Businesses Improving Customers’ Lives Through Social Impact

Why to Be Wary of Corporate Leaders’ Win-win Solutions

Strategies for business-led “win-win” solutions to social and environmental problems—in which companies can promote social good and profit thereby—have gained wide appeal. Associated terms such as “shared value,” “circular economy,” “base of the pyramid,” and “reverse innovation” now pepper corporate reports and foundation websites. Corporate leaders, such as the members of the Business Roundtable, propose that they can simultaneously advance both profit and purpose. Famous academics contend that capitalism itself can be reinvented. The coauthors of this article have a long association with several of these so-called win-win ideas. Given our backgrounds, one would think that we would find the present popularity of win-win strategies heartening. Instead, we are alarmed. We know that these strategies rely on improbable mechanisms, promise implausible outcomes, and boast effectiveness that outstrips available evidence. We believe that they also inflict harm because they distract the business world and society from making the difficult choices needed to address pressing social and environmental issues. Their shiny appeal distracts us from adopting more effective strategies whose costs require careful weighing. The influence of these ideas is hard to overstate. They have reached the world’s biggest companies, informed White House strategy, shifted lobbying, and shaped international policy. In October 1993, President Bill Clinton unveiled his Climate Change Action Plan, which leaned on voluntary programs to help firms profitably reduce energy use and toxic emissions and design more efficient products. President Barack Obama’s November 2016 Climate Action Plan assumed that 20 percent of proposed CO2 reductions could be accomplished through “cost-effective energy efficiency.” The idea that firms could profit by solving social and environmental problems went, as business and sustainability scholar Andrew Hoffman observed, “from heresy to dogma.” Read the full article about the dangers of win-win solutions by Andrew A. King and Kenneth P. Pucker at Stanford Social Innovation Review.