Beyond the Ballot: 5 Change Agents Outside Government

Four centuries ago, English philosopher Thomas Hobbes argued that societies can only achieve social justice and peace if governments are responsible for the collective good. Hundreds of years later, it’s not uncommon for us as global citizens to feel similarly, looking to elected leaders to heal what ails us.

But 21st-century reality might surprise Hobbes—and many of us. Thanks to globalization and advancing technologies, the world runs on increasingly complex social, political, and economic systems. While governmental decisions play a critical role in enacting positive change, they’re not the only source of social progress.

Amid climate change, human rights violations, and now a pandemic, the injustices of the world can often feel overwhelming—and our power to make a difference as individuals can feel minuscule, if not nonexistent. But we are more powerful than we think. As individuals, we can align ourselves with and sometimes influence entities that have great power and capacity for social good.

From nonprofits to market movers, I’ve selected five sectors that wield influence beyond policymaking—think financial clout and global trendsetting—that can be channeled toward the common good. Understanding how they can influence the trajectory of social progress can help us understand our role in the world as well.

Nonprofits: The Mission-Driven Third Sector

With rates of globalization accelerating since the 1980s¹, world politics have gone through a radical transformation. One byproduct of this has been the rise of the so-called “Third Sector,” which is comprised of nonprofit groups advocating for human rights, peace, the environment, and more.

In the US alone, there are around 1.5 million² registered nonprofit organizations. This number grew by about 10 percent between 2005 and 2015, and it accounts for more than 5 percent of the country’s gross domestic product (GDP).³ These groups are now a meaningful force for local, regional, and global policymaking and the public good.

Nonprofits certainly don’t offer a satisfactory replacement to essential government services, and rarely can they fill the shoes of government in creating structural change. Certainly, there are exceptions: Nonprofits like the King Center train the next generation of civil rights leaders. The American Civil Liberties Union⁴ has had a hand in more United States Supreme Court cases than any other private entity, paving the way for such civil rights victories as desegregating schools and allowing LGBTQ military personnel to serve openly. But even when their contributions fill gaps left by government rather than create systemic change, the impact of the broad and sizable nonprofit sector on underserved communities and overlooked issues is clear.

There are many types of nonprofit organizations⁵ in the US, which are often grouped into either public charities or private foundations. The former may be the most recognizable: an organization that accepts donations and typically leverages volunteer labor—think, the American Red Cross. And the combination of donated time and money can be powerful; consider the housing policy implications of Habitat for Humanity helping 29 million people build or improve their homes.⁶

Foundations, on the other hand, are built on private funds from an individual or a company. They typically grant those resources to projects or public charities. Well-funded private foundations chime in where governmental efforts are inadequate. Ford Foundation⁷ committed an investment of $1 billion out of its $12 billion endowment to fund mission-driven projects such as affordable housing in the US and access to financial services in emerging economies. Likewise, the World Wildlife Fund⁸ collaborated with governments and communities to save dozens of species from extinction and launched large-scale conservation schemes to protect the rainforests, oceans, and desserts.

That said, real impact isn’t only born of billionaires or complex plans. Kenyan activist Wangari Maathai kickstarted the game-changing Green Belt Movement in her home country, which made her the first African woman to win a Nobel Peace Prize⁹ in 2004. Her organization has planted 51 million trees¹⁰ to date, and the United Nations credits this movement for alleviating conflict in East Africa, boosting food security in a drought-prone region, and empowering millions of women and African farmers. Launching a nonprofit is obviously the less common way for individuals to be a part of the impactful third sector. From small, grassroots donations to serving as a volunteer board member, nonprofits give individuals plenty of opportunities to get in on the good.

Pensions: A Fair Future for All

Pensions are more than the check your grandparents get in the mail. While there are many different types of pensions around the world, in the US, they’re retirement plans that typically require an employee to make a regular contribution to a fund to generate income, to be claimed in the future.

While the employees who fund pensions are busy working, their pension funds are also at work. Even though just 21 percent of American workers¹¹ currently participate in pension plans (including 76 percent of all state and local government employees) they have remarkable potential to influence over global markets due to the size of their total assets. In 2019, pension fund assets stood at a whopping $32.3 trillion among OECD countries; in the US, those fund assets had a 78.9 percent share of GDP in 2018.¹² Thus, pension fund decisions ripple throughout the markets, not only directly influencing the companies and sectors in which they invest, but sending signals to others about wise investment decisions.

Pension investors might be using those powerful assets to fund fossil fuel or tobacco companies—even gun manufacturers—with ordinary workers’ future income. Or, they might channel those assets toward sustainable investments.

While employees might not have a direct say in what their pensions are funding, a 2019 Journal of Business Ethics study¹³ found they do have an indirect influence. Researchers found that fund investors generally align investment choices with the financial and non-financial interests of their beneficiaries based on demographics; pension fund portfolios in more progressive states are weighted toward companies that perform well on corporate social responsibility (CSR) issues.

Case in point: The recent decision of California Public Employees’ Retirement System (CalPERS) to invest in environmental progress is proof that pensions are a powerful force capable of changing market dynamics. In September 2019, CalPERS announced that its pension funds—worth around $700 billion—would go toward strengthening climate change resiliency.¹⁴ California Governor Gavin Newsom said aligning investments and purchasing power with climate change goals is the ultimate force for a fair planet—and a more equitable future.

It was a controversial move; critics question whether the decision will deprive beneficiaries of financial security.¹⁵ But CalPERS has more than ethical conviction in its corner. The 2019 Journal of Business Ethics found that the pension portfolios tilted toward companies with superior CSR scores generated a slightly higher return than their counterparts.

Other pension funds are moving in the same direction as CalPERS. In February 2020, the New York State Common Retirement Fund put $800 million in responsible funds, including sustainable private credit and green bonds. This action was a part of New York’s plan to commit $20 billion to sustainable investments and climate solutions.¹⁶

The importance of these decisions can’t be understated. Due to their size and importance, pension fund decisions are market trendsetters; their move toward more sustainable investment may help legitimize the move for others. And the direct environmental impact is significant, too.

Banks: Financing a Sustainable Planet

According to the Rainforest Action Network (RAN), banks can be among the worst offenders perpetuating the climate crisis. A comprehensive analysis of the sector found that 35 banks funneled a whopping $2.7 trillion into fossil fuels since 2016—the year the momentous Paris Agreement was signed.¹⁷ RAN’s report documents some of the most devastating impacts these decisions have enabled, from the destruction of villages in Mozambique¹⁸ to the razing of ancient forests¹⁹ in Germany.

These jaw-dropping figures also mean the finance sector has tremendous power to push positive change. As an industry leader on climate change action, Bank of the West was among the first companies to incorporate the United Nations Sustainable Development Goals (SDGs) into our core business strategy. We focus on supporting clean energy, diverse entrepreneurship, and all 17 of the SDGs. And we’ve divested from tobacco, Arctic oil and gas exploration and production projects, coal-fired power plants that are not actively involved in the energy transition, and other activities harming the environment.

Conscious consumers have the power to pressure the market by putting their money into banks that champion positive environmental efforts. Everyday decisions—like the checking account into which people deposit their paychecks—can change the financial picture from gray to green.

Venture Capital: Green is the New Gold

Particularly over the last 30 years, venture capital²⁰ (VC) has emerged as a dominant force in the global economy. From Google to Alibaba, some of the most influential companies enjoy their current scope of success in part because of VC investment. All of that VC investment power can be wielded for good, giving wings to socially conscious business ideas that have little chance of attracting traditional financing. At the heart of any VC operation lies risk-taking: They’re typically more willing to take higher levels of risks for big, visionary ideas, especially compared to other financial institutions like banks. In part, this is because they get more than passive interest from their investment, becoming financial stakeholders with varying levels of influence over the company’s success. Hence, VC firms are uniquely poised to drive—and direct—innovation.

The prevalence of sustainability-minded VC firms has been steadily growing since the 2000s.²¹ These firms fund initiatives operating in clean energy, agriculture, education, and healthcare in order to facilitate sustainable development around the world. There’s evidence that green is the new gold, as mission-driven investments are often good for business’ bottom lines, too.²²

For instance, in recent years, the world installed a record number²³ of solar power projects. Many of these belonged to Asian and African²⁴ companies that can now bring clean and reliable energy to millions of people thanks to millions of VC dollars. Driven by VC backing, global investment in renewable energy could reach $3.4 trillion²⁵ by 2030. With the advent of blockchain technologies, VC firms will likely be even more transparent and collaborative with their impact-based activities in the process of green growth.

The boom²⁶ of Silicon Valley’s mission-driven VC funds further cements these figures. Those numbers should also be meaningful to individual social entrepreneurs with big ideas: Partnering with one of these famously bold venture capitalists could help them build the next world-changing sustainable startup.

Individuals: The Ripple Effect of Good Decisions

In a beloved African folktale, a forest is burning down, making the animals feel scared and powerless. However, as a hummingbird tries to extinguish the fire with the water in its tiny beak, other animals follow the course and save their forest.

“I will be a hummingbird; I will do the best I can,” Wangari Maathai once famously said. Her global thinking and local efforts ultimately brought dramatic change to millions of lives.

The lesson inherent in Maathai’s motto: Even a seemingly small gesture can create a ripple effect, influencing large-scale change. Sort of like consumer spending: Though it’s a measurement of the collective purchasing decisions made by individual, everyday Americans, it accounts for about 70%²⁷ of GDP in the US—making it a powerful economic force.

And there’s plenty of evidence that even a small shift in consumer habits can create a ripple effect in the markets—and the rise in conscious consumerism serves as Exhibit A. The market for sustainable products in the US—something we weren’t even talking much about a decade or so ago—could reach a whopping $150 billion by 2021,²⁸ a growth four times larger than conventional products. And just think: Demand for a sustainable product is demand for a sustainable food chain and fair wages. That means fewer emissions in the air and healthier communities around the globe. That’s the power of your buying decisions.

And when consumers hold companies accountable for potential violations, the results can be striking. The transformations that Nike went through as a response to the customer demands and protests prove this. Once called a “poster child” of unsustainable business practices, the sportswear giant now invests in social and environmental efforts and releases annual CSR reports detailing their progress on sustainable manufacturing, environmental impact, and more. The company admits this progress wouldn’t have happened without the protests they faced from consumers in the 1990s.

Nike’s journey from sweatshops to sustainability isn’t a unique one. Economists²⁹ have long argued that individual behavior change can shift supply and demand mechanisms, thus shaping markets, financial institutions, large corporations, and government decisions. While the history of the modern fair trade movement dates back to the 1940s,³⁰ it’s more successful than ever thanks to social media. Everyone can now be a vocal watchdog, pressuring companies toward ethical and sustainable business practices.

Ethical investing is another way individuals are flexing their financial power for good—and it’s working out pretty well for them, too. A recent analysis of hundreds of investment funds in the US showed that sustainable funds comfortably outperformed the traditional ones over the last five years.³¹

Whether it’s the shoe you purchase, the nonprofit you support, or where you bank, the ways to affect change in the world today are so numerous, even Hobbes might feel empowered. The power to move the world toward a more sustainable future lies not just in governments’ hands, but in a broad spectrum of powerful global influencers—and you are among them. While the world’s most complex problems require an equally complex set of solutions, your own beakful of water can contribute to them.