In short: the law does not recognize two of the three pillars of the triple bottom line:
Joel Bakan wrote a book touching on this topic: The Corporation: The Pathological Pursuit of Profit and Power.
Two relevant takeaways being:
- The current definition of cost in the profit = income - cost equation encourages externalization of as many costs as possible. The costs don't go away, they are just borne by someone else. In effect, you could say, the corporation is stealing from the parties who end up paying the cost.
- The corporate structure encourages this behavior but the structure was put in place by people. Therefore people can change it... though it won't be easy.
They have put together a legal and support framework to put the other pillars back into the articles of incorporation and thereby allow officers to address all stakeholders', not just shareholders', interests.
In their own words:
It's a little bit crazy to need the law to be amended to allow a corporation to act like you or I as private citizens are required to act.
Expand the responsibilities of the corporation to include the interests of employees, consumers, the community, and the environment.A. Give legal permission and protection to officers and directors to consider all stakeholders, not just shareholdersB. Create additional rights for shareholders to hold directors and officers accountable to consider the interests of employees, consumers, the community, and the environment, while also serving the best interests of shareholders.C. Limit these expanded rights to shareholders exclusively; non-shareholders are not empowered with a new right of action.
An alternative is to go private (or stay private) and remove the legal pressure of shareholder primacy. But I suspect that is another topic altogether. Building a business model around this requires some deep thinking, planning and a different idea of what "exit strategy" means from the outset.