Today: Huge Financial Flows as the U.S.A. Aids the Business Community and Workers, Families…How Is the Flow Facilitated?

April 28, 2020 –   #WeRise2FightCOVID-19  Excellent in Corporate Citizenship on Display in the Coronavirus Crisis – #18

Introduction
These are the times when actions and reactions to crisis helps to define the character of the corporation and shape the public profiles of each of the corporate citizens. For the managements of companies, these are not easy times.

Important decisions are to be made, many priorities set in an environment of unknown unknowns — and there are many stakeholders to be taken care of.

The Good News 
Corporations are not waiting to be part of the solution – decisions are being made quickly and action is being taken to protect the enterprise.  This is no easy task while protecting the corporate brand, the reputation for being a good corporate citizen, watching out for the investor base and the employee base — and all stakeholders.

What are companies doing? How will the decisions made at the top in turn affect the company’s employees, customers, hometowns, suppliers, other stakeholders?  Stay tuned to our series.

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

The government of the United States of America is directing hundreds of billions’ of dollars toward individuals, families, business enterprises, and local and state governments to aid in the response to the coronavirus emergency.  How do the much-needed funds reach the intended recipients?

As the U.S. Congress, the Federal Reserve System and the Treasury Department (and other agencies) make the moves to provide continuing financial support for small businesses, laid off and furloughed employees, and major industries like airlines, the ramping up of the enabling technologies to facilitate the financial flow is a herculean task.

Take the first round of financial aid to small business, with funds channeled from the Small Business Administration (SBA) through big banks, regional banks, community banks, credit unions, and other qualified lenders.

As U.S. banks and credit unions faced the “instant” onslaught of a huge volume of applications for financial aid, FIS (working with a growing number of financial institutions) leveraged its “Real-Time Lending Platform” to digitize and automate the lending process. The platform is now processing a high volume of loans and can be scaled to meet demand as needed.

FIS created a COVID-19 Online Resource Center to provide its clients with options and information to “adapt and rebound” to virus emergency challenges. Link:  https://www.fisglobal.com/response-center

About the Company
FIS is a leading provider of technology solutions for merchants, banks and capital market firms worldwide.  The company has more than 55,000 people “globally dedicated to advancing the way the world pays, banks and invests by applying its scale, deep expertise and data-driven insights”.  FIS is a Fortune 500 enterprise and is included in the S&P 500® Index. (FIS:NYSE)

FIS is now using its technology platforms to enable U.S. banks and credit unions to provide loans and other economic relief to small businesses and merchants under the Small Business Administration (SBA) “Paycheck Protection Program” (that is within the CARES ActCoronavirus Aid, Relief and Economic Security Act).

The PPP authorizes lenders (in the first round) to provide up to $349 billion in funds to U.S. small business and merchants that are impacted by COVID-1. Loans can be forgiven in time if used for payroll costs and certain other expenses; all funds must be used by June 30th.

FIS is also waiving minimum monthly service charges for April for U.S. and U.K. merchants and providing free virtual terminal access for U.S. merchants and retailers enrolled in the Worldpay from FIS IQ online portal (for remote processing).

The company is also providing online grocery shopping for SNAP benefit recipients (SNAP is a U.S. Department of Agriculture program – the Supplemental Nutrition Assistance Program).

Using FIS technology, SNAP benefit recipients in a piloted program (rolled out in Washington State, Oregon and Nebraska) can use their Electronic Benefit Transfer (EBT) cards to make online purchases of groceries through authorized retailers – such as Walmart and Amazon.

FIS government agency clients in the states of Arizona, Florida, Idaho and California were next in line for the program. (Typically, EBT users have to make their purchases at brick & mortar retailers.)

In 2017 CEO Gary Norcross became a signatory of CEO Action for Diversity and Inclusion, a network of 500-plus CEOs in 85 industry categories.

Talk About Overload
In the context of describing FIS’ involvement in the Federal aid programs, consider the complexity of banks, credit unions and lenders managing the load of loan applications.  In FY 2019, SBA managed just $28 billion in loans.  That was for 52,000 loans totaling $23 billion under the flagship 7A program and 6,000 loans for $5 billion under the SBA 504 program.

As of April 24, 2020 the volume is:  38,984 loans totaling $7,967,174,888 under just the SBA Disaster Assistance Nationwide National Economic Injury Disaster Loan program!

And no doubt there is more Federal financial aid to be on the table as the coronavirus continues.

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G&A Institute Team Note
We continue to bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency.

The new items will be posted at the top of the blog post and the items today will move down the queue.

We created the tag “Corporate Purpose – Virus Crisis” for this continuing series – and the hashtag #WeRise2FightCOVID for our Twitter posts.  Do join the conversation and contribute your views and news.

Do send us news about your organization – info@ga-institute.com so we can share.   Stay safe – stay healthy — keep in touch!

 

Addressing Supply Chain Challenges in the COVID-19 Era

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

Since the concept of a “new world order” helped to usher in a new era in global trade some 30+ years ago with the end of the Cold War, barriers to trade have continued to tumble. “GATT” (the “General Agreement on Tariffs and Trade” continuing rounds of global trade talks that began in 1947 under United States leadership) gave way to the World Trade Organization (WTO) in 1995.  New rules were applied, and trade continued to become “more liberalized”.  Corporate interests responded with dispersal of many their operations.

Large manufacturing companies spread out their sourcing to many new areas of the world, building a substantial network of suppliers in far-off lands. Mid-sized and smaller firms followed the example and began to source globally.  Manufacturing moved from “home country” to be situated in many other countries over time.

As companies set up their operations in many countries and sourced almost everywhere on the globe; fleets of cargo vessels plied the seas with stacks of containers on their decks.

Result:  today’s diverse, complex, spread out networks of tier one, two and three suppliers, and non-home country factories and facilities — many in China and East Asia and Pacifica nations — have dramatically changed the face and very nature of “home country companies” (such as those based in North America and Western Europe).

Therein, we find the risk!  Today we present two commentaries for you on today’s global supply chains and how to make these more links less risky and more sustainable — and to address the inherent risk in the global supply chain mix.

Writing in SupplyChainBrain, David Cahn suggests “…it is essential for companies and their supply chains to realize that customers prefer to engage with organizations that are focused on environmental sustainability. Significant opportunities exist for leveraging people, processes and technologies to achieve operational efficiencies.”

He suggests five steps in “the Pursuit of Sustainability” that spans the corporate enterprise.  His five areas “ripe for improvement” include: sourcing; manufacturing; recycling; packaging; transportation. There are numerous tips in each of the categories that may be of value to your organization in his commentary.

Author David Cahn is global marketing director for Elemica, a Digital Supply Network for manufacturers that automates and provides visibility into supply chains.

Visibility and understanding the risks inherent in supply chains is important and our second commentary for you comes from our colleague Pam Styles, who poses the question:  “what’s in your supply chain mix”?

The COVID-19 pandemic has exposed countless concerns for corporate managers, and for investors and providers of capital — including global supply chain management issues, Pam writes.  And, she suggests, ESG/sustainability practitioners may be able to offer unique vantage to assist the debrief in collaboration with company supply chain experts and management teams.

Her comments are directed at investor relations officers (IROs) who are on point to answer analyst and investor questions about supply chain risks and issues as well as to corporate ESG practitioners.

Pam concludes: When it comes to Sustainability – climate change is important but supply chain is urgent.  Pam is a long-time Fellow of G&A Institute and a valued collaborator on client projects. She is a long-time member of NIRI and the NIRI Senior Roundtable.

Featured Stories

The Pursuit of Sustainability Spans the Enterprise
Source: Supply Chain Brain – These days, it’s essential for companies and their supply chains to realize that customers prefer to engage with organizations that are focused on environmental sustainability. Significant opportunities exist for leveraging…

Corporate ESG Stakeholders – Supply Chain Management – What’s in Your Supply Chain Mix?
Pam Styles commentary in G&A Institute’s Sustainability Update blog:
Does your company regularly review and remediate identifiable aggregate risks across the company’s supply chain and associated third-party relationships?

 

Boston Common Asset Management – Staying the Course, With Adjustments

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

Boston Common Asset Management with offices in Boston and San Francisco has been a sustainable and responsible investor since its founding in 2003.  The clients served are endowments, foundations, religious/faith-based groups, pension funds, family offices, and mission-driven organizations.

Part of its mission is to strive to improve corporate behaviors and responsibilities through engagement with corporate boards and executives and being active in proxy season with filing of resolutions, supporting other institutions doing the filing (often through collective actions) and voting practices.   Of course, like other asset managers, Boston Common is challenged as well by the changes brought about by the spreading coronavirus.

The Earth Day message from Lauren Compere, Managing Director of Boston Common included these points:

  • The firm’s focus is on both local and global issues – such as the health and safety of our community, planet and Boston Common’s impact as an active, engaged investor. Even as the impacts of COVID-19 are addressed, the work must go on in addressing systemic risk, especially the climate crisis.
  • Engagements (with companies) have not changed, but the tenor and lens through which public companies are evaluated and act will change.
  • Boston Common feels it is important in the crisis for portfolio companies to prioritize stakeholder well-being and the firm commends those companies that step up to show leadership.
  • At the same time, some companies are being called out – those firms that are price gouging, firing employees who are concerned about their health, and limiting access to much-needed products on the front lines.

What Boston Common is doing:

  • Having direct dialogue with company managements.
  • Working with investor networks and partners.
  • Looking at its own “responsible business” practices.
  • Planning and re thinking its future work.

Some specifics:

Company Engagements — Issues include human rights, eco-efficiency, climate risk. The changed tone is having more empathy, with more personal tone in these engagements.  Company responses are applauded and accountability is discussed – balancing interests of shareholders and stakeholders.

Working in Partnerships and Coalitions — The ICCR is a key partner of Boston Common, which is a signatory of the “ICCR Coronavirus Investment Statement” on workplace and supplier practices, and engagement of pharma companies to coordinate & collaborate on urgent medical needs. Link: http://ga-institute.com/Sustainability-Update/watching-the-watchers-what-investors-esg-raters-are-doing-in-the-virus-crisis/

PRI:  The firm joined the Principles for Responsible Investment (PRI), which has awarded Boston Common an A+ rating for our consecutive years.

Boston Common itself, a B-Corporation, is taking these actions:

  • Continuing to pay composting, cleaners, other contract vendors who rely on the income.
  • Supporting local food banks and social agencies addressing urgent community needs in Boston and San Francisco, contributing to date $26,630 in firm and employee-donated funds.
  • Future Focus” includes a “refresh” of engagement priorities and investor and private sector actions.  A range of societal issues that have been in the spotlight during the crisis must be addressed:  how work is valued; the need for a sustainable living wage; public health risks posed by industrial agriculture and food insecurity; unequal healthcare access and outcomes for low-income and communities of color; corporate tax practices, need for investment in healthcare infrastructure, social safety nets…and more.
  • Boston Common is adjusting the lens through which the firm examines its “asks” of companies and actions, and keeping systemic risk in focus (such as for issues like climate change, digital human rights, environmental protections as EPA rolls back the regs, controversial energy projects.)

Much will change with the virus crisis, MD Lauren Compere points out. “We must ensure that as investors we memorialize the lessons learned in this crisis, empowering companies to manage for the long-term, with a focus on joint recovery and prosperity as the world emerges from lockdown.”

Boston Common has long been a proponent for responsible behavior of corporations and investors and regularly joins with other asset managers in initiatives to drive change.

The issues involved include Amazon de-forestation, climate change and the portfolio risk posed by fossil fuel, urging the Detroit Big 3 (GM, Ford, Fiat-Chrysler) to drop opposition to California’s waiver authority on auto emissions standards, encouraging boards to include more diversity in director choices, and bank financing of controversial projects such as the Dakota Access Pipeline.

About the name:  Many people have visited the beautiful Boston Commons in the middle of this New England city.  The firm’s name comes from the concept of standing at the intersection of the economic and social lives of the community; the “universal commons” is the firm’s shared mission and vision.

Information: https://bostoncommonasset.com/Membership/Apps/Boston_HP_Input_App.aspx 

 

Watching the Watchers – What Investors & ESG Raters Are Doing in the Virus Crisis

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

As we have numerous times in this space commented about the dramatic shift from a shareholder primacy focus (for public companies and investors) to today’s stakeholder primacy operating environment, the views of key stakeholders – investors, and their service providers – are critical during the virus crisis.

Today we’re sharing the actions and perspectives of the investor-stakeholders…as the investor coalition in our first item notes…

“…the long-term viability of the companies in which we invest is inextricably tied to the welfare of their stakeholders, including employees, suppliers, customers and communities…”


Investor Coalition Focuses on Corporate Response to the Crisis

The Interfaith Center on Corporate Responsibility, a coalition of 300 institutional investors long focused on corporate responsibility and sustainability, joined forces with the Office of New York City Comptroller Scott M. Stringer and Domini Impact Investments LLC to develop an “Investment Statement on Coronavirus Response” — to urge the business community to take what steps they can and offered five (5) steps for corporate managements to consider.

These include:

  • Providing paid leave – emergency leave for all employees, including temps, part-timers, and subcontracted workers.
  • Prioritizing health and safety – limiting exposure to COVID-19, rotating shifts, enhancing protective measures, closing locations, setting up remote work, additional training where appropriate.
  • Maintaining employment – retain workers as much as possible; a well-trained and committed workforce will help companies resume operations quickly; also, companies should watch for potential discriminatory impact during and after the crisis.
  • Maintaining supplier/customer relationships – As much as is possible, companies should maintain timely or prompt payments to suppliers and work with customers facing financial challenges to help stabilize the economy, protect communities and small businesses, and ensure a stable supply chain will be in place when operations return to normal.
  • Practice financial prudence – the investors state they expect the highest level of ethical financial management and responsibility in the period of (acknowledged) financial stress. As “responsible investors” (the signatories) the expectation is that companies will suspend share buybacks, and limit executive and senior management compensation for the duration of the crisis.

Beyond these, the investors urged companies to consider such measures as childcare assistance, hazard pay, assistance in obtaining government aid for suppliers, paying employee health insurance for laid off/furloughed workers, and deploying resources to meet societal needs related to the pandemic.

Over the past few years, the investor coalition points out, corporations have shown leadership by using their power as a force for tremendous good. This kind of leadership if critically needed now. And, business reputation and social license to operate is at stake.

As we prepare this about 200 long-term institutional investors with AUM of US$5 trillion had signed on to the effort, including: the AFL-CIO funds, American Federation of Teachers, Aviva Investors, Boston Common Asset Management, the Chicago City Treasurer, Communications Workers of America, Connecticut State Treasurer Shawn T. Wooden, Delaware State Treasurer, Illinois State Treasurer Michael Frerichs, International Brotherhood of Teamsters, Investor Environmental Health Network, Office of Rhode Island General Treasurer Seth Magaziner, Oregon State Treasurer, Robeco, SEIU, UAW Retiree Medical Benefits Trust, Treasurer of the State of Maryland, Vermont State Treasurer, and a large roster of faith-based institutions and religious denomination funds.

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Walking-the-Talk of Corporate Responsibility

Refinitiv provides investors with ESG ratings and perspectives on corporate ESG performance and builds ESG / sustainability considerations into products and services for investor clients. The company announced what it is doing to maintain its forward ESG momentum during the crisis.   And the changes will over time affect the public companies that are rated and ESG news distributed worldwide by Refinitiv. 

On Earth Day 2020, the folks at Refinitiv – this is one of the world’s largest providers of financial information – announced the beefing up of their own operations…walking the talk of what they provide to investor clients in terms of ESG Data and solutions for evaluating public companies’ ESG performance.

Refinitiv is putting in place for itself more stringent, science-based emissions targets, climate change reporting standards to meet the TCFD’s recommendations, and is joining the RE100 initiative to source 100% of its electricity from renewables.

Refinitiv had made three core pledges on the environment, social impact and sustainable solutions to support the UN SDGs. Part of this was a goal of achieving carbon neutrality before the end of 2020. The company is joining the Business Ambition For 1.5C commitment; aligning its own corporate reporting with the Task Force for Climate-Related Disclosures (the TCFD); and by this coming summer should be 100% in terms of how they source energy from renewables.

Refinitiv recently launched “The Future of Sustainable Data Alliance” to accelerate the mobilization of capital into sustainable finance, and will work to sustainability “at the core of product offerings”. Refinitiv serves more than 40,000 institutions in 190 countries, providing ESG data for 15+ years.

We can expect that these moves will result in the intensifying of the evaluation of corporate sustainability efforts by this major financial information provider. As the Refinitiv CEO David Craig comments:

The pandemic is clearly providing humanity with a re-set moment: a stark reminder about our fragility as a species and a sharp lesson about what happens when we mess with nature. It is also a moment when the old rules about the role of the state no longer apply. We can therefore attack the twin challenges of COVID-19 and climate change simultaneously, not sequentially. After all, when again will we be at a moment when governments are injecting such unprecedented sums into the economy just as the world needs up to $7 trillion a year of renewable investments to hit 2030 development and climate targets.”

Luke Manning, Global Head of Sustainability and Risk Enterprise at Refinitiv, adds:

Our commitment is going further than before and aiming for more ambitious emissions reductions that – if repeated by businesses across the world – should limit atmospheric warming to 1.5C above pre-industrial levels. If we want to truly progress the climate agenda we need to help everyone understand that tackling it is in all our personal and financial self-interest. It’s not just about the impact we are having on the environment, but the impact the environment is having on us.

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Morningstar Acquires Full Ownership in Sustainalytics

Morningstar, a leading firm in providing investment research to individual and institutional investors in North America, Europe, Asia and Australia-Pacific region, began measuring the performance of ESG-focused mutual funds and ETFs three years ago. As part of the initiative, Morningstar acquired a 40% interest in the ESG ratings organization, Sustainalytics.

Now, that interest will be 100% as Morningstar solidifies its competitive advantage in measuring the performance of ESG investable products. Says CEO Kamal Kapoor:

“Modern investors in public and private markets are demanding ESG data, research, ratings, and solutions in order to make informed, meaningful investing decisions. From climate change to supply-chain practices, the nature of the investment process is evolving and shining a spotlight on demand for stakeholder capitalism. Whether assessing the durability of a company’s economic moat or the stability of its credit rating, this is the future of long-term investing.

“By coming together, Morningstar and Sustainalytics will fast track our ability to put independent, sustainable investing analytics at every level – from a single security through to a portfolio view – in the hands of all investors. Morningstar helped democratize investing, and we will do even more to extend Sustainalytics’ mission of contributing to a more just and sustainable global economy.”

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As companies large and small, public and private, step up to help society during the virus crisis, they burnish their reputation and social license to operate.And help society cope with the impact of the crisis on individuals, families, communities and institutions. 

We’re bringing you the news of those corporate actions.  And, we’re watching the investment community for their reactions, and their intention to encourage public companies to stay the course of their sustainability journey during the virus crisis.  Stay Tuned to this blog. 

It’s Earth Day Again – Let’s Celebrate – and Pledge Again to Defend Mother Earth!

For Earth Day – Plus 50 – April 22, 2020

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

The first Earth Day was the idea of and championed by a United States Senator, Democrat Gaylord Nelson of Wisconsin on April 22, 1970. Fifty years ago!

Let’s also celebrate his life (1916-2005) and the environmental movement he helped to launch as we observe Earth Day 2020.

For those of us who were not around back in the day, I will also offer up some background for you as we celebrate the 50th Earth Day.

Why Earth Day?
In 1970, there were too many assaults on the nation’s environment. On Our Good Earth with air, water, soil polluted – in many parts of the nation, we were really heavily polluted!  (There are still SuperFund sites being cleaned in many states.)

The American landscape was rich with manufacturing facilities and processing plants, located in every state. Our manufacturing and processing exports in the post-WW II period comprised fully one-quarter and more of all world trade.

The generosity of the U.S. in creating the Marshall Plan to help our former wartime enemies build up their economies and our WW II allies’ economies fueled the exports of American-made goods. 

Even today, U.S. manufacturing (really cleaner!) accounts for half of U.S. exports. U.S. manufacturing today by itself makes up the world’s 10th largest economy (ahead of China, Japan, Germany and many other manufacturing centers). But back in the day…

The Importance of U.S. Manufacturing in the Post War
After World War II, the U.S. was the dominant manufacturing center of the world. Germany and Japan factories were coming back on line, having suffered tremendous damage [to each country’s industry].

Early in the post-WW II period many European companies began setting up factories in the U.S. (chemicals, pharma) — and many of those companies were serious polluters here, as they were in Europe. (One reason why European investors were early adopters of ESG approaches – not often discussed.)

In 1951, “re-armament” was in full gear and the Cold War was on. Military production was greater than for consumer goods – and that meant many more plants would be turning out goods without necessarily protecting the environment around the plant. (“In the national interest…”)

Solvents used for manufacturing would go into the ground. Emissions from toxic fumes, into the air. Solid and liquid waste – into ground, or waters (streams, bays, rivers, oceans). As consumer goods manufacturing rose, a “Guns & Butter” economy emerged in the U.S., with the factories running in two or three shifts. Out put steadily rose. So, too, nasty byproducts.

The steady assault on Mother Earth by industry and governments steadily rose.

Among the catalysts for action after two decades:

The Cayuhoga River, flowing through Cleveland, Ohio, the industrial city on the Great Lakes, caught fired and the junk on top burned. (Noontime, June 22, 1969 – a five story fire flashed out of the river in the downtown!) Info at: https://clevelandhistorical.org/items/show/63

A huge oil spill just offshore fouled the beaches of Santa Barbara, California. January 28, 1969 – 3 million gallons of crude spilled off the shoreline of the beautiful city by Union Oil (now Unocal), leaving an oil slick of 35 miles in length along the California shores…killing bird, fish, mammals (and tourism!). 1,000 gallons of oil per hour flowed for a month.

The federal government had relaxed the regulations on casing around the drilling hole and an explosion ripped the sea floor. (Sound too familiar in 2020?)

The federal government did stop offshore drilling for a few years (in the state’s waters) but then that restriction was relaxed and The Los Angeles Times (which has covered the story for five decades) says today there are 23 oil and gas leases in state waters.

The California spill is considered a catalyst for the modern environmental movement. Richard Nixon was a California native — then sitting in the Oval Office — and was moved to action shortly after the spill.

The LA Times coverage is at: https://www.latimes.com/local/lanow/la-me-ln-santa-barbara-oil-spill-1969-20150520-htmlstory.html

In the eastern U.S., the trees on mountaintops were constantly seared and leaves gone, branches standing naked of greenery. The “acid rain” coming from parts of the nation to the west wafted high up and denuded New York and New England mountaintop greenery (that was SOX, NOX, etc from smokestacks carried far to the east on the higher winds).

Those with light color cars would be scrubbing the dark stains running vertically on the vehicle. Acid rain streaks. We saw those on our homes (the white paint, the rain gutters, these would be streaked with black stain).
https://www.sciencedaily.com/releases/1998/09/980928072644.htm

Personal Remembrances
As a boy, heading in the car to Manhattan or Brooklyn with family, I remember being curious about the large black, brown, yellow clouds hovering above the Empire State Building or Chrysler Building in midtown. Wafting along, at leisurely pace. You could “smell” the city as you approached. There was often a coating of soot on my shirt or coat when I returned home.

“Smog” enveloped many American and European cities. (Fog and smoke.) I have written a few times about my flying through or over city smog. Looking down below from the cockpit, thick yellow clouds often blanketed Manhattan on hot summer days. Flying through (at lower levels) I would be on instruments until I was safely over New Jersey’s rural parts heading west. And clean air again filled the cockpit!

You could always see the bellowing smoke coming out of New York City’s electric generating plants, furnaces fired by coal in those days.

For a time, to build flight hours, I flew around the city and suburbs on weekends broadcasting as “Captain Hank, Your Eye-in-the-Sky” for radio stations WGBB and WGSM. Checking on traffic to the beach, open spaces Jones Beach parking fields, fishing offshore, surfing at Gilgo Beach, and the like. Quite often I would be dodging in and out of smog banks that drifted eastward.

Up in Connecticut, driving one day along a river road, I was startled to see “rubber rocks” along the river bank. A large rubber tire company’s outflow of waste from the factory to the river had coated the rocks before heading downstream into Long Island Sound and then to the Atlantic Ocean. Everything would just disappear into the seas, right? (Prevalent thinking of certain business leaders at the time – externalize the crap and let someone else pay for results.)

Up in The Bronx (boro of New York City) and the northern parts of Manhattan, trucks would idle for hours as they picked up or dropped off food at the terminals…the children of minority populations living there had high rates of asthma. Part of the payment for the necessary local industry that employed their parents.

New York City – the Manufacturing Center!
It is hard to believe here in 2020, but New York City was once a mighty manufacturing city for goods now produced in Asia — apparel, footwear, jewelry and accessories. Also, for food and beverages (local beer manufacturers, sugar processing factories, colas). The Brooklyn Navy Yard produced mighty battleships and repaired aircraft carriers damaged in battle (the USS Enterprise).

Manufacturing is still big in Gotham City – but it is far cleaner, safer, more responsible in operations — by many magnitudes. https://nycfuture.org/data/manufacturing-in-nyc-a-snapshot

City of Transportation
New York has a magnificent harbor. The shorelines of Manhattan and Brooklyn boasted of many ocean shipping terminals for both passengers and cargo. Railroads ran along the shoreline (one abandoned line is now the High Line, an important Manhattan tourist attraction). The line brought carloads of meat to the west side, and then on to giant cruise ships of yesteryear.

Trucks ran uptown and downtown (my father owned a local trucking company and I would ride along on school breaks). The driver would back a truck up to the dock, load it, run around the city to deliver and pick up, bringing freight to the waiting rail cars along the docks, which would go on large barges over to New Jersey and out to the nation.

All of this activity pouring engine emissions into the air of New York, and with drip-drip-drip from transport machines (oil, gas, fluids) tricking down into the sewers and out to the rivers and out to the ocean.

This was at the height of 20th Century industrial America, the Arsenal of Democracy of World War Two. From east to west coasts and all through the heartland, factories poured out war materiel, and then shifted to peak production of peacetime goods for 1950s and 1960s consumer purchase. Along with Cold War materiel. Guns & Butter.

We were the world’s major manufacturing exporters, then, not China.

But at a cost. And so the rivers burning, smog choking the cities, creeks and bays and inlets and rivers and then oceans polluting.

Earth Day Helped to Change All of This – Looking Back, Rather Quickly
Senator Nelson was impressed by the 1960s “social revolution” with protest across the country as especially young men and women voiced their opposition to the status quo. Sit-ins were staged at universities to protest the draft and the Vietnam War. Marches took place in the south despite the marchers suffering beatings and arrests.

The senator was fascinated with civil rights sit-ins at southern soda fountains and marches by both black and white leaders — including many clergy and public officials. By the early organizing efforts to protect and ensure the rights of females and passage, state-by-state of the ERA – the Equal Rights Amendment (which failed to reach the votes to become part of the Amendments to the U.S. Constitution).

According to the Earth Day origin story, Senator Gaylord Nelson was thinking to himself: “If we could tap into the environmental concerns of the general public and infuse the student ant-war energy into the environmental cause, we could generate a demonstration that would force the issue onto the national political agenda.” And he did!

He set up an “Environmental Teach-in” (like civil rights counter “sit ins”!) to tell the story of the environmental degradation of the country and send a call to action to college campuses and schools. (Hey, let’s do that again today — so many youngsters are at home in the digital classrooms during this virus crisis!)

The result in 1970 was that 20 million people — roughly one-of-10 citizens — participated that first Earth Day (and that would be like 33 million people celebrating Earth Day today, out of our 330 million population!).

The midterm elections of 1970 saw many long-standing members turned out and a new wave of consciousness sweep the country. President Richard Nixon and the U.S. Congress on January 1, 1970 moved to pass the National Environmental Protection Act – which created the U.S. Environmental Protection Agency (EPA).

Then came passage of Clean Water Act (1972), Clear Air Act, Endangered Species Act, RCRA (waste), SuperFund (CERCLA-1980), Wilderness Act (1974) and many more federal and state regulations.

The good news is that while Senator Nelson hoped to kick off a movement, he did — and observance of Earth Day took hold – the year 1990 (20 years in) saw the peak participation in the U.S. and by 2000 some 184 countries held formal observances. There’s interesting background at: http://www.nelsonearthday.net/earth-day/

Alas, here in April 2020 we are homebound and not able to march or gather in groups. But we do have our electronic platforms of all kinds – so let’s connect and celebrate Earth Day that way.

We only have one (Earth) to protect and in the spirit of Senator Gaylord Nelson and those early organizers, let’s say we are still here, still with you in spirit, and there is much work still to be done!

Happy Earth Day, Mother Earth!

Shared Perspectives
You might be interested in the environmental movement perspectives here from March/April 2005, my column from the former journal, Corporate Finance Review. Popular Movements: A Challenge for Institutions and Managers” – explaining the emergence of ESG and the Sustainability Movement.

When Sustainability Movement Champion Michael Bloomberg was Mayor of New York City, in April 2007 he delivered a wonderful speech – A Greener, Greater New York – presaging his wonderful work in helping many of the world’s cities make their environments safer and more sustainable. This is what great mayors do!

One of the influential voices following the lead of Senator Nelson in our time is Bill McKibben, whose books and extensive writing have helped to influence the more recent sustainability movement. He was interviewed by the Times Union (Albany , New York) newspaper for this year’s celebration. 

You can follow him on Twitter.

Can’t get into the streets today to help celebrate? Earth Institute at Columbia University offers some suggestions on sheltering in place and celebrating

Corporate ESG Stakeholders – Supply Chain Management – What’s in Your Supply Chain Mix?

By Pam StylesG&A Institute Fellow

The current COVID-19 pandemic has exposed countless concerns, including (global) supply chain management issues near the top of the list.

Public and private-sector professionals and officials are soon to be attempting to get economies back up and running. Following Herculean and likely imperfect restart efforts, it will be important to debrief supply chain systemic failures and risks that have been exposed during the pandemic crisis.

ESG/Sustainability practitioners may be able to offer unique vantage to assist the debrief in collaboration with company supply chain experts and management teams.

Well-established ESG tracking practices and voluntary reporting frameworks, such as GRI (est. 1997) and CDP (est. 2000), could possibly be used to expand internal information sharing and analysis to augment internal supply chain risk assessments, monitoring and oversight capabilities.

ESG reporting frameworks are not necessarily a perfect fit or infallible, however they could potentially provide existing information platforms from which to add and/or improve accessible reporting, analysis and assessment, and executive leadership observation in a multitude of strategic (multi) sourcing risk assessments and repositioning exercises to come.

As we all try to learn and make important changes going forward, important questions to ask:

What do you know about your company’s suppliers’ supply chain, their suppliers, and so on?

The Business Continuity Institute, Zurich Insurance Company and others have been raising the red flag for years that too many companies do not have full visibility of their supply chain, nor the ability to fully track components through the full vertical supply chain.

Just a few recent examples of how reality has suddenly struck some pharmaceutical, consumer products and electronics companies (the list of other sector impacts can go on):

  • U.S. Pharmaceutical supply chain dependencies on China were well known at high levels prior to COVID-19, but effectively nothing was done about it and consumers were unaware of the looming risk.
  • Consumer Products giant Procter & Gamble indicated 17,600 products could be affected by Coronavirus in China.
  • Apple is dealing with pandemic-driven supply chain and sourcing woes.

Back in 2008 PwC published a fascinating paper about German companies supply chain sourcing practices in China, in which it suggested companies take a closer look at their KPI’s.

Who should raise warning flags and influence corrective supply chain action?

Supply chains can be very complicated with many layers or tiers, all the way down to original raw materials source. Aggregate supply chain geographic risk management is surely challenging.

As a specialist at well-known Gartner Supply Chain observed, “COVID-19 should be a wake-up call to boards of directors, CEOs and supply chain leaders that being well prepared for disruptions, regardless of their cause, is not an optional extra. It is a business necessity.

Companies are learning painful lessons in the shortcomings of legal boilerplate risk disclaimer language in situations like today’s. These lessons should compel executive leadership and Boards to step-up their efforts and investment in overseeing supply chain strategy and active risk management mitigation.

Does your company regularly review and remediate identifiable aggregate risks across the company’s supply chain and associated third-party relationships?

As recently pointed out in a COVID-19 related article by another G&A Institute Fellow, Daniel Goelzer, “Internal auditors are missing key risks.” He went on to observe,

“The Institute of Internal Auditors (IIA) has released its annual survey of Chief Audit Executives. The 2020 North American Pulse of Internal Audit “reveals serious gaps in internal audit’s coverage, with audit plans deficient in key risk areas.”

“For example, the IAA found that almost one-third of respondents did not include cybersecurity/information technology in their audit plans. In addition, more than half did not include governance/culture or third-party relationships, and 90 percent did not include sustainability.”

Postulating that the professional supply chain management tools kit is loaded with granularity to boggle the mind, it is fair to suggest the possibility that the many different tools may inadvertently complicate aggregate risk assessments.

Thus, we should think about whether there might be an opportunity for ESG/Sustainability professionals to constructively share their inherently top-down vantage and tools kit to assist companies with additional angles for risk assessment and oversight.

Brainstorming how the growing mainstream ESG/Sustainability field can help:

One gets a strong sense that professional supply chain experts across the board are now committed to re-engineer their collective body of knowledge and management resources to truly understand–down to the last pharmaceutical raw ingredient source, medical gear and equipment–the geographic and geo-political risks of their companies’ product vertical manufacturing and supplies.

First, let’s acknowledge that professional supply chain experts have a lot of knowledge, skills and complex management tools at their disposal that those outside their discipline know little about.

Second, kudos to the U.S. Army Corps of Engineers for their brilliance and ingenuity. Their recent reminder to all of us that, when a problem is large and complex and a fast solution is needed, it’s worth remembering the “keep it simple” concept.

Their challenge: emergency need to rapidly expand hospital bed and critical care capacity in multiple locations across the country.

Their solution: work with the infrastructure already there – large convention centers, empty hotels, and the like – and quickly retrofit them to meet the hopefully short-term surge capacity needs.

So now let’s apply the “keep it simple” concept, to think about what infrastructure we already have that can be efficiently and effectively adapted to immediate re-purpose, constructive to supply chain risk management.

Pre-dating the world’s awareness of the coronavirus COVID-19 crisis, the Global Reporting Initiative (GRI) stated in an article published November 15, 2019, that it “recognizes that joining the dots between corporate reporting and the practical changes needed to promote transparent supply chains can be challenging.”

In that same article, GRI announced its new two-year business leadership forum to help businesses work through challenges to bridge the gap between supply chain management and reporting. Your company may already use or be familiar with the GRI reporting framework.

Specific to supply chain, you might take another look at three GRI KPI sub-series: 204 – Procurement Practices, 308 – Supplier Environmental Assessment, and 414 – Supplier Social Assessment.

GRI is the oldest and most widely recognized voluntary ESG/Sustainability reporting framework and provides a wide range of supply chain related leadership interaction. It has alliances and synergies with the ISO certification standards and CDP, among other organizations.

Hence, GRI could be a robust resource to turn to for facilitating internal supply chain risk discussion, brainstorming and improvement.

CDP, originally known as the Carbon Disclosure Project, has grown beyond carbon to include a host of other key sustainability topics including supply chain. Several germane excerpts from the CDP Supply Chain Report 2018-2019:

  • Companies’ supply chains create, on average, 5.5 times as many greenhouse gas emissions as their own operations. (This hints at the veritable iceberg of suppliers beyond the companies’ direct control.)
  • Having a single, common disclosure platform is also proving to be beneficial. Amongst program members, 63% are currently using, or considering using, data from CDP disclosures to influence whether to contract with suppliers or not.
  • Managing supply chain risks, impacts, and capturing opportunities for sustainable value creation is complex. However, the fundamental steps are common across all organizations: understanding, planning and implementing. Learning from outcomes is essential in order to deepen and broaden the value of a Supply Chain strategy.
  • This year a record number of companies submitted disclosures on climate change. CDP supply chain members made requests to 11,692 suppliers, with 5,545 responses received from businesses headquartered across 90 different countries. This is a 14% increase on the 4,858 responses received in 2017.

Taking inspiration from the U.S. Army Corp of Engineers, a serious question to ask is whether either or both the existing GRI and CDP reporting and data analysis infrastructures could be used (1) ingeniously for a foundation from which to build or expand distance and country concentration inputs to provide additional foundation for sourcing risk analysis and oversight capabilities for companies, as well as (2) to facilitate improved global commerce and public stakeholders supply chain risk awareness?

Concluding Encouragement

To ESG/Sustainability practitioners:

Your reporting frameworks, databases and analytical tools may be well-positioned for collaborative solutions to help companies identify and address deep-tier supply-chain risks — both immediate (public health/safety) and longer-term (climate change) — that can and should now rise to a higher level of scrutiny.

When it comes to Sustainability – climate change is important, but supply chain is urgent.

Pamela Styles – Fellow G&A Institute – is principal of Next Level Investor Relations LLC, a strategic consultancy with dual Investor Relations and ESG / Sustainability specialties.

Technology: Providing Vital Components Influencing the Fight Against COVID-19

G&A Institute Team Note
We continue to bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency. This is post #17 in the series, “Excellence in Corporate Citizenship on Display in the Coronavirus Crisis” –

16 April 2020   #WeRise2FightCOVID-19   “Corporate Purpose – Virus Crisis”

By Lama Alaraj – Sustainability Reporting Analyst-Intern at G&A Institute

As the tasks of our everyday world are put on hold, all around the world we are playing the waiting game, hoping for an end to this madness.

While at home, waiting for the world to be “normal” again, often our only source of communication with the outside is through our tech devices.

Without most people doing much to get ready for the unanticipated spread of the virus, technology for connecting with one another and the outside world was widely-available and already serving as our first source of comfort…and tech connectivity remains so during this crisis.

Where we stand today: Many sectors in our economies are muted and our reliance as a global society leaning on the digital world greater than ever.

What about after the crisis ebbs and then eventually passes? This is a survey of what is happening in the virus crisis and how tech companies are lending their support. And what developments during the crisis might be breakthroughs for future use.  Here is a round-up of what tech companies are doing in the virus crisis.

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Blue Dot
From the beginning of the crisis, this Canadian tech startup had caught on to the danger posed by virus even before the WHO released an official statement. Blue Dot used a cloud-based GIS platform that works to detect infectious disease outbreaks around the world. This sophisticated technology also uses AI to send alerts about diseases tailored to the affected region (source: Bluedot, 2020).

The power of knowledge enabled by these approaches to use of advanced technology is unrivaled. Artificial intelligence (AI) has the capability of harnessing a previously unthinkable amount of data to sift through, then applying results to an algorithm and calculating vital information that influences our responses (Source: Bowles, 2020).

Technology tools were not only able to detect the first few cases of COVID-19, but through this innovative software development, Blue Dot was able to predict the region the disease was going to spread to from the initial location at Wuhan.

The CBS Network program “60 Minutes” had a good look at the technology and approach behind the success of the Blue Dot detection capabilities.  The program:  ‘The Computer Algorithm That Was Among the First to Detect the Coronavirus Outbreak”.

Subtext:   On New Year’s Eve, a small company in Canada was among the first to raise the alarm about an infectious disease outbreak. Its computer algorithm calculated where the virus might spread next. The technology could change the way we fight another contagion.

You can see the segment here: https://www.cbsnews.com/news/coronavirus-outbreak-computer-algorithm-artificial-intelligence/

We are seeing the global tech giants partnering with the American government to fight against the pandemic. Supercomputers and Artificial Intelligence are the key components in the battle.

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The IBM supercomputer (Watson) is built to analyze standard mathematical problems utilizing AI to generate algorithms based on various models.

In Oak Ridge National Laboratory, the IBM technology was used to look at 8000 different drug compounds – quickly narrowed down to 77 that are believed to be possible components of a future vaccine (Gil, 2020).

This supercomputing / processing power has helped in the current crisis by being able to conduct rapid research that otherwise would have taken years.

Although technology has not yet found a solution for our current dilemma, the foundations and resources these companies are providing are based on valuable insights — giving us relief from trying to understand this disease completely in the blind.

The relationship between health and technology — which has been going on for years —  is now leading the fight in the combat zone.  And there are many promising opportunities for society in the post-crisis, thanks to tech advances.

# # #

Microsoft – another global tech giant — has introduced a Healthcare chatbot. The bot uses machine learning to quickly assess COVID-19 symptoms and provide a resolution of whether you should stay home or seek medical help. The US Centre for Disease Control and Prevention (CDC) is currently using this innovation.

#  #  #

A statement from Alphabet’s Google Inc, and Apple Inc was released recently in regards to the latest development against the fight. The tech giants are now going to utilize AI through our smartphones in order to be able to track the movement of COVID-19.

The end result is that our smartphones will actually start sending us warnings when we have come into contact with a person who has tested positive with the deadly virus.

#  #  #

Although this is an incredibly sophisticated innovation that can help us flatten the curve, where do we draw the line when it comes to AI and our morals and ethics?  And personal privacy?

There have been a lot of positive changes coming out from this sector that will aid the world’s health professionals with resources to speed up the process in finding a cure.

However, the concept of utilizing surveillance and accessing our private medical records is an area of concern for many. This exact turn in events is what makes humankind fear the coming of AI.

While economies around the world are experiencing a global shutdown and many are suffering due to this, some tech companies have actually experienced new growth.

#  #  #

Zoom, a video conferencing application, actually experienced a dramatic surge in the amount of users (10X user growth just in days!).

Many people in all walks of life had to adapt quickly to the new norm and Zoom presented its platform as the easy, available answer to be able to connect multiple users at once making meetings, interviews, school classes possible. (The company did experience problems and suffered wide public criticism in the rollout to a broader audience, with many new users mostly unfamiliar with the platform.)

As Zoom shows, the world as we know it every day can be completely transformed in the blink of an eye.

In a world that has just turned dark, our strength must not be divided. Zoom in its concern for society gave us the platform to jump back into our accustomed social constructs in order to hold onto some sense of normal — but for many, through a digitalized lens.

# # #

Bloomberg LP reported that Samsung was experiencing growth in the crisis. The company released their results for the Q1 with an unexpected increase in sales by 5%.

The positive performance of some tech companies can be attributed to the economic shock we are in due to the pandemic. The instantaneous lock-downs across the world changed the consumer demand pattern, where the almost-complete transition to work from home and adaptation to social distancing spiked a demand in video gaming — and thus demand for semiconductors that Samsung provided (Kim, 2020).

#  #  #

Cautionary Note
The growth the companies are currently experiencing may not be sustainable throughout the rest of the year due to the continuing, aggressive economic downturn and spreading of the virus.

With all these changes that we are seeing it is important to take into account the concern that some may not be able to take part in this ongoing transition. Many businesses have completely shut down for the time being without being able to continue production from home.

We are asking ourselves the questions: What will happen to these concerns when the virus crisis levels off and then subsides? What will happen to their workers?

Moreover, in areas where poverty is more prevalent, and rural regions, there is a real digital divide. This is becoming quite evident in the crisis.

Not every household has access to the internet (or can afford access) and therefore individuals and families cannot take part in the current state of daily life.

The opportunity to cling on to some piece of our world as we knew it is not available to all. For example, there are many school children who currently are not able to attend school, and without technology are missing out on continuing their education. Often, this is simply because they do not have adequate access to the internet or a machine to use for their class work.

We are seeing companies in the tech industry doing their part through the donation of large sums of money to various needy causes.  Examples:

# # #

Google has stepped up and is donating US$800 million to help governmental institutions and small businesses through this pandemic and economic crisis. The money will be supplied through channels of advertising credits/grants and loans (Zakir, 2020). Although this does not “fix” the detrimental effects of COVID-19, the tech giant provides temporary relief in dire times.

# # #

Chuck Robbins, the CEO of Cisco released a statement that the company will be donating “$225 million in cash, in-kind and planned-giving” to support the cumbersome fight against the pandemic.

During times of crisis, of course we do need business leaders like this CEO to help to meet peoples’ needs in order to provide humanity with hope and comfort amid the chaos. That includes shifting from normal production to emergency supplies for the medical community.

# # #

Honeywell has turned their operations over to producing N95 masks in their facilities, to help to address the global supply shortage. Efforts such as these are helping to make us more capable of coping through this crisis and the corporate contributions are helping buffer the severity of the pandemic.

The significance of the technology sector’s heavy involvement with the pandemic of today is no surprise. While many of us are sheltered at home, the internet has become our source of sanity. For many governments, artificial intelligence is their presumed knight in shining armor, ready to save the world.

I do believe that in the new normative we will not be shying away from our relationship with groundbreaking technology. However, there is much uncertainty in this transition.

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The Future Outlook
Our heavy dependence on the technology sector during this crisis is going to have dramatic impacts in our labor force, education and our various economic markets. Moreover, current global economies who do not have a developed technological sector may be left further behind and unable to reap benefits from the current against the pandemic.

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About the Author
Lama Alaraj
is a Sustainability Reporting Analyst-Intern at G&A Institute. She graduated from Dalhousie University (Canada) with a double major in economics and international development studies. Over the years, she developed a growing interest in the power of technology and how it manages to integrate in every sector in our global community.

In addition to the G&A analyst-internship, Lama is currently working as a marketing consultant for Web.com, a company built on web development.

Her personal goal is to take the knowledge she gains from this role and apply it extensively throughout any project or role she takes on.

Lama is very excited to be part of the G&A Institute community and to learn about how industries manage to adhere to their environmental responsibilities. Lama thinks that as the climate continues to change, the choices we make today are more vital than ever.

# # #

G&A Institute Team Note

In this series we are bringing you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency.

New items will be posted at the top of the blog post and the items posted today will move down the queue.

We created the tag “Corporate Purpose – Virus Crisis” for this continuing series – and the hashtag #WeRise2FightCOVID-19 for our Twitter posts. Do join the conversation and contribute your views and news.

Do send us news about your organization – info@ga-institute.com so we can share. Stay safe – be well — keep in touch!

The Virus Crisis Affects Business in Many Ways – What Will the Risks and Opportunities Result in for Companies “Post-Emergency?” BNP Paribas Offers Views…

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

What might our world look like when the COVID-19 global emergency finally winds down and we move into the “recovery and restoration” phase?  What is in store for business in the transition? And beyond? Looking at risk and opportunity through an ESG lens.

BNP Paribas Asset Management has offered up some important perspectives. ESG Analyst Anupama Rames asks and answers:  (1) Will the world go back to status quo when we exit the current dis-location? (2) Probably not. 

“We believe,” she writes, “that the learnings from the go-remote experiment are here to stay.”

Last year BNP Paribas offered up the “3-E’s” – their methodology for addressing what the large asset management firm sees as the three key sustainability challenges of our time:  (1) Energy transition; (2) Environmental sustainability; (3) Equality and inclusive growth. 

Now, analyst Rames is determining the risk, changes, risk mitigation strategies and opportunities in each of the categories.

The examples she cites:

Energy Transition
There’s now a 20% drop in global oil consumption and negative regional oil pricing; the energy sector is under-performing equity and high-yield indices. Such factors as lower plastic uses (petro is a key component), electrification of transport and climate mitigation policies add up to dampened oil demand.

Changes in work patterns (more remote working, distancing), reductions in personal and business travel mean less oil demand today. Key concern going forward:  stranded oil & gas assets over the long-term.

Possible winners in the opportunity zone:  renewables, conservation measures, energy storage (capturing the energy from the windmill).

And, BNP Paribas ESG integration methodology aims to differentiate winner and losers in the transition, post-emergency

Environmental Sustainability
Analyst Rames brings up a topic not really being discussed (yet) in broader public dialogue – the disease transmission path, from animal to human, such as with COVID-19, SARS, MERS, and other virus infections of recent years.  Natural habitat destruction and global wildlife trade are factors.  Vectors move in times of climate change and bring diseases with them!

Equality and Inclusive Growth
The urban-rural divide — with many differentiations in the access to opportunities, access to the digital economy, mis-information overload, access to affordable healthcare — are key issues being confronted by society (and with varying results during the crisis).

The virus crisis is accelerating the transition to “remote” and digital connectivity in our personal and business lives.  This can be positive – and quite negative in the socio-economic divide. 

A positive:  on the opportunity side, remote healthcare can bring benefits to rural areas. The virus crisis day-by-day brings society closer to a “digitized” future.  Analyst Anupama Rames sees this:  Of all industries being re-shaped, healthcare will be most affected. 

And an important note to corporate leaders:  BNP Paribas is viewing transformations and market shifts through the lens of its 3E (ESG) framework, to identify public companies being proactive in finding solutions to the societal issues that can support “sustainable returns” for the long-term.

There are more details for you in the Top Story.   

Top Story

Will COVID-19 lead to sustainable change?   
Source: Investors-Corner (BNP Paribas Asset Management)
Will the world go back to ‘status quo’ when we exit this dislocation? Probably not. We believe the learnings from the ‘go-remote’ experiment are here to stay. The implications for the future of energy, real estate, work…

G20 & Central Banks Response on COVID-19 — Global Challenge Requires Global Response

By Sofia Yialama – Sustainability Reporting Analyst-Intern, G&A Institute

Exploring how the G20 leaders plan to preserve the global financial safety.

The G20 Group, representing both developed and developing countries and the 80% of the world’s economic output, recently expressed its willingness and responsibility to undertake an immediate, coordinated and bold response on the current global health and economic crisis.

At the latest virtual G20 Leader’s Summit, the leaders of the world’s largest economies committed to amplify their fiscal, credit and monetary support aiming to bolster the resilience and stability of the global economy, provide adequate stimulus packages and safeguard the global market from a global recession.

In a spirit of cooperation and readiness to support the global economy, the G2O nations, among other commitments, pledged to underpin the global economy with over US$5 trillion, as part of targeted fiscal policy, economic measures, and guarantee schemes.

All together, they expressed their support to the central banks and highlighted the urgent need for cooperation between them and the International Monetary Fund (IMF) and the World Bank in order to mobilize emergency funding.

To surmount the socio-economic impact from COVID-19 and ensure market recovery in all countries, they also mandated their respective Finance Ministers and Central Bank Governors to develop a G20 joint action plan.

Following the G20 Leader’s Communiqué, the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC Ministerial Meeting on 9th April and the G20 Energy Ministers Meeting on 10th April, were both crucial for the global economic stability.

“OPEC+” (“plus”) is joining forces with the G20 to coordinate the supply/demand imbalance in the international oil market and finally work to end the recent oil price war during such exceptionally difficult times. This was characterized as ‘a historic show of cooperation” and “by far the biggest supply deal in history”.

Enough Effort – Is More Action Needed?

Are these actions enough to counteract the detrimental coronavirus impact on the global economy?

Front-line international organizations — such as the United Nations, the International Chamber of Shipping (ICS) and the International Association of Ports and Harbours (IAPH) — have called on G20 leaders to provide explicit support to vulnerable countries and sectors in high risk, respectively.

At the same time, a strong international group, including various former presidents and prime ministers, with an open letter to G20 leaders, asked them to set up a G20 Executive Task-force and accelerate the development of an action plan for COVID-19, along with targeted financial packages to support the global health system and provide essential financial aid to the developing countries, especially in Africa.

These facts showcase that the world needs urgent coordinated action.

Which system will last by the end of the virus crisis? The cooperation pact or the self-protectionism?

How the central banks of key G20 members responded on COVID-19

In 2009, after the 2008 global financial crisis, the G20 group urged the establishment of the Financial Stability Board (FSB) to gather treasury ministries and central bank governors together with the aim of coordinating actions and find solutions for the global financial system’s vulnerabilities.

For this reason, it is highly important now to examine how the central banks of the world’s largest economies have responded during the pandemic.

Central banks have taken surprising credit, regulatory and monetary measures to ensure adequate liquidity in the market and uphold the credit safety of businesses and households.

And at this moment, as the rampant spread of the virus continues, every day each of the banks announce additional financial packages to prevent the economic collapse.

So far, the central banks of key G20 member countries — notably the US Federal Reserve (Fed), the European Central Bank (ECB), the People’s Bank of China (PBOC), the Bank of Japan (BOJ), and the Bank of England (BOE) — have moved to:

  • monetary policy easing and unprecedented cut of interest rates,
  • increasing lending,
  • provision of cheaper loans and new funding schemes,
  • emergency free lending to other financial and non-financial institutions,
  • easing bond issuance, and
  • additional incentives for SMEs.

Further, as a joint response, the central banks of the U.S., Canada, Japan, Euro Area, the U.K., and Switzerland, enhanced further the provision of liquidity via the standing US dollar liquidity swap line arrangements.

The extraordinary measure of cutting rates to near zero started from the U.S. Fed and triggered similar measures by other central banks all over the world — such as in New Zealand, Japan and South Korea and Australia.

As a result, this extreme U.S decision spurred the “domino effect” and so, other non-G20 central banks followed on reducing their interest rates.

Are these coordinated measures enough to save the global financial system?

The answer is still vague, as the pandemic is still ongoing in all the affected countries.

As the title of this document says, a global challenge requires a global response.

The world economies now are called to action in order to secure a sustainable and resilient future.

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About the Author

Sofia Yialama is a GRI-certified Senior Sustainability Research Analyst from Greece. She holds a Bachelor and MSc degree in International and European studies and her areas of expertise include international relations, international cooperation and sustainable development.

As a former E.U Projects Consultant and member in regional Task Forces, she has significant experience in project management in sectors such as

Sustainability in the Blue Economy sectors, Green Economy, Sustainable Tourism and Nature-Based solutions.

Her solid career objective and self-motivation is to inspire, influence and develop initiatives and projects coupled with multilateral partnerships towards achieving “Sustainability Transition” in the private sector.

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References 

  1. https://g20.org/en/media/Documents/FMCBG_Extraordinary_Press%20Release.pdf
  2. https://g20.org/en/media/Documents/G20_PR_Second%20Virtual%20FMCBG%20Meeting_30%20March_ENG%20(1).pdf
  3. https://g20.org/en/media/Documents/Virtual_Leaders_Summit_King_Salman_Opening_Remarks_EN.pdf
  4. https://g20.org/en/media/Documents/G20_Extraordinary%20G20%20Leaders%E2%80%99%20Summit_Statement_EN%20(3).pdf
  5. https://www.theguardian.com/world/2020/apr/07/coronavirus-global-leaders-urge-g20-to-tackle-twin-health-and-economic-crises
  6. https://www.japantimes.co.jp/opinion/2020/04/08/commentary/world-commentary/now-never-global-leadership-covid-19/#.XpMfFMgzbIU
  7. https://www.ft.com/content/150df67ba-839f-455a-9546-6edf72a08df0
  8. https://www.opec.org/opec_web/en/press_room/5882.htm
  9. https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#U
  10. https://www.bankofengland.co.uk/coronavirus
  11. https://www.piie.com/blogs/realtime-economic-issues-watch/timeline-central-bank-responses-covid-19-pandemic
  12. https://www.oecd.org/about/secretary-general/Coronavirus-COVID-19-Joint-actions-to-win-the-war.pdf
  13. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm
  14. https://www.boc.cn/en/
  15. https://www.boj.or.jp/en/index.htm/
  16. https://www.ecb.europa.eu/home/html/index.en.html
  17. https://www.seatrade-maritime.com/regulation/ics-iaph-joint-call-g20-support-maritime-sector-and-global-supply-chains
  18. https://www.reuters.com/article/us-health-coronavirus-central-banks-glob/global-central-banks-pull-out-all-stops-as-coronavirus-paralyzes-economies-idUSKBN2130KR
  19. https://www.un.org/sg/en/content/sg/note-correspondents/2020-03-24/note-correspondents-letter-the-secretary-general-g-20-members

Stepping Up in the Virus Crisis: Leaders in the Oil & Gas Sector

G&A Institute Team Note
We continue to bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency. This is post #16 in the series, “Excellence in Corporate Citizenship on Display in the Coronavirus Crisis”.

13 April 2020    #WeRise2FightCOVID-19 “Corporate Purpose – Virus Crisis”

By Sarah El-Miligy – Sustainability Reporting Analyst-Intern, G&A Institute

The Oil and Gas Sector has already taken strong hits due to the OPEC+ conflict and the Saudi-Russian oil price war prior to the outbreak of the novel coronavirus (COVID-19) Pandemic.

The worldwide pandemic was the second hit this year that has dramatically affected the oil and gas industry, causing significant disruption with long-term harmful consequences.

According to the IEA, for the 1st time since 2009 the global demand for oil is expected to fall by 2.5 million barrels per day in the 1st quarter of 2020.

These negative consequences are expected to extend out to 2022.

However, the industry’s recovery given the amount of damage caused by the virus can’t be predicted at this stage, given the evolving nature of the coronavirus and the widespread impact on the global society.

The oil and gas industry has had to take a major step back — as have many different industries across the globe – due to the COVID-19 pandemic.

The Largest of the Oil & Gas Companies

The top industry players are found to be ready to fight back and help to mitigate the drastic effects of the pandemic and to support their communities through a strong global response.

Despite being financially-affected due to the decline in production, travel restrictions, drop in oil demand and lower oil prices resulting from the pandemic, many companies in the industry have contributed to the global efforts taken in response to the coronavirus outbreak.

For example, some by directing considerable amount of funds to the World Health Organization’s (WHO) COVID-19 Solidarity Response Fund as a part of their demonstration of social responsibility towards their employees, customers and the communities where they operate.

Looking at the top 10 O&G companies, some of them have invested in research and innovation, even shifting their production lines and putting their technical knowledge and financial resources in use in order to help fighting the battle against the virus. Other companies had a quick response and supplied key protection products used by the healthcare professionals.

On the internal front, the oil and gas companies have shown immediate responses to guarantee the safety of their employees and customers.

This begins with updating their health and safety protocols and constantly introducing new, up-to-date protection policies in order to ensure the safety of their dispersed staff.

Social distancing measures have been one of the premier precautionary actions adopted and stressed upon industry-wide.

In response to the many negative impacts of the pandemic, the major players in the oil and gas industry — such as BP, ExxonMobil, Total, Chevron — have demonstrated significant Corporate Citizenship practices while dealing with the current crisis at all levels.

I’ve compiled 10 corporate examples for you:

1- ExxonMobil

ExxonMobil Global Response to the COVID-19 Crisis

According to the company’s official website the efforts by the Oil & Gas giant in fighting COVID-19 include:

  • Supporting vulnerable communities, specially in the most infected countries through financial donations, subsidized fuel supply and providing other significant products required to address the COVID-19 challenges.
  • Investing in research and development, producing an innovative reusable personal protection equipment to the healthcare staff and other consumers.
  • Taking a number of measures to slow the spread of the virus in many European and Asian countries.
  • Directing operations to focus on manufacturing ingredients such as isopropyl alcohol, which is used in the production of hand sanitizers, alcohol wipes and disinfectant sprays.
  • Implementing health and safety precautionary actions in order to protect the employees such as applying restrictions on business travel, as well as applying working from home and social distancing policies.
  • In terms of customer safety, ExxonMobil has increased the safety and hygiene levels in all their stations and stores. As well as applying online payment where available in order to limit the money transactions.
  • Implementing a 14-day work-from-home policy for individuals traveling from locations with sustained community transmission, as defined by the U.S. NIH and Centers for Disease Control and Prevention.

West Texas Food Bank Initiative
ExxonMobil is supporting hunger relief in the Midland-Odessa area and across West Texas with a US$100,000 donation to the West Texas Food Bank to help those facing difficult economic circumstances resulting from the COVID-19 pandemic.

Supporting Online Education
ExxonMobil supports Online Education with $100,000 funds for Carlsbad Municipal Schools in response to the distance-based education policies due to the coronavirus outbreak. 14 schools in the district have been closed affecting 7,000 students. This funding will support providing low-income students with the needed equipment and internet connectivity facilitating the transition to online learning.

The Global Center for Medical Innovation Partnership
ExxonMobil is aware of the scarcity of protective masks and responded by manufacturing reusable protective masks to help solve the problem, in collaboration with the Global Centre for Medical Innovation (GCMI).

The mask would use disposable cartridges containing filter fabrics and would withstand sterilization. Because of this, it would not need to be replaced. The company and center stated that the new mask design covered the mouth and nose even better than existing N95 masks.

Prototypes are currently being tested and reviewed by the U.S. Food and Drug Administration.

If/when approved, production will begin immediately, with ExxonMobil supporting the identification of manufacturers familiar with the materials and process to quickly deliver the masks to doctors, nurses and health care providers.

Once approved, manufacturers indicate they will be able to produce as many as 40,000 ready-to-use masks and filter cartridges per hour

Source

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2- BP

The Corporation Supporting Communities

  • The BP Foundation will donate $2 million USD to the WHO COVID-19 Solidarity Response Fund to support medical professionals and patients worldwide by providing critical aid and supplies. The Solidarity Response Fund also helps track and understand the spread of the COVID-19 virus and supports efforts to develop tests, treatments, and ultimately, a vaccine.
  • In Brazil, BP is following a different approach, allocating their own resources (ethanol from sugarcane used normally in fuel) to use them as a disinfectant, not only for their employees use but also distributing it to local health services to help close to 1.4 million people in danger and risk of infection.
  • BP also started offering free fuel to emergency service vehicles in the United Kingdom, as well as supplying free fuel to jets that serve as air ambulances there, along with their continuous support to the efforts in Australia, Spain, Turkey and Poland to control the pandemic.
  • In the UK, emergency service vehicles can refuel for free at BP retail stations as well as supplying free fuel to air ambulances. In additional, supporting similar efforts in Spain, Turkey, Poland, and Australia.
  • And in Germany where they have provided fuel cards to health care workers.

BP Turkey will provide free fuel to ambulances operated by the Ministry of Health Istanbul Directorate to support the fight against COVID-19

Source https://www.bp.com/en/global/corporate/news-and-insights/covid-19-bp-response.html

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3- Total Group

France today is one of the most affected countries with high numbers of coronavirus cases, and the nation’s companies are responding to the pandemic spreading.

The French oil & gas player “Total Group” has been consulting with the French health authorities to supply the healthcare staff in France with gasoline vouchers worth up to 50 million Euros that can be used at Total stations across the country.

The company has provided the hospitals’ professionals with a telephone number and an email published on their website in order to receive their vouchers.

“In this period of crisis, Total’s teams remain mobilized to enable French people to make all their necessary travel arrangements. With its nationwide network, Total is working alongside those who are fighting the epidemic everywhere. Which is why the Group has decided to make this practical gesture of support for our hospital staff, who are working to ensure the health of patients.” –  Patrick Pouyanné, Chairman and CEO of Total

Moreover, the Total Foundation will contribute €5 million to the Pasteur Institute and to hospital and health associations involved in the fight against COVID-19.

Source https://www.total.com

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4- Shell

Caring for the People

Shell is doing many things to keep their customers, colleagues and communities safe. These include carrying out enhanced cleaning operations, increasing stocks of sanitation products and other essential goods, social distancing, working from home policies and health monitoring for teams at retail sites

Caring for the community:

  • Shell has also increased the production of some of the key products which is used in manufacturing soaps and sanitizers in response to COVID-19
  • Shell Manufacturing plants in the Netherlands and Canada are diverting their resources to produce isopropyl alcohol (IPA) as fast as they can. IPA makes up about half the content of the hand-sanitizing liquids being used to keep the virus down around the world.
  • The Shell team is also working closely with governments to keep track of and help meet evolving needs. On March 20, Shell announced that it would make 2.5 million liters of IPA — roughly equivalent to an Olympic-sized swimming pool — available free of charge for the Dutch healthcare sector.

On March 31, the Government of Canada listed Shell Canada as one of the Canadian companies that has stepped up to help during this crisis. Shell is donating 125,000 litres of IPA to the Government of Canada free of charge over the next three months to help the Canadian healthcare sector.

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5- Chevron Corporation

US operator Chevron has also donated $7 million to food banks, education and health services, and is matching employee donations two-to-one, in an initiative to integrate their employees in the world goal in fighting the pandemic.  Actions:

  • $500,000 has been allocated to purchase the required equipment of online learning to the Donors Choose program, “Keep Kids Learning”.
  • Helping to fund emergency services in remote parts of Western Australia and providing medical supplies to hospitals in Thailand.
  • More than $2 million has been granted to the American relief efforts in several U.S./ states and an additional $2 million to match 2:1 employee contribution to U.S.-based nonprofits.

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6- Valero
In a similar effort, the large refining company Valero has elected to donate $1.8m to fight the virus in the cities where it operates.

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7- OMV

Austrian oil, gas and petrochemical company OMV is donating $1.09m of fuel cards to the Austrian Red Cross and Caritas Austria, a food and shelter charity.

OMV Chairman and CEO Rainer Seele said: “These aid workers accomplish great things. We are helping them get around, which is an essential factor in delivering provisions and support to people in need as well as emergency aid”.

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8- Sinopec

Sinopec Corp., China’s leading energy and chemical company, has shown support and solidarity to the international community by supplying 10,256 tones of “much-needed bleaching powder” to more than 10 affected countries including Italy, France, Thailand, Australia, New Zealand and Vietnam.

The company has allocated limited time in their Yanshan Factory in Beijing to manufacture fabrics that are put in use to make the N95 disposable masks.  They got this assembly line running in just 12 days in order to cover the shortage in fabrics required to manufacture these masks to help give back to the society.

Source http://www.sinopecgroup.com/group/en/Sinopecnews/20200327/news_20200327_696607861362.shtml

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9- Southern Company Gas

Atlanta-based Southern Company Gas and its subsidiaries have committed a total of $4.85 million in support of communities affected by the coronavirus outbreak.

The Southern Company Gas Charitable Foundation will award $2.5 million in support of several human services organizations — including Meals on Wheels, American Red Cross, the Salvation Army, and United Way, in seven states,.

The Alabama Power Foundation and Georgia Power Foundation have each pledged $1 million and the Mississippi Power Foundation has pledged $350,000 to the effort.

Source https://www.webwire.com/ViewPressRel.asp?aId=257009
https://scgcares.org/

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10- Sempra Energy

In San Diego, California, Sempra Energy Foundation has established a $1.75 million Nonprofit Hardship Fund to provide expedited grants ranging from $500 to $50,000 to small and midsize nonprofits serving the health, education, welfare, or social services in response to COVID-19 to the individuals and families in California, Texas, and Louisiana impacted by the coronavirus.

Source https://www.sempraenergyfoundation.org/pages/areas-of-giving/health-and-safety.shtml

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CONCLUSION

This COVID-19 pandemic is an unprecedented worldwide crisis that not only affecting the oil & gas industry but every industry and household around the globe. In response, many of the top oil and gas players concluded that to help overcome the affects of this horrific crisis they have to give back to their communities, employees and customers and unit to do their part in supporting and mitigating these negative effects of the pandemic.

REFERENCES

  1. https://www.al-monitor.com/pulse/originals/2020/03/covid19-fear-oil-market-mideast-coronavirus.html
  2. https://www.offshore-technology.com/features/coronavirus-fight-charity-help-covid-19/

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About the Author
Sarah El-Miligy
is a Sustainability Reporting Analyst-Intern with G&A Institute. She was was graduated from the Faculty of Economic studies and Political science at Alexandria University, holding a bachelor degree in Political science and she is currently acting as a Teacher Assistant in scientific research methodologies and Diplomatic and Consular Relations in the political section department and a former international diplomacy coordinator with Ambassador Sameh Abu- El Enien – Deputy Foreign Minister and Director of the Egyptian Diplomatic Academy at Universidad Oberta de Cataluña.

Sarah El-Miligy is also a Sustainability Research Analyst in Egypt at DCarbon for Environmental and Sustainability Consultancy, the first and sole Certified Global Reporting Initiative Training Partner in Egypt and a member of the GRI Gold Community.

She has a broad experience in volunteering and working abroad with the European Union, United Nations and the League of Arab States — specifically in the fields of Sustainable Development, Climate Change, Peacebuilding and Women and Youth Empowerment.

G&A Institute Team Note
This is another in our series – “Excellence in Corporate Citizenship on Display in the Coronavirus:. We bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency.

New items will be posted at the top of the blog post and the items posted today will move down the queue.

We created the tag “Corporate Purpose – Virus Crisis” for this continuing series – and the hashtag #WeRise2FightCOVID-19 for our Twitter posts. Do join the conversation and contribute your views and news.

Do send us news about your organization – info@ga-institute.com so we can share. Stay safe – be well — keep in touch!