Capitalism, with its emphasis on market competition and profit maximization, has often been criticized for prioritizing short-term gains over long-term societal well-being. However, the integration of social sustainability into capitalist frameworks presents a transformative opportunity. By prioritizing ethical practices, fair labor conditions, and environmental stewardship, businesses can align their profit motives with the needs of communities and ecosystems. This approach fosters innovation and resilience, encouraging companies to adopt sustainable practices that not only enhance their brand reputation but also contribute to the overall health of society. Ultimately, capitalism can evolve to support a more equitable and sustainable future, where economic growth and social responsibility coexist harmoniously.

From Shareholder to Stakeholder view

The stakeholder view shifts business purpose from maximizing shareholder profit to creating shared value across a wider network of relationships. Rather than focusing solely on financial returns, it emphasizes social sustainability—ensuring that organizational practices support equity, well-being, and long-term resilience for people and communities. This perspective recognizes that businesses do not operate in isolation but are embedded within social and environmental systems, and their legitimacy depends on contributing positively to both.

Within this model, primary stakeholders—such as employees, customers, suppliers, and investors—are vital to the organization’s daily functioning and long-term survival, while secondary stakeholders—including communities, advocacy groups, media, and civil society—shape broader perceptions of corporate responsibility. Addressing the needs and concerns of both groups supports not only business continuity but also social cohesion, trust, and inclusivity, reinforcing the role of business as a partner in advancing sustainable futures.

Under capitalism, stakeholder consideration has become increasingly vital as businesses recognize that their success is intertwined with the interests of various groups affected by their operations. Stakeholders include not only shareholders but also employees, customers, suppliers, communities, and the environment. This broader perspective encourages companies to go beyond profit maximization and consider the social and environmental impacts of their actions. Engaging with stakeholders can lead to improved decision-making, enhanced reputation, and greater trust, ultimately fostering long-term sustainability. By balancing the needs and expectations of diverse stakeholders, businesses can create value not just for themselves but for society as a whole, contributing to a more equitable and responsible capitalist system.

Corporate Social Responsibility

In relation to move from shareholder to stakeholder view, companies that prioritize CSR actively engage in efforts to promote diversity, equity, and inclusion within their workforce and supply chains. They strive to create equal opportunities for employees from diverse backgrounds and ensure fair treatment for all. Moreover, CSR initiatives often target marginalized communities to uplift and empower them, promoting social equity through various social programs and partnerships. By considering the needs of vulnerable groups and supporting projects that enhance social well-being, companies contribute to a more equitable society.

Carroll’s Pyramid of Corporate Social Responsibility (CSR) is a framework that outlines the different levels of responsibility that businesses have toward society. Developed by Archie B. Carroll in 1991, the pyramid consists of four tiers, each representing a different aspect of corporate responsibility:

1. Economic Responsibility: At the base of the pyramid, businesses are expected to be profitable and economically viable. This foundation supports the other responsibilities, as financial success allows companies to contribute positively to society.
2. Legal Responsibility: Above economic responsibilities, companies must adhere to laws and regulations. Compliance with legal standards ensures that businesses operate fairly and ethically within the framework of the law.
3. Ethical Responsibility: This tier emphasizes the importance of ethical behaviour beyond mere compliance. Businesses are expected to act in ways that are morally sound, considering the broader impact of their decisions on stakeholders, including employees, customers, and the community.
4. Philanthropic Responsibility: At the top of the pyramid, philanthropic responsibilities involve voluntary actions that contribute to the welfare of society, such as charitable donations, community engagement, and support for social causes. While not mandatory, these efforts enhance a company’s reputation and foster goodwill.

Together, these tiers illustrate that corporate social responsibility encompasses not only financial performance but also legal, ethical, and philanthropic dimensions, encouraging businesses to contribute positively to society while pursuing their economic goals.

Corporate Social Responsibility and Social Washing

Social washing refers to the practice of organizations overstating or misrepresenting their commitment to corporate social responsibility (CSR) in order to enhance reputation, build stakeholder trust, or attract investment, without implementing substantial change. Similar to greenwashing, which masks environmental harms with claims of sustainability, social washing often relies on glossy CSR reports, vague ESG (Environmental, Social, and Governance) statements, or selective disclosures to create the impression of ethical conduct. Companies may spotlight charitable donations or diversity campaigns while neglecting deeper issues such as exploitative labor practices, inequitable governance, or systemic exclusion.

As CSR has become a mainstream expectation, the pressure to appear socially responsible has intensified, making social washing more prevalent. Organizations recognize the reputational and financial value of being seen as responsible, yet some prioritize image over impact. This not only misleads stakeholders but also erodes trust, dilutes genuine CSR efforts, and hinders progress toward social sustainability, allowing corporations to benefit from a façade of responsibility while perpetuating existing inequalities.

Business practices for true social sustainability

Business practices that improve social sustainability go beyond compliance or image-building and focus on creating fair, inclusive, and supportive systems that enhance well-being for all stakeholders. Here are some important practices to nurture true social sustainability:

• Diversity, inclusion, and decentralization – Ensuring decision-making is not concentrated in narrow groups but reflects diverse perspectives, enabling more equitable and resilient outcomes.

• Bringing marginalized stakeholders to the table – Actively involving underrepresented voices in organizational processes to address systemic inequities and co-create just solutions.

• Community engagement and place-based organizing – Building strong relationships with local communities, aligning business practices with local needs, and fostering long-term trust.

• Meaningful jobs, work–life balance, and mindfulness – Creating dignified work environments that support employee well-being, reduce burnout, and promote a healthier organizational culture.

The role of individuals

What we prioritize in our life impact how we shape our society. Role of individuals in advancing social sustainability lies in rethinking priorities and everyday choices. Rather than centering life around material accumulation, individuals can emphasize what truly matters for long-term well-being—such as cultivating rich, enduring relationships, engaging in physical activity and healthy lifestyles, and fostering connections with their communities. By valuing experiences, care, and balance over consumerism, individuals contribute to a culture that supports equity, resilience, and collective flourishing.

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