Sustainable prosperity.

• Author: Kumar, Supriya
• Position: WORLD WATCHER - Corporate welfare

TRANSNATIONAL CORPORATIONS now are so numerous and, in some cases, so well capitalized that their global influence rivals--and, in many cases, exceeds--that of governments, according to a Worldwatch Institute State of the World report. Around 80,000 transnational corporations (TNCs) operate worldwide, a mere 147 of which control 40% of the total value of all these corporations' value. Any vision of a sustainable future must include full recognition of the role that TNCs play in shaping the planet's human and ecological destiny.

Because corporations operate with a primary purpose of increasing value for their shareholders, they often deprioritize other fundamental concerns. In the worst instances, the pursuit of profit has led to neglect for their employees, lack of accountability in their societies, and indifference in their contribution to negative environmental effects. These failures have come under particular scrutiny since the beginning of the financial crisis in 2008 and the realization that financial corporations deemed "too big to fail" pose a serious threat for the economy.

Here are four areas in need of transformation by the modern corporation:

* Purpose. A company is not required to have a statement of purpose in countries that have common law traditions, including the U.S., United Kingdom, Australia, and Canada. The B Corp (or "benefit" corporation) is a U.S. example where participants are required to have a corporate purpose to create material positive impact on society and the environment.

* Ownership. Ownership systems such as trust ownership, hybrid social enterprises, and cooperative ownership have much more potential to align their goals and values for the benefit of society and to realize that their actions form part of the larger economic system. These alternative ownership structures are flourishing around the world and provide testament to the ability of corporations to operate successfully while contributing to the benefit of society.

* Capital. Historically, capital markets operated without regard to long-term social or environmental impacts or regulations. Recent efforts to embed sustainability within the investment decisionmaking process show that it is possible to generate significant changes in corporate sustainability behavior.

* Governance. If boards can shift from a narrow focus on increasing shareholder value to a more comprehensive view of the corporation and its impacts, progress toward sustainable...