A recent article published by IMD discusses the concept of economic profit and its potential to benefit society [26a9abc6]. The article explores the idea of measuring a firm's value creation and the surplus it generates, and how this surplus can be used to address societal challenges such as achieving net zero and implementing the UN Sustainable Development Goals. It emphasizes that there is no inherent trade-off between economic profit and environmental, social, and governance (ESG) performance. The article further analyzes the financial resources available in the private sector to finance social imperatives, such as climate change mitigation and achieving the SDGs. It concludes by highlighting the importance of tracking economic profit and designing policies that enhance legitimate firm value creation.
This insightful analysis sheds light on the connection between economic profit and its potential impact on society. It highlights the role of firms in addressing societal challenges and the importance of measuring and tracking value creation. The article also emphasizes the need to consider ESG performance and the availability of financial resources in the private sector for financing social imperatives. By providing a comprehensive understanding of these concepts, the article contributes to the ongoing discussion on the role of businesses in creating positive societal impact.