What is Stakeholder Capitalism and is it so Relevant Today?


Stakeholder capitalism accounts for serving the interests of all stakeholders, instead of just corporate shareholders and this philosophy is becoming more central to the long-term health of our economies.

The recent economic and health shocks starting since 2020, have had a meaningful impact in the way we conduct business. Environmental Social and Governance (ESG) practices have become the norm as also witnessed by the large investment going into sustainability. In 2022 $2.5 trillion dollars were invested in sustainability, and in 2023 one out of three dollars of Asset Under Management (AUM) is going to be invested in the broadly defined ESG products and services.

As we see more policies and regulations catching up with inequalities and market failures, you should expect more stringent rules governing how we do business. For instance, we will observe a resurgence of stakeholder capitalism and investing.

What is stakeholders’ capitalism? The stakeholder’s capitalism trend started in the 1960s in Central Europe, when corporate leaders made efforts to ensure that business success created benefits for all its employees and the communities it affected. This was particularly effective in Germany, where there was a concerted effort to bring all stakeholders together. Through this approach, corporate leaders did not only try maximizing profit and shareholders returns but focused also on creating positive externalities for the society at large. This model lost steam in the 80’s and 90’s but has made a progressive comeback since early 2000 pushed by more climate and youth activism.

Behind this comeback, there are several recent crises and shocks, including the 2007 financial meltdown, the progressive climate deterioration, and the most recent Covid 19 Pandemic. These crises accelerated, (thank you to global activism) the debate about the labor, climate and economic challenges affecting us all, providing the opportunity for government, corporation, civil society, and communities to work together towards the solutions of these challenges and towards a more equitable future. The best outcome of these efforts would be for all actors in society to reach an agreement that bypasses the short-term self-interest approach that has led us into these crises.

Andrea Zanon Confidente

Personal Growth, risk management , women empowerment & CEO of Confidente.io Chairman of Empowercities.org, and Founder of Confidente.io