Busy Summer 2020 for the World of ESG Players – Rating Agencies, Information Providers, UNGC & the SDGs…and More

August 27 2020

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

It’s been a very busy summer for organizations managing corporate reporting frameworks and standards, for ESG rating agencies, and for multilateral agencies focused on corporate sustainability and responsibility.

If you are a corporate manager — or a sustainable investment professional — do tune in to some of the changes that will affect your work in some ways. Here’s a quick summary:

ISS/Institutional Shareholder Services
For four decades, ISS has been the go-to source on governance issues for proxy voting and corporate engagement guidance for major fiduciaries (pension funds are an example).

Two years ago, “E” and “S” ratings were added for investor-clients.

Now, ISS ESG (ISS’s responsible investing unit) is providing “best-in-class fund ratings” that assess the ESG performance of 20,000 firms. Funds will be rated 1-to-5 (bottom is 1) – this to be a broad utility resource for investment professionals. And for corporate managers – ISS ESG scores along with those of other ESG ratings agencies are a factor in whether your company is included in indexes, benchmarks, maybe ETFs and mutual funds that are being rated.

Bloomberg LP
It’s launching E, S & G scores for thousands of firms (highlighting environmental and societal risks that are material to a sector).

First sector up is Oil & Gas, with 252 firms rated. Also, there are new Board Composition scores, with Bloomberg assessing how well a board is positioned to respond to certain G issues. (Note that 4,300 companies are being rated – probably including yours if you are a publicly-traded entity.)

And in other news:

UN Global Compact and the SDGs
The UNGC observes its 20th anniversary and in its latest survey of companies, the organization asked about the SDGs and corporate perspectives of the 17 goals and 169 targets. The findings are in the blog post for you.

MSCI
This major ESG ratings agency expanded its model for evaluating company-level alignment to the Sustainable Development Goals. New tools will help capital markets players to enhance or develop ESG-themed investment services and products.

Global Reporting Initiative
The GRI continues to align its Universal Standards with other reporting frameworks or standards so that a GRI report becomes a more meaningful and holistic presentation of a company’s ESG profile.

GRI Standards were updated and planned revisions include moving Human Rights reporting closer to the UN Guiding Principles on Business and Human Rights and other inter-governmental instruments.

Climate Disclosure Standards Board
The CDSB Framework for climate-related disclosure is now available for corporate reporters to build “material, climate-related information” in mainstream documents (like the 10-k). This is similar to what the TCFD is recommending for corporate disclosure.

This is a small part of what has been going on this summer. We have the two top stories about ISS and Bloomberg and a whole lot more for you in the G&A Sustainability Update blog.

For your end-of-summer/get-ready-for-a-busy-fall schedule!

Top Stories

The G&A Blog with many more organizations and their actions here.

Moving The World Forward Toward a More Sustainable Future: The Member Nations of the United Nations, Working Collaboratively For Progress in the 21st Century

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

“The United Nations” began as a World War II-era strategy as President Franklin D. Roosevelt talked about the allies of the United States of America partnering in the fight to save democracy and collectively battling the regimes of fascist dictators in Europe and Asia.

On January 1, 1942, 26 nations “united” in Washington DC to coordinate the battle with the “Axis” powers.  (“Axis” – the axis line, said President Roosevelt, ran from Berlin (Germany) through Rome (Italy) and to Tokyo (Japan) – the clear linkage in his mind of the fascist leadership.)

In February 1942 the president addressed the nation in his 20th “fireside chat” (broadcasting nationwide on “the radio”) to talk about the progress of the war.

The U.S. was coming from far behind in terms of preparedness for a global battle, and so an important part of the progress in this, the start of the first year of U.S. involvement in the global conflict, President Roosevelt explained to the nation of 125 million souls:

“The United Nations constitutes an association of independent peoples of equal dignity and equal importance. The United Nations are dedicated to a common cause. We share equally and with equal zeal the anguish and the awful sacrifices of war. In the partnership of our common enterprise, we must share in a unified plan in which all of us must play our several parts, each of us being equally indispensable and dependent one on the other.

“We have unified command and cooperation and comradeship. We of the United Nations are agreed on certain broad principles in the kind of peace we seek. The Atlantic Charter applies not only to the parts of the world that border the Atlantic [Ocean)] but to the whole world; disarmament of aggressors, self-determination of nations and peoples, and the four freedoms – freedom of speech, freedom of religion, freedom from want, and freedom from fear.”

The leader of the free world of that era envisioned an global organization that could bring about a new world ordering, to assure greater peace and prosperity to many peoples of the world.  President Franklin Roosevelt passed away in April 1945; soon the global conflict ended; and then what he long envisioned became the possible:

On October 24, 1945, 50 nations gathered in San Francisco to sign on to the “United Nations Conference on International Organizations” – and the UN as we know it today was launched.  (We celebrate UN Day on 24 October in commemoration of that historic event.)

Today the UN has 193 members – sovereign states that have equal representation in the UN General Assembly. The UN is the world’s largest intergovernmental organization – a forum for governments, not a world government.  And within the organization are important initiatives that have been shaping corporate responsibility, corporate citizenship, sustainability, and for capital markets, as well as for sustainable investing.  These are agencies, programs, institutes, global collaborations, and other entities.

You know some of them as the UN Principles for Responsible Investing (PRI); the UN Global Compact (UNGC); the UN Sustainable Development Goals (SDGs); the work of the UN Environmental Programme (UNEP).

Today we are hearing quite a bit in the corporate sector and in the capital markets about the Universal Declaration of Human Rights (adopted 1948); the UN has been the driving force behind 80-plus “human rights laws”.  Consider:  the declaration has been translated into 380 languages to date, says the UN High Commissioner for Human Rights..

We are sharing with you three recent highlights from the UN universe.   First, an update from the UNGC CEO Lisa Kingo, stressing that now is the time for society to invest in the 1.5C future…”there never has been a time”, she points out, “like today for coming together and jumpstarting a worldwide transformation towards a more inclusive and sustainable net-zero economy.”

Also from the UNGC, news of the launch of the Ocean Stewardship 2030 Report – to be a roadmap for how ocean-related industries and policymakers can jointly secure a healthy and productive ocean by 2030.

We are now in the Decade of Action on the Global Goals (the SDGs). The UNGC is an initiative of the UN Secretary General, a call to companies everywhere to align their operations and strategies with 10 universal principles focused on human rights, labor, environment and anti-corruption.

The Global Reporting Initiative (GRI) is today an independent global foundation that was birthed by the United Nations, building on the principles advanced for corporate responsibility by the NGO Ceres (based in Boston). An organization known for a philosophy of “constant improvement”, GRI recently organized an Agriculture and Fishing Project Working Group that will lead the work to create a new sustainability standard for ag & fishing.

This is part of the work of GRI’s New Sector Program – a multi-stakeholder group will move forward the initiative to help companies with ag and fishing in their value chains promote transparency and accountability, and better understand their role in sustainable development.

It’s almost 80 years now since President Franklin Delano Roosevelt – one of the most progressive leaders in U.S. history – conceived of the “united nations”, as a necessity to bring together the resources of other nations to fight a war on all of the continents, whose outcome was then uncertain.  And then to assure the peace and work to end wars, or at least settle disputes peacefully.

In November 2010 Secretary General Ban Ki-Moon noted:  “Sadly, FDR never saw the fruits of his efforts.  He died weeks before the founding conference. Yet his vision lives on in the UN Charter’s collective commitment to peace and security, economic and social welfare, tolerance and fundamental human rights.  Franklin Roosevelt’s Four Freedoms. This legacy of multilateral cooperation guides us today…”

Well said!

Top Stories

OOPS
In the June 8th issue of our newsletter (Highlights), with headline “Will We Ever See SEC Rules/Guidance for Corporate ESG Disclosure and Reporting?  The Question Hangs in the Wind..”  We incorrectly identified the corporate reporting regulations being reviewed by the Securities & Exchange Commission – should have said “Reg S-K” (not Reg F-D).  Sorry for the any confusion caused.  A more complete commentary on all of this is here on our blog.

Message From Africa – Invitation to Collaborate With Village Ventures Intl


May 14 2020

We share this commentary by a professional social sector manager in Kenya, East Africa.  Corporate managers who are interested in supporting and collaborating with a not-for-profit organization in African nations may find this information of interest. In posting the guest author commentary G&A Institute is not endorsing Village Ventures but sharing the information provided with our corporate and investment professionals colleagues who have Africa in focus in their sustainability journey.

Guest Post by Lindy Wafula – CEO/Lead Consultant – Village Ventures International

Greetings and a message of goodwill to you.   Kindly allow me to share information about Village Ventures International.

Ours is a non profit/social enterprise that invests in the startup and growth of village enterprises by:  

  1. Providing basic education and vocational training to women, youth and people with disabilities,
  2. Providing space for work, tools, and equipment for trade.
  3. Provide Seed capital for raw materials and stock for business start-up.
  4. Assist in the Management of village ventures to sustainability and to alleviation of poverty.  

We are currently investing in VillageVentures In East Africa — which include our Women’s Academy, a vocational training centre for women only.

We aim to train 100-to-500 young women/ mothers every year to the tune of USD$250,000 capital.  

Our Trainees also get a chance to learn by doing and earning through our Village enterprises, cottage industries and commercial villages where they also learn and work as apprentice trainees.

We train women mostly in trades that have traditionally been called “male jobs” such as: Agribusiness, Automobile Mechanics, Welding, Plumbing, Building and Construction, Heavy Vehicle driving, mobile phone and computer repairs — but also we incorporate others in catering and hospitality, hairdressing and beauty therapy, and garment making. 

We get training equipment from our partners Project Africa in Sweden, Tools with a Mission in the United Kingdom, and Tools2work from the Netherlands, who donate refurbished equipment from Europe (and we pay for shipment, customs clearance and inland transport as well as maintenance).

Other equipment that may not be provided for by our partners are bought locally through peer-to-peer entrepreneur arrangement or from local suppliers.  

We believe that our approach of vocational skills training and investment in the tools for trade, raw materials and seed capital is a catalyst to self employment and sustainable village enterprise development.  

Many village enterprises fail to take off because either the entrepreneur has no vocational or business skills, or has vocational skills but without the space, tools/equipment and financial capital to start work.

Thus collaboration with us will assist in promoting gender equality, socio-economic empowerment of women, youth employment and rural development.  

Kindly watch here my TEDx Presentation which I made when I visited the Bay Area and on the idea stage of our project when we trained Lady Mechanics in Kenya https://www.youtube.com/watch?v=Ii7bfPpLVxs  

This initial stage of our apprenticeship training for women was partly-funded by Peery Foundation, Cordes Foundation and Global Philanthropy Alliance.  

We are kindly requesting that those interested in our work may invest in us and/or promote our work in the empowerment of women and youth in rural Kenya, Uganda, Tanzania and the wider East Africa.

Also, we invite you to share with members of your network and other grant making organizations about our community work.  

We will be happy to share a comprehensive project proposal upon request. Kindly consider working in partnership with us and feel free to share information about us with your network.  

Lindy Wafula – CEO/Lead Consultant  –  Village Ventures International

P.O Box 35542 00200  City Square Nairobi, Kenya

Email.  villageventures.kenya@gmail.com

Lindy Wafula

 

Confluence: Coronavirus Crisis, Climate Change, Global Warming, Sustainable Investing, Corporate Sustainability & Citizenship…Shaping These Times

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

Over the past several weeks we have been witnessing an important confluence of events, a critical convergence of forces — something we might call reaching a critical inflection point for the sustainability and well-being of our planet, people, plants, and yes, profits going forward. Consider:

The COVID-19 infection has now touched just about every sovereign state on Earth, shutting down the largest economy, that of the United States of America, as well as the economies of many European nations…and of course important parts of the world’s second largest economy, China.

As this was happening, the public conversations about the impacts of climate change and global warming on people, flora and fauna, and planet continued, with the worldwide observance of the 50th Earth Day. Attention on climate change has doubled down even in the face of a frightening disease and resulting economic turmoil.

Numerous conversations among science and climate experts, in media channels, among public sector leaders, and other stakeholders, focused on the possible links between the coronavirus (and other serious infections) and climate change.

Questions are raised:  What new diseases might emerge…what new vectors might we see, moving from tropics to temperate climes and carrying unfamiliar diseases.  What fate awaits humanity as in some countries we see systematic destruction of rain forests (the “lungs of the Earth”) and as populated cities continue to push farther into wilderness areas?  Do we know the effects, short- and long-term, on human, as the arctic tundra warms and releases microbes and other organisms stored there in colder climes for millennia?

As the world’s capital markets were being impacted by the virus crisis and shutdowns of entire economies, the focus on sustainable and impact investing has intensified.

(On one conference call this week, a lecturer pointed to ESG investing trends and explained, look at the more resilient and sustainable companies for opportunity in the crisis and as we emerge. The ESG leaders will be more attractive for investors.)

Early results showed that sustainable investments (especially ESG mutual funds and ETFs) were performing with more resilience than more traditional instruments in the slowdown and in the ongoing adjustments of institutional investors’ portfolios in response to the crisis. (The outflow of ESG ETFs and mutual funds were small than for traditional peers.)

The focus on the corporate sector intensified as the three important sectors of 21st Century economies struggled to adjust to the widespread effects of the virus crisis – that is, public sector (governments), private sector (corporate and business) and social sector (institutions, NGOs, foundations, charities, others, as first defined as the social sector by management guru Peter F. Drucker).

There is considerable public discussion now about what the “new normal” might look like as we emerge from the terrible effects of the coronavirus.  The confluence / convergence of recent events as outlined here will help to shape society in the near term — moving into the post-crisis period.

The G&A Institute team has been monitoring and sharing perspectives on the above and more in our usual communications channels. In these newsletters, in our Resource Guides, on our Sustainability Update blog.

You can check out our blog posts here.

We are offering perspectives in the ongoing series, “Excellence in Corporate Citizenship on Display in the Coronavirus Crisis”  — #WeRise2FightCOVID-19.

We offer here several features along the lines of the above themes of confluence / convergence of factors for you:

Featured Stories

Why we cannot lose sight of the Sustainable Development Goals during coronavirus
Source: World Economic Forum – Our world today is dealing with a crisis of monumental proportions. The novel coronavirus is wreaking havoc across the globe, upending lives and livelihoods.

An Earth Day CEO summit shows how dramatically corporate values have changed
Source: Fortune – This week marks the 50th anniversary of those nationwide environmental celebrations and “teach-ins” that came to be called Earth Day. From the largest 1970 gathering, in Fairmont Park in Philadelphia, to smaller marches and…

The Covid-19 crisis creates a chance to reset economies on a sustainable footing
Source: The Guardian – New Zealand climate minister says governments must not just return to the way things were, and instead plot a new course to ease climate change

50 years later, Earth Day’s unsolved problem: How to build a more sustainable world
Source: MSN/Washington Post – We haven’t quit the fossil fuels scientists say are warming the atmosphere and harming the Earth. Humans use more resources than the planet produces. Society has not changed course.

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 

 

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.

* * * * * * * *

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.

* * * * * * * *

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.

* * * * * * * *

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

* * * * * * * *

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.”

* * * * * * * *

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!

Issues in Egypt in Focus, 2020 – Ken Cynar Perspectives – Could the Nile Go Almost Dry?

by Ken Cynar – Editor-in-Chief, G&A Institute

On Water Sustainability:

Critical Question: Could the Nile River Go Almost Dry?

Where can Egypt’s people find enough water to drink and continue sustainable agriculture that has lasted more than 5,000 years?

Blue Nile at Luxor

Long before the modern era of civilization first blossomed, the waters of the ancient Blue Nile flowed north from central Africa more than 4,100 miles into the Mediterranean Sea.

Along the way over the millennia the river’s flood cycles deposited fertile soil along its banks, fighting back the ever-encroaching desert, and quenching the thirst of the people and irrigating the crops they grew.

The Nile became the life blood of a region and a nation. This, the world’s longest river, became both the foundation of and the catalyst for the creation of ancient Egypt, nourishing its science, religion, engineering, writings, and other cultural foundations.

Today the Nile River flows through ten countries that share in its water and electric generating capacity…but not equally. The ever-fragile status quo is being threatened by the construction today in Ethiopia of yet another dam.

For Egypt: A Grave Situation

The situation is becoming grave for Egypt and its 97.5 million people who closely congregate in the land adjacent to the Nile as it flows northward.

Only 6 percent of the land in Egypt is usable in its current form and that tiny percentage is the home to almost all of Egypt’s people – with 22 million people in Cairo alone.

The Nile is their source of water for their crops, drinking water and more. Any sizeable disruption in the flow of the Nile would devastate the country, creating ecological calamity for its people and precipitating one economic disaster after another.

The truth is this: Here in northern Africa, water is more precious than oil.

Aswan Dam, Upper Nile

The solution to the problem like most regarding water is not cut and dried (forgive the pun). No one disputes Ethiopia’s right to build the dam and to generate electricity for its own people. The problem is in the details.

Lake Nasser

Behind the new dam the plan is to create a new lake and that lake must be filled with water…the question is how long will it take to fill the lake and how that disruption will impact the flow to the Egyptian Aswan Lake Nasser complex — and thereby the flow of water to the majority of Egypt’s almost 100 million people.

So far that question is unresolved and the dam construction is going forward.

Talks in Washington D.C. have not been fruitful — with no resolution of the issues involved in this complex situation.

As populations grow and poorer countries try to bring themselves and their people into the 21st and 22nd centuries, water control…in terms of protecting source and distribution…are becoming issues that could drive nations to armed conflict.

Currently it appears as Ethiopia is not bargaining in good faith and ignoring the impact their actions will have on its neighbors.

Moving Off “No” and “No Progress” to Resolution

While the United States is trying to broker a compromise there not been significant movement. Is water the new oil? Or has it become the key catalyst for nations marching inexorably to war with their neighbors?

Watch carefully in the coming weeks to see if this issue is being resolved.

There are two difficult sides to the story: Ethiopia wants its dam but Egypt cannot allow the lake to dramatically reduce the flow of the Nile.

That could result in a draught of Biblical proportions leading to the destruction of wildlife, agriculture and even death to those living along the Nile. Could armed conflict ensue? Can a country in the 21st Century allow their supply of water to be cut off by another country?

We have to accept: Water is more precious than ever in a world facing global warming and climate change. Leading to greater civic unrest.

A similar situation is brewing between India and China with the river Ganges …same issue, different continent. They who control the water have the power, the upper hand…more on this issue in coming soon.

About My Egypt Travels

Egyptian Pyramids

We spent eight days touring 5,000 years of Egyptian history…from stately Coptic Churches to the temples at Karnack and Luxor, to King Tut’s tomb in the Valley of the Kings to the Giza plateau and the great Pyramids and the Sphinx.

Our Egyptian tour guide — with a B.A. and Masters in Archeology and Egyptology, Amr — was a wealth of knowledge painting a picture of the gods, goddesses, and pharaohs that made the history, culture and religion of ancient Egypt come alive for us.

His knowledge was enhanced by his love and passion for his country and its history and his deep respect for those ancient peoples. His talks were like the encompassing lectures from the best professor at your university filled with facts, color and excitement.

All this was combined with the execution of the complex logistics by Norm of Mike’s Guiding Light Tours, helping us smoothly glide from location-to-location by plane, river boat, bus, horse-drawn carts and camels — and even by Felucca (the traditional Egyptian sail boat) – all of which made the trip even more exciting.

If you are thinking of touring Egypt or other places worldwide, I recommend that you consider Mike’s Guiding Light Tours. (I know, interesting name, but I think the Guiding Light was his wife’s favorite soap opera.) He is expert in coordination and logistics, with excellent selections of hotels and restaurants and a special feeling of adventure and comradeship…all of this making for a superb travel experience.

Ken Cynar, Inside Tombs

Egypt Museum

Sphinx with Ken & Donna Cynar

Pyramids with Ken & Donna Cynar

Temple of Philae

The Year 2020: Off To Great Start For News About Sustainable Investing

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

January 2020 — Here we are now in a new year, and new decade (already, the third decade of the 21st Century) and much of the buzz is all about (1) climate change and the dramatic impacts on business, finance, government and we humans around the globe; and (2) many investors are moving their money to more sustainable investments.

Oh, of course, there are other important conversations going on, such as about corporate purpose, corporate stewardship, human rights, the circular economy, worker rights, supply chain responsibility, reducing GHG emission, conserving natural resources, moving to a greener and lower carbon economy, workplace diversity, what happens to workers when automation replaces them…and more. 

But much of this is really part of sustainable investing, no?  And corporate purpose, we’d say, is at the center of much of this discussion!

The bold names of institutional investors/asset management are in the game and influencing peers in the capital markets – think about the influence of Goldman Sachs, BlackRock (world’s largest asset manager), State Street/SSgA, The Vanguard Group, and Citigroup on other institutions, to name here but a handful of major asset managers adopting sustainable investing strategies and approaches.

This week’s Top Story is about Goldman Sachs Group Inc’s pivot to “green is good”, moved by Reuters news service and authored by Chris Taylor.  The GS website welcome is Our Commitment to Sustainable Finance

The company announced a US$750 billion, 10-year initiative focused on financing of clean energy, affordable education and accessible healthcare, and reduction of or exclusion of financing for Arctic oil-gas drilling.

Head of GS Sustainable Finance Group John Goldstein explains the company’s approach to sustainable financing and investment in the Reuters story. 

Our other Top Story is from Morningstar; this is an update on the investors’ flows into sustainable funds in 2019…what could be the leading edge of a huge wave coming as new records are set. 

For 2019, net flows into open-end and ETF sustainable funds were $20.6 billion for the year just ended – that’s four times the 2018 volume (which was also a record year). There’s always information of value for you on the Morningstar website; registration is required for free access to content.

And the commentary on the January 2020 letter from BlackRock CEO Larry Fink to the CEOs of companies the firm invests in – we’ve included a few perspectives. 

We’d say that 2020 is off to an exciting start for sustainability professionals, in the capital markets, and in the corporate sector! Buckle your seat belts!

Top Stories for This Week

Green is good. Is Wall Street’s new motto sustainable?   
Source: Reuters – If you have gone to Goldman Sachs Group Inc’s (GS.N) internet home page since mid-December, it would be reasonable to wonder if you had stumbled into some kind of parallel universe. 

Sustainable Fund Flows in 2019 Smash Previous Records   
Source: MorningStar – Sustainable funds in the United States attracted new assets at a record pace in 2019. Estimated net flows into open-end and exchange-traded sustainable funds that are available to U.S. investors totaled $20.6 billion for the… 

Pope Francis Issues Call for Action on Sustainable Development at Rome Conference of Experts & Activists

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

Global faith leaders can directly and indirectly affect significant changes in our global society. 

One leader with high visibility and strong opinions on important societal issues is the Holy Father in Rome, Pope FrancisThe Roman Catholic Church as a collective institution is one of the largest owners and holders of assets in the world, including pension systems of various orders, Catholic charities, healthcare systems, and more.

The Roman Catholic Church’s policy is guided by important encyclicals issued by the Pope in the Vatican City. 

For example, the contents of the historic 1891 encyclical issued by Pope Leo XIII on capital and labor and the rights of both (and concerns about the Industrial Age working class) continues to reverberate even today in discussions about corporate-labor and public sector-labor issues (this was “Rerum Novarum”).

Amidst the rising discussion worldwide about climate change and the need for action, Pope Francis issued “Laudato Si” (Our Home) in May 2015.  This is a powerful work addressing environmental and ecology issues, especially including the need for action on climate change. This work called on the world society – and especially the institutions of the R.C. church – to address the urgent threats posed by climate change.  (The subtitle was “On care for our common home”.)

As part of the public dialogue, Pope Francis addressed the joint houses of the U.S. Congress in May 2015 and received 37 standing ovations as he addressed climate change, common needs, risk to our common home (the Earth), the responsibility of richer nations, and other societal challenges.

The discussion continues:  the Roman Catholic Church convened a three-day conference earlier this month in Rome to bring together experts and activists in human development, the environment and healthcare.

To – as Pope Francis explained – explore new paths of constructive development … development having been “…almost entirely limited to economic growth… [which] is leading the world down a dangerous path where progress is assessed only in terms of economic growth.”

The title of the conference:  “Religions and the Sustainable Development Goals:  Listening to the Cry of the Earth and of the Poor”. The theme:  “Without a change of attitude that focuses on the well-being of the planet and its inhabitants, efforts to achieve the SDGs will not be sufficient for a fair and reasonable world order.”

Said the Holy Father, leader of the world’s 1.2 billion Roman Catholics:  “No branch of science or form of wisdom should be overlooked, and this includes religions and the languages particular to them.” 

Our Top Story is the news report of the Catholic News Service out of Rome with background on the conference and related information.

Background on the historic significance of Laudato Si (Our Home), Pope Francis’s encyclical is in the “Trends Converging! – A Look Ahead of the Curve” book of essays by G&A Chair Hank Boerner, available (chapter 44) online

There is also a management brief on this on G&A Institute’s “To the Point!” management briefing platform:
https://ga-institute.com/to-the-point/


This Week’s Top Story

Pope: World in need of ‘ecological conversion’ to advance sustainability   
 (Tuesday – March 12, 2019) Source: Cux Now – ROME – Sustainable development cannot be achieved without the voices of those affected by the exploitation of the earth’s resources, especially the poor, migrants, indigenous people and young men and women, Pope Francis told… 

Is the Movement to Achieve Greater Societal Sustainability Reaching the Consumer? One Consumer Marketers’ Story…

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

The story is being well told -– a growing number institutional shareowners and their global networks of asset managers steadily embrace ESG / sustainable investing approaches.  Corporations of all sizes are adopting sustainability strategies and churning out sustainability and responsibility reports to tell the story of their sustainability journey.

Many national, state and local governments are following through on their commitments made in Paris in 2015 (the Paris Accord on climate change). NGOs galore are focused on driving sustainability into all corners of human behavior.

What about the vast global consumer market?  What’s happening at the consumer level?  The House Beautiful magazine (part of the Hearst UK Fashion & Beauty Network) brings us news from the UK about one large company’s sustainability-focused marketing efforts.

The headline:  Why 2018 is the year sustainability went mainstream. The most-watched TV show of the year was the BBC series on sustainability.  And at least one major retailer has put “sustainability at the heart of everything we do,” says its senior sustainability manager.

The firm in focus is John Lewis & Partners (manufacturers and marketers of “homeware, fashion, furniture, electricals,” mens and womens wear). The employee-owned company offers its lines of products through a vast network of retail outlets. What is the company doing?

It has introduced a duvet (quilt bed cover) made of 100% recycled polyester from plastic bottles (120 bottles = one duvet).  The product is made in an “eco-factory” running on renewable energy. The company has its own factories as well as contract manufacturers.

The S’well Geode Rose drinking water bottle sales are up year-to-year (by 37%) says the company.  Glassware made from recycled glass is offered in the company’s John Lewis Croft Collection.  As alternatives to tin foil and plastic cling film for food storage the company offers brands “Stasher” and “Bees Wrap” -– silicone kitchen storage bags.

The company works with the Re-Use Network in marketing its new sofas; when a customer buys a new sofa in the “Thomas Snuggler” line, the company arranges for the old sofa to be re-used or re-cycled in collaboration with local charities that support disadvantaged communities.

All of this and more is in its annual 2018 Retail Report.  Shoppers became more conscious about what they buy and where the products come from, explains the company.  And, this was the year we took it upon ourselves to build a more sustainable future rather than leaving it to others.

The company (“partnership”) is the largest employee-owned company in the United Kingdom. “Partners” (83,000 permanent staff) own 50 John Lewis shops across the United Kingdom, plus Waitrose supermarkets, shops at Heathrow International, online and catalogue shops, production facilities, farms, and more.

Founder John Spedan Lewis created a “constitution” to define the business and how individual “partners” are expected to behave toward stakeholders. This reminds us of the foundational document of Johnson & Johnson (“the credo”) here in the USA.

The partnership model was and is “an experiment in industrial democracy,” showing that long-term success can come from “co-ownership” with shared power and collective responsibilities.  Societal challenges like climate change and social inequality guide company thinking.

As information: https://www.johnlewispartnership.co.uk/csr/governance.html

Its human rights report and related information is available at: https://www.johnlewispartnership.co.uk/csr/source-and-sell-with-integrity/tackling-modern-slavery.html

This Week’s Top Story

Why 2018 is the year sustainability went mainstream
(Wednesday – October 24, 2018) Source: House Beautiful – This was the year we took it upon ourselves to build a more sustainable future rather than leaving it to others,’ said John Lewis & Partners in its annual Retail Report 2018. ‘We know that 73 per cent of millennials will spend…

And along the lines of sustainability-themed marketing…

Nielsen: How do sales of sustainable products stack up?
(Thursday – October 25, 2018) Source: Food Navigator – Sustainability-related claims on food products are popping up more frequently and while still just a small fraction of market, items mentioning sustainability outperformed the growth rate of total products in their respective…