What Is Conscious Capitalism?

Conscious capitalism is an ethical approach to profit-making that emphasizes environmental and social impact. Compared to traditional capitalism, conscious capitalism takes a broader view of value creation and the stakeholders a company must serve. The conscious capitalist pursues profits for shareholders while creating value for employees, suppliers, communities, society, and the environment.

Read on to learn about conscious capitalism, including the concept's origins, its guiding principles, and successful companies that practice a socially aware business approach.

Overview

Understanding conscious capitalism

Origin of conscious capitalism

The concept of conscious capitalism originates from a 2012 book written by John Mackey and Rajendra Sisodia. Mackey is a co-founder of Whole Foods, and Sisodia is a Babson College marketing professor and co-founder of Conscious Capitalism, Inc.

The book, "Conscious Capitalism: Liberating the Heroic Spirit of Business," argues for an upgraded form of free-market capitalism. The authors state that business leaders can achieve far more by incorporating higher purposes into their business plans than they can by a single-minded pursuit of profits.

Conscious capitalists believe that businesses aren't just accountable to shareholders -- they're accountable to the larger population and the environment, too. Business leaders and employees should incorporate the needs of a broader stakeholder group into their daily decision-making.

The goals of conscious capitalism

Conscious capitalism is ambitious and transformative. The overarching goal is to make a positive impact on the world. A starting point is elevating capitalism to its highest potential, where business as usual involves generating wealth while enriching lives and healing the environment.

Conscious businesses pursue many objectives under the umbrella of positive change. Examples include fostering leaders who are driven to serve ethically, employees who are passionate and fulfilled, workplace cultures that are accepting and authentic, wealthy shareholders, opportunity-rich communities, and a healthy, flourishing planet. 

The benefits of conscious capitalism

Businesses, people, and the environment benefit from conscious capitalism. For example:

• Socially conscious businesses garner more trust, which can enhance customer loyalty.
• Happier, motivated employees are more productive and provide better customer service. They're more efficient and deepen customer relationships.
• Conscious businesses work to promote and enhance their communities, which can elevate the quality of life.
• Programs to conserve energy, minimize waste, and reduce the consumption of nonrenewable resources help protect the environment while countering the effects of climate change and pollution.
• Socially responsible investing and ESG investing are growing in popularity; the types of stocks that practice conscious capitalism appeal to investors who demand good corporate citizenship.

Guiding principles

The four guiding principles

Conscious capitalism has four guiding principles: higher purpose, stakeholder orientation, conscious leadership, and conscious culture.

1. Higher purpose: The conscious capitalist sees profits as a means to achieve a higher purpose, which is the business's true goal. As such, it should be incorporated into business plans and used as a guidepost for decision-making.
   
   You'll often see a higher purpose described in a business mission statement. The Motley Fool, for example, is on a mission "to make the world smarter, happier, and richer." As another example, Toms, the shoe company, says, "We've always been in business to improve lives."
   
   Such mission statements align and engage employees and guide the company in the right direction.
   
2. Stakeholder orientation: The conscious business takes a broad view of its stakeholders and works to serve their best interests at all levels of the organization. The stakeholder group goes well beyond shareholders and board members; it includes anyone or anything affected by the business. Employees and their families, suppliers, customers, shareholders, local communities, governments, and the environment are all stakeholders of the conscious capitalist.
   
   The conscious capitalism philosophy views the business and its stakeholders as one symbiotic ecosystem. The company depends on the health and well-being of stakeholders, and stakeholders depend on the company as a productive, ongoing concern.
   
3. Conscious leadership: In a conscious business, every team member follows the tenets of leadership on some level. These tenets are anchored by a continuous improvement mindset. Conscious leaders are striving to learn, grow, and innovate. They engage employees to support the higher purpose, they work to create win-win situations, and they are committed to operational excellence.
   
4. Conscious culture: Conscious workplace cultures are transparent, fair, and inclusive. They are consistent with the higher purpose of the business, and they value accountability and integrity.

Conscious capitalism companies

Conscious capitalism companies

The table below shows three companies that practice conscious capitalism.

For a longer list of publicly traded companies that invest in people and the planet, see our list of the best ESG stocks.

Costco

Mission statement: "Here at Costco, we have a very straightforward, but important mission: to continually provide our members with quality goods and services at the lowest possible prices."

Costco practices conscious capitalism in several ways, but the retailer's treatment of employees is particularly noteworthy. Rather than squeeze employee compensation to gain efficiencies and keep prices low, the retailer takes a different approach.

At Costco, above-market wages, benefits for full- and part-time workers, and generous retirement contributions promote worker satisfaction and reduce employee churn. In its 2024 annual report, the company articulates how its dedication to the workforce is a priority:

Other ways Costco serves its ecosystem include:

• The donation of millions annually to charities and local communities.
• The company's 10-point Climate Action Plan that defines its energy usage, waste reduction, and emissions goals.
• A code of ethics enforced throughout its supply chain.
• An animal welfare policy that includes a company-owned poultry supply facility that allows birds more space, better air quality, and more protection from weather.

Patagonia

Mission statement: "Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis."

Providing premium clothing to help outdoors enthusiasts stay comfortable, as well as equipment and food, privately held Patagonia has established a brand that is closely identified with nature. The company has demonstrated a steadfast financial commitment to the environment for four decades. Since 1985, Patagonia has pledged 1% of sales "to the preservation and restoration of the natural environment."

Additionally, Patagonia is dedicated to maintaining a supply chain that respects human rights. The company requires that new suppliers acknowledge its "Supplier Workplace Code of Conduct and the supporting Benchmark Standards, which define and set standards prohibiting child labor, forced labor, and modern slavery in Patagonia's supply chain."

Patagonia has implemented a variety of practices that help it to support its goal of mitigating harmful impacts on the environment and adopting positive labor practices. For example:

• Since 1985, Patagonia has awarded more than $140 million in cash and in-kind donations to domestic and international grassroots environmental groups for use in their local communities.
• In 2020, Patagonia established its Fibers Sourcing Policy, prohibiting suppliers from purchasing cotton from China, Turkmenistan, and Uzbekistan or conducting any manufacturing processes in Xinjiang, China.
• Patagonia has partnered with Fair Trade USA to certify more than 30 factories, which produce more than 90% of all Patagonia styles.

Starbucks

Mission statement: "In everything we do, we are always dedicated to our mission: to inspire and nurture the human spirit -- one person, one cup, and one neighborhood at a time ." 

Starbucks describes its culture as "performance driven, through the lens of humanity." The world's largest coffeehouse chain pursues a range of programs to promote diversity, inclusion, and opportunity in its workforce. In 2017, the company pledged to hire 10,000 refugees around the world, and in 2023, it had made significant progress towards that goal, having hired 5,500 refugee partners. Starbucks has hired 25,000 veterans and military spouses, and the company hopes to hire 5,000 more annually.

Employees who work at least 20 hours weekly can take advantage of Starbucks' College Achievement plan -- a partnership implemented in 2014 with Arizona State University offering 100% tuition coverage. As of February 2025, the tuition program has helped more than 15,000 Starbucks employees complete bachelor's degrees, with more than 25,000 Starbucks employees enrolled in the program.

Starbucks also prioritizes sustainability initiatives and ethical sourcing. For example:

• The company is working toward a 50% reduction in carbon emissions, landfill waste, and water consumption.
• Starbucks will donate 100 million disease-resistant coffee trees to farmers by 2025.
• In 2021, Starbucks partnered with Ocean Conservancy to donate $1 each time a customer orders a beverage using a personal reusable cup.
• In 2004, Starbucks launched Coffee and Farmer Equity (C.A.F.E.) Practices, a verification program that measures supplier farms on economic, social, and environmental criteria. The program was among the first of its kind for the coffee industry.

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Business that makes the world better

Under conscious capitalism, businesses have the power to create opportunity and change the world. The approach doesn't come at the expense of profits, either. Profits are still a priority for businesses because they fund the pursuit of a higher purpose.

Successful companies such as Costco, Patagonia, and Starbucks are proving the conscious capitalism model: Investing in good is good for business.