I recently listened to a New York Times podcast titled What Warren Buffett Understood About Capitalism which, looking ahead to his retirement at the end of this year, described Mr. Buffett, the most successful investor in America, as the conscience of capitalism – someone who sits outside of the current system and its obsession with short-term greed.

Buffett is well-known for amassing his tremendous fortune by creating real value through conscientious business strategy, long-term thinking and trust building. So, it made me wonder: If the model investor made more money than anyone by focusing on long-term value creation, why does social and sustainable business, which is rooted in the same values upon which Buffett built his fortune, have to work so hard to progress? 

Today, with the world so out of balance, long-term value creation demands that capital and assets be put to productive use to generate both social and economic value. And doing so effectively requires approaching business in a way that builds trust and encourages collaboration with the public, investors, government, non-profits and other relevant stakeholders in a way that is different from the way business is typically practiced. Yet, while the case for investing in social and sustainable organizations is clear based on both demonstrated returns and plain as day examples like this one, it still represents only 2% of all assets under management worldwide (Global Impact Investing Network, 2022). Why?

The podcast points to something else about Buffett’s experience that is important in addressing this question of why. Buffett’s success and store of trust has afforded him a certain amount of legitimacy that has allowed him to speak openly and honestly about things that are broken in the business world. He is a champion of capitalism but also an outspoken critique of its misuse. And while he is a role model for how capitalism works best when employed in good faith, he didn’t actively influence policy or effect systemic change. But Berkshire Hathaway was founded in 1962 and grew into the business it is today during a time when subtle and not so subtle signalling of the dangers of unchecked capitalism might have felt sufficient. Given the realities of current day, however, it is clear we missed the signs.

Today, in the face of devastating climate disasters, crippling inequality, technological upheaval and social unrest, it is imperative that sustainable business picks up the torch as the conscience of capitalism and actively works to address the things that are broken in the business world by embedding itself in a just and transparent system with the necessary checks and balances. This requires change of the inner workings and machinery of business; however, complexity and resistance to change is slowing the transition. The global economy is so far reaching and consequential that the conscience of capitalism can no longer be a single ultra-rich investor and, today, must be a collective of all of us working together to break down the complexity and combat the resistance to re-establish the natural order and society’s right to grant business the privilege to operate in order to rebuild an innovative, inclusive and enlightened system that transforms our world for the better.  

Note: Warren Buffett has committed to donating his sizeable fortune to a charitable trust, which will be managed by his children, when he passes away. While it is not yet clear what the foundation’s focus will be, the idea will be to give the money away intelligently to make the biggest difference.