By abandoning a narrow understanding of capital as just assets that appear on a balance sheet, businesses and other organizations can harness the value of their people, relationships, knowledge and processes to move the world closer to achieving the Sustainable Development Goals.
To describe how far the world is from achieving the SDGs, the U.N. and other organizations often frame the challenge in terms of finances, describing the gap as a $5 trillion to $7 trillion problem.
While viewing the issue in terms of money may make it broadly accessible, it comes with a cost: It primes people to prioritize financial considerations above other values, including equity and sustainability, when they are developing solutions. It encourages a cost-benefit mindset that privileges productive efficiency—such as minimizing expenses—over distributive efficiency, which focuses on ensuring that resources are allocated to their most valuable use. And it encourages organizations to ignore important drivers of value creation—people, relationships, knowledge and processes—which then suffer underinvestment as a result, leading to new costs, lost productivity and decreased capacity for creative problem-solving.
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