The Global ESGT Megatrends 2026-2027 | #5 – Capitalism: competing models of capitalism
· 14 min read
With the magnitude of change taking place in politics, geopolitics, tech, climate and leadership trust and ethics, we also have major disruption taking place in the forms that capitalism is morphing into in various parts of the capitalist and quasi-capitalist world – the US offering a couple of new and different cases in point.
In addition to the well-established shareholder capitalism model and the more recent but also solid stakeholder model, we now also have regenerative and nature-respecting capitalism as an extension of stakeholder capitalism, on the one hand, and plutocratic or oligarchical capitalism, on the other. And then there is a strange new form of state market capitalism (if we can call it that) rising in one of the “freest” market economies – the US - instigated by the current Republican, conservative, supposedly pro-free market administration. Whether this latter form or distortion presents a lasting change or a passing fad in the evolution of capitalism remains to be seen.
In this final Megatrend #5 of this year’s edition of The Global ESGT Megatrends, Competing Models of Capitalism, we will examine the implications of these developments via several sub-trends listed below and offer leadership suggestions on how to navigate these competing, confusing, and interconnected forms of capitalism. Some present serious risks (e.g. corruption and kleptocracy) while others offer amazing opportunities (scaling industry sustainably via a nature-based or biomimetics approach).
Our sub-trends are:
Let's analyse how this megatrend fits into the narrative of this year's Global ESGT Megatrends, the theme of fragmentation, accumulation and acceleration. The graphic below situates our discussion visually in the longer arc of the history of capitalism.
Source: GEC Risk Advisory 2026
Fragmentation. Capitalism is in motion and maybe in distortion. It's moving because of the speed of change today, heck, capitalism is fuelling exponential technologies like never before. But capitalism is also distorting and fragmenting in other ways, maybe that's what happens when there is so much fast, furious and pervasive change happening all at once. As the movie said: "everything, everywhere, all at once".
Take the case of the injection of digital money into the world economy via various forms of crypto, this presents both a series of incredible breakthrough opportunities (democratising financial services access to the world's unbanked billions) and unpredictable, potentially huge threats to global financial stability given that much of crypto is unregulated, cloaked in opacity, mendacity, corruption and kleptocracy, some of it probably at scale.
Thus, we have the emergence of new forms of oligarchical or plutocratic capitalism in some of the most unexpected places (the US) on one side of the spectrum while on the other, we see important outgrowths from the stakeholder variant of capitalism in the form of the sustainability-focused regenerative capitalism and other iterations, moving past the much maligned but mostly well-intentioned "ESG" nomenclature.
And there is one more strand reflecting this fragmentation worth mentioning though it may be fleeting. This is a variant in the state capitalism category but taking place in what otherwise might be considered the freest of free market economies (the US) where the country's leader now decides if and when to use taxpayer funds to purchase large shareholdings in for-profit companies (like Intel, e.g.). We discuss this further in Sub-trend #2.
Accumulation. This theme is most clearly manifested in the extraordinary growth of wealth of an increasingly tiny group of people (consider the Silicon Valley tech broligarchy that I discuss at length in my book Governing Pandora) and a corresponding loss of wealth and increase in inequality between the top few and the vast majority of middle class, working class and poor. This has become very visible not only in the United States but in a few other countries as well as the charts below show.
This accumulation of wealth is depicted in the graphic below and carries with it serious economic, political and social cautions and implications. Put simply: a society where the wealth of the top 400 Americans surpasses 20% of the largest economy's GDP cannot be a reflection of a healthy and balanced society in equilibrium with itself.
Source: The Financial Times
Visual Capitalist also provides a disturbing picture of this growing inequality in the US from 1990 to 2023 showing the holdings of the bottom half shrinking while those of the top 1% are expanding, fairly dramatically, and very recently.
Source: Visual Capitalist
Extended to the rest of the globe, the accumulation story can be partially gleaned from this UBS Global Wealth Report 2025 with 82% of the world's population owning 12% of total global wealth and 1.5% owning almost half at 48%.
Source: UBS Global Wealth Report 2025
Acceleration. The acceleration of these various strands of capitalism is almost as breathtaking as that of other things changing these days. Who could have predicted even 2 years ago that the US might have become the epicentre for both a new and brazen form of oligarchical or plutocratic capitalism as well as a strange new form of "American State Capitalism". But here it is and maybe it's just temporary and a fad but it depicts something larger about the world today: everything is moving much faster than we can perceive in the moment and we need to brace ourselves to understand and get comfortable with dealing with the brazen, the fast, the unknown and the brand new.
And everything is interconnected, plutocratic capitalism (and associated kleptocracy and corruption) is enabled by the associated acceleration in the tearing down of the rule of law. This is happening rapidly in the US, over the past 18 months, with fewer enforcement cases against financial crimes (in the US, FCPA anti-corruption prosecutions have been stopped in their tracks), in the pardoning of many previously convicted financial criminals (often in exchange for political contributions) and in the untapping of the opaque and often underworld crypto-infused financial transactions.
This is capped off by an abrupt stop to collaboration across democracies in the investigation and prosecution of international organised crime including that committed with crypto. Indeed, the US President, his family and inner circle seem to be benefiting from this extraordinarily accelerated flow of funds having declared $2.2B in income for 2025 alone (the first year of his 2nd term), half of it gained from crypto, and that's only what has been declared.
The discussion on the extraordinary accumulation and acceleration mentioned above is fuelling what appears to be the rise in the US of a more plutocratic, oligarchical form of capitalism where in exchange for political contributions and bribes the select few wield disproportionate influence and access in and to government.
One need only see the photo of the Silicon Valley tech "class" attending the 2nd Trump inauguration. And, sadly, it has only gotten worse since then expanding to a variety of industries and sectors, media, the defence industry, unregulated crypto and the wild west world of betting markets (e.g. Polymarket).
Either as an outcropping of or in parallel with this more oligarchical form of capitalism we now seem to have oligarchy in America that disturbingly resonates with Putin's post-Soviet era takeover of Russian politics and economics. There he anointed an oligarch class with untold riches, stolen from the state, in exchange for undying loyalty. Something similar seems to be happening in America with one caveat and a question: this may be temporary but, is it?
And don't take it from me, the Financial Times did a Big Read feature called "America's New Oligarchy: Under Trump an ultra-wealthy clique has infiltrated government, raising concerns about democratic integrity" in which they unfurl chapter and verse of the "oligarchizing" of the American economy. The names mentioned? Check out the table below.
Source: The Financial Times
Much of this development of a more unequal, accelerated accumulation of wealth, influence and privilege is also yielding another unusual strain of capitalism in America, a form of state capitalism never seen in the US before, what Ian Bremmer calls "State capitalism with American characteristics". Bremmer goes on to say "Trump is picking winners and losers at a scale not seen in modern US history". Indeed, below is a table I assembled with the deals that have already been closed but there are many more in the pipeline.
Sources: Cato Institute, MishTalk, Reuters, Fortune
Tie this together with some other aspects of the new capitalism under Trump and it paints a deeply disturbing picture of lawlessness. Witness Trump's latest scheme, the Truth API, to provide access to his latest Truth Social postings (which often move markets) prior to posting to those who would pay $100K a month to gain such access. CNN reports that Wall Street firms are already making such payments.
Meanwhile this "plutocratizing" of American politics and economics is leading to or accompanied by more polarisation politically between the haves and have nots, the oligarchy and everyone else, with Americans showing deep distress around these issues. It is also turbocharged by the intersection of exponential technological change and the enormous, unprecedented billions and even trillions of dollars being invested into data centres with a variety of consequences for localities. The data centre discussion has become the focal point of a broad coalition of unhappy citizens around the world mobilising against unbridled tech and unlimited wealth creation for a few.
We are seeing this unfold during the US 2026 Midterm election season in the US with politicians from the left and the right "rebelling against the market-first consensus that dominated Washington for four decades" including the unprecedented interest in and rise of social democrats or democracy socialists in the US in local elections across the country including the election of Mayor Mamdani in New York City. Source: Axios "Why Both Left and Rights have Rejected Free Markets". Take a look at the fascinating poll results below showing a majority of US Democrats having a more positive view of socialism than of capitalism with Republicans quite to the contrary.
Source: The Financial Times
Not all discussion of capitalism merits a gloom and doom lens, there are reasons to be optimistic from a stakeholder and other shareholder capitalism standpoint. Because most business is rational it understands that ESG or sustainable responsible capitalism is not a nice to have or a thing of the past, it is very much a thing of today and the future as the world is heating like never before, accelerating technologically at the speed of light with environmental and social consequences including vast labour disruption.
The smart money is continuing to do the necessary work of transitioning to renewables, preparing for water, climate, air and land contingencies and emergencies, building the organisational resilience that is at the heart of surviving and thriving through the polyrisks and polycrises of our times.
With the continuing surge in sustainability risk management, business strategies and governance, and the rise of new developments in this space, from regenerative capitalism, to the use of beneficial (more stakeholder centric) corporate entities and the deployment of a scaled biomimetics (nature-based) approach to scaling regenerative and renewable solutions, much good is taking place around the world as well.
And contrary to popular opinion (or at least that of certain media, influencers and the current US administration) ESG and everything that goes with it is not dead or dying. It's metamorphosing into something more strategic, more enterprise ready, integrated and resilient.
Whether you call it ESG, sustainability, impact investing or something else, we are talking about whether a business, government or other type of organisation is preparing itself for the times we are living in where environmental and climate events will be pervasive and destructive, where social impacts, polarisation and populism will dominate and where the governance of it all needs to be turbocharged into an exponential governance mindset. Nothing less will do.
Below are some data points showing how financial metrics on sustainability and ESG continue to matter, even more than before, to most rational decision-makers:
Morningstar in its April 2026 piece about "Why Sustainable Investment Strategies are Doing Better Than You Think" states: "Sustainable indexes are keeping pace with the broader market, despite the energy sector's outperformance" and I would add, despite the Iran War and the energy crisis (or some would say opportunity) resulting therefrom. One need only look at China and how it has not only survived but thrived during this recent energy crisis from its long-standing scaled renewable energy strategy for a sense of where this rebalancing of sustainable energy policy and action may head.
Morningstar's graphs below show that despite the downswing in US sustainable fund flows in recent times, we are seeing an upswing in passive funds and an improvement in active funds in the last few quarters.
Source: Morningstar
In this Financial Times July 2026 piece called "Investor Demand Holds Up for Environmental Funds by Another Name" it is stated that:
"Investor demand for private capital funds that explicitly seek positive environmental or social outcomes has held steady in recent years despite the political backlash against climate and diversity agendas. Private equity, infrastructure, real estate and private debt funds that aim to generate measurable environmental or social good alongside financial returns raised $31bn last year, in line with the previous year, according to Preqin data shared with the FT."
And, finally, below are a couple of Morningstar charts showing the continuing incremental growth of sustainable fund flows not only in the US (where it is most challenged by the current administration's anti-ESG, anti-renewable official policies), but in the rest of the world as well.
Source: Morningstar
This discussion of this Megatrend #5, Competing Models of Capitalism, has perhaps been the most sobering of all given the whirlwind of challenges. But these are human-made challenges, and they can be human-solved. All they require is a backbone and a moral compass from our leaders. Simple. So with that in mind, here are the four leadership to-do recommendations relating to this megatrend:
Don't participate directly in the plutocratic/oligarchical economy. Unless you are one of the so-called tech masters of the universe (and even if you are), don't start bribing or default to corruption because it is part of the current political environment. There may be negative consequences (investigations and prosecutions) down the road from a future administration or even retribution from the current one. Upholding your personal and organisational reputation is paramount if you want to be around for the long term.
Maintain good to great governance no matter what. If you are a company into which the US Government has invested, you must maintain good governance no matter what minding the traditional challenges, conflicts of interest, influence peddling, lobbying, interference with rational business planning, inconsistency, inability to plan strategically, cultural issues, and retaining and attracting staff.
Participate proactively in the sustainability economy. Environmental, social, governance and technological issues are not going anywhere and are in fact here to stay, they are deeply intertwined and critically important in the development of human and organisational resilience as well as business success in our hyper-challenging times. Don't let the confusion (or temptation) of our present obscure your planning or distort your business strategy into the future.
A good culture is everything. Continue to nurture your organisational culture, choosing the right leaders (especially empathic polymaths if you can find them), proactively measuring their qualitative as well as quantitative performance, their "walk the talk" of a consistent set of values that you actually operationalise, tie to performance incentives. Hold leaders accountable and allow a free to speak up, listen up and follow up culture to flourish, it is more important than ever at this time of great unease, confusion, concern and opportunity for us all.
illuminem Voices is a democratic space presenting the opinions of leading Sustainability Thought Leaders, their views do not necessarily represent those of illuminem.
The world needs sustainability knowledge. At illuminem, no interest group or shareholder can influence our work. Thank you for supporting our mission to make high-quality and independent sustainability information free for all. Every contribution helps. Thank you for donating today.
Charlene Norman
Corporate Governance · Sustainable Business
Steven W. Pearce
AI · ESG
Philip Corsano
Corporate Governance · Sustainability Law
Business Insider
AI · Corporate Governance
Time News
AI · Corporate Governance
ESG News
Sustainable Finance · Corporate Governance