The Case for Multicapitalism

We need to move beyond incrementalist ‘numeration’ indicators and add ‘denomination’ indicators tied to upper (ecological ceilings) and lower (social foundations) thresholds.

Allen White, Global Reporting Initiative Co-Founder, 2019[1]

From a common-sense perspective, the case for Multicapitalism is self-evident: it is a comprehensive and holistic doctrine that mirrors the dynamics of complex self-regulating living systems. In other words, Multicapitalism aligns and integrates with material reality, as it is most accurately understood as of now. This distinguishes Multicapitalism from Monocapitalism, in that the latter is a partial and exclusionary economic doctrine, predicated on the assumption of perpetual growth that is found nowhere in nature — wine vats included.

Once financial and material capital are sufficient to meet basic human needs, creating social capital within community and restoring natural capital in the world are valued above acquiring more financial capital.[2]

The best way to better understand the case for Multicapitalism is to explore its conceptual foundations. In a 2015 journal article, concept originators Mark McElroy and Martin Thomas (a former Unilever finance executive) lay out the ontology of Multicapitalism as comprising:

Figure 9: Global Footprint Network [6] [emphasis added]
Figure 10: Meadows et al., 1972 [7]

sustainability reporting draws significant meaning from the larger context of how performance at the organisational level affects economic, environmental, and social capital formation and depletion at a local, regional, or global level… reporting organisations should consider their individual performance in the … context of the limits and demands placed on economic, environmental, or social resources at a macro-level.[8][emphasis added]

At about that same time, Dana Meadows was also starting to contemplate how to allocate these macro-level limits to micro-level organizations, along with Mark McElroy, Board Chair of the Sustainability Institute that she had established in the mid-1990s. After Dana’s untimely death in 2001, Dr. McElroy continued their line of inquiry, crystallized by the GRI Sustainability Context Principle, and after about a decade of development, he introduced the concept of Context-Based Sustainability as a framework enabling implementation of the Context Principle — specifically, measuring organizational performance in the context of the limits to growth.[9]

Figure 11: McElroy, 2008[11]

“Running publicly traded companies myopically for shareholders doesn’t make damn sense. Why should the citizens of this world keep companies around whose sole purpose is the enrichment of a few people?… why do [companies] destroy the ability to live on this wonderful planet for future generations, why do you treat people in a value chain the way you don’t want to treat yourself or your own children, why do you use scarce resources which we don’t have enough of, why do we refuse to take externalities into account into your business models and not take the responsibilities for the consequences, air pollution alone killing eight million people a year, it’s a crime against humanity…”

Are the prevailing business models built on the domination of shareholder primacy, profit maximization, and limitless growth intrinsically antithetical to the sustainability agenda that most enlightened corporations claim to support? Rigorous, systems-based sustainability measurement is not an option, but a necessity, if companies are to dramatically elevate their contribution to reversing the multiple crises facing the planet. The challenge before us, then, is not simply to refine the metrics we already use, but instead to rethink the scope and assumptions underlying prevailing practices.

To meet this challenge, next-generation measurement points to advancement beyond absolute metrics, so-called “numerators” such as kilograms and liters, wages and workplace injuries, diversity and human rights — to those that capture performance relative to scientific, economic, and social boundaries, benchmarks, and norms. Absent such “denomination,” we will continue to move blindly forward, hoping that the collective impact of thousands of enterprises all “doing better” will avoid violation of the upper and lower boundaries. Overshooting upper limits and undershooting minimum standards and norms is antithetical to building a just and livable world. In other words, continuing to design measurement in what might be called a “context vacuum” is a fool’s errand.

Beyond such contextualization, we must attend to the full range of capitals — natural, social, human, intellectual, finance and built — that collectively constitute the stocks and flows of resources integral to building a thriving world. Preservation and enrichment of all these capitals is the litmus test of an enterprise’s commitment to a truly sustainable strategy. Strategies that undermine or drain one form of capital for enrichment of another — e.g., reducing R&D and worker benefits for purposes of bolstering short-term profits, dividends, and stock buybacks — runs counter to a robust, long term multi-capital strategy.

Context and multi-capitalism are critical to this endeavor, as are generally accepted mechanisms for allocating responsibility for adherence to boundary conditions that define ecological ceilings and social floors.[13]



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