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The gospel according to Adam Smith

Is doing good compatible with making money? It is if you practise spiritual capitalism.

Spiritual capitalism is consequently not a zero-sum game, but a holistic approach to business that’s quickly becoming more—much more—than the sum of its parts.

Spiritual capitalism got its start during the 1970s, in the business ethos that prioritized people over profits and gave birth to idea of social entrepreneurship. “We were hippies shouting to the masses,” recalls Mollner. “This was after the ’60s when we had a temper tantrum and thought we were rebelling against businesses that had only to do with profits. Everyone moved to the farms and started growing their own food. We set up community land trusts; we established alternative currencies. And out of all this came the idea for socially responsible businesses that would focus not on making a profit but on having a decent relationship with the employees, the environment and the community.”

These enterprises weren’t as successful as their creators had hoped. Why not? A big part of the reason was that without profits, they couldn’t be self-sustaining. Businesses can’t survive on good intentions alone. By setting up the Calvert Group, Mollner wanted to demonstrate that a company’s spiritual ethos could help it do good while giving it a competitive advantage. Some 30 Calvert-branded funds are on the market, representing hundreds of billions of dollars in market value, and socially responsible investing (SRI) has become one of the primary sectors in which money and spirit meet.

SRI began as a method for excluding socially harmful products—alcohol, tobacco, weapons—from investment portfolios. “We were evaluating companies based on what bad things they had done in the past,” Mollner explains. This quickly proved insufficient for SRI pioneers, so they began screening firms for the good things they were doing: for their spiritual values. “We realized that we wanted companies that were not just not doing bad things but that were promoting the common good,” says Mollner.

Today, SRI fund managers screen potential investments for environmental responsibility, social justice and corporate governance—all factors that contribute to a positive balance in the spiritual ledger.

Adam Smith would be proud.

The Munich-based insurance, banking and money management firm Allianz sells more than $160 billion worth of financial products and insurance policies each year. The company has operations in more than 70 countries, including the Netherlands, where Allianz salespeople receive training to help them identify and resolve their clients’ emotional and psychological issues about money. The goal, according to Paul Versteeg, director of asset management for Allianz Netherlands Group, is to enable salespeople to “hear their customers’ hearts” and give them better service. “You cannot listen to the heart of another person if you’re not able to listen to your own heart,” he says.

Versteeg, 48, took up his current post in 2004, after more than 20 years with Allianz. As soon as he began, Versteeg recognized he faced a serious challenge—Allianz’s brokers were perceived negatively by Dutch customers, who regarded them as slick, self-interested salesmen rather than genuine, helpful advisers. “What is our social responsibility as an insurance company?” Versteeg recalls asking himself. “We block out risks. We protect people. So why was our image so negative?”

One source of distrust turned out to be uncertainty about how salespeople earned their commissions. It also appeared that brokers were spending far too little time—just 84 seconds—listening to potential clients express financial concerns before launching into a sales pitch. “We were only selling a product instead of giving advice,” Versteeg says. “That needed to change. We had to put the customer in a central position and teach him to focus on the money barriers he may feel.” So Versteeg hired consultants George Kinder and Brett Davidson to teach Allianz staff the fine art of listening with their hearts.

Kinder, author of The Seven Stages of Money Maturity: Understanding the Spirit and Value of Money in Your Life, argues that many financial problems have more to do with our beliefs and attitudes about money than with our bank accounts. Before people can take the practical steps necessary to master their financial situations, Kinder believes they have to look at themselves and their hidden relationships with money. He developed the idea of “money maturity” as a framework to resolve what he calls “the apparent conflict between life and money.”

So while Davidson helped the sales force communicate with clients, Kinder helped them recognize and address clients’ emotional as well as financial needs. “A broker learns to find the emotional and psychological barriers a client has concerning money,” Versteeg explains. “What are his experiences of and memories about money? What has he done with money in his life? A broker has to find out these things by listening and asking the right questions. By doing that, he has to try to get through these barriers.”

Sounds great, but is it worth it? Versteeg thinks so. Brokers are performing better and the number of customers is increasing, mainly through referrals from existing clients.

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