The United Nations at 75 Years This Week – Corporate CEOs Around the Globe Pledge Support of the Missions

October 20, 2020

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

Three-quarters of a century of serving humanity — the family of nations celebrates the 75th Anniversary of the founding of the United Nations on October 24th.

After the global conflict of World War Two, with great losses of life, liberty and property, 51 nations of world gathered in San Francisco to put the Charter into force — to collectively explore a better way forward with collaboration not confrontation.  (The Charter was signed as the war was ending in the Pacific and had ended in May in Europe).  We can say that on October 24, 1945, the United Nations “officially” came into existence with the ratification of the Charter by nations and the gathering of delegates.

The United Nations members states — the global family of sovereign nations collaborating peacefully for seven-plus decades to address common challenges — got good news in its 75th anniversary year.

More than one thousand business leaders from 100+ nations endorsed a Statement of Renewed Global Cooperation, pledging to further unite in helping to help to make this a better world…for the many, not the few. Some of the world’s best known brand marketers placed their signatories on the document.

UN Secretary General Antonio Guterres received the CEOs’ messages of support at a Private Sector Forum during the recent General Assembly in New York (September).

The Statement from Business Leaders for Renewed Global Cooperation was created as the nations of the world are coping with the impacts of the Coronavirus, domestic and global economic slowdown, rising political and civic unrest, wars in different regions, critical climate change challenges, the rising demand for equality of opportunity, and more.

The corporate CEOs’ public commitments included demonstration of ethical leadership and good governance (the “G” in ESG!) through values-based strategies, policies, operations and relationships when engaging with all stakeholders.

Now is the opportunity, the statement reads, to realign behind the mission of the UN to steer the world onto a more equitable, inclusive and sustainable path. We are in this together – and we are united in the business of a better world.

“Who” is the “We”? Leaders of prominent brands signing on include Accenture, AstraZeneca, BASF, CEMEX, The Clorox Company, Johnson & Johnson, Moody’s, Nestle, Thomson Reuters, S&P Global, Salesforce, Tesla, and many other consumer and B-to-B marketers. (The complete list of large-cap and medium and small companies accompanies the Statement at the link.)

There are many parts of the global community’s “meeting place” (the UN) that touch on the issues and topics that are relevant to us, the folks focused on sustainability. Think of the work of:

UN Global Compact (UNGC)
This is a non-binding pact (a framework) to encourage enterprises to voluntarily adopt sustainable and socially responsible policies and report on same; 12,000+ entities in 160 countries have signed on to date (the Compact was created in July 2000).

UN Principles for Responsible Investing (PRI)
Founded 2006, this is a global network of financial institutions and others in the capital markets pledging to invest sustainably, using 6 principles and reporting annually; today, there are 7,000+ signatories to date in 135 countries; this is in partnership with UNGC and the UNEP Finance Initiative.

UN Sustainable Development Goals (SDGs)
The SDGs (17 goals with 169 targets) build on the earlier Millennium Development Goals MDGs- (2000-2015).

The Paris Agreement builds on the UN Framework Convention on Climate Change.

The UN Environment Programme (UNEP) plays important roles in protecting the world’s environment.

In all, there are almost three dozen affiliated organizations working to advance humanity through the United Nations System.

 

SHARED PERSPECTIVES: FAYE LEONE
With all of this activity, the UN needs support, and shared ideas, to build even stronger foundations. Our colleague, G&A Institute Senior Sustainability Content Writer Faye Leone, has a decade of experience reporting on the UN.

Her perspectives: “It is exactly right for business leaders to express support for global cooperation– not competition- at this time. This is in the spirit of the UN’s 75th anniversary and critical for the next big challenge for multilateralism and solidarity: to fairly provide a safe vaccine for COVID-19.”

She explains that leading up to its 75th anniversary in September 2020, the UN conducted a year-long ‘listening campaign”. The results, after over one million people around the world participated!

They said they do not want “more of the same” from the UN.  They overwhelmingly called for a more inclusive, diverse, and transparent UN that does a better job of incorporating businesses, cities, vulnerable peoples, women, and young people. They also said the UN should be more innovative.

(View Source)

The Sustainable Development Goals, says Faye, can help with that.  The 17 goals “provide a common language for everyone to combine their strengths. According to the head of B Lab, business’ role is to participate in delivering on the SDGs, use the power of business to solve the world’s most urgent problems, and inspire others to do the same”.

(View Source)

Read more about the UN’s 75th anniversary through Faye’s work with IISD here.

Read more about the UN’s 75th anniversary here.

Mark October 24 on your calendar. That’s the day we commemorate the UN’s official founding after WW II (on 24 October 1945). We invite you to think about how you can support the UN moving toward the century-of-service mark in 25 years (2025) – and what ideas you can share to help this organization of the family of nations to address 21st Century challenges!

TOP STORY

Celebrating Highlights Issue #500 – And Unveiling a New Design

October 16, 2020

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

Celebrating Highlights issue #500 – this is a landmark achievement, we will say, for this is also the tenth anniversary year of publishing the G&A Institute’s weekly newsletter (G&A Institute’s Sustainability Highlights).  As you will see in reading #500, we are also introducing an enhanced format intended to make the newsletter easier to read or scan as well.

Our G&A Institute’s Sustainability Highlights newsletter is designed to share timely, informative content in topic/issue “buckets” that we think will be of value to you, our reader. So much is happening in the sustainable investing and corporate sustainability spaces these days – and we are working hard to help you keep up to date with the important stuff!

Publishing the Sustainability Highlights newsletter is a team effort here at G&A.

Our company was formed in late 2006 and among our first efforts, Ken Cynar, then and now our Editor-in-Chief, began the daily editing of the then-new “Accountability Central” web site with shared news and opinion. The focus was (and is) on corporate governance, environmental matters, a widening range of societal and corporate-society issues, SRI investing, and more.

Two years later we created the “SustainabilityHQ” web platform – Ken manages content for both platforms today.

Back in those early days there was not the volume of ESG news or opinion pieces that we see today. Whenever we “caught” something of note the rest of the G&A team would quickly share the item with Ken.

Our team had worked together (some for a number of years) at the former Rowan & Blewitt consultancy, specialists in issue management, crisis management and strategic communications for the fortunate Fortune 500s.

That firm was acquired by Interpublic Group of Companies and after 7 years the New York City team created G&A Institute to focus on corporate sustainability, responsibility, citizenship and sustainable & responsible investing.  All of us came equipped with a strong foundation of issue management, risk management, critical issues managements, and corporate communications experience and know-how.

“ESG” had just emerged as a key topic area about the time we began our publishing efforts and soon we saw a steady flow of news, features, research reports, opinions & perspectives that we started sharing.

We had worked on many corporate engagements involving corporate governance, environmental management, a range of societal issues, public policy, and investor activism.  Here it was all coming together and so the G&A enterprise launch to serve corporate clients!

By 2010, as we emerged from the 2007-2008 financial markets debacle, then-still-small-but-solid (and rapidly expanding) areas of focus were becoming more structured for our own information needs and for our intelligence sharing, part of the basic mission of G&A from the start. And so, we created the weekly Highlights newsletter for ease of sharing news, research results, opinion & perspectives, and more.

It is interesting to recall that in the early issues there were scant numbers of corporate CSR or sustainability etc. reports that had been recently published (and so we were able to share the corporate names, brief descriptions of report contents, links of those few reports).  That trickle soon became a flood of reports.

But looking back, it was interesting to see that at the start of the newsletter and our web sites, there were so few corporate sustainability / responsibility reports being published we could actually post them as news for readers. Soon that trickle of corporate reports became a flood.

A few years in, The Global Reporting Initiative (GRI) invited G&A to be the data partner for the United States and so our growing team of ESG analysts began to help identify and analyze the rapidly-increasing flow of corporate reports to be processed into the GRI’s global reporting database.

Hank Boerner and Lou Coppola in the early days worked closely with Ken on the capturing and editing of content.  Lou designed the back end infrastructure for formatting and distribution.

Amy Gallagher managed the weekly flow of the newsletter, from drafts, to layout and then final distribution along with the coordination of a growing body of conference promotions with select partner organizations.

And now with a solid stream of content being captured today, all of this is a considerable effort here at G&A Institute.

Ken is at the helm of the editorial ship, managing the “AC” and “SHQ” web platforms where literally thousands of news and opinion are still hosted for easy access. He frames the weekly newsletter.

Today Ken’s effort is supported by our ESG analysts Reilly Sakai and Julia Nehring and senior ESG analyst Elizabeth Peterson — who help to capture original research and other content for the newsletter.

Hank and Lou are overall editors and authors and Amy still manages the weekly flow of activities from draft to distribution.  Our head of design, Lucas Alvarez, working with Amy created this new format. As you see, it is a team effort!

There is a welcome “flood” — no, a tidal wave! — of available news, research and opinion being published around the world that focuses on key topic areas: corporate sustainability, CSR, corporate citizenship, ESG disclosure & reporting, sustainable investing, and more.  We capture the most important to share in the newsletter and on our web sites.

We really are only capturing a very tiny amount of this now-considerable flow of content, of course, and present but a few select items in the categories below for your benefit.  (The target is the three most important stories or items in each category.)

Much more of the ongoing “capture effort” is always available to you immediately on the SustainabilityHQ web platform (see the “more stories” links next to each category of headlines).

We hope that you find Sustainability Highlights newsletter of value. It’s a labor of love for us at G&A, and we would like to get your thoughts and feedback …including how we can continue to improve it. Thanks for tuning in all of these years to our long-term readers!

TOP STORIES

As example of the timely news of interest for this week we offer these (two) commentaries on the Sustainability Development Goals (SDGs).  We are five years in/with 10 years in which to make real progress…where do you think we are headed?

As students and faculty head back to campus – there’s discussion about “sustainability” and “campus”:

 

Rising Heat & Humidity, Rising Sea Levels, Up & Down Shifts in Crop Yields, More Large Fires, Huge Human Migration Within the United States -– What We Are Learning Today

September 24 2020

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

There is so much going on in the global sustainability space that we could draw an apt analogy – it’s “like drinking water not out of a straw but a fire hose!”

Every week our team seeks out the news, feature and research items that will help you stay informed on developments in corporate sustainability and CSR, sustainable investing, the actions of governments and civil society leadership, activists, academics & researchers…and more.

For the past two or three years the pace of these developments has accelerated and so created a long list of many “possibilities” to share with you.  Sometimes, certain news jumps up and shouts at us from the print or digital page.

Example:  This week we see a powerful accounting of the impacts of climate change as assembled by ProPublica, an independent, nonprofit journalism organization focused on the major issues of the day.   The collaborating journalists – at ProPublica and The New York Times with support from the non-profit Pulitzer Center — focused on “the compounding calamities of climate risk” and the projected impact on the continental U.S.A. over the coming decades.

The issues “stack on top of one another”, they write.  Such as rising heat, excessive humidity, oceans rising, very large fires, crop failures, economic damages, and more…scary projections for the 2040-2060 timeframe.   (That is starting only 20 years, or 240 months, just 1,000+ weeks away!)

ProPublica worked with data from the Rhodium Group, which when presented in the context of the report, tell a story of warming temperatures, and changing rainfall that will drive agriculture and temperate climates from south to north, as the sea levels rise and vast amounts of coastlines “are consumed” and dangerous levels of humidity “swamp the Mississippi River Valley”.

All of this will profoundly interrupt the way that we in this, the world’s largest economy, will live and farm and work later in this century.  This could be an era to be marked by mass migration within the U.S.A., far outpacing the dramatic “Great Black Migration” with large populations moving from southern states to the north, profoundly reshaping this Land.

The data is presented in maps and county-by-county review; you can in the visuals presented see how the temperate zone marches north and more…for corn and soy production, harvests will decrease and increase, depending on location in the country.

Economic impact? (Serious projections to consider today while we experience dislocation now due to the Coronavirus pandemic include rising energy costs, lower labor productivity, poor crop yields, increase in crime and more.

Which counties will rise and which, fall?  The maps tell the story.

This reportage was so important and timely that the NY Times published a comprehensive wrap up this weekend in the Sunday magazine (reaching well beyond two million print and digital subscribers).   We present this important reportage for you in the Top Stories.

Timeliness:  This is also Climate Week, with important digital and some physical meetings around the world to focus on climate change challenges. We’re sharing some of the coverage of that as well.

 

Top Stories

Americans Tuning in to Sustainability During Crises, Expecting “More” from Government and Corporate Sector

August 27 2020

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

According to responses to a June on-line survey of 2,000 adults in the U.S.A. for “clean manufacturing” leader Genomatica, sustainability is now a top-of-mind issue, with an overwhelming majority (85% of respondents) of Americans indicating they’ve been thinking about sustainability the same amount or more…and 56% want brands and government to prioritize sustainability even in the midst of the crises (Coronavirus, economic downturn – plus civil unrest).

According to Genomatica CEO Christophe Schilling: “The collective consciousness on sustainability is rising, and certainly faster than most would have expected during these unprecedented times.

While this shift has been underway for decades, and is particularly strong in Europe, many of us in the U.S. have been inspired by the rapid improvement in air quality and traffic that shine a bright light on how our behaviors and decisions impact our environment and quality of life.”

Other interesting survey findings:

  • 59% of Americans say working from home is more sustainable than working in an office.
  • 37% of Americans are willing to pay a little more for sustainable products, even during an economic downturn. Gen-Z is the most willing age group, at 43%.
  • Half of Americans won’t be comfortable using sharing economy services like Uber or Airbnb (53%), riding public transportation (54%) or carpooling (50%) until there is a vaccine, if ever.

There’s more findings in the Top Story link below:

Part of the “sustainability thinking” is about personal investments…and how to do well financially while doing good with one’s financial activities.

A new report published by the foundation of The Forum for Sustainable and Responsible Investment (US SIF) explores the growth of passive ESG investing and the outpace of investor flows into passive vs. active ESG funds.

The report shows that “net flows into passively-managed ESG funds have in recent years outpaced net flows into their actively managed counterparts” — despite the fact that “the vast majority of sustainably-invested assets are in actively-managed ESG funds.”

Meg Voorhes, Director of Research at the US SIF Foundation explains:  “The advent of passive ESG funds provides more options to investors seeking sustainable impact, and we encourage these fund managers to make commitments to comprehensive ESG approaches.”

Follow Up to Last Week
In last week’s Highlights we told you about Morgan Stanley’s pioneering move to join the Partnership for Carbon Accounting Financials (“PCAF”).  The update:  Citi and Bank of America are on board, too.  Great news moving toward the low-carbon economy. 

Citi, Bank of America join Morgan Stanley in carbon-disclosure group

Individual news releases from the banks with the details:

Lively Discussions: The Move Toward Harmonized Corporate ESG / Sustainability Reporting

September 22 2020

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

There are lively discussions going on, centered on improving publicly-traded company disclosure and reporting – and especially ESG reporting…that is, storytelling about the company’s “non-financials” (in accounting-speak).  And the story of the corporate sustainability story for those-in-the-know!

The proliferation of ESG / sustainability reporting frameworks, standards, information platforms, industry guidance, stock exchange guidance and much more has been astounding in recent years.

We think of all this as about the organizing of the storytelling about a company’s sustainability journey and what the enterprise has accomplished. 

And why the story matters to society…to investors, employees, customers, suppliers, communities…and other stakeholders.

And it has a been a long journey to the state of today’s expanding corporate ESG disclosure.

The start of mandating of periodic financial and business mandated disclosure goes back to the 1930s with passage of landmark federal legislation & adopted implementation (compliance) rules for publicly-traded companies in the United States.

Corporate financial disclosure in concept is all about providing shareholders (and potential investors) with the information they need to make buy-sell-hold decisions.

The sturdy foundations of mandated corporate disclosure in the U.S. are the laws passed after the 1929 stock market crash – the 1933 Securities Act and 1934 Exchange Act.  These laws and the bodies of rules deriving from them have been constantly updated over the years, including with Sarbanes Oxley legislation in 2002 and Dodd Frank in 2010. These mandate or guide and otherwise provide the rules-of-the-road for financial disclosure for company managements.

Disclosure has steadily moved well beyond the numbers – Sarbanes-Oxley updated the 1930’s laws and addressed many aspects of corporate governance, for example.

Voluntary Disclosure & Reporting – ESG Issues & Topics
Over the past 40 years, beyond the financials, corporate voluntary non-financial disclosure has been steadily increasing, as investors first embraced “socially responsible investing” and moved on to sustainable & responsible & impact investing in the 21st Century.

Asset owner and asset manager (internal and external) requests for ESG information from publicly-traded companies in portfolio has steadily expanded in the depth and breadth of topic and issue areas that institutional investors are focused on – and that companies now address in significantly-expanded ESG disclosures.

Today, investor interest in ESG / sustainability and related topics areas is widespread throughout asset classes – for equities, equity-focused products such as imutual funds and ETFs, fixed-income instruments, and now credit risk, options and futures, fixed assets (such as real estate), and more.

With today’s dramatic increase in corporate sustainability & ESG reporting, the maturation of reporting frameworks and standards to help address the internal need for better organizing non-financial data and information and accompanying ESG financial disclosure.

And all of this in the context of trying to meet investor demands.  Today with expanded ESG disclosure, corporate executives find that while there are more resources available to the company, there is also more confusion in the disclosure process.   Investors agree.

Common Complaints:  Lack of Comparability, Confusion, Demand for Change
The result of increasing demand by a widening range of investors for accurate, detailed corporate ESG information and the related proliferation of reporting frameworks and standards can and has resulted in confusion among investors, stakeholders and companies as to what is important and material and what is frill.

This especially as corporate managements embrace various elements of the available frameworks and standards and industry guidance and ESG ratings for their still-voluntary ESG reporting.

So where do we go from here?  In our selection of Top Stories for you, we bring you news from important players in the ESG reporting process as they attempt to move in the direction of more uniform, comprehensive, meaningful and decision-ready corporate ESG reporting. That investors can rely on.

The news for you is coming from GRI, SASB, GSSB, IIRC, CDSB, and CDP (among others) – all working to get on the same page.

The aim: to benefit corporate reporters – and the users of the reports, especially capital market players.

Because in the end, ESG excellence is all about winning in the competition for access to capital. Accurate, timely, comprehensive comparable ESG information is key!

Top Stories

As “Corporate Citizen” Working In Many Lands – This Can Be Challenging, As Corporate Experiences With China Show…

Another in the series The Corporate Citizen and Society – the Dynamics of the Relationship

Started in Autumn 2019 – drafting interrupted – further edited in June 2020 – and posted in September 2020. 

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

Running a multi-national business today is quite challenging, especially for firms with “footprints” of size in countries beyond the homeland.

Recently we have been watching some critical events…at times crisis situations…that senior executives are navigating. 

Of course, corporate leaders are responding to the Covid-19 pandemic – and civil protests in many cities and towns related to equality issues and objections to current methods of policing. – and the economic dislocations of the virus and more.  

For large multi-nationals with a presence in many different nations – sourcing there, or with local facilities in operation, or with products and services extensively used in the countries, with partnerships established with the public sector or NGOs – the challenge of being a “good corporate citizen” is ever-present. And sometimes can be daunting.

Challenges? Think about those related to continuing “freedom to operate” or “social license” or actual regulatory license to operate that may be placed in jeopardy in some way or another. 

Something done, something said (or published or communicated)…with the foreign governments objecting to that “something”.– and threatening to or taking action to limit the freedom to operate. 

When I began drafting this commentary last fall, tiny bits of news about the Coronavirus was just beginning to be reported out of China, with very sketchy details.  By year end, It was a kind of flu. Nothing to worry about. 

In the news headlines at that time (summer into fall 2019) there were more obvious challenges being presented to non-Chinese tech companies as the Hong Kong people protests continued to build momentum, and the Communist government in the mainland began to put pressure on the corporate sector (perhaps pressuring foreign companies’ media that had China news coverage).

An example of this kind of threat came to us in October 2019 involving Apple — concerning its vital relationship with the “two Chinas” – and with significant production and retail stores on the mainland — the People’s Republic of China being the #2 global market for Apple sales.

Other non-China-based companies have also being feeling the pressures as well.  

Just offshore from mainland China, trouble was quite evident to the world in the former British territory of Hong Kong, which is a kind of status aparte of the mainland. (That is similar to the status of Aruba in the Caribbean Basin to parent country The Netherlands.)  China has maintained a “one country-two systems” approach to Hong Kong. Until now. 

China gained re-sovereignty over the Hong Kong territory in 1997 with the execution of a treaty at the end of the United Kingdom’s 99-year lease. The treaty terms were meant to assure separate governance systems for the more advanced Hong Kong economy and territory’s political system of that era.

Early in October 2019, an Apple device software application – Hkmap.live – developed by an outside firm and sold through the Apple Store, was removed from the on-line store. 

The concerns:  Reuters News and Associated Press reported that the Communist Party’s main newspaper (the People’s Daily) had singled out Apple for criticism for having the third party app for sale (and used on smartphones)  that reportedly enabled Hong Kong protesters to track the local police activity.

The People’s Republic of China’s propaganda arm (the publication) said this was a no-no – that is, Apple making the app available — and Apple removed the app because it “violated the rules,” according to the Reuters/AP report at the time.  (Reason: the app could be used to ambush police and by criminals where police were absent – the Apple rules allow for removal when the app is found to facilitate illegal activity.)

Apple had first rejected HKmap.live — then agreed to make it available — and then as the protest mounted (and mainland China responded), the app came off the App Store.

Was it the People’s Daily targeting of Apple and the app…or what the company said (“…many concerned customers in Hong Kong contacted the company…”).

An MSNBC commentator (Kif Leswing) weighed in, pointing out that Apple also removed a news stream (Quartz) because the content is illegal in China. Quartz was covering the Hong Kong democracy protests.

This is/was not a new issue: Back in 2017 several U.S. Senators presciently charged that Apple was enabling the Chinese government’s draconian moves on censorship and citizen surveillance.  (Which moves, according to news reports of today, involves collecting everyone’s DNA and placing cameras everywhere to track everyone – plus developing a “social profile” for tracking the movements of citizens — and meting out punishment where officials think it is merited.)

We note here that Google also quietly removed Hong Kong protest content from the Android store — without creating Apple-type headlines.

But – for those who had downloaded the app, it continued posting locations of police patrols, so said The Los Angeles Times.

MSNBC noted that Apple more than other tech companies has a very close relationship with China (where 200 million-plus iPhones are made each year) and China is an important market as well with tens of billions in revenue in total from the “three Chinas”.  (For Apple, China is the #2 market for iPhones.)

The third China: the separate nation of the Republic of China, more generally known as Taiwan, and persistently claimed by the mainland as part of its territory. “China” is a complicated subject for many company managements. And then there is Hong Kong and nearby Macao, outposts of China mainland.)

Apple CEO Tim Cook sent a memo to Apple’s 130,000 employees to explain the move. And we can assume try to calm nerves internally.

US Senator Josh Hawley (Missouri) quickly posed the question:  Who is running Apple…Tim Cook or Beijing?

If We Don’t Agree — We Will Name & Share – Beware of the China Leadership

Brands targeted by China’s rulers have been subjected to campaigns (name and shame) to alert local customers of issues with a company or organization.

This could become more of a threat to non-Chinese companies as the government continues to develop the “social profile” of its citizens. And captures their imagines on street cameras. Which company’s products they buy could become a major issue in the western democracies!

Further complicating life for execs — we’ve seen the rise of internal protest inside U.S. tech companies, when employees don’t like the work being done for customers –particularly government agencies, police departments, intelligence agencies, military branches, etc. 

Business-society relationships are complicated. Sports is a big business in the USA. The National Basketball Association is a powerful sports enterprise now with global reach and the ownership universe (the key decision-makers) is made up of corporations and wealthy partnerships that own local sports teams. 

So – when the manager of the Houston Rockets briefly voiced support of the Hong Kong protests — the state TV in China stopped the broadcast of NBA games.  Pow!

Senator Majority Leader Mitch McConnell (R_Kentucky) quickly weighed in: “The people of Hong Kong have risked much more than money to defend their freedom of expression, human rights and autonomy.  I hope the NBA can learn from that courage and not abandon those values for the sake of their bottom line.” (The NBA apologized for the Twitter comment of the Houston team GM. It’s not comfortable being in the middle of intercontinental cat fight.)

Complicating matters: Majority Leader McConnell’s wife – Secretary of Transportation Elaine Chao – is a Chinese-American born in Taiwan. She was Secretary of Labor under President George W. Bush (and therefore an overseer of U.S. fiduciary investment policy-making at the DOL, affecting decisions of many large investors.) More complications in public and private sectors, we could say.

The Houston basketball team has been very popular in China and a star player (Yao Ming) played for the team.   The U.A. Senate majority leader is a constant critic of China policies. Complicated matters for companies doing business in and with China!

Senator Ted Cruz (R-Texas) also weighed in:  “We’re better than this. Human rights should not be for sale and the NBA should not be assigning Chinese communist censorship.”  Remember, his father fled Communist Cuba to come to the U.S.A.

The aggravated condition of U.S.-China trade relations under the Trump Administration is also complicating things. 

One, Two, Three Chinas – It’s Complicated

We should explain that the “ Two Chinas” policy of the United States government should now be considered as “three,” as the identification has traditionally meant the relationship of [mainland] Communist China and the offshore democracy of the Republic of China (Taiwan) to the USA.

The Nationalist ROC has governed the island nation since the end of civil war of 1949 when many mainland refugees fled to Taiwan as the Communists came to power.

With China moving aggressively toward Hong Kong independence-of-a-sort, the Trump Administration and members of Congress are talking about possible actions to attempt to ensure some independence of the little territory.  

Another dustup:  Hollywood’s Dreamworks and a China production company (Pearl Studio) collaborated to create an animated feature – “Abominable” (about a young girl meeting the Abominable Snowman or “Yeti”).  The film features Asian-American actor and was quickly a hit on release in America.

The film debuted in Vietnam as well – and was quickly pulled from viewing.  A map of China used in the animation showed the “nine dashes” – a no-no in China’s neighboring countries.

The Nine-Dashes – Complicating Matters in the South China Sea

What are the 9 dashes, you might ask?  (I’m sure that question rapidly went ’round in Dreamworks’ Hollywood offices — what the hell!.)  China attempts to impose its authority over the South China Sea with a series of dashes (not firm lines) to imply control or ownership. 

Which angers neighbors — Vietnam, Taiwan, the Philippines, Malaysia, and other nations with access to the vital sea lanes.  And those nations are trading partners of the U.S. — and American companies have significant presence in them.

How many people in corporate suites are tuned in to the vagaries or subtleties of China’s diplomacy!   

We recommend that you read Foreign Affairs and China-scholar Robert D. Kaplan’s excellent book on all of this — red warning flags flying! — “Asia’s Cauldron:  The South China Sea and the End of a Stable Pacific.”  Published in 2014 – available on Amazon. 

Simply stated –  “China” – it’s  a complicated subject for corporate citizens.

The China – United State of America Relationship

Former Secretary of State Henry Kissinger has said that the USA-China relationship with shape the international order for the 21st Century and the countries will have to deal with serious cultural differences (like freedom of expression and the right to protest and the freedom to trade etc.).

We saw that the investors in the USA shrugged off the Apple dustup with China over the Hong Kong protests. The share price was up $6.00 (3%) and moving toward an all-time high as the China-Hong Kong-APPL news stories appeared… this is a US$1 trillion-plus company! (Well, after the coronavirus crash of March 2020, we did have to check again and the price is back up in high $300s.)

Challenge: Being a Good Corporate Citizen When You Are a Guest

For large corporations, in general, worldwide, being a “good corporate citizen” in many lands is always a concern and a challenge as well as a competitive advantage (the brand and reputation and consumer favor as a 21st Century moat) — but things can be very complicated in the execution of citizenship on the ground. 

Complicated Challenge: Some companies operate in literally all but three or four nations of the world, excluding Iran, North Korea and perhaps a few others from their operations and marketing activities.

As we first prepared to finally publish this June 2020, dusting off the earlier Fall 2019 draft, we were in the midst of a global epidemic (COVID-19), and U.S. and global civil protests — with the news coverage all but eliminating the news out of Hong Kong on some days.

But China actions focused on western business organizations are very much in focus today. Recently several large news organizations (corporate-owned, of course, and at the top, corporate board and C-suite managed) saw their in-country journalists booted out of China because the Communist leaders objected to their news coverage.

Journalists employed by The New York Times (owned by The Times Company); The Wall Street Journal (owned by News Corp); and The Washington Post (now owned by Jeff Bezos, head of Amazon) were told to leave mainland China and the “regulated territories” of Hong Kong and Macoa.

In September 2020 we learned that Australian journalists had fled China to avoid detention. 

The leaders of the People’s Republic of China, it is said, are angered by coverage of the coronavirus (and the Communist government’s response); coverage of Hong Kong protests; and the reporting of “shadowy business dealings” of the country’s government leadership.

In addition, Time magazine (now owned by Marc Benioff, head of Salesforce) and the Voice of America – AND the expelled media organizations — were instructed to turn over information about their operations to the government minders.

U.S. Retaliation Complicates Corporate Life

This is not happening in a vacuum – in Washington, D.C., President Donald Trump designated the five China media organization operating in the USA as government functionaries of China, limiting the number of Chinese citizens who could work in the U.S. as journalists. The five are propaganda tools, the charge goes.  Their activities are being restricted. 

And so here in the USA the tit-for-tat is targeting China’s main news outlets –– Xinhua, CGTN, China Daily, People’s Daily, China Radio.

The Trump Administration is also moving to de-list publicly-traded Chinese corporations (traded on American stock exchanges). 

In all of the dustups, as U.S. business leaders are deftly navigating the tricky shoals where the seas of statesmanship meet the rocks of ideology and pose challenges to strategy and business models. 

Some of the challenges in the US-China relationships are about freedoms.  Such as our First Amendment freedoms. There are no China equivalents. 

President Franklin Delano Roosevelt set out four important freedoms for the peoples of all nations during the early days of World War II  — freedom of speech and religion, freedom from want and fear. These have long been central to many elements of U.S. and western capitalism — and foreign concepts to the rulers of present-day China. 

American companies have to carefully navigate the differences when they do business in China, with China, and other non-democratic nations. 

An example getting news coverage this week:  The Walt Disney Company, a U.S.-based global entertainment and communications company.  The company has been a  very able and savvy global marketer since the earliest days of Uncle Walt’s cartoon studio in sunny California.  Founder Uncle Walt always innovated and marketed that innovation far and wide. 

Consider that Disney has a $5 billion-plus investment in Shanghai Disneyland Resort (opened 2016) — co-owned by the Communist government — and an older Disney park in Hong Kong.   China is an important market for various activities of the company, including motion pictures.

And so the anxiety we logically could expect in the Disney offices as a new dustup occurred.  The company created “Hulan”, a movie about an important character (female) in China mythology, with a China-born female lead and a female director, and scenes filmed in China for accurate depiction of locations for the story. 

One snippet of the 1 hour/50 minute film — the usual (traditional) roll of credits at the end named a number of governments within China as assisting. Including Xinjiang, rolling by in a long list.  Where other American companies operated.  And where in 2018 as the film was underway, the local government was locking up tens of thousands of Muslims in concentration camps!  And so the September 2020 criticism of The Walt Disney Company — including by two dozen members of the U.S. Congress. 

There’s a thorough, fair and balanced recap of all of this in The New York Times, Sunday, September 13, 2020 (“How a 1 Minute of Scenery in ‘Mulan’ Put Disney in a Bind Over China”).    It’s an important read for you, I think, in the context of U.S.-China relations and for non-China-based companies operating in the country. 

Thinking about “open” communication not being permitted today in China we are reminded of President Thomas Jefferson’s perspective: “The only security of all is in a free press. The force of public opinion cannot be resisted when permitted freely to be expressed. The agitation it produces must be submitted to. It is necessary, to keep the waters pure.” – Thomas Jefferson letter to the Marquis de Lafayette.

So true some two centuries later in our great democracy!

 

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.