. Whereas in the 21st Century, this must and is starting to change. Raworth illustrates that this concept is no longer viable and sets the parameters for creating a successful economy for the world we live in today.
In a diagram that resembles a donut, she explains that in order to create a successful economy for the world we live in today, we must respect and nurture our environment and create opportunities for communities to thrive. In short, she argues that for society to grow, we must focus our efforts and attention to building a ‘safe and just space for humanity’. By this, she sets the parameters for mankind to nurture society and social cohesion, whilst protecting the planet and the environment we live in.
At the same time, we have arrived at a point whereby consumers are questioning their consumption habits in all walks of life. If we go back to Kate Raworth’s case for reviewing how we define economic growth, we should also review and reconsider how we define consumers. Interestingly, the word consumer was invented in the 20th century in 1955. Yet, as consumers increasingly adopt consumption habits that go beyond themselves, they are seeking to make a positive difference. They are altruistic and seek to promote ethical and environmental progression. Whether that is pursuing a lifestyle that is plastic free, investing in an ethical stock, or buying from an eco-friendly brand, they are combining financial reasoning with social conscience. As such, we are witnessing a world whereby consumers are realigning themselves as citizens.
So what exactly do those parameters look like, and what does this mean for Vorto Trading? In the world of finance, ESG investments have skyrocketed! Portfolios are now being built on ethical, social and green credentials. In terms of property, green real estate and eco-initiatives are growing rapidly. In September, Vorto exchanged a record a number of Cross-Border transactions for Asian investors with even more scheduled for October. Interestingly enough, Brexit doesn’t seem to be stopping our clients from investing in the UK economy.