Perspectives – Bloomberg, McKinsey, Leading ESG Investors, Mark Cuban – on Corporate Purpose and the Virus Crisis

Excellence in Corporate Citizenship on Display in the Coronavirus Crisis – Post #8   

“Corporate Purpose – Virus Crisis”   #WeRise2FightCOVID-19

April 1, 2020

By Hank Boerner, Chair & Chief Strategist, and the G&A Institute team members

On Corporate Purpose – Words and Actions – Thoughts From Influentials As The Virus Crisis Deepens Worldwide — the Focus on Purpose Can Help Corporate Generals Lead From the Front

In summer 2019, The Business Roundtable (BRT), the association of the CEOs of 200 firms, revamped the organization’s mission statement to read…

…“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.”

This followed the publication of the January 2019 CEO-to-CEO letter of Larry Fink, who heads BlackRock, the world’s largest asset manager (and therefore a major fiduciary investing in the BRT companies). He regularly writes to the CEOs of companies that BlackRock invests in to let them know where of the major investors stands.

He wrote at the start of 2019…

…Purpose is not the sole pursuit of profits but the animating force for achieving them. And, profits are in no way inconsistent with purpose; in fact, profits and purpose are inextricably linked.

And again in his January 2020 letter to CEOs, Chair & CEO Larry Fink said:

…“As I have written in past letters [to CEOs in 2019, 2018] a company cannot achieve long-term profits without embracing purpose and considering the needs of considering the needs of a broad range of stakeholders. Ultimately, purpose is the engine of long-term profitability.”

Fast forward to March 2020 and now into April. What is the walk-of-the-talk of the CEOs (181 of them) who were signatories as the coronavirus crisis grips the U.S. and the world — and the actions of the signatories’ firms as stakeholders look for aid, comfort, security, payroll, taxes paid, and more?

And what other companies not necessarily in the Roundtable? What actions are taken leveraging corporate power to help society?

The stakeholders are watching. And a good number of the Business Roundtable companies are responding to address societal needs.

And what are the perspectives shared about all of this? We bring you some of these today. Here are some of the views and advice of experts and  influentials.

McKinsey Speaks – On How to Demonstrate Corporate Purpose

Says the influential management consulting firm, McKinsey & Company: Companies will define what they do in the crucible of COVID-19 response – or be defined by it.

So what could company managements be doing when the primary purpose of their efforts is to help the enterprise survive? McKinsey acknowledges this — and provides some advice. This is from their bulletin today.

Questions are being asked, of course, related to survival. How long will the crisis last? What are peers doing? How do we pay our people?

“WIN” – what is important now? (The G&A team has asked and helped to answer that question many times in our three decades of crisis management support for client companies over the years.)

First up, advises the McKinsey team members — understand your stakeholder needs and then with the understanding gained, prioritize your response. There will be tradeoffs among stakeholders – prepare for that.

Then, bring the greatest strengths of the organization to bear – consider, how can you make a difference?

McKinsey advises “collaborate with suppliers and customers and they may identify strengths you didn’t know you had”.

Examples offered:  Car makers can make ventilators (GM, Ford etc). Perfume companies can rapidly turn to manufacture hand sanitizer (LVMH and Estee Lauder are doing that today as we’ve reported in these briefs).

As you move forward, test the assumption and decisions you are taking against your stated purpose – communicate – explain (how and why).

Banks have a commitment to lend money in their community. If the bank pulls away – why? The action could help to define that institution in and after the crisis.

Give people something to do! (We also shared this advice a number of times early in the crisis.)

Involve employees in solutions. Give them a sense of purpose. Your team is looking for signals of leadership. And how to help.

And McKinsey says, the positive is that you may in the process be identifying the next generation of your company’s leadership!

Try new ways. Try using “cross-cutting” teams to develop new solutions, new ways to do things.

When in 2005 Hurricane Katrina hit, Wal-Mart Stores asked employees to deliver supplies to areas that were hard to reach. And we remember that the company’s store managers on their own ordered extra supplies and kept the stores open – even as their own homes were being destroyed.

That led to the CEO embarking on a strategic sustainability journey that revolutionized the whole company and in the process formed the Sustainability Consortium!

And like the best of the military leaders, you should yourself lead from the front. Communicate – often, early. Don’t sugarcoat the news. Adapt to changing conditions (and then communicate again). Your enterprise looks to its leaders for guidance.

Things that stand out for us that McKinsey explains:

  • Executives are uniquely poised now to bring corporate power, guided by social purpose to aid millions of dislodged and vulnerable lives. Done well, your actions can bridge the divide between shareholders and stakeholders. And leave a lasting, positive legacy.
  • Credibility is both essential and fragile element of executive leadership. Authentic actions demonstrate the company’s genuine commitment to social purpose.

Thanks to McKinsey’s Bill Schaninger, senior partner in Philadelphia, and Bruce Simpson, senior partner in Toronto, and their colleagues Han Zhang and Chris Zhu, for the valuable insights and guidance offered to corporate leaders.

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Mark Cuban on COVID-19 – Words & Action

We are often entertained by the antics of Mark Cuban on the courts (he’s owner of the Dallas Mavericks NBA team) and appearances on the hit TV show, “Shark Tank”. He was serious this week in addressing the virus crisis.

On Twitter he advised the federal policymakers: “Dear government, here is why you require companies that receive bailouts to retain 100% of their employees. The cost of the bailout loan – eventual payments will cost taxpayers less than the cost of government assistance programs for fired employees. Case closed.”

And…

“If you run a business, BEFORE YOUR FIRE ANYONE (or any more), you have an obligation to yourself/employees to find every gov loan option available today and those soon to come. Find the time. When the gov loans start you want to be already an expert and in line.”

Mark Cuban then walked-the-talk, setting up a way to pay his team’s venue employees (American Airlines Arena) even though games are cancelled and no one is coming. Then sent $100,000+ to the area’s not-for-profits aiding the Big D residents.

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Investor Coalition Speaks Its Mind on Corporate Purpose

Nearly 200 long-term institutional investors (with AUM of US$4.7 trillion) called on company managements to protect their workers – difficult to do, the investors acknowledge. Board directors are accountable for long-term Human Capital Management strategies (they remind board members on both domestic U.S. and global companies).

The steps companies could take, says the investor group:

  • Provide paid leave – including emergency leave) for full-time, part-time and subcontracted workers.
  • Prioritize health and safety – meaning, worker and public health safety, and to protect social license to operate. That may include closing facilities as precautionary step.
  • Maintain employment levels – your workers are well-trained (we hope!) and will enable the company to ramp up quickly once the crisis is resolved.
  • And be on the watch for any moves that may be discriminatory.
  • Maintain customer – and supplier — relationships to ensure that you can help stabilize them if necessary (such as financial challenges to suppliers) and to protect your own and other communities and businesses.
  • Practice financial prudence – demonstrate, the advisors strongly urge, the highest levels of ethical financial management and responsibility. And, limit executive and senior management compensation during the crisis (not repeating the practices of companies in the 2008 financial practices with money provided by the taxpayer).

Corporate leadership is critically-needed, the coalition stresses, to help society get through the crisis.

Among the investors in the coalition issuing the advice to public company managements: the Interfaith Center on Corporate Responsibility (ICCR) coalition (with 300 institutional members); the New York City public employees pension fund, led by Comptroller Scott Stringer; AFL-CIO fund; the state treasurers of Connecticut, Maryland, Rhode Island, Oregon, Vermont; American Federation of Teachers (AFT); the British Columbia Government and Services Employees Union; Aviva Investors; APG; Boston Common Asset Management; Coalition on Corporate Responsibility in Indiana & Michigan; Cornerstone Capital Group; Communications Workers of America (CWA); Robeco Asset Management; numerous foundations and religious orders and denominations.

Information: https://www.iccr.org/program-areas/human-rights/investor-action-coronavirus

All of this is spelled out in the “Investor Statement on Coronavirus Response” being circulated among fiduciaries.

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Believe the Investor’s Urging Will Pay Off?

Bloomberg LP provides us with some of the early answers.  Bloomberg Intelligence’s (BI) Shaheen Contractor (ESG Team BI Industry Analyst) in a brief for terminal users noted that an analysis of ESG Exchange Traded Funds (ETFs) during the selloff for the week ending February 28 provided a buffer for their investors and outperformed their benchmarks. The data: only 8% of ESG ETFs had outflows while 22% of all U.S. ETFs saw outflows.

This, she writes, suggests ESG is seen by investors as a long-term investment and not a trading strategy.

And the flow to ESG ETF’s suggests that these instruments are “sticky” and less cyclical. Where where the flows to ESG ETFs? BlackRock, JPMorgan, BNP Paribas, Societe Generale, DWS, State Street, and Vanguard all saw inflows during the drawdown.

Good news for investors looking for “proof of concept” of ESG/sustainable investing from Shaheen Contractor – thanks to her and Bloomberg for sharing this good news.

Her email is: scontractor2@bloomberg.net

The brief: “ESG ETFs See Relative Outperformance, Inflows During Drawdown”

For information, it is on the Bloomberg: https://blinks.bloomberg.com/news/stories/Q6RT29T0G1L2

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Lead from the front.  The general who led the effort to win WW II for the U.S.A. and the democracies, General Dwight D. Eisenhower (President, 1953-1961) observed:   “Leadership is the art of getting someone else to do something you want done because he wants to do it.  You don’t lead by hitting people over the head–that’s assault, not leadership.”

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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-19” for our Twitter posts.  Do join the conversation and contribute your views and news.

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

COVID-19 — And the Global Fashion Industry – Dramatic Impacts – And Good News

By Jesse VelazquezGRI Report Analyst Intern at G&A Institute

Good news in the midst of bad news — emblematic of the COVID-19 crisis environment. 

#7 in the Series – Excellence in Corporate Citizenship on Display in the Corona Virus Crisis

The impact of the coronavirus on the fashion industry has been felt at the height of the season’s fashion month with fashion show events from Giorgio Armani, Prada, Gucci, and Versace, to name a few, cancelled across the world.

In the midst of the bad news there is also welcome news of excellence in corporate citizenship from the industry.  We bring you this wrap-up.

Sharp decreases in sales and revenue loss with global brands like Nike and Uniqlo closing store locations and experiencing major supply chain disruptions with many factories operating out of China, Italy, and France having to close.

The troubling news:

Some retailers, such as Victoria’s Secret, have also had to temporarily close their e-commerce sites.

Reported earnings are stark across the board, with names like Ralph Lauren reporting a decrease in sales by an estimate of US$55 to $70 million dollars.

Capri Holdings — which owns Versace, Michael Kors, and Jimmy Choo brands — experienced a revenue loss of US$100 million dollars, according to CNBC.

Fashion retailers took major hits in the stock market with companies like Gap Inc., down 11.8%; J.C. Penny, down 12.1%; and Nordstrom Inc., down 11.4% (to name but a few).

Smaller fashion brands are unable to weather the financial losses of the pandemic. Los Angeles fashion brand Bldwn had to go directly into Chapter 7 bankruptcy, liquidating assets and letting go of its entire staff.

There are others that have also had to file Chapter 7. Chanel, a major fashion house, had to halt its productions in Italy, France, and Switzerland for the next 2 weeks — but announced its workers will still be paid.

Looking Creatively At the Way Forward

In the midst of all the turmoil, the fashion industry is looking for creative ways to move forward, such as staging fashion shows on Facebook Live and stepping up their philanthropic efforts in their impacted communities.

The Good News
Here are just some of the contributions to COVID-19 relief from the global fashion industry:

Giorgio Armani has donated 1.25 million euros to hospitals and institutions in Italy, and Versace contributed about $144.000 to the China Red Cross Foundation.

LVMH — which owns Dior, Fendi, Louis Vuitton, and Givenchy — is using its perfumes and cosmetics division to produce and distribute hydroalcoholic gel (free) for French hospitals. They also announced that they will be supplying French authorities with more than 40 million face masks in collaboration with a Chinese manufacturer.

Ralph Lauren pledged $10 million dollars to be split among World Health Organization (WHO) COVID-19 Solidarity Response Fund and CFDA’s “A Common Thread” project, among others.

Gucci is donating 2 million euros to COVID-19 efforts. This is split between the Italian Civil Protection Department (Gucci is based in Italy), and through a matching Facebook campaign for the WHO COVID-19 Solidarity Response Fund. Gucci also pledged to make more than 1 million protective face masks.

Nike had announced that it will donate $15 million dollars in COVID-19 relief efforts in communities both in the US and abroad where Nike employees live and work. It has also recently announced that it is prototyping a face shield to help protect healthcare professionals.

GAP Inc. announced that it will use its factories to make gowns, masks, and scrubs for healthcare workers.

Prada is one of the latest high-end fashion brand to announce that they will produce 110,000 masks by April 6th..

As businesses are able to reallocate their personnel, assets, and networks to support the communities that support them in times of crisis, there are strong signals that the private sector has the capacity to not only transform business to be more resilient to change, but also our communities, and society.

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Note: Along the lines of this wrap-up, Hank Boerner highlighted Estee Lauder’s actions in the Excellence in Corporate Citizenship Series on Display in the Coronavirus Crisis blog –  on March 25, 2020.

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Jesse Velazquez is a GRI Report Analyst Intern at G&A Institute. He’s a career managers in retailing with leading organizations and stepped down from his management role to pursue a degree in Environmental Sustainability (full-time) and now analyzing corporate sustainability / responsibility disclosure & reporting at G&A.

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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-19” for our Twitter posts.  Do join the conversation and contribute your views and news.

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

Company in the CSR Reporting Spotlight: Salesforce

By Julia Nehring – Report Analyst-Researcher, G&A Institute

In recent months I have been analyzing many dozens of corporate sustainability, responsibility, stewardship, corporate citizenship, and similarly-titled public reports. Many of these are published by very prominent names with well-known brands attached to the corporate name.

For example, you probably know of Salesforce. As many technology companies have done, the enterprise began humbly in a small West Coast residence in 1999, when several entrepreneurs attempted to re-imagine how businesses could utilize computer software.

Today, the company offers a variety of sales, marketing, analytics, and other business services to its 150,000+ clients, which include startups, nonprofits, governments, large corporations, and anything in-between.

Measuring success, between 2017 and 2019 alone, Salesforce’s employee base increased 44 percent and its billions of dollars’ in revenue increased by 58%.

During this period of significant growth, Salesforce has impressively been lauded as a best workplace for diversity, a best workplace for women, and a best workplace overall, among numerous other types of accolades.

The Company’s Reporting Practices

Salesforce discusses these and a range of other accomplishments in its FY19 Stakeholder Impact Report. However, I am not commenting here to heap praise on Salesforce.

Using my lens as a CSR analyst-intern, I will attempt to highlight several reporting frameworks and concepts Salesforce has chosen to use in its most recent report that provide both transparency and promotional value for the company’s practices and accomplishments.

I also offer my own comments and ideas that come from learning about different reporting guidelines from different agencies, as well as reviewing many dozens of corporate CSR reports as a GRI report analyst.

Clicking on any of the links below will take you to G&A resources mentioned about the topic.

ESG Reporting Frameworks

By far the most commonly-used framework worldwide by companies in G&A’s research is the Global Reporting Initiative (GRI). Salesforce includes multiple references to this framework (formally, the GRI Standards) in its content index. (Best practice: including a content index in your company’s report to help users find information quickly.)

However, the report was not prepared “in accordance” with the GRI Standards. Instead, Salesforce opted to reference only certain disclosures and metrics of the GRI framework, as they apparently deemed applicable internally.

The apparent rationale? Since each framework identified in the report — including the GRI Standards, the Task Force on Financial-related Disclosures (TCFD), and the Sustainability Accounting Standards Board (SASB) — define materiality in different ways, Salesforce did “not attempt to formally reconcile the divergent uses of the term materiality”.

In other words, instead of providing a more complete set of disclosures for one of the frameworks, the company opted to in effect dabble in each.

Along with its GRI references, the report includes some SASB references in the content index, and (positively) mentions its support of and use of the TCFD in conducting a climate-related scenario analysis.

I think investors may find this confusing. While Salesforce is ahead of the majority of companies who do not currently acknowledge SASB or TCFD at all, it is difficult for the report reader to discern which disclosures from each framework have been excluded. This does not help to paint a full picture for the reader.

It appears the company does acknowledge this, as it states that, “Over time we will work to expand our disclosures and align more closely to the leading frameworks, even as the frameworks themselves rapidly evolve.” A good practice, I think.

United Nations Sustainable Development Goals (SDGs)

Salesforce is a supporter of the United Nations Sustainable Development Goals (the 17 SDGs). In its report, Salesforce lists 12 SDGs that the company closely aligns with.

However, the company does not explicitly state how each SDG aligns with a particular action or initiative. Providing this level of detail — common practice among companies that discuss SDGs in their reports — Salesforce could show the reader that these are not merely ideals for the company, but that in fact Salesforce is actually taking actions in regards to each stated goal.

Regarding External Review

Ernst & Young was retained to review and provide limited assurance for select sustainability metrics in Salesforce’s report.

The items reviewed cover Salesforce’s reported GHG emissions, energy procured from renewable resources, and carbon credits. A limited level of assurance and review of only GHG data or specified sections is very commonly seen in CSR reports.

The companies that tend to stand out among their peers in our wide and deep research of corporate disclosure are those that have decided (strategically) to obtain reasonable/high assurance, or opt to have the entire report reviewed by credible third party auditors.

Salesforce’s awards and growth speak for themselves — the company is undoubtedly providing great value to its clients and doing so in a way that people admire.

While its Stakeholder Impact report overall does an excellent job at showcasing the company’s progress, in my comments here I covered the above areas to encourage and provoke thoughts of striving for even greater completeness and reader comprehension.

Not just for Salesforce, but for public companies in general with Saleforce’s report as one example.

Epilogue: Why did I decide to review Salesforce?

During my time as an analyst-intern for G&A Institute, my intern colleagues and I analyzed dozens upon dozens of CSR reports in depth over the months, many of which are reports of The Business Roundtable (BRT) companies.

Many BRT CEO members signed on to the re-stated “corporate purpose” statement last summer and we researched the companies’ sustainability / responsibility track records and public disclosure practices.

In our research, we found that:

  • Twenty-nine (29) BRT companies had upward trends for all Yahoo! platform’s sharing of Sustainalytics scores (including those for environment, social, and governance) since 2017.
  • Of these 29, five had CEOs that were identified on the Harvard Business Review’s Top 100 CEOs list
  • Of these five, Salesforce was the only company whose Carbon Disclosure Project (CDP) score rose between 2017 – 2018 (from “B” to”A” score)

So, while I certainly do enjoy using Salesforce’s tools at my job, it had no bearing on my decision to analyze the company’s CSR report for this project. The company’s growth in spite of (or because of) its commitment to people and planet is very exciting to see.

I hope that my analysis is helpful to Salesforce and other companies that may be following this corporate responsibility leader’s sustainability journey.

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Since her internship as a report analyst, Julie Nehring joined G&A as a Sustainability Analyst. She continues her research role as a member of the G&A team. She pursued an MBA at the University of Illinois in Urbana-Champaign and interned at the Caterpillar Inc Data Innovation Lab. Julie previously worked for several years as a project manager for a national environmental consulting firm and for a year as an AmeriCorps volunteer. As the president of her university’s Net Impact chapter, she enjoyed helping colleagues and classmates get involved and volunteer in the community.

Note the views and opinions expressed here are those of the author and do not necessarily reflect the views or position of Governance & Accountability Institute regarding the company.

Is There a Trend of Greenwashing in the Fashion Industry?

By Reilly Sakai – Sustainability Analyst at G&A Institute

Despite being identified by some as one of the top contributors to impact on society’s environmental and social issues, on close inspection we could say that the fashion industry continues in 2020 to lag behind other sectors when it comes to a close review of the industry’s sustainability efforts.

The positives: Some major apparel industry players have or are attempting to create strategies and initiatives to reduce plastic and improve the sustainability of their supply chain.

However, in reviewing industry performance overall, it can be difficult to parse through which initiatives are actually making a difference — and which are simply an example of greenwashing, especially given the lower rate of disclosure of ESG emissions by prominent companies’ reporting.

Solutions? What Steps To Be Taken?

So, we can ask, what steps must be taken now — both at the company and the consumer level?

We can ask this question: Is it possible for an industry that so depends on continuous consumption of its products (clothing) to become more sustainable?

The fashion industry is reported to be responsible for more carbon emission than all international flights and maritime shipping combined — “producing 10 percent of all humanity’s carbon emissions” (source: UNEP, 2018).

The apparel industry is also the second-largest consumer of the world’s water supply — after fruit and vegetable farming, which can be very intensive in terms of water use (source: Thomas Insights, 2019).

And, among the challenges, it’s reported that up to 85% of textiles end up in landfills rather than being recycled or upcycled (UNECE, 2018).

Between 2000 and 2015, clothing sales increased from 50 billion units to over 100 billion units, while utilization of clothing (the average number of times a garment is worn) dropped 36% during the same timeframe (Ellen MacArthur Foundation, 2017).

These figures are nothing to scoff at as various sectors and industries move toward less water use; less waste to landfill; more recycling and re-use, among many measures adopted throughout industries.

Is the Fashion Industry Drive to Sustainability Slowing Down?

And yet, according to the Pulse of the Fashion Industry report from the year 2019, sustainability efforts in the industry appear to be slowing down rather than accelerating to address these issues.

In GRI’s Sustainability Disclosure Database, there are currently 248 organizations that fall in the textiles & apparel sector worldwide. Put that in perspective of the total 14,476 organizations in the database.

That’s less than 2% of reporting organizations in the textile & apparel sector. In the sector, there are just 80 GRI Standards industry reports, vs 4,089 GRI Standards reports in the database as a whole.

Given the rate at which the global fashion industry has been growing (before the coronavirus emergency) – more people, more apparel, more income, etc) — we might conclude that companies in the industry have simply not been doing enough to offset their well-charted detrimental environmental impacts.

So what to do now? We know that the fashion industry is important in terms of global economic impact and employment, and creativity – while also being a top contributor to waste, greenhouse gas emissions, water pollution, and an array of other negative environmental factors.

Incentives For Changing – Lacking

Today, there aren’t major economic or societal incentives in place for apparel companies to make real changes.

It’s going to take a lot of time and effort, not to mention considerable investment, to switch factories in which clothes are produced and polluting or violating human rights and so on (to address key ESG issues).

And it’s also quite difficult to have real transparency at every level of the apparel and footwear global supply chain to help to ensure a more sustainable production process.

Consumer Tastes – May Make a Difference. Maybe.

Moreover, while many consumers are now starting to buy what they believe to be the more sustainable products in many categories including fashion, very few consumers are apparently willing to pay more for them — or have the time or means to investigate every company’s sustainability initiatives and track record before making their purchase (Source: Pulse of the Fashion Industry, 2019).

Since it’s so much quicker and cheaper to do, companies instead may turn to marketing messaging that tells their customers that they are working towards a more sustainable future — without actually doing much or even anything in reality.

What Leading Companies Are Doing – the Positives

There is good news.  The “we are sustainable” message has begun to sell well and customers have been moving to certain apparel brands that are promoting a sustainable vision — without the buyer being able to (at point-of-sale) fact-check a company’s claims. That is the reality of at-market sales.

We can begin by taking a look at Everlane, which touts “radical transparency,” but doesn’t actually divulge the name of the factories in which its garments are produced.  So we don’t know what is going on there.

Patagonia, on the other hand, is considered best-in-class, offering repair and buyback programs in order to promote a circular economy, and has a multitude of policies and systems in place to ensure they’re doing everything they can to protect the environment and people who work at or interact with the company.

Nike, similarly, has done a lot to improve their supply chains over many years, using innovation as a driver for sustainability.

Rather than increasing factory audits to ensure that workers are wearing protective gear, Nike engineered a non-toxic glue so protective gear is no longer needed.\

Nike’s flyknit sneaker vastly reduced the amount of material needed to construct a shoe, meaning lower costs and less waste.

Other brands, from Adidas to Puma, have followed suit.

On the luxury end, Eileen Fisher has been a staple of sustainable clothing for decades, sourcing environmentally friendly materials, offering a buyback program, upcycling old materials into new garments, and sharing the wealth with all of her employees by offering a comprehensive ESOP.

Looking to the Future to Protect the Planet

With our Planet Earth’s environmental situation growing ever more dire, it is critical for the fashion industry — now! —  to encourage and make major changes — but convincing individual corporate leadership that this is a worthwhile investment is no small feat.

Because of the higher costs typically associated with implementing sustainability initiatives (or at least the perception of higher cost), overhauling a company’s entire supply chain is quite challenging.

Many fashion companies do not find it feasible in this competitive pricing environment to raise their prices or cut into their margins, especially when they continue to see the industry growing at such a swift pace year-over-year.

Perhaps more and more companies will consider Nike’s successful approach. That is, increasing spending in R&D as opposed to marketing, which has major potential to decrease costs and increase margins in the long-term, while improving their ESG efforts at the same time.

In my opinion, it’s going to probably take some form of public sector intervention or a mass consumer revolution or some similar dramatic action to influence the bulk of the fashion industry to move toward a truly sustainable future – and one of those things might happen sooner than later.

The leaders in corporate sustainability in the industry will be the major beneficiaries when the tide turns.

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Reilly SakaiReilly Sakai is a sustainability analyst at G&A Institute; she began her work with us as one of our outstanding analyst-interns in grad school. She is completing her MBA program in Fashion & Luxury at NYU Stern School of Business, where she is specializing in Sustainable Business & Innovation, and, Management of Technology & Operations. She has been working with NYU’s Center for Sustainable Business on an independent study that explores environmental sustainability in apparel manufacturing.

Nasdaq Supports Crisis Relief Organizations, Makes Commitment to Clients

March 25, 2020  #6 in the series

by Hank Boerner – Chair & Chief Strategist – G&A Institute and the G&A team — continuing the conversation about corporate and investor response to the coronavirus crisis.

We are going to post the individual organization’s actions for ease of reference for our readers.

See the first post in the queue for details about this series.

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NASDAQ Supports Relief Organizations, Makes Commitment to Clients

Nasdaq CEO Adena Friedman notes: “As a responsible corporate citizen, we strongly believe Nasdaq can contribute in important ways to support our communities as we manage through these challenging times together.

“This means support government authorities and global health organizations in their response efforts, increasing our philanthropic support to organizations focused on supporting small businesses, and providing funds to groups working tirelessly on the front lines of this pandemic to keep our communities safe.”

Walking the Talk: Cash and in-kind donations (US$6 million) are being provided, with $5 million cash in these commitments:

  • Opportunity Fund’s Small Business Relief Fund to support small business owners;
  • the World Kitchen’s #ChefsForAmerica relief efforts to provide meals to students, seniors, vulnerable communities;
  • World Health Organization’s COVID-19 Solidarity Response Fund to help front-line health workers and their patients to get essential supplies and to accelerate efforts to develop vaccines, tests and treatments.
  • The Greater New York Hospital Association is receiving 12,000 face masks from Nasdaq and the firm’s clients, partners and vendors are encouraged to donate more.
  • Nasdaq employee contributions to global COVID-19 relief/response efforts are being double matched through the Nasdaq GoodWorks program. Info at: https://www.nasdaq.com/GoodWorks
  • Employees are now volunteering “virtually” as part of the effort to keep employees and partners’ employee safe in the crisis.
  • An estimated $1 million in advertising time on the Nasdaq MarketSite Tower in New York City’s Times Square has been reserved for PSAs (public service announcements) related to the concept of “social distancing” (stay away from each other!) and efforts to #flattenthecurve.
  • And – corporate clients’ philanthropic and PSAs will be included in Nasdaq campaigns (such as in outdoor advertising, social media, digital campaigns).

Important: All Nasdaq operations – products – services will remain operational through the global remote workforce and splitting of team deemed to be essential for the on-site staff.

The company is asking for U.S. Securities & Exchange Commission (its regulator) permission to suspend price-based and shareholder equity rules for listed companies to give those public companies breathing room to adjust to the crisis — and for other adjustments.

Nasdaq is one of the world’s leading global technology companies, serving the global capital markets with data, analytics, software and a range of services. 120 market operators are served globally.

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Bravo, Nasdaq team – and thank you for your efforts. We are all looking forward to the recovery and upward bound quotations on the Nasdaq global platforms on the post-crisis period.

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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-19” for our Twitter posts.  Join the conversation and contribute your views and news — info@ga-institute.com.

Estée Lauder Companies Actions in the Crisis

Continuing the Series – Excellence in Corporate Citizenship on Display in the Coronavirus Crisis – Actions Taken By the Corporate Sector Leaders – #5 in the series

March 25, 2020
by Hank Boerner – Chair & Chief Strategist – G&A Institute and the G&A team — continuing the conversation about corporate and investor response to the coronavirus crisis.  From this post on, we are going to post the individual organization’s actions for ease of reference for our readers.  We’re sharing these posts through our social media and suggest you might do the same to help get the news around.

See the first post in the queue for details about this series – scan down to see that for information.

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“Guided by its family values and spirit of giving,” The Estée Lauder Companies and The Estée Lauder Companies Charitable Foundation (ELCCF) “stand with the global community” and are adjusting the traditional giving programs to provide aid to help limit the spread of the virus and help to ease economic hardships. Just announced:

The company and foundation are supporting the work of Doctors Without Borders/Medicins Sans Frontieres (MSF) with a financial grant of U$2 million. Among the many projects of MSF, the international medical humanitarian assistance has been lending aid to people in distress.

Such as in wartorn Syria, with one million people uprooted in the midst of war, suffering food shortages, lack of medical aid, and now the virus crisis. The MSF organization has to date provided specialized burn units, surgery, physiotherapy and psychological support in Syria and other regions of the world.

The Estée Lauder financial assistance will help Doctors Without Borders/Medicin Sans Frontieres in highly-impacted countries.

The company’s Melville, New York manufacturing plant (on the Nassau-Suffolk counties border) re-opens now to product hand sanitizer for high-need organizations and populations – especially including front-line medical staff.

Note: compensated employee volunteers are doing the vital work here, as both counties are covered by the New York State “stay at home” guidance.

In New York City, where the company is headquartered, a grant was provided to support “The NYC COVID-19 Response & Impact Fund”. This is administered by the New York Community Trust which manages hundreds of family and organizational trusts and makes targeted grants to worthy causes.

The new fund will (with at least US$75 million raised to date) support NYC’s vital social services and cultural community organizations.

The 90-year old NY Community Trust helps donors “make smart grantmaking solutions” that address the quality of life issues that align with the donors’ values. (The Trust staff is continuing their work remotely as New York City is mostly shut down.)

The various donors (individual and organizational) are typically in such buckets as poverty, justice, education, health, arts, environment, LGBTQ, elderly, and children and teens. More information is at: https://www.nycommunitytrust.org/

In China, over $800,000 was awarded by Estée Lauder to relief efforts – including the Red Cross Society of China, Shanghai Charity Foundation, and Give2Asia. $1.4 million was provided with in-kind donations to the China Women’s Development Foundation to support front line medical staff.

As the crisis evolves, ELC and the ELCCF will continue to align philanthropic resources based on needs – prioritizing food, medical and emergency assistance. The foundation focuses effort on health, education and the environment and makes annual grants to organizations that align with these.

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Congratulations to the global Estée Lauder team (in the USA and other nations, wherever you are working today).  These efforts reflect the values instilled early on in the firm from those earliest day by Estée Lauder and husband, Joseph, in New York City in 1946.  They created cleansers, oils, skin lotions, creams. Today grandson William P. Lauder is executive chairman of the global firm that makes fragrances, hair and skin makeup products, make up, and other products.   Founder Estée Lauder was named by Time magazine in 1998 as one of the 20 most influential business leaders of the 20th Century.

* * * * * * * *

G&A Institute team note: We are continuing 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 are posted (beginning with this one) at the top of the blog post and the items then 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. Join the conversation and contribute your views and news — email info@ga-institute.com. Keep up the good fight!

A Special Message From the G&A Institute Team – To Our Valued Colleagues

From all of us on the G&A Institute team, our greetings to you wherever you are working today.  From conversations, we know many of you are sheltered in place, and preparing for this period of uncertainty and anxiety. 

We hope this communication finds you safe and well today, and able to continue to be engaged and connected.

We wish for the same for your family and colleagues (your business family). These are the times of many unknowns and adjustments as we quickly move away from our usual daily “normal” to find the way forward through the crisis and on to post-emergency recovery.

This is a time of great uncertainty as society “closes down” in terms of the many things we do every day and take for granted.  We work at home today, not the office.  We have food delivered and don’t go to stores or restaurants. We don’t take public transportation to work or drive the car to the facility parking lot.  Our colleagues are now voices on the phone, not the co-worker in the room next door in the office.

In summer 2019, The Business Roundtable (the association of leading CEOs in the U.S.) re-defined its “Purpose of a Corporation” statement to pledge to promote an economy that serves all Americans. Jamie Dimon, Chair/CEO of JPMorgan Chase, was then the chair.  His comments in 2019 apply many times over in March 2020:

“The American dream is alive but fraying.
Major employers are investing in their workers and communities
because they know it is the only way to be successful over the long term.
These modernized principles [of the BRT] reflect the business community’s
unwavering commitment to continue to push for an economy
that serves all Americans.” 

Today, the almost 200 CEOs of major companies signing on to the updated principles are challenged to keep the promise. Millions of us are counting on the corporate sector to help us through the crisis, many now partnering with federal, state and local communities to address the challenges.

From our team’s crisis management work over many years, we know that the “unknown” is the important fear factor – for many people, what “if” quickly comes to mind.  We can talk instead about “what is”, what is the known and what we can do about it, even in some small way to help reassure.  And, we can give other people something to do.

Staying at home – that is doing something positive to do on the personal level.  What we can do in and from the home – that is our contribution to addressing the emergency affecting all of society.

Today, we are using this communication with you to share this from our team:

We are writing to say that we are here for you, continuing our communications with you and sharing information, as best we can, given the circumstances.  We are able to report that all of our team members are doing OK and connected and working remotely to keep things on track.  (Of course, like some of you with young children at home, it’s an interesting juggling act!)

As some of you may know, our G&A team members have been working together for several decades (depending on when the team member joined).  Our prior firm, where many of the founding members were a dedicated team, was a premier crisis management consultancy, serving the Fortune 500(R) companies. 

Our experience includes having all hands on deck during the September 11th attacks in 2001 to support our clients.  And, helping clients with strategies and support and communication in the aftermath and recovery period as the nation got back to business.

We applied that crisis & issue management, strategic communication legacy, experience and knowledge base in the emerging field of corporate ESG / sustainability / citizenship and sustainable investing when we founded the company in 2006-07.

We will continue to communicate with you via our usual channels to help to keep you informed and updated.  We want to continue “the normal” as much as we can and our weekly newsletter will be part of that effort.

The global emergency presents risk to us, yes, but also opportunity for all of us individually and collectively, as teams working together, to be strengthened.  Our organization’s reputation and brand to be enhanced, and the demonstration of “sustainability” in the traditional use of the term  – to be viable, resilient and here for the long-term for all stakeholders. 

The Wei Ji, the ancient Chinese symbol for risk and opportunity, presents the two sides of today’s crisis environment. On the opportunity side of the risk equation, we think that excellence in corporate citizenship will be on full display these days, visible to all of our stakeholders.

What the company does, its mission stated clearly, the actions taken, the protection of stakeholders, the protection of brand and products, the caring for Human Capital, the actions that benefit society…all of this will demonstrate the character, purpose, and culture of the corporate entity.

The old saying today is something to consider — now is the time for all good companies to come to the aid of their countrymen.

The ESG / sustainability / responsibility work underway by you and your organization during these challenging times is a strong foundation of all of this. It’s what sustainability leadership and excellence is corporate citizenship is all about – continue on with the good work!  Continue on the path is our advice today.

Let us know if we can help in any way.  We are all in this together – and we will enter the post-emergency period together, to be stronger than ever.

Do keep safe and secure and healthy. We’ll keep communicating with you. Keeping as much as we can “normal” in the new normal is important.

The team at Governance & Accountability Institute.

Excellence in Corporate Citizenship on Display in the Coronavirus Crisis – #4

by Hank Boerner – Chair & Chief Strategist – G&A Institute and the G&A team — continuing a new conversation about the corporate and investor response the coronavirus crisis…continuing the second week of the conversation… Post #4 – Late Evening,  March 23 … second of the day

 

 

 

 

 

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 companies, these are not easy times.

Many important decisions are to be made, many priorities set in an environment of unknown unknowns — there are many stakeholders with needs 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.

* * * * * * * *

Getting Pharmaceuticals to Those in Need

The giant global pharma company Novartis commits to donate up to 130 million doses by end of May of generic hydroxychloroquine (a compound) – this and chloroquine are being evaluated to treat COVID-19. In New York State, tomorrow trials will begin for the use of the two drugs.

Novartis Sandoz division is pursuing regulatory approvals and once that is in hand the managers will work with stakeholders to figure out how to get the drugs to patients. (Novartis has registration for hydroxychloroquine in the USA.)

This is part of the Novartis COVID-19 Response Fund (US$20 million) effort for drug discovery, development, collaboration and price stability. Novartis will work with other companies to support global supply.

The Novartis enterprise resulted from the merger of Sandoz and Ciba-Geigy.

* * * * * * * *

Bayer AG (Germany) is partnering with the federal government to get several millions of anti-malaria drugs – millions of tables of chloroquine (on label: Resochin® – made of chloroquine phosphate) to the U.S. – the other half of the experimental treatment. President Donald Trump called on regulatore to agree on an emergency-use authorization.

* * * * * * * *

Funding — Cash Really Helps to Bring Aid to the Nation

Morgan Stanley committing $10 million in cash to support children’s wellbeing and capacity-building for first responders. The first distribution is for Feeding America, the CDC Foundation and the World Health Organization’s COVID-19 Solidarity Health Fund.

The CDC Foundation will use the fund to support local and state health departments, the global response, logistics, communications, data management, PPEs, and supplies. These funds are in addition to $500,000 in employee matching to charities supporting the initial outbreak in Wuhan, China.

* * * * * * * *

Keeping the Power on and Communities’ Needs Met

Alliant Energy, the utility serving Iowa and Wisconsin in the Heartland, donated $100,000 to COVID-19 relief efforts through its foundation arm. CEO John Larsen said the firm worked with non-profit partners to identify local needs – and cash was at the top of the list.

Contributions are headed to non-profits in the two states – to six food banks to be divided between Iowa and Wisconsin (for food boxes, mobile drive-through pantry support, gaps in school lunch programs. And the American Red Cross chapters in each state will receive funds. When the employees and retirees donate to local relief efforts, the Alliant Energy Foundation will match gifts up to $3,500 this year.

The company activated its comprehensive pandemic emergency plan and instituted safety work practices to protect employees. And yes, “Powering What’s Next” is the title of the 2019 Corporate Responsibility Report – you can see it here: https://sustainability.alliantenergy.com/

* * * * * * * *

Driving Folks Around in a Lyft During the Crisis

The drive-sharing service Lyft’s co-founders (John and Logan) sent customers an email. “All of us feel the weight of our responsibility to the community right now.” To drivers (who need the cash) and to customers, to be their critical lifeline, especially those in need.

And so to support drivers and maximize community impact:

  • Supporting delivery of medical supplies and providing access to necessary transport, especially for low-income individuals.
  • Activating LyftUp to donate tens of thousands of dollars to families and children, low-income seniors, doctors and nurses.
  • Teaming with United Way, World Central Kitchen and Team Rubicon.
  • Riders and drivers encouraged to stay home if they are sick – and work with medical professionals to discuss transportation options.

Coming all together to help:

Governments, not-for-profits, healthcare entities are asked to get in touch with Lyft to discuss how the company can help – form to reply is here. 

Foundations and philanthropic organizations looking to help can connect via email: LyftUpCovid19Funding@lyft.com.

* * * * * * * *

The Buzz is All About E-Learning – What Do People Need?

In Houston, Texas, school children are at home (and so are their teachers), and “e-learning” or tele-learning is the alternative method of keeping the school year going. Harris County Sheriff’s Office and CITGO Petroleum Corporation are donating 150 tablets (Kindles) to the Houston and Alief Independent School Districts to support low-income students’ e-learning needs during the crisis.

CITGO has had a six-year partnership with the sheriff’s office in offering the “Kindling Young Minds Program” to provide Kindle Fire tables to Houston-area students with perfect or much-improved attendance records – that program is modified now to meet crisis conditions.

The tablets were in student’s hands by March 19th. (More than 600 tablets are now in use.) As they say, life hands you a lemon – go make buckets of lemonade!)

CITGO operates three refineries in Texas, Louisiana and Illinois; wholly or jointly owns 48 terminals, 9 pipelines and other businesses and is #5 refiner in the U.S. The familiar brand is in 30 states. Old timers remember the original brand – Cities Service.

* * * * * * * *

Along these lines, Discovery Education is helping homebound students (and parents & guardians) by launching “Daily DE” – digital curriculum resources, engaging content and professional learning for K-12 classroom. This is a suite of free activities and resources for students and their families.

There are partners in the offering: Afterschool Alliance, American Heart Association, the NFL, US Shoah Foundation, Tiger Woods Foundation, Siemens, 3M, TCS, and others. You can find out more at: https://www.discoveryeducation.com/

* * * * * * * *

Putting Food on the Table — Addressing the Anxieties of Families

Families and individuals are in need of food during the crisis and Albertsons Companies and Albertsons Foundation pledge funds and launch a major fundraising drive to “fight hunger” during the crisis.

This is a call to action; CEO Vivek Sankaran explains that Albertsons Companies are on the front line of hunger relief and calls on communities to assist. The “Nourishing Neighbors” program (especially focused on breakfast for kids) needs help to feed families now.

Contributions are solicited for food banks, emergency meal distribution at schools, senior center meals, and family access to federal food programs.

There’s information at: AlbertsonsCompaniesFoundation.org.

Hey shoppers – you, too, can chip in at branded retail outlets as they stock up for their own families – look for information at Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Star Market, Tom Thumb, Randal’s, ACME, and other of the company’s retail food outlets.

Internally, Albertsons employees are helping each other with donations to the “We Care Fund”, part of the foundation activiti4es.

In 2019, Albertsons Companies and the foundation donated $225 million in food and financial support to communities, for education, hunger relief, cancer research and treatment, veterans outreach, and for people with disabilities. To that list the company and foundation added COVID-19 relief.

* * * * * * * *

Getting Money and Help to the People Who Need it

Fifth Third Bank Bancorp (Cincinnati) and the Fifth Third Foundation and the Fifth Third Chicagoland Foundation will direct $8.75 million in funds to support community members.

“Recovery and Resilience Funds” will direct funds through “Strengthening Our Communities” grants of the foundation to support small businesses, affordable housing and homeownership, and economic development. Relief funds are directed for COVID-19 response in areas served by Fifth Third Bank.

The institution is also offering a vehicle payment waiver program; consumer credit card payment waiver; mortgage and home equity program for late payments (with no late fees); small business payment waiver (up to six months for loans); suspension of vehicle repossession actions; suspension of foreclosures. Many of these are for at least 60 and 90 days duration.

Banking units serve Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, W Virginia, Georgia, and North Carolina. The federal bank had $169 billion in assets and 1149 full service banking centers. Money management: Fifth Third is among the largest institutions in the Midwest with $413 billion in assets under care.

* * * * * * * *

And More Funds for Small Businesses

Facebook launched a $100 million grant program for small businesses that are being impacted by the pandemic – most of the disbursements will be in cash payments, with some credits for business services.

“We’ve listened to small businesses to understand how best we can help them,” explains Facebook COO Sheryl Sandberg. Being helped: 30,000 small business enterprises in 30+ nations where Facebook employees live and work.

Facebook’s estimate is that as many as 140 million businesses use the apps each month to help in management and market of the firm as some 200 million people visit an Instagram Business Profile every day.

According to Forbes writer Maneet Ahuja, such firms as Unashamed Imaging (principal, Anesha Collins), a Florida-based wedding photographers is using Facebook Live and IGTV to keep in touch clients; Heavenly Soap (principal Patti Gibbons) pushes ahead using Facebook. These are the types of firms considered for the program.

Last week Facebook launched Business Hub, with resources for small businesses. Info: https://www.facebook.com/business/boost/resource?ref=alias

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Close to home for some of us on the G&A Institute team who live in suburban Nassau or Suffolk counties, PSEG Long Island and the PSEG Foundation are lending support to the leading food bank in the area – Island Harvest.

The company and its foundation are supporting the Island Harvest Food Bank with a grant of $45,000 to address rising food insecurity – including helping local children without access to school food programs because their schools are closed.

Island Harvest relies on donations of surplus food by commercial establishments, wholesalers, supermarkets, individuals. Each day, surplus bread and other commodities have been donated by local Panera Bread markets, for example.

The electric utility’s regional territory includes the populous Nassau and Suffolk counties (almost 3.5 million population. CEO Daniel Eichorn points out that many of the company’s employees volunteer to help Island Harvest each year and the funds will help as part of the ongoing partnership with the food pantry.

PSEG Long Island is a subsidiary of the New Jersey-based Public Service Enterprise Group Inc, a diversified energy company.

* * * * * * * *

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-19” for our Twitter posts.  Join the conversation and contribute your views and news — email info@ga-institute.com

Important Crisis Talk About PPE – Personal Protective Equipment – Excellence in Corporate Citizenship #3

by Hank Boerner – Chair & Chief Strategist – G&A Institute and the G&A team   — continuing a new conversation about the corporate and investor response the coronavirus crisis…continuing the second week of the conversation…   Post #3 – March 23 – first of two 

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 companies, these are not easy times.

Many 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 continuing commentary.

* * * * * * * *

Important Crisis Talk About PPE – Personal Protective Equipment

About those face masks…”PPE’s” for this conversation include protective clothing, gowns, face shields, goggles, face masks, gloves, and other equipment designed to protect the wearer.

These could be those PPEs especially designed for medical use (such as for use in surgery or dentistry) that are fluid-resistant, loose-fitting and disposable, for example. Many of the devices are regulated such as by FDA, or reviewed and registered with the agency.

Or the N95 that many refer to could be the ubiquitous industrial mask, tye disposable type, used in many industries.  It’s important to note that the medical version (“S”) is desperately needed in the medical crisis, of course.

And the corporate sector is stepping up to fill the gaps.

Many PPE items are in short supply. Right now, FDA is collaborating with manufacturers of surgical masks and gowns to “better understand” the supply chain issues related to the outbreak, and to deal with widespread shortages of products.

The U.S. government has strategic stockpiles of surgical (medical) N95s filtering facepiece respirators that exceed the manufacturers’ recommended “shelf life” — and so the Agency is considering whether or not to release the equipment during the crisis.

The good news is that many of the devices tested should provide the expected level of protection to the user. This varies by manufacturer and shelf life.

Manufacturers identified by CDC in its communications include 3M, Gerson, Medline/Alpha Portech, Kimberly-Clark, and Moldex. Other makers include Cardinal Health, Ansell, DACH, CM, Hakugen, Shanghai Dasheng, Yuanqin, and Winner. The CDC is providing guidance at: https://www.cdc.gov/coronavirus/2019-ncov/release-stockpiled-N95.html 

(Note: Kimberly-Clark also produces toilet paper, towels and diapers – items flying off consumer shelves these days.)

The N95 industrial mask is a different situation than the “s” model designed for medical use, since the N95 model is made for industrial and construction use (as examples) and not for medical care.

In a crisis such as this one, “something” would be better than nothing, or having medical workers fashion masks out of materials to try to be safe.

The “perfect” solution here would be the enemy of the good, as the saying goes. And so millions of N95 are pressed into action and industry is responding with donations.  And companies are in high gear to produce masks.

Background: With the masks generally in short supply, the Centers for Disease Control (CDC) is saying that the usual N95 respirators are not recommended for use by the general public to try protect themselves from respiratory diseases, including COVID-19. Also, people who are well should not be using surgical (face) masks to protect themselves from the virus.

Worn properly, the surgical mask (the “s”) can help to block large-particle droplets, splashes, sprays or splatter containing viruses or bacteria – but not small particles in the air transmitted by coughs, sneezes or medical procedures because of the loose fit (face mask, on the face). And the masks are suggested to be used just once and then discarded.

N95 Respirators generally are protective devices designed to achieve a fit tight and serve to filtrate airborne particles, exceeding the protection of the face mask. The design forms a seal around nose and mouth – as explained, there are both industrial and surgical version.

The industrial version is used in construction, food preparation, manufacturing, etc. The surgical version is the N95s, tested for various medical applications. Manufacture of these devices is regulated.

The N95s is in great demand for healthcare workers and the CDC is urging “conservation” of surgical masks and gowns (such as use of reusable gowns vs. single use) while supplies are being made available to medical professionals.

* * * * * * * *

3M – 24/7 Production Lines In Action

The company is the largest producer of the N95 respirator face mask – the global output was just upped to the target of 1.1 billion or 100 million monthly. Inside the U.S. the company makes 400 million-plus N95’s in a year. Investment is now being directed to produce 30% more over the next 12 months.

The company is advising consumers not to show up in stores for the masks  – production should be directed to the front lines, those caring for coronavirus-infected patients.

In response to the crisis, 3M is striving to produce 100 million masks per month going forward (the global output). Current production is 35 million per month. Healthcare workers will receive 90% of the production, and the rest will go to other sectors of the economy (like food, energy, pharm companies).

This week 500,000 respirators are going to sent to New York State/City and Seattle. The company also produces hand sanitizers, disinfectants and filtration solutions, and is working with government officials, customers and distributors worldwide to address the supply issue.

* * * * * * * *

Honeywell is expanding production of masks at its Smithfield, Rhode Island eye protection products plan to make N95 masks – and hiring 500 workers immediately to support the effort. The products will go to the U.S. Department of Health and Human Services for the national stockpile. (VP Michael Pence talked about this in the weekend briefing – orders for “hundreds of millions of masks” were placed through the Federal Emergency Management Agency.)

* * * * * * * *

Dr. Anthony Fauci (head of NIH Allergy and Infectious Disease) said fresh supplies of masks will be reaching medical professionals in days, not weeks.

Note that the U.S. Congress expanded the U.S. PREP Act to ensure both types of N95 respirators will be available to hospitals and healthcare workers.

* * * * * * * *

Challenge: Mike Bowen, principal of Prestige Ameritech (a mask maker in Texas), told The New York Times that 95% of face masks are made outside of the U.S. including by U.S.-headquartered companies that moves production offshore. He’s getting 100 calls a day now for his products.

Challenge: Even for those companies making masks in the United States, we cite the example of Strong Manufacturing in Charlotte, North Carolina, making of 9 million masks each month. The raw materials come from Wuhan, China – ground zero of the coronavirus outbreak. The materials are not arriving (yet) – the boxes are on the dock in China.

Challenge: Just one facility here in New York City (the Columbia-Presbyterian system typically would use 4,000 N95 makes per day — and is now using 40,000 per day and expecting to double that in the crisis.

 * * * * * * * * 

And so — the Corporate Sector Responds

Apple:  CEO Tim Cook is going to donate millions of masks to healthcare workers in the U.S. and Europe (according to his weekend Tweet) – Vice President Michael Pence said that on the weekend White House Task Force briefing and the company CEO then confirmed this:

“Our teams at Apple have been working to help source supplies for healthcare providers fighting COVID-19. We’re donating millions of masks for health professionals in the US and Europe. To every one of the heroes on the front lines, we thank you” (CEO Tim Cook).

Tesla – CEO Elon Musk donated a truckload of PPEs (masks, gowns etc) to a UCLA Health center in California. We know this from Twitter tweeting. Musk told California Governor Gavin Newsom that 250,000 masks will be donated to California hospitals.

Hanes Brands – President Donald Trump at the weekend briefing talked about Hanes, the clothing maker, that is retrofitting factories to make face masks. The goal is to make 1.5 million masks a week, and working with Parkdale Mills America (they make the yarn for Hanes) and a consortium of companies, will ramp up to 5-to-6 million makes every week.

The company’s experts in supply chain and product development worked with the U.S. Department of Health and Human Services to develop the products and FDA has given its approval to masks that are not the traditional N95 but a prototype that can be used in N95s are not available.

The Hayner Hoyt Corp, a local company doing construction work at St. Joseph Health, in Syracuse (upstate New York) donated 1,200 face masks to the hospital. “I encourage other construction businesses and construction supply companies to see if they have any PPE that they can give to our healthcare providers during this critical time,” says the firm president, Jeremy Thurston. The hospital itself has reached out to doctors, dentists and vet offices to ask for donations of masks, gowns, eyewear, thermometers and other PPEs – something we will be seeing all over the nation to help to meet local shortages.

* * * * * * * *

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-19” for our Twitter posts.  Do join the conversation and contribute your views and news.

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

 

Excellence in Corporate Citizenship on Display in the Coronavirus Crisis – #2

by Hank Boerner – Chair & Chief Strategist – G&A Institute and the G&A team   — continuing a new conversation about the corporate and investor response the coronavirus crisis…this is the beginning….

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 companies, these are not easy times.

Many 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.

Employees – Customers – Suppliers – Regulators – Partners – Investors – Lenders – Communities – Civic Leadership.

As the the arms of the Federal government rush to aid the American society, CEO Chuck Robbins of Cisco put things in perspective in the story: “It’s critical that D.C. do something fast for companies – if you get 80 percent right today, it’s better than waiting a week and getting it 90% right.”

The good news:  Corporations are not waiting – decisions are being made quickly and action is being taken to protect the enterprise – 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.

This continuing commentary in the first week of the crisis breaking through the barriers of doubt and with reality setting in. 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.

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Friday, March 20, 2020 – Day Four of the National Shutdown in the Coronavirus Crisis…  The Second Roundup of the Day –  Evening Today

Walmart Responds – Setting the Pace for Mass Retailing

Walmart is the largest retailer in the United States of America, with branded stores, Sam’s Club stores, warehouses and other facilities in literally thousands of communities across the continent.

During hurricanes, floods, superstorms and the like, the Walmart men and women have stepped forward to aid their communities in various ways.

The company has a web site up for employees, customers and stakeholders to detail “Walmart’s Response to COVID-19″ (link below).

Among the steps announced so far:

The message from the CEO-President John Furner (Walmart U.S.) to his team members:  “We are so grateful for your hard work.  It’s been incredible to see Walmart associates step up to the challenge of serving America this month.  During a very uncertain and stressful time, you have done your jobs with calm, compassion and excellence.”

Full message here: https://corporate.walmart.com/newsroom/2020/03/19/walmart-u-s-ceo-john-furner-to-associates-we-are-so-grateful-for-your-hard-work

Walmart’s Walking-the-talk reward for associates:

  • Every full timer in stores, supply chain and HQs will receive $300 and part-timers $150 in the bonus (on April 2nd). The bonus payments for Q1 will be accelerated to be paid later in the month of April – the amount will be just as if the first quarter goals were reached.  No associate will receive less than the first Q bonus payment. Cost to WMT: US$180 million.
  • Overall, $550 million will be going to WMT associates during this critical period.  2019 Q4 payments were made this week – so Walmart team members will be seeing money coming in March 19 – April 2 – April 30 – May 28.

We’re hiring!  More associates are needed – the doors are open for up to 150,000 temporary workers for stores, clubs, distribution centers and fulfillment centers – some may convert to permanent jobs after the crisis.  The 2-week application process is now 24 hours.  Information is at careers.walmart.com

The company beefed up its COVID-19 emergency leave policy to encourage sick employees to stay home, or those “uncomfortable”, those who are quarantined, and associates with the virus.

Today (March 20) from 6 a.m. to 7 a.m. employees had an “associates-only” shopping hour with the usual 10% discount expanded to include vital grocery items.

Consider the lift:  This company has 2.2 million associates worldwide.

Walmart has a huge footprint across North America and stretched into parts of the world.  Each week (in normal times) 265 million shoppers (customers and “members”) visit 11,500 stores under 56 banners in 27 countries and eCommerce websites.

Says CEO-U.S. John Furner:  “Thank you again for what you’re doing – America needs Walmart right now, and we have been at our absolute best.

Bravo, Walmart associates, for keeping us supplied as best you can in this emergency.

You can keep up with Walmart news at: https://corporate.walmart.com/coronavirus

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Give Us a Few Hours and You Will Have Your Hand Cleaner

LVMH, the luxury brand marketer, met France’s call for more hand sanitizer in just 72 hours. On a typical day the Orleans, France factory produces perfume (Christian Dior etc).  This Monday, reports The Financial Times, the first lines of hand sanitizer in plastic bottles rolled forth, headed for doctors and nurses in Paris hospitals.

The government of France called on industry to help – that was last Friday – and Monday the bottles began to head for boxes for delivery to the besieged hospitals.  (LVMH – Louis Vuitton, Moet Hennessey is the largest company in France.)

The company intends to produce 12 tonnes (!) of the gel to 39 hospitals in Paris (the APHP”) over the coming days and two other production lines (Givenchy, L’Oise and Guerlain Brand, Chartres) are coming on line.

Secret to the ramp up: FT writer Leila Abboud explains that sanitizing needs three main ingredients – purified water, ethanol and glycerine – and the company had these at the ready as the equipment was set up (cosmetics and pharma products being close cousins). The company makes liquid soap, moisturizing creams for the usual products – Dior, Givenchy, Guerlain.

Said the company:  “LVMH will continue to honour this commitment as long as necessary.”

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In related news The Financial Times tells us that other French companies have joined the battle.

  • BNP Paribas donated 500,000 masks to Paris hospitals.
  • Renault loaned 300 autos for medical purposes.
  • L’Oreal is retooling factories to make millions of hand sanitizers destined for nursing homes and hospitals.

Keeping in mind:  Makers of luxury goods will be hard hit in the current crisis, especially as the lucrative China markets shut down – both for sales and for production.  (LVMH is not reliant on China for production, but sales, definitely.)

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Closer to Home – Bacardi in Puerto Rico Steps Up

Bacardi Limited, makes of popular rums, will help to supply the ethanol required for making hand sanitizers.  The distillery in Catano, P.R. where 80% of the rums are made, is partnering with Olein Refinery to product raw materials that will contribute to the production of the products.

Target: at least 500,000 of the 10-ounce units of hand sanitizers – and these will be donated to local communities.  Said Jose Class – VP-Supply Chain & Manufacturing:  “This is a family-owned business sand we know what it means to take care of a community in need.  In the 158 years of [the family-owned] Bacardi, we’ve endured our share of challenging times and have learned that resilience, optimism and community are what will help us come out stronger.”

We’ll hoist a glass to that!  Make it BACARDI® – GREY GOOSE® – DEWARS® – BOMBAY SAPPHIRE® – MARTINI® – and other brands of this corporate citizen in a U.S. territory still struggling to recover from a devastating superstorm.

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Reuters / Ethical Corp:  Moving to the Online to Share Important Perspectives & Guidance

Ethical Corp / Reuters Events create “Reuters Events Ethical Corporation” events.  While in-person meetings will be a zero right now and probably at minimum for a while, that does not mean that the sharing has to stop.

The partners are organizing a new webinar series of 60 minutes each to “deliver solution to key sustainability challenges”.  Senior event speakers from Europe and the USA will present at the upcoming sessions:

  • Investors Engagement: Measuring Your Social Impact
  • Traceability & Visibility: Successfully Map and Monitor Across the Tiers
  • Best Practice Sustainability Supplier Engagement
  • Climate Disclosures – Accurately Reporting Climate Impacts, Risks and Future Opportunities

G&A Institute regularly partners with Reuters / Ethical Corp and G&A’s VP Amy Gallagher is the point person who alerts our connections about upcoming Reuters / Ethical Corp conferences.  She’ll keep us posted on the webinar series – watch for our communications through the usual channels.

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Global Reporting Initiative – Staying Safe and Continuing on Course

Tim Mohin, Chief Executive of the GRI, updated the global community plugged into the standards organization with news from Amsterdam (HQs of the GRI):

  • Most employees have transitioned to remote work arrangements to continue the operations.
  • Virtual solutions are enabling stakeholder engagements through online platforms.
  • All air travel is restricted for the GRI workforce.
  • Employees are being updated and informed through messaging apps, video, collaboration tools.

The GRI organization’s three priorities: (1) the wellbeing of all employees worldwide; (2) continuing the work with partners; (3) meeting new challenges with resilience, dedication and hard work.

You should know: Timothy J. Mohin was senior director of CR for Advanced Micro Devices (AMD) and former chair of the Electronic Industry Citizenship Coalition (EICC) before joining GRI as chief executive.  He’s the author of the best-seller, “Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations”.

Earlier in his career Tim was founder/leader of Apple’s Supplier Responsibility program, and also led Intel’s sustainability functions.

G&A Institute is Data Partner for the GRI in the United States of America, the United Kingdom and the Republic of Ireland (an EU state).   We value our long relationship with the GRI team and with Tim Mohin and our decade-long collaboration with GRI.

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The National Geographic Shoulders On – Facts and Science in the Forefront

The National Geographic Society has assembled the magazine’s COVID-19 “scientifically-accurate” information for subscribers (online). This includes text, graphics, photos, videos, “fake news” exposes, data sets, and much more.  Also, resources for families (“for facts geared toward kids and ideas on how to occupy their minds while they are out of school – at “Nat Geo Kids”).

All of this is in addition to the usual broad fare of science, geography and other content that the National Geographic offers.  The society’s national office in Washington D.C. is closed until at least March 31st

Says NatGeo:  “The work continues in these uncertain times.  It must.  Earth’s last wild places and millions of species are on the brink of being lost forever. If anything, this pandemic shows what happens when science and the experts are ignored.  We need solutions to the biggest challenges threatening our planet now more than ever. We can’t afford to pause our work, and we’ll do the best that we can to build a better future together while maintaining the health of all.”

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G&A Institute Team Note:
We will 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 in this first blog post will move down the queue.

We are creating 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.

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