Classic Capitalism Is So Over: Here's How You Can Profit from That

Whole Foods Market Co-CEO Walter Robb
Getty Images
While profit-seeking motives and greed have not been wiped out, serious changes are under way in American capitalism.

Need proof?

Look no further than your environmentally conscious Prius-driving neighbor, Whole Foods' Whole Planet Foundation, and even crowd-sourcing websites like Kickstarter. Each is an example of people and businesses casting aside selfish greed and acknowledging that caring for the world at large might be a more noble pursuit than money alone.

Tom Serres, founder and CEO of Rally.org, a crowd-funding website devoted to raising money for charitable and political endeavors, says such altruistic outcroppings are creating what he calls a "cause-based economy." And it's growing like wildfire.

Also known as "conscious capitalism" -- after the book of that name by Whole Foods co-founder John Mackey and Bentley University marketing professor Rajendra Sisodia -- this movement champions the idea that, at their best, companies should create value not just for customers, employees, and stakeholders but also for society at large.

Make no mistake: These do-good companies are no weaklings when it comes to traditional, financial measures of success. In fact, they've provided a bright spot in a dismal economy. Companies like Whole Foods (WFM), Google (GOOG), and Chipotle (CMG) have proven that good deeds and good business do indeed mix.

Some Not-So-Obvious Investment Angles

Of course, for investors who want to devote a portion of their portfolio to companies that do good, Whole Foods is the obvious example. As a health-focused grocer with award-winning company benefits and socially conscious business practices -- all with tremendous growth potential -- it is the poster child for conscious capitalism.

A not-so-obvious but just as attractive company is Waste Management (WM). The trash and recycling hauler has made green trash management a priority. It's making investments now to transform trash into a source of renewable energy. As a result, it has been named one of the world's most ethical companies for six straight years.

Another company that's cashing in on doing well in the world is Clean Harbors (CLH). It's the largest hazardous-waste disposal company in North America. But it also is the go-to company for big environmental messes like the BP oil spill. It similarly looks out for the environment in its own operations, preferring lower-emitting transportation options like railroads to freight trucks.

Of course, these aren't the only companies making positive changes today that will have a lasting impact on the world. Even mainstream companies like Walmart (WMT) and McDonald's (MCD) are incorporating business practices that would have seemed completely out-of-character just a few years ago, becoming better stewards of the Earth by focusing on using recyclable packaging, increased use of renewables, and boosting energy efficiency. (Here are a few other big companies making changes you might not expect.)

Some companies are created to help foster a cause-based economy. Others are integrating these ideas slowly into their traditional approach to business. However it comes about, someday we may look back and call this the time when Wall Street and Main Street recognized that capitalism and conscientiousness could successfully coexist.



Motley Fool contributor Adam Wiederman has no position in any stocks mentioned. he Motley Fool recommends Chipotle Mexican Grill, Google, McDonald's, Waste Management, and Whole Foods Market. The Motley Fool owns shares of Chipotle Mexican Grill, Clean Harbors, Google, McDonald's, Waste Management, and Whole Foods Market. Read Adam's free report for two more investing ideas aligned with conscious capitalism.

Increase your money and finance knowledge from home

Managing your Portfolio

Keeping your portfolio and financial life fit!

View Course »

Investing in Emerging Markets

Learn to invest in a globalized world.

View Course »

Add a Comment

*0 / 3000 Character Maximum

32 Comments

Filter by:
h.hughjardon

The statists decided we can still profit. Fancy that. Have they decided how much we're allowed to profit?

June 21 2013 at 5:57 PM Report abuse +3 rate up rate down Reply
legacykwst

Many of these companies are making the changes for 1 of 2 or both reasons: 1. The technology or methods have arrived that make them cheaper to use; 2. Their clientele are demanding the changes. However, for companies like Whole Foods - the vast majority of people cannot afford to shop at Whole Foods. It's still a niche. It all sounds good, and is, indeed, a step, but a baby step.... and unfortunately, it was too late 30 years ago...

June 21 2013 at 12:20 PM Report abuse rate up rate down Reply
1 reply to legacykwst's comment
theycallmeroy3

Its hard to promote health without tagging along happy. Whole Foods gets that. Its a food choice. A pack of name brand cookies at Walmart, might be the same price as a bag of pistachios nuts at WF. Look at the medicaid study. You can lead a horse to water, but you can't make them drink.

June 21 2013 at 12:54 PM Report abuse rate up rate down Reply
bobeball

Hi Adam

Great Article!

This is the shift in the paradigm that leads to economic, environmental and social sustainability.

There is hope.

June 21 2013 at 12:16 PM Report abuse -1 rate up rate down Reply
jaguar6cy

Capitalism as an economic system is ending fast. Add up the voters who collect welfare, work for government or hold government contracts and that majority of voters will always vote for more and bigger government. Votes and elections are bought that way. You don't have to be very bright to see where that will end.

June 21 2013 at 12:01 PM Report abuse -1 rate up rate down Reply
h.hughjardon

The author finds a handful of corporations to use as an example and says that 'classic capitalism is over'?

June 21 2013 at 11:46 AM Report abuse +2 rate up rate down Reply
David

Greed is a term of envy used by some, simply to incite, or by others that lack ambition or knowledge to advance themselves in life.

June 21 2013 at 11:26 AM Report abuse rate up rate down Reply
Tom

filucy
There is nothing communist about voting with your available dollars. It has created a lot of new opportunities for small businesses. It is the free market at work people are beginning to choose where they spend their hard earned dollars with an eye toward supporting businesses they want to be successful.

It has a side benefit of marginalizing those who act like parasites in this country.

Thus,it is capitalism at work isn't it?

June 21 2013 at 11:07 AM Report abuse -1 rate up rate down Reply
h.hughjardon

I've never been into a whole foods. Are they expensive?

June 21 2013 at 11:05 AM Report abuse -1 rate up rate down Reply
packard54

I believe that American companies are starting to toe the line when it comes to being greedy. The one bad thing is that so many outsiders are now investing large sums of money in our companies and want results, and I MEAN results. We have to be careful of who we are villifying because instead of the MONSTER AMERICAN Capitalist, you may have to look a lot closer to see WHO the real monster is. Follow the MONEY to the truth.

June 21 2013 at 10:45 AM Report abuse -1 rate up rate down Reply
walligor

You forgot to mention Costco....a company where employees are well-rewarded, customers are taken care of, and stockholders are pleased.
The average worker earns $45,000.00 annually and has good benefits. Turnover is very low; return policies are unbelievably broad.

June 21 2013 at 9:57 AM Report abuse +1 rate up rate down Reply
1 reply to walligor's comment
malayangtao

The stockholders of that company are far from happy. They have been pressuring the CEO of that company for years to lower wages and benefits for employees to increase the company profits

June 21 2013 at 11:02 AM Report abuse rate up rate down Reply