Feeding the 9 Billion in Year 2050 Is A Great Challenge for Society

The United Nations Population Prospects 2019 tells us that there will be nine billion souls to feed on this Good Earth by year 2050 (up from seven billion-plus of us today). The greatest growth will be in Asian nations (such as India, China) and on the African continent. 

There will be 4.7 billion people to feed in Asia and 4.3 billion in the nations of Africa. Latin America, North America and Europe combined will total but 1.8 billion. The 47 least-developed nations of the world are the fastest-growing (population) and the need to feed the world’s population bumps into the challenges as we work to reduce and eradicate poverty, promote more diversity, address the climate change crisis, improve healthcare and education, and find the money and political will to do all of this.

The numerous challenges implied in these projections include finding the available farmland & ranchland to grow the food that will be needed by the 9 billion; to do this even as cities expand and farmland shrinks as a result; to assure that the farmers, especially in less developed countries, are able to survive economically; to replace today’s farmers as the population of such workers ages; to increase protein sources as the middle classes continue to rise in many countries in Asia and Africa in rising the economies of local nations…and more!

Oh, and agriculture is a major factor in climate change with its carbon emissions, as well of use of (and often) degradation of ever-more land for growing crops.  Today’s example is burning the old growth Amazon forests (the “lungs of the Earth”) to make room for cattle ranches (more protein!) and palm oil plantations.

There have been encouraging developments related to farming — some welcomed and some controversial.  Hydro-farming and rooftop farming in urban areas are considered a plus; advances in genetically-modified crops are both welcomed and condemned, depending on your geography or business interests or public policy point-of-view.  Fake meat is cheered in some quarters, condemned in others, even as leading meat companies and purveyors explore the breakthroughs to consider both risks and opportunities. 

The National Geographic Society has offered up a five-step plan to feed the world. Step One is to freeze agriculture’s footprint (ag is one of the major contributors to GhGs); Two, grow more on today’s farms; Three, use our resources more efficiently; Four, shift diets (meat in focus); Five, reduce waste.  NatGeo experts say these five steps could help to double the world’s food supplies while cutting the environmental impact of agriculture.  Click here to read more.

This issue we’ve aggregated food & agriculture-related content for your reading.  The three Top Stories are of interest, we think you’ll agree. 

Top Stories

The future of food is mobile, plant-based, and sustainable, experts say
Source: Geek Wire 

Farming Ain’t For Sissies, & Sustainable Farming Is Especially Tough
Source: Clean Technica 

How sustainable is tuna? New global catch database exposes dangerous fishing trends
Source: Science Daily 

Fashion, Style, Brand and Sustainability Are Today’s Coupling Terms Now for a Growing Number of Consumers…

We’re all consumers of one type or another.We buy food and beverages, electronic products, and an assortment of apparel and footwear products.  So the questions come to mind…

What are you wearing?  Is it fashionable?  Stylish? And sustainable (as a product you want or need)?  Sustainably and responsibly produced?  In a global (mostly invisible) supply chain that you could say with certainty is “well supervised and responsibly managed”?

Do you identify yourself with the brand’s culture, ethos and sustainability and the praiseworthy efforts of the maker or the retailer in their declarations to the marketplace?  Do you make sustainability a conscious buying decision?

A growing number of apparel & footwear brand producers/marketers are counting on “yes” answers to these questions.

In our monitoring of news and feature content from around the world and many prominent and not-so-prominent sources, we have been seeing a significant amount of content related to “fashion” and “sustainability” being coupled (as it, taken together as a given, like human nature (human + nature – a natural coupling).

The big bold industry and brand marketing names are part of the conversation: Victoria Beckham, Stella McCartney, Tommy Hilfiger, Gucci, and H&M are focused on sustainability and delivering the fashion + sustainability sales message in the coupling efforts (details in our story selections).

We’re presenting our “capture” of fashion and consumer-buying content this week in our Top Stories in the newsletter.  In our monitoring we are seeing the trend in other consumer-facing areas of industry – in autos, toys, and a variety of food products and ingredients (palm oil, coffee beans, seafood/harvests of the seas).

The good news is that many more corporate leaders recognize the timely opportunity for their company to demonstrate that their company’s strategies and processes, and products & services offered in both consumer and B-to-B markets are “sustainable & responsible” – as now more frequently explained in the company’s sustainability report, in the 10-k, proxy statement, on its web pages…and on their products’ labeling. 

In this week’s Highlights we bring you a selection of the many news and feature stories focused on consumer marketing with a sustainability theme. The range of coupled content (our product + sustainability) is growing by leaps and bounds and we try to select the most topical and informative content for you.

On coupling:  the best-selling author Malcolm Gladwells’s newest book is “Talking to Strangers”, a great read, we recommend.  He explains why we are so overwhelmingly trusting of others (the strangers) as a basic human default and the concept of “coupling” that can make certain assumptions ring true.  This comes to mind the acceptance of apparel, footwear and other brand marketers’ claims about “sustainability” in product and/or production.  Gladwell’s insights are terrific to contemplate as we receive the messages about sustainability from some brand marketers.

Top Stories

Fashion Brands Take Sustainability Further for Spring 2020
Source: Forbes 

Exclusive Q&A: Why Retailers Should Embrace Sustainable Supply Chains
Source: Retail Touch Points 

Why Sustainability Should Be Top of Mind for Retailers This Holiday Season
Source: Yahoo

Consumers want to buy sustainably—they just don’t know how
Source: Fast Company 

How Sustainability Became the Future of Retail
Source: Footwear News

Consumers Want to Buy Sustainably, but They Often Don’t
Source: Architectural Digest 

The Best 11 Brands for Sustainable Vegan Sneakers
Source: Love Kindly 

How can shoppers make sense of sustainable fish labels?
Source: The Guardian 

The Young People Move to the Streets to Protest Slow or Lack of Action on Climate Change Challenges…

by Hank Boerner – Chair & Chief Strategist, G&A Institute

When our young people take to the streets in significant number, there is usually a revolution of some type in store, history tells us.  Revolutions belong to the young, we can say with some certainty if history is our guide. 

Think: Young “Minutemen” in the American Revolution, youngsters on the barricades in the French Revolution, counter-sitters and marchers in the Civil Rights protests in the American South. 

Dramatic change followed these protests. And now, we watch the young men and women in the streets of Hong Kong.

So what to make now of at least four million young men and women flooding into the streets and plazas of large cities and local communities around the world to “protest” their views of “inaction on climate change challenges” by those adults in charge (government and business, especially).

In New York City, Rome, Amsterdam, Tel Aviv, Madrid & Barcelona, Montreal, Berlin, Vienna, and many other of the world’s cities, on September 20th hundreds of thousands of young people rallied in protest and called on leaders to protect our planet. 

There were marches, music, signs of all sorts, speeches, and other public expressions intended to draw attention to the dangers posed by climate change.

A real crisis in our time and a dangerous threat to the young men and women and their younger peers in the decades ahead!

As symbol of the moment, climate activist Greta Thunberg (at age 16) boldly sailed over the seas from her home in Sweden (rather than take a jet airplane) to get to New York City for the celebration of Climate Week and the gathering of leaders at the United Nations General Assembly).

In interviews she commented that she does not understand why world leaders — including the President of the United States — would mock children and teenagers for acting on science that advances evidence that climate change is real – and dangerous for humanity and our planet.

But business is responding – and investors and the public sector, too. 

In one of the focus features we bring you this week, in the Harvard Business Review author Andrew Winston tells us what 1,000 CEOs really think about climate change and inequality. (We know Winston from his best-seller, “Green to Gold”.) 

He reminds us that nearly 200 CEOs working through the Business Roundtable (BRT) declared that business is no longer just about maximizing shareholder profit.

Many more hundreds of CEOs are in agreement and many are focused on climate change.  Are we moving fast enough? 

A report from UN Global Compact and Accenture (“The Decade to Deliver: A Call to Business Action”) presents the views of more than 1,000 global executives on their views of sustainability.

All of the large-cap company CEOs interviewed believe that sustainability issues are important to the future success of their enterprises.  The biggest challenge is climate change. 

This week our Top Stories (plural) are presented as snapshots of where we are as consumers, investors, government leaders and yes, business leaders, focus on sustainability and especially climate change matters.

An appropriate footnote:  in rural Southwest Montana, a participant in the local rally by mostly young people had this to say in a letter to the editor of the Bozeman Daily Chronicle in response to criticism of the young peoples’ rallies:  

“Climate change is not a political issue. It is a life or death issue. Our children are asking in what way school matters when our future is disintegrating before our eyes. 

“Children have as much right and reason to march anyone.  They march because they can still see possibility, opportunity and reasons to fight four just futures. 

“Next time, maybe you should join us to understand what our kids are marching for.”

Our offerings for you this week:

After strikes, youth climate activists keep pressure on leaders
Source: Reuters 

What 1,000 CEOs Really Think About Climate Change and Inequality
Source: Harvard Business Review

Business leaders join the UN Global Compact Leaders Week to address climate crisis and advance the SDGs
Source: UN Global Contract

Banks worth $47 trillion adopt new UN-backed climate, sustainability principles
Source: UN News 

Markets face major risks over lax climate forecasts, top investors warn
Source: Reuters 

The second-largest gift to a US university was pledged to Caltech. It’s being used for climate research
Source: CNN 

Climate Activism Requires More Than Just Sustainability Statements From Brands
Source: Ad Week 

Most of world’s biggest firms ‘unlikely’ to meet Paris climate targets
Source: The Guardian 

Lead on global climate change and sustainability
Source: St. Peter Herald 

Editorial: Climate Week 2019
Source: Advanced Science News 

Climate crisis seen as ‘most important issue’ by public, poll shows
Source: The Guardian 

The DJSI – Pioneer in ESG/Sustainable Investing Indexes, Celebrating 20 Years of Industry Leadership and Partnership of RobecoSAM and S&P Global Dow Jones

by Hank Boerner – Chair & Chief Strategist, G&A Institute

ESG equity indexes are certainly all the buzz these days as many more institutional and retail investors are embracing sustainable investing and directing their investment dollars toward existing and new index families that qualify (or purport to qualify) as a suitable ESG/sustainable investment.

Of note, Morgan Stanley Institute reports that its surveys reveal that are there very strong signals in asset management circles for growth and opportunity as sustainable investing has definitely gone mainstream. 

Three-quarters of asset managers report they are adopting sustainable investing (up from a modest 10 percent in 2016).  Those surveyed for Morgan Stanley said they believe they can maximize financial returns while investing sustainably (62% said so); and 89% of respondents say their firm is devoting additional resources to the approach over the next year or two.

It was not always this way. The he pioneers (asset owners and their internal and external managers) focused on the early forms of sustainable investing back 40, 30, 20 years did not have a wide range of indexes/indices to choose from as they embraced a new approach in equity analysis and portfolio management. 

They believed that sustainable investing methods could help them do well by doing good, as the early adopters proclaimed.

To meet investor demand, in 1999, the early days in sustainable investing as we know it today, S&P Dow Jones and SAM (one of the first asset managers focused on sustainability) developed the pioneering approaches to sustainable indexing with a family of funds that have over the two decades worked to shape global sustainable investing practices. Today, SAM is known as RobecoSAM, based in Switzerland.

Over time, inclusion in “the DJSI” (family of indexes/benchmarks) became a distinct badge of honor and pride for a public company board and management.

Here at G&A Institute we hear that from a wide range of company managers in various sectors and industry categories. “The CEO wants to be in…”  Part of our service offerings is helping corporate managers understand and respond effectively to the annual Corporate Sustainability Assessment – the CSA.

Today with literally thousands of sustainable indexes and benchmarks and ESG investable products available to investors and more coming every day (it seems to us in our monitoring) the DJSI choices remain king-of-the-hill for sustainable investment professionals.

RobecoSAM and S&P Dow Jones Indexes continue to set the pace for this ever-more important class of benchmarks.

That first year, public companies were invited to provide ESG information to the partners – 280 did and 228 were included in the first versions of the DJSI. Today, 1,200 companies actively participate in the annual “CSA” exercise, providing critical ESG data and information to RobecoSAM comprehensive analysts.

The invitations go out from RobecoSAM to companies in the spring of the year and the new formulations for the family of DJSI indexes are announced in the fall (companies included and excluded). 

The period between the September announcement and the preparation for the next spring’s CSA response is critical for examining the results of (say, the 2019 response and results) and the preparation of the 2020 CSA response by the company.  In our experience, it can take a full six months of preparation to increase scores by providing updated data and information – which the competing peers are doing as well!

The more you know about the DSJI and related process, the better as you prepare for the 2020 CSA response when/if your company is invited by RobecoSAM.

There’s a complete history of the DJSI and a wealth of useful current information in this week’s Top Story for you.

SPECIAL BY INVITATION WORKSHOP FOR UNDERSTANDING THE DJSI AND RESPONDING TO THE CSA…


SPECIAL EVENT FEATURING ROBECOSAM

G&A Institute and Donnelley Financial Solutions (DFIN) have partnered to host an invitation only event featuring RobecoSAM to help corporate managers whose companies are responding – or plan to respond – to the annual Corporate Sustainability Assessment (CSA).  Our next program is scheduled for October 15, 2019 at Baruch College’s Vertical Campus in New York City.

This by-invitation program is specifically designed for qualified corporate managers (such as corporate IROs, corporate governance managers, and sustainability managers and others in the corporation charged with responsibility to respond to the CSA) to help workshop participants understand the process.

And, to hear first-hand from experts involved in the CSA process, including ESG investment professionals utilizing the data for scores and index creation (DJSI, S&P ESG Indexes for example).

To request an invitation to participate submit your info here:
https://www.ga-institute.com/index.php?id=502

The one-day event will feature speakers from RobecoSAM, S&P Dow Jones Indices, State Street, Abbott and Owens Corning, and valuable peer-to-peer conversations for corporate sustainability and IR managers. 

The event is sponsored by G&A Institute and Donnelley Financial Solutions, Inc., (DFIN) the leader in risk and compliance solutions, providing insightful technology, industry expertise and data insights to corporate clients around the world.

Top Stories

Top Stories

Dow Jones Sustainability Indices Review Results 2019
Source: Yahoo Finance – The three largest (by free-float market capitalization) additions to and deletions from the DJSI World this year are:

And also of interest…

State Street to Battle BlackRock, DWS With New Sustainable Funds
Source: Yahoo Finance – State Street Corp. is almost doubling its line-up of socially-responsible exchange-traded funds as it looks to compete with the likes of BlackRock Inc. and Deutsche Bank AG’s DWS Group in the burgeoning market for values-oriented…

3 Myths About Sustainable Funds
Source: MorningStar – In a 2017 Nuveen survey of investors, four out of five said they want their investments to make a positive impact on society and on environmental sustainability. And in an Allianz Life survey released in April, two thirds of…

Fidelity International launches ‘Sustainable Family of Funds’ ESG range
Source: International Investments – Fidelity International today announced the launch of its Sustainable Family of Funds (the Sustainable Family), a new cross-asset class fund range with a focused environmental, social and governance (ESG) framework.

Climate Change-Related Disclosure: The TCFD Is Here — the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures

Original Document: August 2017 – published in G&A’s “To the Point” Management Briefing Platform

Republished on  Sustainability UpdateOctober 2, 2019

by Hank Boerner – Chair and Chief Strategist – G&A Institute

The Work of the TCFD Will Affect Your Company’s Important Financial Disclosure & Filings.

And Your Relationship With Investors, Lenders, Asset Managers, Insurers, Public Sector Entities…

More climate-related disclosure in store for your company’s income statement/cash flow statement/balance sheet.

How will your company be affected by the FSB TFCD guidelines for your company’s ESG disclosure?

The Financial Stability Board (FSB) is a global, multi-stakeholder organization that brings together senior policy makers from the G20** nations plus leaders from the European Union (with 28 individual states), Hong Kong, Singapore, Spain, and Switzerland.

The Board’s gatherings include representatives of the G-20’s central bankers, regulatory leadership, bank and financial sector oversight leaders, and others.

The deliberate and work to create “financial stability” policies for countries to follow — these are not mandates, not replacements for existing sovereign authorities — that those at the table as thought leaders and influencers can also take home and implement in various ways.

There are six regional “consultative groups” that help coordinate activities in an additional 70-plus countries, including in developing economies & emerging markets.

In this way as financial sector policies are being formulated there is help available from more experienced professional (such as professional colleagues in developed nations, the G20 plus four group),

The work of the FSB (formed after the 2008 global financial crisis) is all about addressing risk in the financial services sector – the important tasks of identifying risk, addressing risk, avoiding risk, developing protective risk management approaches for underwriters (insurance companies); lenders (banks); investors (asset managers and asset owners).

And in “risk” for all of these entities and their activities there is the looming question of the possible impacts on all kinds of assets in a rapidly-changing global and in regional climate conditions.

The Finance Ministers and Central Bankers of the nations in the G-20 asked the FSB to address this evolving challenge and to review and make recommendations on how the financial sector can take account of climate-related issues. Think: The Federal Reserve and the Securities & Exchange Commission in the U.S.A. — the Bank of England in the U.K.

And the focus is on “risk” for all these entities and their activities.

Therefore, there is the looming questions about possible impacts of a changing climate on both corporate and fiduciary assets.

The FSB leaders convened a “Task Force on Climate-Related Financial Disclosures — the FSB TCFD*.

The task force is headed by Chair Michael Bloomberg (he’s former mayor of New York City, principal of Bloomberg LP, UN Envoy to Cities, chair of the SASB, etc.).  Mr. Bloomberg leads the 32-member task force; the work began in December 2015.

There were numerous invitations to stakeholders to submit suggestions (such as the American Bar Association); public meetings were held; industry input was solicited — and at year-end 2016 the recommendations were being drafted for public release in late-June 2017.

Quick review: The primary aims of the task force work were:

  • To develop climate-related disclosures that could promote more informed investment, credit, and insurance underwriting decisions;
  • This, in turn, would enable stakeholders to understand the carbon-related assets in the financial sector and the financial system’s exposure to climate-related risks.

The recent release of the task force’s draft report is an important heads up to boards and managers in many sectors — the carbon-related risk / the climate change risk is likely to be a very important consideration for the financial sector players going forward, in the ways they do business with your company.

It is important to note that the FSB task force focused on the financial impact of climate change on a corporation, especially in the financial services sector — not the impact of the corporation on the environment.

These are the four top-line thematic areas for corporate disclosure on climate change matters across sectors and industries; these are to be disclosed in either the regular public filings or in supplemental reports on a voluntary basis (so far):

Corporate Governance Factors
The organization’s governance structure around climate change risk and opportunities (in the USA, the SEC has reminded public company boards of directors of their responsibility to oversee this more than six years ago).

Strategies / Strategy Setting
The current and potential impacts of climate risks on the company’s strategies, and, operations, business, and financial planning.

Risk Management
The company should identify, assess and manage climate-change risks and disclose the processes used to do this.

Metrics / Targets To Be Set
Determining the appropriate metrics used and targets set by the organization to assess and manage climate-related risks and opportunities? These should be explained to stakeholders.

Think about the approach of the FSB TCFD guidelines and the impact on your organization in this way:

•  There are transition risks for a company which will include: policy, legal; technology; markets; corporate reputation issues.
•  Transition opportunities for companies will include: enhancements in resource efficiency; varied energy/sources; innovative products & services; corporate resilience.
•  All of the above could and do have an impact on the company’s financials — its revenues and expenditures.
•  The impacts should be reflected in key corporate disclosures: the 10K, the proxy statement, the income statements; cash flow statements; balance sheets.
•  Which then impacts: corporate assets and liabilities; capital and financing.
•  And all of this is the province of the board of directors and the C-Suite of the public company. The responsibility is clearly at the top of the organization in the Task Force work.

Ask yourself as you evaluate these developments:  What business is your company in?  How resilient to climate-related risk is your company? Are you taking advantage of climate change opportunities?

There is [Task Force] Guidance for Financial and Non-Financial companies in certain sectors. 

1. For the Financial Sector: Banks:  Insurance Companies; Asset Managers; Asset Owners.

2. For Non-Financial Industry Categories: [Initially] Energy; Transport; Materials & Buildings; Forest Products.  These industries are identified as accounting for the largest proportion of GHG emissions, energy usage, and water usage.

The task force suggests that companies in these sectors with more than US$1 billion in annual revenues should consider disclosing strategy and metrics and targets information in other reports when the information is not considered to be material and therefore included in the required financial filings.

It is expected that the adoption/uptake of the FSB task force recommendations by companies in the financial sector and in targeted industries will evolve over time, as companies disclose important information and [especially] as financial sector firms utilize the information in some way.

The task force adopted a five-year time frame for development of quality and consistency of reporting as suggested by the recommendations.

The ultimate goal: Broad understanding of the concentration of carbon-related assets in the financial system and the financial system’s exposure to climate-related risks (such as in the industries in focus).

The task force will be monitoring implementation of the recommendations beginning later in 2017 and into 2018 and will engage with stakeholders going forward.

Corporate Community Reaction

How did the corporate community react to these recommendations?
The FSB says more 100 companies with combined market caps of US$3.3 trillion and financial community firms with more than $24 trillion in AUM provided statements of support, encouraging the embrace of the TFCD recommendations.

The FSB task force recommendations closely align with other public disclosure standards and frameworks. Adoption would move a company in the direction of an integrated reporting structure.

The SASB recommendations for sustainability disclosure such as in the 10-k is closely aligned with material information (and materiality is addressed by the task force).

It’s important to keep in mind: The GRI Standards, taking effect in January 2018, replaces the current G4 framework for all corporate reporting; the GRI Standards will definitely move companies in the direction of reporting against the FSB TFCD recommendations.

If you have questions about the task force recommendations and the impact on your company, or the opportunities presented for enhanced disclosure for investors and stakeholders, the G&A Institute team is available for a conversation.

We are monitoring the uptake of the important climate change disclosure recommendations by U.S. and global companies going forward.

For information about the Task Force recommendations: https://www.fsb-tcfd.org/
For information about the Financial Stability Board (FSB): http://www.fsb.org/

# # #

Notes:

The TCFD:
* The Task Force Vice Chairs include Graeme Pitkethly, CFO Unilever; Denise Pavarina, Managing Officer Banco Bradesco; Christian Thimann, Group Head, Strategy, Sustainability and Public Affairs, AXA; and Yeo Lian Sim, Special Advisor, Singapore Stock Exchange.

Task Force Members include leaders at KPMG; BlackRock; Generation Investment Management; JP MorganChase; UBS Asset Management; Moody’s; Tata Group; Ernst & Young; Barclays; Bank of China; Deloitte; PGGM; Swiss Re; BHP Billiton; HSBC; Storebrand; Aviva Investors; ENI; S&P Global Ratings; Tokio Marine Holdings; Canada Pension Plan Investment Board; Daimler; Air Liquide Group; Dow Chemical; EnBW; PGGM. 

Keep in mind these important organizations are members of the Financial Stability Board:

USA:  U.S. Department of the Treasury; US Securities & Exchange Commission; Board of Governors of the Federal Reserve System

Canada:  Bank of Canada; Office of Superintendent of Financial Institutions; Department of Finance

China:  People’s Bank of Chain; China Banking and Insurance Regulatory Commission; Ministry of Finance

United Kingdom: Bank of England; Financial Conduct Authority; HM Treasury

Germany:  Deutsche Bundesbank; BAFIN; Bundesministerium der Finanzen 

The complete list is here: https://www.fsb.org/about/fsb-members/

The G-20

** The Group of Twenty (“G20”) nations comprise an international forum for discussing economic, financial and related issues. The Group of 20 account for more than 80% of the world Gross Domestic Product and almost the same amount of world population.

The first meeting of the Group was in Berlin in late-1999; there have been almost two dozen meetings since then; attendees include heads of state. (The initial participants were finance ministers and central bank leaders — the same players who asked for the Task Force to go to work on expanding corporate disclosure on climate change issues.) 

The G-20 nations are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of South Korea, Mexico, Russia, Saudia Arabia, the Republic of South Africa, Turkey, United Kingdom, United States of America – plus the European Union; plus the European Central Bank; plus The Netherlands and Spain, “non-members” that attends leader summits.

Also participating and invited to conferences: Chair, ASEAN Association of Southeast Asian Nations; African Union; New Partnership for Africa’s Development (NEPAD); World Health Organization (WHO); International Monetary Fund (IMF); United Nations; World Bank; International Labour Organization (ILO); Organization for Economic Cooperation and Development (OECD); World Trade Organization (WTO); Chile, representing the APEC nations; Asian Development Bank (ADB).  The invite list can vary. 

The G7 is a smaller group: Canada, France, Germany, Italy, Japan, United Kingdom, United States of America.

This was originally the G8; Russia was added (the eighth state) was suspended after the annexation of Crimea in 2014. The G7 governments’ focus is on issues in the more developed industrial economies.

Generation M – the “Millennials” – Making a Difference in Many Spheres of Society

by Hank Boerner – Chair & Chief Strategist, G&A Institute

For many years, our references to “generation” usually meant that we were speaking about the people living (and able to act) at the time. 

For example, President Franklin Delano Roosevelt in 1936 on accepting his party’s nomination to a campaign for second term (in the depths of the Great Depression), ended his remarks with this: “There is a mysterious cycle in human events.  To some generations much is given.  Of other generations much is expected.  This generation of Americans has a rendezvous with destiny…” 

President Roosevelt was a progressive and liberal leader who worked to save our democracy and in fact, capitalism. He was cautioning the nation about the need to be on guard to protect our freedoms as European fascist leaders such as Hitler and Mussolini came to power (and addressed internal U.S. terrorist threats as well).

The “generation” hearing his words would go on to fight for the nation and the free democracies of the “united nations” standing with the U.S.A., England, France and other countries in World War Two.

Some 28 years later, actor-politician Ronald Reagan (who would soon become Governor of California and then President of the United States) in “The Speech” in October 1964 in a call-to-action for political conservatives to move away from Roosevelt’s New Deal policies of the 1930s and 1940s told listeners:  You and I have a rendezvous with destiny.

Again, speaking across the spectrum of the audience to “the generation” of the time. And especially to voters in all age cohorts.

But with the coming of the “Baby Boomers” — those men and women born in the postwar, 1946 to 1964 and 77 million strong in total number — came a departure in the use of the general term and the characterizing of a specific cohort of men and women with defining tastes and cultural leanings (it is presumed).  They got a name — Baby Boomers. (The birth rates were high 3 million to 4 million during their 18 years’ of coming into the world.)

And so they were two-and-a-half again in total number in size than their parents’ generation — those to be known later as the “Silent Generation” and also as “the Greatest Generation” of WW II, as profiled by author Tom Brokaw (the former NBC-TV Network news anchor).

In the years after WW II each age and demographic cohort has been characterized and given a catchy title in this way.  Baby Bust (the children of the early wave of Boomers).  Gen X (born 1965-1980), Gen Y, the Millennials (coming of age in the 21st Century/Third Millennia).  Gen Z is a current fascination – they are the next wave of 21st Century leaders.

Generally, today’s Millennials were considered to be born after 1980/81 to 1996 — they are thus 23 to 38 years of age.  Larger than the GenXers, (today ages 38 to 53/54), the Millennials now outnumber the trendsetting Baby Boomers (especially the Boomers still in the workforce) and are busily shaping political, financial, business, cultural, investing, and other spheres of our society.

The buzz about Millennials goes along the lines of (what Morgan Stanley describes): Millennials and their younger cohort (teens and younger) will re-shape the financial industry (especially banking) in their tech-savvy, mobile-first image, which has ramifications for all consumers, companies and investors.  (GenX presented the last opportunistic “pocket of growth” coming of age during the 2008 crisis.)

Each week our team led by Editor-in-Chief Ken Cynar captures the essence of sustainability / responsibility news, perspectives and research results that we think you might be interested in. 

This week’s Top Story is by Junaid Wahedna, founder and CEO of Wahed Investments via MENAFN, providers of Middle East and North Africa tech networks and related services (the comments were published in its newsletter).

Topic: The impact of the Millennials on the tech industry — and on investing.  The members of the “M generation”, the author tells us, are focused on ethical issues, making a difference, and steadily shifting to sustainable & responsible investing approaches. 

They are making careful, conscious decisions and achieving results through positive impacts and bringing about real change.

Author Wahedna cites Morgan Stanley and Ernst & Young research of late (focused on the Millennials) and adds his own experience (his firm has State of Delaware and Amman, Jordan offices).  He concludes:  As long as young investors continue to express a need for social good, and the idea gains traction and familiarity, these ethical investment options remain entirely sustainable alternatives to the traditional confines of the wealth management landscape.

What are your views on the Millennial Generation – are you a member of “the cohort” that will be managing businesses, government and social sector organizations in the years ahead, or running your own business? 

If you would like to share your thoughts as a guest writer in how Millennials are shaping today’s society, do send us a note (to hboerner@ga-institute.com).

Meantime, for all our readers, everywhere (and of all ages and generations!), tune in to our Top Story this week, with focus on the wondrous generation that will run things in the 21st Century.

Top Stories

Millennials are changing the investing landscape, one ethical choice at a time   
Source: MENAFN – With the growing consciousness regarding ethical and sustainable investment choices, particularly from the millennial generation, we expect this sector to continue to grow in the coming years

For more on this fascinating topic, take a look at some of Morgan Stanley’s research at:

60% of the Russell 1000 Published Sustainability Reports in 2018 — Trends Among Large-Cap, Publicly-Traded U.S. Companies Included in the Russell 1000® Index — G&A Institute Shares Research Results

by Hank Boerner – Chair & Chief Strategist – G&A Institute

Topline
60% of the Russell 1000
Published Sustainability reports in 2018, however of the smaller set of the 1000 (500 companies) by market cap only 34% are reporting, compared to 86% of the largest 500. Click here for more details.

Question — How many times today do you think you looked at or mentioned a stock index to colleagues?

Some days investor and corporate conversations are all about stock index performance (up, down and sideways!). 

Stock indexes, explains Investopedia, are our powerful indicators for specific economies (such as that of the U.S.A.) and we are of course familiar with the bold face names whose “performance” many media report on constantly  – the “Dow” (the DJIA), Nasdaq Composite and S&P 500(r).

There are literally thousands more indexes/benchmarks used by investors for the analysis of their own performance (“against the benchmark”). Investable products are created using the benchmarks (the intellectual property of their owners (such as the Dow and various S&P indexes, like those for Real Estate, Energy, Consumer Staples, etc.).

The familiar S&P 500® (launched in 1957) has 500 of the largest U.S. companies by market cap and other factors and represents about 80 percent of the total value of the U.S. stock market (it is market-weighted, or capitalization weighted). This is owned by S&P Global Inc. and its S&P Dow Jones Indices units provide a wide range of indexes/benchmarks for global investors.

The 500 and other large-caps are represented as well in another large index universe — the Russell 1000 Index, owned by LSE (the London Stock Exchange). This benchmark for large-cap companies is used by investors to go beyond the S&P 500 to include up to 1,000 of the large-cap U.S. equities, including the S&P 500 companies.

The S&P 500 Index companies are the largest companies with US$8 billion or more in market cap, 50% float, certain liquidity and positive earnings. 

The Russell 1000 Index is a subset of the broad Russell 3000 Index® and represents the largest 1,000 companies in the U.S. equity market (the largest is Microsoft).  About 90% of the total market cap of all U.S. listed stocks are represented by this important bellwether index, says Investopedia.

Each year since 2011 the analyst team at G&A Institute has tracked the S&P 500 companies’ ESG reporting activities.  That first year we found just about 20 percent of the companies publishing “sustainability, responsibility, citizenship” et al reports. 

(These reports have titles such as Corporate Citizenship Report, Corporate Responsibility Reporting, Environmental Progress Report, and so on.)

In 2012 that number rose dramatically to more than half of the companies publishing such reports (53%).  Then each year after the number steadily rose (to 72% in 2013 and up to 86% in 2017).  We share the research results – you can see the latest “Flash Report” here.

The Russell 1000® Research Results
This year we expanded our research to include the “next 500” – the U.S. large-cap companies not included in the S&P 500 Index.  The top-line results:

  • 60% of the 1,000 companies are publishing sustainability reports in 2018.
  • The top half of the companies align with the S&P 500 universe and comprise 72% of the Russell 1000 universe that does publish a report.
  • Of the reporting companies, only 28% were from the bottom 500 of the Russell 1000 Index.
  • Of the 40% of that do not report, 83% were those smaller in market-cap, and only 17% were S&P 500 Index companies (reflecting the results of our annual S&P 500 research).

Takeaway: The larger companies by market cap are by a wide margin the publicly-traded firms that publish sustainability and responsibility reports, and it’s clear that their smaller peers in the Russell 1000 have a ways to go to catch up.

Those non-reporters are or will be hearing from their institutional investors that an annual sustainability or similarly-titled report is expected to be published by the firm, following the example of their larger peer companies in the Russell 1000.  Many of the large caps are already being asked questions about their ESG performance by investors, major customers and other stakeholders. 

Within their sector and specific industry categories, the reporting & disclosure pace is set by larger-cap peers.  The laggards (the large-cap companies in the Russell 1000 that are not reporting) will have ever-rising challenges ahead as the larger pacesetters expand their reporting efforts (usually competing with other large peers) and raising the bar for those companies not yet reporting in the respective industry category or categories for diversified firms.

Note the Russell 1000 was launched in 1984 by the Frank Russell Company and is part of a family of indexes that are market-weighted; today the benchmarks are owned by FTSE Russell, a subsidiary of the London Stock Exchange (LSE).

Governance & Accountability Institute team members help companies publish sustainability and responsibility reports and in various ways disclose data and information about their ESG strategies, performance and results (outcomes of the sustainability journey efforts). 

For more information please see our web site at www.ga-institute.com.

Information about our Russell 1000 Index analysis regarding public company ESG publishing is in the Flash Report, our Top Story this week.

Top Stories

FLASH REPORT: 60% of Russell 1000® Are Publishing Sustainability Reports, G&A Institute’s 2018 Inaugural Benchmark Study Shows   
Source: Governance & Accountability Institute, Inc. – In this inaugural benchmark study, G&A found that 60% of the [total] Russell 1000® published sustainability reports in 2018. Of importance to consider is roughly the top half (by market cap) of companies in the Russell 1000® are…

GRESB at the Decade Mark – the Global Real Estate Sustainability Benchmark Serving Investors, Real Estate Asset Owners and Managers, Developers…

by Hank Boerner – Chair and Chief Strategist, G&A Institute

A decade ago, two large institutional investors — PGGM Investments and APG Asset Management –and Maastricht University (The Netherlands) launched “GRESB” to try to develop more efficient access to comparable and reliable data related to the ESG performance of their investments.  (GRESB=Global Real Estate Sustainability Benchmark.) 

The initial research for the approach was done by Dr. Nils Kok and Sander Paul van Tongeren.

As the 10-year anniversary is observed in 2019, consider that GRESB data now covers US$4 trillion in real estate and infrastructure value, and the small group of pioneers (there were 10 founding members) is part of a considerable global network of institutional investors, asset owners / managers, and stakeholders including industry partners, ESG service providers and media platforms.

GRESB – Important Benchmark for Real Assets

The GRESB mission is to assess and benchmark the ESG performance of “real assets” (think: real estate and infrastructure) and move toward standardization and validation of such ESG data for consideration by capital market players.

Through the GRESB proces;s, real estate and infrastructure industry players can have vital business intelligence to compare where they stand against peers and develop strategies and action plans to catch up or surpass peers — along with a reliable means of sharing their ESG data with investors.

To give you an idea of how far the concept of the GRESB approach has come, today there are more than 1,000 entities participating in the 2019 real estate assessment and 17 funds and 393 assets participating in the 2019 infrastructure assessment. 

GRESB covers 100,000 assets in total (of which 66,000 are reported at the asset level for the real estate market).

The GRESB annual survey for asset owners can be challenging — but worth doing for the company.  The annual surveys are organized in (7) specific categories with 50 or more questions for responders’ consideration…the results are scores assigned by GRESB. 

A Guidance Document helps responders (such as asset owners / managers) organize their effort to strive for a higher score (“100” is tops; downward scores from there represent percentages).

GRESB real estate assessment is a reporting framework for listed property companies, private property funds, developers and investors that invest directly in real estate.

The GRESB developer assessment focuses on development activities.

GRESB bold name members today include CalPERS, Credit Suisse, BlackRock and Aviva on the investing side; and, CBRE, Brookfield, Centerpoint and Manulife Real Estate on the real estate management roster. (Click here for the Member list)

GRESB is reviewing its 2019 results on a global basis with briefing in world capitals.  There’ll be shared insights on trends and best practices and reflection on “lessons learned” in the first decade of GRESB.

For the meeting near to you, check GRESB events.

Governance & Accountability Institute teamed with GRESB management to produce an introductory webinar – “GRESB in 60 Days:  Tech, Tools & Best Practices to Respond…” 

Here you can find out why these reports matter, and how to get started on the GRESB journey.  Guest speakers include Matt Ellis, Founder of Measurabl (a G&A partner organization); Mark Delisis, at Avalon Bay Communities; Ulrich Scharf of GRESB; and Hank and Lou from G&A Institute. You can tune in here.

Here is information from Measurabl on GRESB.

The G&A Institute team advises and supports several real estate management client organizations.  For more information about our services to the industry, please email info@ga-institute.com.

The Top Story

GRESB expands its ESG coverage of the real assets industry 
Source: GRESB – The Benchmark for Real Assets 

Dramatic Change of Direction For The Business Roundtable With Issuance Of “Purpose Statement” Signed By The CEOs Of America’s Largest Companies

by Hank Boerner – Chair and Chief Strategist, G&A Institute

The Business Roundtable (BRT) is an organization of CEOs of the largest companies in the U.S.A. — firms that generate a combined US$7 trillion in revenues, employ 15 million people, invest $ 147 billion annually in R&D, and provide healthcare and retirements benefits for tens of millions of Americans.

Member companies operate in every one of the 50 states and through the organization the nation’s top business leaders work to influence major societal issues — tax policy, infrastructure needs, trade and other issues..

This universe of large companies is where many institutional and retail investors place their bets on the economic future and enjoy some of the fruits of the efforts of the enterprises they invest in. 

Investors provide much of the capital that make the wheels go ‘round for the BRT companies.  Consider: investors in the BRT member companies received almost $300 billion in dividends.

And so investors have been a priority concern for the CEO members for the almost half-century existence of the Business Roundtable. 

The BRT’s long-term guiding philosophy seemed to many to have been rooted in the period four decades ago when influential economists such as Dr. Milton Friedman of the University of Chicago advised the CEOs that their primary duty was to look out for the shareholders first…and all else would fall in place.

Professor Friedman famously set out the agenda for major company CEOs and boards in his essay in The New York Times magazine in September 1970: A Friednzan Doctrine.

“When I hear businessmen speak eloquently about the ‘social responsibilities of business in a free-enterprise system’…the businessmen believe that they are defending free enterprise when the declaim that business is not concerned merely with profit but also promoting desirable social ends, that business has a ‘social conscience’ …” he began.

In doing this, he explained, those running companies believe they “have responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers…”

Only people can have responsibilities, the professor said. A corporation or business as a whole cannot be said to have responsibilities, even in this vague sense.

He concluded his 3,000 word anti-CSR screed with this: “…the doctrine of social responsibility taken seriously would extend the scope of political mechanism to every human activity. It does not differ from the most explicitly collectivist doctrine…” (Read: Communism; this was written in the days of the Cold War.)

Dr. Friedman saw corporate social responsibility as a “fundamentally subversive doctrine and that business had one and only one social responsibility: to increase profits so long as it stays within the rules of the game…”

In fact, the business managers / owners are, or would be if anyone else took them seriously, “preaching pure and unadulterated socialism.”

We Are In a New Era

We are almost 50 years away from the 1970 essay by the good professor.

The game has changed. The world has changed. The nature of the former Russia-USA standoff of the Cold War era has changed. Attitudes in the business (corporate) community have changed (witness the BRT “purpose statement”). Institutional investor attitudes have changed (see: sustainable investing). A vast array of stakeholders have entered this discussion since the 1970s.

So What Is The Purpose of The Corporation in the 21st Century – in 2019?

In 1997, the Business Roundtable issued its statement of the purpose of the corporation:  “The paramount duty of management and of boards of directors is to the corporation’s stockholders.”

No more.  This week, the Business Roundtable moved beyond the long-term “shareholder primacy” operating principle, releasing its revised “Statement on the Purpose of a Corporation” — representing a dramatic course change in the principle operating philosophy of this powerful, CEO-led organization.

The almost 200 CEO signatories pledged to: 

–invest in employees;

–deliver value to customers;

–deal fairly and ethically with suppliers;

–support communities in which they work; and, –generate long-term value for shareholders.

Each of stakeholders is essential, the Purpose Statement reads.  We commit to deliver value to all of them, for the future success of our companies, our communities, and our country.

Jamie Dimon, CEO of JPMorgan Chase is the current head of the BRT and played an important role in the dramatic shift of attitude in the official stance of the organization.  He sees this as “an acknowledgement that business can do more to help the average American.”

Adding color to this critical public re-positioning:  “Society gives each of us a license to operate. It’s a question of whether society trusts you or not,” Ginni Rometty, CEO of IBM told Fortune.

On its web site, BRT states “as leaders of America’s largest corporations, BRT CEOs believe we have a responsibility to help build a strong and sustainable economic future in the United States.”

We can say here that it appears that ESG and Sustainability basic principles are now “officially recognized” by the members of the CEO association — and have been enshrined in the declaration of the purpose of the U.S. large corporation.

The Purpose Statement does touch on numerous concerns of the sustainable investor – a good step forward for this powerhouse organization.

Perspective: This new BRT direction is about ESG / Corporate Sustainability / Corporate Responsibility / Corporate Citizenship — the issues and topic areas we deal with every day here at G&A Institute!

The BRT was created two years after the Milton Friedman essay appeared in The New York Times magazine (October 1972). Institutional investors were flooding into the equities market with relaxation of “prudent man/prudent investor” rules or guidelines of that the day. Large publicly-traded companies were the crown jewels of cities and towns (think: IBM, Hudson Valley, NY; GE, Connecticut; GM, Detroit).

The CEOs of that day — the predecessors to today’s BRT leadership — were operating in very different societal environments than in the 21st Century.

Congratulations to the CEOs who signed on to the new Purpose — no doubt the conversations with institutional investors will be centered in some ways on the new “official” BRT perspectives in the days ahead.

For the record, note that the BRT released its first sustainability report — “SEEing Change” — in April 2008 with 32 companies contributing to the report. The tally was 155 companies involved by 2017, with goals being set for E and S improvements.

We are following the discussion kick-started by the Purpose Statement and will have more to perspectives to share in the weeks ahead.

Our Top Story is the excellent Fortune feature on all of this by veteran business writer Alan Murray. It’s a great summary of the dramatic move by the CEO signatories this week.Click here to read the Business Roundtable’s “Statement on the Purpose of a Corporation” and see the list of corporate CEO signatories. 

The Top Story

America’s CEOs Seek a New Purpose for the Corporation
Source: Fortune – For more than two decades, the influential Business Roundtable has explicitly put shareholders first. In an atmosphere of widening economic inequality and deepening distrust of business, the powerful group has redefined its mission…

Dramatic Change Of Direction For The Business Roundtable With Issuance Of “Purpose Statement” Signed By The CEOs Of America’s Largest Companies

The Business Roundtable is an organization of CEOs of the largest companies in the U.S.A. — firms that generate a combined US$7 trillion in revenues, employ 15 million people, invest $147 billion annually in R&D, and provide healthcare and retirements benefits for tens of millions of Americans.

Member companies operate in every one of the 50 states and through the organization top business leaders work to influence major societal issues (tax policy, infrastructure needs, trade and other issues).

This is where many institutional and retail investors place their bets on the economic future and enjoy some of the fruits of the efforts of the enterprises they invest in.  Investors provide much of the capital that make the wheels go ‘round for the BRT companies.  And, investors in the BRT member companies received almost $300 billion in dividends.

And so investors have been a priority concern for the CEO members for the almost half-century existence of the Business Roundtable.  The guiding philosophy traces back to the period four decades ago when influential economists such as Milton Friedman of the University of Chicago advised the CEOs that their duty was to look out for the shareholders…and all else would fall in place.

In 1997, the Business Roundtable issued its statement of the purpose of the corporation:  “The paramount duty of management and of boards of directors is to the corporation’s stockholders.”

No more.  This week, the Business Roundtable moved beyond the long-term “shareholder primacy” operating principle, releasing its revised “Statement on the Purpose of a Corporation” — a dramatic course change in the principle operating philosophy of this powerful, CEO-led organization.

The almost 200 CEO signatories pledged to: invest in employees; deliver value to customers; deal fairly and ethically with suppliers; support communities in which they work; and, generate long-term value for shareholders.

Each of stakeholders is essential, the Purpose Statement reads.  We commit to deliver value to all of them, for the future success of our companies, our communities, and our country.

Jamie Dimon, CEO of JPMorgan Chase is current head of the BRT and played an important role in the dramatic shift of attitude in the official stance of the organization.  He sees this as “an acknowledgement that business can do more to help the average American.”

Adding to this critical public re-positioning:  “Society gives each of us a license to operate. It’s a question of whether society trusts you or not,” Ginni Rometty, CEO of IBM told Fortune.

On its web site, the organization states “as leaders of America’s largest corporations, BRT CEOs believe we have a responsibility to help build a strong and sustainable economic future in the United States.”

ESG and Sustainability basic principles are now “officially recognized” by the members of the CEO association and enshrined in the declaration of the purpose of the U.S. large corporation.

The Purpose Statement does touch on numerous concerns of the sustainable investor – a good step forward for this powerhouse organization.

Our Top Story is the excellent Fortune feature on all of this by veteran business writer Alan Murray. It’s a great summary of the dramatic move by the CEO signatories this week.

Click here to read the Business Roundtable’s “Statement on the Purpose of a Corporation” and see the list of corporate CEO signatories. 

The Top Story

America’s CEOs Seek a New Purpose for the Corporation
Source: Fortune – For more than two decades, the influential Business Roundtable has explicitly put shareholders first. In an atmosphere of widening economic inequality and deepening distrust of business, the powerful group has redefined its mission…