At the intersection of tourism and capitalism lies global prosperity
Adam Smith, one of the fathers of economic theory, argued that there is something in human nature that interests us in the fortune of others…empathy. Travel and Tourism is an extraordinary basis for empathy: the capacity to recognize feelings being experienced by another. Travel is an absolute imperative for Capitalism. And Capitalism, driving innovation, inspiration, and creativity, is still the best system known today to address the great challenges facing the world.
For investors and corporations interested in capitalism as a force for good, a driver of long-term economic and profit outcomes, we need to focus on key questions related to sustainability….enduring value creation. We need to focus on “Corporate Sustainability” and the unprecedented shifting dynamics of the capital markets.
In understanding the market taxonomy of asset owners, asset managers, investment banks, exchanges, regulators, accountants, academics, standards setters, and all the other pieces of the capital markets, corporations seeking excellence over the long run need to consider the value of all the capital deployed in pursuit of their stated mission. Investors need to be able to consider the returns on the investments made in terms of the financial capital, human capital, and natural capital engaged in a firm’s business.
We need to ask if a company balances the demands of shareholders, employees and customers in a synergistic cycle while recognizing and articulating the trade-offs that inevitably exist. We need to know if a company seeks to drive shareholder value by working towards a more regenerative and inclusive global economy that fosters prosperity and ultimately profitability. We seek a level of transparency that allows us to understand priorities and values. Is a company’s vision consistently articulated and operationalized from the very bottom to the very top of the organization? And at the very top, in the Boardroom, are there true “Stewards of Corporate Legacy” sitting at the table?
The private sector offers tremendous potential to address today’s global imperatives. The empathy and humanity which can be associated with capitalism can be reestablished through an understanding of the dynamics at play in the system. Today, with structural changes including the enhanced analytics associated with big data that can turn noise into predictive insight, with social media accelerating the drive towards transparency, and with the demands of a new generation of investors with $50T to invest consciously over the coming decades, we can restore capitalism to its best and highest purpose: facilitating global prosperity. It will take a great deal more empathy. It will take a good deal more travel.
Written by Erika Karp, one of the speakers at the upcoming WTTC Global Summit 2016 in Dallas, TX.
Erika Karp is the Founder and CEO of Cornerstone Capital Inc. The mission of the firm is to apply the principles of sustainable finance across the capital markets enhancing investment processes through transparency and collaboration. In seeking positive societal impact at scale, Cornerstone offers wealth and investment advising, research and strategic consulting, and investment banking services. Working with investors, corporations and financial institutions, the firm drives the systematic analysis of Environmental, Social and Governance (ESG) factors throughout the global capital markets.
Prior to founding Cornerstone, Karp was Managing Director and Head of Global Sector Research at UBS Investment Bank where she chaired the UBS Global Investment Review Committee and managed a global team of analysts and strategists. Erika is an advisor to the UN Global Compact’s LEAD Board Development Program, a founding Board member of the Sustainability Accounting Standards Board, a member of the World Economic Forum’s Global Agenda Council on Financing and Capital, and an Advisor to the Clinton Global Initiative’s Market-based Approaches track. Karp has been named among the nation’s “Top 50 Women in Wealth” by AdvisorOne, the “GOOD 100” and the “Purpose Economy 100” and one of 50 “Conscious Capitalists” who are Transforming Wall Street.”