It’s easy to be confused these days about where capitalism is headed. The current state of discourse on the role of business in society tends to suggest either that progress toward inclusivity and sustainability are rapidly accelerating, or that we’re all being hoodwinked by entrenched interests bent on preserving the status quo. Sometimes, those debates can turn fiery.

For instance, the Business Roundtable’s Statement on the Purpose of the Corporation has been heralded by some as a genuine commitment by CEOs to make their businesses more accountable to stakeholders and society, while critics lambast it as a cynical ploy to be less accountable to anyone by professing accountability to everyone.

The swift growth of ESG investing is cited as a sign that financial markets are shifting at scale to play a more constructive role in addressing societal and environmental risks. But this is countered by those who warn that today’s main ESG investment products have negligible real-world impact, and serve as a dangerous placebo distracting us from making the policy changes we need to address climate change and inequality.

Similarly, the B Corporation movement has garnered attention as prominent companies adopt benefit governance or B Corporations go public. Proponents cite this as evidence that stakeholder governance can go mainstream, while critics question whether the stakeholder governance movement is desirable at all.

At Omidyar Network, a social change venture founded by the creator of eBay that has sought to harness the power of markets for positive impact for more than a decade, we believe these are important debates to grapple with. But we think that too often we’re having these debates on the wrong terms.

There’s often a dynamic of the straw man fallacy playing out—setting the bar unattainably high for what a given movement or solution should achieve, and then calling it a failure for not reaching it.

Will ESG investment products solve climate change? Of course not. And marketing to suggest otherwise is dangerous and wrong. But we believe that the wider goal of the ESG movement—getting corporations, and their investors, to systematically identify, measure and manage their positive and negative impacts on people and planet and improve outcomes—is a critical part of the transformation we need to measure the performance of business. Similarly, B Corporations will not resolve fundamental tensions of corporate governance, but we think that they offer a better context in which businesses can wrestle with hard decisions on how to balance stakeholder interests.

The problem is not that these individual business and investor-led movements are unworthy of pursuit. Rather, they are not sufficient on their own to enable lasting systemic change—change urgently needed to fix an economic system that is exacerbating inequality, perpetuating structural racism and accelerating the destruction of our planet.

At Omidyar Network, we have spent a decade supporting the growth of impact investing, and we’re proud of that work. But we’ve realized that individual efforts led by movements of well-intentioned companies and investors won’t ultimately succeed unless we also address the underlying incentives that wire those very markets.

That’s why we’re committing $10 million to a new focus area: Corporations, Capital Markets and the Common Good. The vision for this work is to create an economic system in which the rules that govern markets encourage businesses to contribute to societal well-being and curb the pressures that drive businesses to contribute to negative outcomes for people and the planet. Realizing this vision will require shifting policy and shifting power.

To shift policy will require at least three key changes. First, the rules—particularly those defining fiduciary duty—should reinforce that corporations are accountable to workers, customers, suppliers and communities—not solely shareholders. Second, the rules should drive businesses to systematically account for their impacts on people and the planet, so that companies can better manage their impacts; stakeholders can hold those companies accountable; and there is a means to curtail practices by businesses that privatize profits but socialize societal costs. Third, the rules need to curb pressures from capital markets that reinforce short-termism, drive excessive financialization and enable outright extraction that benefits speculators at the expense of stakeholders and society.

This is why we are partnering with a range of advocacy organizations seeking to shift corporate governance rules, create a globally harmonized system of mandatory ESG disclosure and build a fairer financial system.

It’s also critical to shift power, particularly by strengthening stakeholders’ voices in corporate and investor decision-making. We think this means strengthening structural bargaining power for workers, increasing the worker voice in the corporate boardroom and making more workers owners themselves by broadening equity ownership.

This also means shifting perspective in the investment management industry to focus it more on serving the vast majority of investors: working people saving for their retirement and their children’s education. These days, most such individuals are highly diversified investors saving for the long-term through passive investment strategies. What matters most for such investors’ long-term well-being and financial security is neither chasing alpha nor minimizing an index’s tracking error—it’s the health of our societal systems. It’s employers that provide quality jobs, an economy that delivers broad-based prosperity, stable democratic governance and a planet that isn’t beset by climate catastrophe.

These interests of the average investor are fully in line with the long-term orientation of building a more sustainable, inclusive capitalism. There is a tremendous opportunity to leverage the voice of these individual investors via more forceful stewardship of the fiduciaries that vote their shares and represent their interests when engaging companies and fund managers.

To invoke Rebecca Henderson’s call to action, it is time to reimagine capitalism in a world on fire. We must work together to reorient the systems that govern our corporations and capital markets, and focus on building a resilient economic system that can stand up to the challenges of the 21st century.

— Chris Jurgens, Director on Reimagining Capitalism Team, Omidyar Network