The second big change, far more significant, is that companies today are doing more of what the activists want than they ever have done before, and it’s not because they’re being socially responsible. It’s because they’re listening to the markets. If it seems surprising that as the world has become more virulently capitalist, it has also become more concerned about the environment, child labor, and human rights–well, that’s what makes life interesting. Some would argue that the world’s rising prosperity has helped make room for those issues on the mainstream agenda.

The fact is that today consumers care about those things more than ever. A substantial number now base buying decisions on who made their Nike shoes or where Exxon Mobil got its gasoline or what McDonald’s does with its paper waste. The trend is hardly universal–plenty of people still just want the lowest price–but it’s utterly clear. You’ve seen it yourself, probably in your own family.

At least as important as consumers’ caring, employees care. One trend in business is that employees, especially the best young employees, want a sense of purpose in their work. We all want a sense of purpose in our lives, but in the past we didn’t demand it from our jobs. Now workers increasingly do. They want to know that what they do at work is good and right in some large sense. Since most companies are in a desperate war for talent, they’d better be able to make that case.

Consumers care and employees care. That means equity markets care. And that means CEOs care.

via Should Companies Care? – June 11, 2001.

HT Yang Ruan

Markets, markets, markets. Bottom up.