In much the same way that human beings have evolved throughout history, so capitalism, its concept, and its language are evolving within the business world. The capitalism model has evolved over time, from shareholder capitalism to a model which includes creating sustainable and shared value for all “stakeholders.”
Each period, each concept and each idea has its own language, its own way of emphasizing what’s important and how to achieve it. Different languages are inspired by different perspectives. The language of “shareholder capitalism,” in which the corporation’s social responsibility lies solely in maximizing profits, speaks of “net income” and “free cash flow.” However, in a sustainable and interconnected world, companies must plan for creating value that’s shared with all stakeholders.
Capitalism is therefore going through a transformation which will necessarily see it enter a new dimension, one where the business model must be geared towards developing sustainability. The concept of value creation is therefore also evolving, and it must have the ultimate goal of planning, optimizing and distributing value for the benefit of all stakeholders. The “stakeholder capitalism” concept adds a new dimension to the capitalism model, through which the commitment of companies to creating value for everyone is better embodied.
At Enel, in order to explain how we create value for all our stakeholders, we have developed a new model: ENEL STAKECAP©TM.