The Friedman doctrine is a theory advanced by economist Milton Friedman which holds that the social responsibility of a business is to increase its profits. This approach views shareholders as the economic engine of the organization and the only group to which the firm is socially responsible. decide such matters for them. The Friedman doctrine has been very influential in the corporate world.
The World Economic Forum, on the other hand is a staunch supporter of ESG which in its simplest form promotes that a corporation exists for benefit of all stakeholders. Stakeholders is a broad term, but from a corporation’s perspective this would include inter alia the following:
• The environment
The following image represents the 4 pillars of the stakeholder capitalism metrics (image source World Economic Forum.
While most of us take the view that only large corporates need to take heed and apply these standards, we are all responsible for “doing our bit”.
If you would like to learn more about ESG and the changes that you can make to contribute towards achieving the 4 metrics described above contact us for professional advice in this regard.