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Sustainability is a Talent Issue

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Guest Comments from Katheryn Brekken, Ph.D., Senior Research Analyst, Institute for Corporate Productivity (i4cp)

G&A Institute is a partner of i4cp, a global human capital research firm. We are pleased to share a post from Dr. Katheryn Brekken explaining the findings of a recent study by i4cp on the impact of human resources on sustainability.

Leaders wanting to make progress on their organization’s sustainability goals should look to human resources.

Research by the Institute for Corporate Productivity (i4cp), a global human capital research firm, found that organizations that make progress on their sustainability commitments are far more likely to have HR leaders who are highly involved in designing the strategy for social goals and programs and governance and environmental ones as well.

The study included survey data representing 191 business and HR leaders from 20 countries and explored HR’s role in organizations’ environmental, social, and governance (ESG) programs.

Among those reporting that their organizations are making progress on ESG goals, 79% said HR is highly involved in designing strategy for social goals and programs, 29% reported HR is highly involved in governance goals and programs, and 18% said HR is highly involved in environmental goals and programs.

The data found that organizations with solid market performance were far more likely to have a cross-functional team or group overseeing ESG and HR. Most respondents who reported that their organizations have been making major progress on their ESG commitments in the past two years have cross-functional teams that include HR, sustainability officers, legal counsel, and public or corporate affairs. For example, at Citi, the head of HR is part of an executive leadership team that drives the company’s ESG strategy.

“Given the labor market, and being the global bank that we are, it’s really important for us to think about human capital interests as part of our ESG strategy,” said Sam Santos, Citi’s Head of Diversity and Inclusion Strategy.

Having a diverse and inclusive global workforce is an important goal for Citi, so much so that they met their three-year aspirational representation goals and recently announced new ones.

And ESG goals are intertwined throughout other HR functions. For example, diversity, equity, and inclusion, including representation of women and racial and ethnic minorities at the managing director level, are part of senior executive performance management scorecards. This ensures that leaders are held accountable for making efforts toward diversity, equity, and inclusion, and other related ESG goals.

i4cp’s research identified specific workforce strategies that were significantly more likely to be adopted by organizations reporting making major progress on their ESG goals. These involve:

  • Including information about ESG commitments in onboarding materials
  • Providing compensation programs that incentivize progress on ESG commitments
  • Offering trainings to reduce waste and /or save energy and resources
  • Providing training to employees about policies such as anti-corruption or anti-harassment
  • Providing training to employees to reduce bias and microaggressions
  • Supporting employee resource groups/business resource groups) related to ESG
  • Offering elective discounts or benefits that promote certain ESG-supporting behaviors, such as subsidies to purchase electric cars, or paid leave to volunteer in the community
  • Organizing volunteer events that support ESG goals
  • Providing leadership development that promotes behaviors aligned to ESG goals

Among these strategies, involvement on the part of the learning and development team is clearly critical to help organizations make progress on their sustainability commitments.

An example of this from Citi is its Owning My Success (OMS) program, which provides mentoring and development to Black colleagues. The program provides participants with exposure to Citi’s senior leadership and supports professional and personal development. Over the course of several months, participants join group coaching circles, led by an external executive coach and a senior leader at Citi. Managers also take part in group coach­ing to better understand the experience of Black colleagues in the workplace. More than 700 Black leaders have participated in OMS since the program began in 2018, and the company recently promoted one of the largest and most diverse managing director classes in recent history.

“We have this wide range of stakeholders across the organization involved in our ESG efforts and HR is one of them. We engage our employees as part of this. We use the voice of our employees from surveys and our affinity networks are groups that are heavily involved as well. If you think about social change and how we can improve the environment, it’s through our own employees,” Santos said. “They further these initiatives.”

Click here to read i4cp’s full research paper.

Going Green and Still Pumping Oil? The Challenges of Climate Change and Potential “Solutions” For Fossil Fuel Producers

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October 19, 2022
by Hank Boerner – Chair & Chief Strategist, G&A Institute

We were thinking the other day about the enormous challenges posed by climate change to our global society — and therein of the challenges of meeting the ambitious goals being set by governments, the private sector, and investors to achieve “a net zero economy” by mid-century. That’s not so far away.

And so the pumping of tens of millions of gallons of crude oil every day by OPEC countries and other nations (like the U.S.A.) to meet the insatiable demands of society is not helping in the short term.  But we need the oil!

Not so far back the United States was a very different country (meaning, at the end of the 19th Century). Not so dependent on “oil” from below the ground (yes, we did rely on kerosene lamps and before that whale oil!)

The majority of people lived outside of cities, mostly on farmlands and ranches and wilderness places. Horses and boats provided the main means for transport of people and goods. (Remember stage coaches and canal boats towed by mules?) Homes were heated by wood and coal fuels.

Coming into their own in the early 20th Century: miracle developments like electric power, telephony, radio, gasoline-powered cars & trucks, powered flight, modern chemicals, modern medicines. And people were moving en masse to rapidly-expanding cities and the newly-identified “sub-urban” communities.

One such place was Queens County, New York, where some of the G&A team live and work or grew up in (today home of JFK International).  After World War One ended, 100,000 people a year (!) moved in to the new suburbs, rapidly replacing farms that dated back to Dutch settlement in the 1600s.

After World War Two ended, neighboring Nassau County (where some of us live and work today) saw the same growth pattern – in just four years “Levittown” replaced the sprawling farmlands of the former Island Trees (NY) on the largest prairie in the Eastern U.S.. (That was the Hempstead Plains.)

Which required more railroads and roads for autos & trucks to move commuters to city-center offices and factories. And so, more more more drilling for oil & gas and mining of coal.

All of this dramatically changed how Americans today live, work, and play, and s0 many aspects of our family and business lives. The same things were happening in Europe, the British Isles, Japan, and many other places.

And here we are in the 21st Century enjoying the fruits of all of this progress and at the same time trying to undo the negative sides of the sweeping progress made over the past 125 years or so.

To put some of this change and resulting challenges in perspective: TIME magazine had an essay recently about Saudi Arabia, its state-owned oil company (Saudi Aramco) and the ambitions of the world’s leading oil exporting sovereignty to lean toward green while still pumping 12 or more millions of gallons of oil per day (to help meet global demand of 100 million BBLs a day!).

Today, Saudis talk of the dreams of carbon capture, of moving to hydrogen power for autos, of building a new “green” city (NOEM) from scratch.  The Saudi goal is Net Zero emissions) by 2060!

The dreams include the desert blooming with new green (cities)…and yet that Saudi oil keeps moving to distant points on Earth through pipelines and on oil tankers. Missing: the plan to reduce oil & gas production by 2030.

To help companies around the globe to meet ambitious 2030, 2040, and 2050 (net zero!) goals. Challenging. 

To contrast the astonishing changes of the recent decades: The Saudi Arabia we know today as a top oil & gas producer was a desert kingdom populated by Bedouin tribes and often shown on maps as “the Empty Quarter”.

Discovery of oil reservoirs changed all of that – today the kingdom has a Sovereign Wealth Fund (the SWF is the Public Investment Fund) with US$600+ billion and more in treasury thanks to oil & gas pumping and invests in many publicly -traded companies like Netflix (so dependent on fossil fuels to ever more power servers!).

About the impacts of climate change and the inherent challenges of our present society to achieve solutions – we see the story-telling of this everyday now in our favorite media!

Our editors and G&A team members carefully track and curate the coverage for you in the issues of our Highlights newsletter and here in our G&A Institute Sustainability Updates blog.

In our newsletter we regularly feature many news and feature stories about the efforts of public and private sector organizations taking actions to protect the planet and help the global society achieve a sustainable (and livable) planet in the decades ahead.

That’s the good news we try to share.  At the same time, as we think about the world’s progress from wilderness1800s to dramatic changes of the 1900s and into challenges of the 2000s and the negative aspects of progress…we cheer on the strategies, policies, actions, actions of leaders of organizations in the capital markets, corporate community, activist organizations, multilateral organizations, and more to address climate change challenges.. 

Ah, to save the planet while still making progress – that’s the ambitious goal of so many now.  After all, there is no Planet B for we, the billions on Earth (at least not yet).  

Top Story:

We bring you the fascinating story of Saudi Arabia and its plan to go green while remaining the world’s number one oil exporter over the coming years: https://time.com/6210210/saudi-arabia-aramco-climate-oil/

And a personal note:  A  durable book that has been around telling the story of the first half of the 20th Century (since 1952) may be of interest to you. This is “The Big Change, American Transforms Itself, 1900-1950” by Frederick Lewis Allen. He was the long time editor of Harper’s Magazine and authored such books as “The Lords of Creation” (about key capitalists like the Rockefellers, Morgans, Vanderbilts, and other of the Gilded Age wealthy). 

Systemic Racism in Corporate America

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by Janis Arrojado, G&A Institute Analyst-Intern
Note: This is the third post in the blog series by Janis:

In the wake of George Floyd’s tragic murder in May 2020, corporate America took action to fight racism. Collectively, by August 2021, America’s 50 largest public companies and their foundations committed at least $49.5 billion to causes and initiatives that advance racial equity. However, 90% of that amount is apportioned as loans or investments that these companies can earn profits from. A total of $4.2 billion pledged is in the form of grants, which represents less than 1% of the profits earned by those companies in the most recent year. Although it is good to see that corporate America is taking strides to address racism, these numbers show how companies run the risk of performative activism, and raises questions of whether companies are making efforts internally in their workplaces to address issues of racism and inequity.

Systemic Racism

Issues of racial inequity are not new to the workplace. Corporate America operates under systemic racism, which is defined as referring to: “the complex interactions of large scale societal systems, practices, ideologies, and programs that produce and perpetuate inequities for racial minorities.” The most important component of systemic racism is that it operates on a large scale independent of individuals, meaning inequality can persist for racial minorities even if individual racism is not occurring. In the workforce, this may manifest itself in racial bias leading to discriminatory policies that impact hiring, starting pay, and professional upward mobility for people of color, especially Black Americans. People of color may face microaggressions, which are subtle behaviors impacting marginalized groups. Professional standards relating to language, dress code, and communication are rooted in white and Western ideals. People of color can face isolation and a lack of support in their workplace.

Representation Gap

Discriminatory policies contribute to a racial representation gap in the workforce. There is an underrepresentation of Black/African American and Hispanic/Latino workers at every career level above the support staff level when comparing representation in the general population. There is a general pattern showing that representation of people of color decreases as career levels rise, with Asians/Pacific Islanders being an exception, as shown in a global equality report released by Mercer in 2020.  In addition to impacting representation, racial bias impacts the advancement and experience of people of color in the workforce.

Benefits of Racial Diversity

Changing the norm of systemic racism is integral for minorities to feel welcomed and included in their workplace. Having a diverse workplace offers different cultural perspectives that can inspire innovation and foster collaboration. Additionally, cultural insight and local knowledge can create more informed and targeted marketing and production of products. Addressing the gap in racial representation is also financially beneficial, as companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns higher than their competitors.

What Companies Can Do

Corporations have power in fighting systemic racism in their workplaces. Devoting resources toward enhancing the experience of minorities through training in topics such as racial equity, unconscious bias, and microaggressions is a start. Inclusion is an integral component for minorities to feel a sense of belonging in the workplace. Through initiatives such as employee resource groups (ERGs) for different identity groups, employers can create a space for employees to feel supported and raise issues with work environments. Incorporating more equitable hiring processes is also important, which can look like asking all prospective employees the same exact set of questions in the same order. Corporations can also recruit candidates from historically Black colleges and universities (HBCUs) and minority-serving institutions (MSIs) to gain diverse talent.

Conclusion

Although discussing racism outright may be a taboo topic, it is important to understand how companies operate within systemic racism and how systems of racial inequity negatively impact workers of color. Being proactive in addressing systemic racism can improve the experience and livelihood of people of color and is integral to creating a more diverse and equitable workforce.

ABOUT THE AUTHOR

Janis Arrojado is a senior at the University of North Carolina at Chapel Hill, studying Environmental Science and Geography.  Her interests include corporate sustainability, environmental justice, and sustainable development. She currently is an analyst-intern at G&A Institute.

 

 

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ESG from a Corporate Vantage Point – Anniversary Update

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Important Perspectives shared by Pamela Styles, Fellow G&A Institute

Foreword by Hank Boerner, Chairman & Chief Strategist, G&A Institute
One year ago, the National Investor Relations Institute (NIRI) IRUpdate quarterly magazine published its Winter 2021 edition that was dedicated to ESG topics and issues — which G&A Institute shared with publishers’ permission.  G&A’s executive leaders and IR professional and G&A Fellow Pam Styles each contributed an article to the edition to provide three different perspectives and vantage points.

It is with great pride that we congratulate our IR Fellow, Pam Styles, for being named Gold Winner of the DeWitt C. Morrill Editorial Excellence Awards for her article in that magazine, titled: “A Practical Approach to ESG From a Corporate Vantage Point”.

She was be honored by NIRI and presented the award in-person at the NIRI Annual Conference which held June 5-7 in Boston, MA.

G&A Institute coverage of many rapid changes across ESG-related issues bridges two important spheres of influence in our modern economy – the corporate sector and capital markets.  

To that end, Pam has taken time to summarize and briefly update three topics touched on in her original article – SEC, ESG Raters and Voluntary Frameworks – to highlight some major announcements and trends in the last year that should be useful to corporate executive and investor relations perspective.  Here is Pam’s April 2022 award-winning commentary:

Anniversary Update
The full title of my original article one year ago, “A Practical Approach to ESG from a Corporate Vantage Point”, started with “A Practical Approach…” and continued with “…to ESG from a Corporate Vantage Point”.

The reason for this was and still is that the ESG landscape has been changing so rapidly as to be humanly impossible for any one person or company to stay on top of without practical focus and strategy of approach.

Much of that article about launching and maintaining a successful company ESG reporting program, including supporting strategies and resources, remains relevant today.  The most important thing is for companies to be organized and deliberate to make sure that, no matter how much or how little ESG-related policies, disclosure or other communications they can provide, it all can be easily found via the company’s website by human stakeholders and AI research tools alike.  This is to make sure that the company is getting as full credit as possible for all it is doing and communicating with regard to ESG matters.

The article goes into far greater specifics and, even one year later, is worth the (re)read.

Three topics warrant brief update to highlight some of the major announcements that have occurred just in the one year since the article was published – as listed in the table below.

Major Announcements in One Year
Roughly Spanning Winter 2021 to Winter 2022
(Partial list only)

Securities and Exchange Commission (SEC) Major ESG Raters and Rankers1 Voluntary Reporting Frameworks1
May 20, 2022 – deadline for comment letters on Pending rule proposal on climate risk and GHG disclosure.  Proposes TCFD-like reporting requirements within Reg S-K and financial metrics within Reg S-X, with phase-in 2023-2026 based on registrant filer status. Additional Highlights. April 24, 2022 – Crowded ESG Ratings Landscape Sows Confusion for Investors, the days of largely unregulated ESG ratings providers may be numbered. January 2023 – GRI “Universal Standards” will go into effect, which will include supply chain. Additional Highlights.
March 9, 2022 – Pending rule proposal on cybersecurity. Summary sheet.  (Data Security and Privacy falls under “S” of ESG) February 2022 – call for ESG ratings regulation in ESG Ratings and ESG Data published by Accenture UK and the International Regulatory Strategy Group (IRSG).  Reason: due to huge variation and significant inconsistencies, lack of transparency, frustration and confusion for reporting companies, conflicts of interest with fee models, and a low correlation for ESG ratings (as low as 0.38) compared to credit ratings (as high as 0.99), all which impact investment decisions. March 24, 2022 – The IFRS Foundation and GRI announce they are taking the latest step toward a more closely aligned set of global ESG reporting frameworks.  Part of global moves toward consolidation.
July 26, 2021 – earlier call by International Organization of Securities Commissions (IOSCO) initiate for ESG ratings regulation. GRI and IFRS are just one example of multiple frameworks that have been announcing collaborations and harmonization efforts.  A common reporting standard may not happen for a while.  Additional Highlights.

1 As defined in “The Complexity of ESG Reporting and Emerging Convergence Trends”, by Louis Coppola, EVP & Co-Founder, Governance & Accountability Institute

Rapid Changes
The U.S. has been rapidly catching-up with the UK and EU in terms of ESG public discourse in general.  As simplified in his article “The Surging Volume and Velocity of ESG Investing”, Hank Boerner, Chairman & Chief Strategist of Governance & Accountability Institute, indicated 2020 was the year of Human Capital Management focus and 2021 would be the year of Climate Change/ Climate Crisis focus.

Looking ahead, I predict that 2022 may end up being a year of Practical Stress Testing. Global dislocation (economic, human, energy, security, etc.) brought on by protracted pandemic conditions in China and the Russia-Ukraine military conflict with implications to energy, natural and agricultural resources, are both critically affecting the global supply chain and have opened a lot of eyes as to the speed at which ESG net-global progress may actually be being made.

Certain realities and practicalities seem to have been missed in haste to press ESG initiatives that need to be addressed.  Here’s to hoping honest brokers can be up to the task.

In the meantime, a lot of companies are still in ESG journey catch-up mode, especially in the U.S.  With ESG here to stay, it is important for companies to make as much progress as they can in areas of ESG strategy, execution and disclosure that make sense to address at this time.  But keep an eye on major announcements and build flexibility into your company’s ESG communications and disclosure capabilities – as a lot of changes are yet to come.

About the Author
Pamela Styles is long-time Fellow of G&A Institute and principal of Next Level Investor Relations LLC, a strategic consultancy with dual Investor Relations and ESG / Sustainability specialties.

The Working Woman’s Dilemma: A Look into Women in Corporate America

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by Janis Arrojado, G&A Institute Analyst-Intern

Note: This is the second post in the blog series by Janis.  Click here to read the first post.

Although corporate America has made strides in promoting gender diversity in the workplace, there is still significant progress to be made. In the United States, a gender wage gap still exists, with on average women making 84 per cent of what men make. 85.8% of Fortune 500 CEOs are white men, showing a clear underrepresentation of women in corporate leadership positions.

The underrepresentation of women not only hurts women but also impacts corporate performance. Research has shown that companies with well-represented gender diversity in leadership are 50% more likely to perform better than their peers.

More inclusion of women can bring varied approaches to problems, increase employee satisfaction, and foster collaboration. Women in leadership positions benefit company culture as they are more likely to incorporate employee friendly practices and speak out about the importance of gender and racial diversity than senior-level men.

Causes of Underrepresentation

Unconscious gender bias can impact the perception of women in the workforce. Traditional notions of women being warm and nurturing can prevent women from moving up the corporate ladder, and on the flip side if women take charge and are assertive they are often perceived as overly angry or aggressive. These gender-role expectations can negatively impact hiring and promotion opportunities, which can impede a woman’s career progression.

Women also face the challenge of being more likely to have more demands at home, as mothers are three times more likely than fathers to do most of the housework and caregiving in their home. Research has also shown that women are significantly more likely to reduce their hours for child care compared to men. Women with these increased demands at home have increased risk of burnout and negative biases, also impacting career progression to a higher role in a company.

COVID-19’s Impact

COVID-19 has only exacerbated the increased demands at home for women. 50% of mothers who quit their job due to the pandemic said that one of the reasons was closure of their children’s school and/or daycare. Women are also more likely to care for elderly family members due to an overloaded health care system. Time spent doing unpaid labor of watching children, assisting with schooling, and taking care of family members can cause women to take time away from work or quit their jobs.

What Companies Can Do

Corporations have an important role to play in increasing the inclusion of women in the workforce. Opting in for gender-based unconscious bias training and shifting performance reviews to be more measurable and attainable is a start.

Transparency
Another step towards equity is for companies to disclose their gendered wage gap. Research has shown that the gender pay gap shrinks when companies are transparent about wage discrepancy between men and women. Choosing to communicate the difference between men and women’s earnings can spark the momentum for initiatives and policies to close the wage gap.

Clear Boundaries and Flexibility
The move toward remote working during the pandemic can cause women to always feel the need to be responsive and available. Companies communicating clear boundaries and establishing set times for work and meetings is a way to decrease burnout and exhaustion. Additionally, having flexible work and scheduling options can promote wellbeing amongst working women.

Accommodations
Providing accommodations for working mothers is integral to supporting women at work. Initiatives such as having a designated space for new mothers to breastfeed or pump, providing financial assistance with childcare or on-site childcare facilities can foster an inclusive environment for working mothers.

Paid Parental Leave
Offering paid parental leave for men and women is another important component of supporting women in corporate America. Mothers are more likely to return to their employer when they have paid maternity leave, and offering paid paternity causes a more even distribution of childcare and household responsibilities among mothers and fathers.

Paid maternity leave amongst members of the Organisation for Economic Co-operation and Development (OECD) averages around 14 weeks, excluding the United States. The United States is one of few countries that does not have a nationally mandated paid parental leave law, despite clear benefits. Establishing paid parental leave is a way for companies to promote gender equity, contribute to infant and maternal health, and foster familial economic security.

Mentorship
Creating a formalized women’s mentorship program provides a safe environment to discuss the challenges of navigating the workplace for working women. Mentorship is a way for mentors to serve as role models and representation, while fostering connections and career advancement. By recruiting women from all positions and having intentional pairings, mentorship gives women relationships and spaces that contribute to a positive working environment.

External Initiatives
Companies dedicated to advancing gender equality can sign the UN Women Empowerment Principles, which “are a set of Principles offering guidance to business on how to promote gender equality and women’s empowerment in the workplace, marketplace and community.” Corporations can signal to stakeholders and the public their commitment to empower women through business practices that promote gender equality.

Companies can also get involved with organizations that are taking initiative to increase representation of women in corporate leadership such as 30% Club, 50/50 Women on Boards, and Women Business Collaborative. Supporting NGOs that are striving to improve working conditions for women around the world like WIEGO and Care International is another way for businesses to empower and support working women.

Conclusion

Women make up nearly half of entry level roles in organizations across the nation, but the percentage of women decreases significantly moving up the corporate ladder. Companies need to address this underrepresentation and take initiative to cultivate a supportive and inclusive culture for women in the workforce.

ABOUT THE AUTHOR

Janis Arrojado is a senior at the University of North Carolina at Chapel Hill, studying Environmental Science and Geography.  Her interests include corporate sustainability, environmental justice, and sustainable development. She currently is an analyst-intern at G&A Institute.

 

Sources & References For More Information

Emerging Trends in Electric Vehicle Industry

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By Noelani West, G&A Institute Analyst-Intern

No doubt you’ve noticed the increase of electric vehicles (EVs) on the road over the last few years. With more than 10 million EVs on the road as of 2021, compared to around 2 million in 2016. Some projections are that by 2050, EVs will account for over 60% of new car sales. With gas prices now at their highest since 2008 and increase concern over the use of fossil fuels, this is no surprise.

Tesla Motors might be the first company to come to mind when thinking of EVs. In 2008, Tesla released its first all-electric vehicle to the public – the Roadster. At the time, the vehicle’s bas price was around $100,000 USD, making the EV market quite exclusive. Now, one can purchase a Tesla Model 3 for half the price. At their 2020 shareholder meeting, Tesla’s CEO Elon Musk announced the company’s plan to produce EVs for prices in the future for as low as $25,000 – making it far more accessible to a wider range of consumers.

Now with a slew of other car companies jumping onto the EV bandwagon, and many at more affordable prices, it’s easy to say that the popularity of EVs will continue to soar.

These trends aren’t emerging solely due to consumer demand and a growing sense of environmental responsibility. Substantial government actions have been made to aid in the transition of the auto industry to EV. Part of President Biden’s Build Back Better Agenda and the Bipartisan Infrastructure Deal includes an Executive Order which sets a target of making half of all sold vehicles in 2030 zero-emissions vehicles. Actions under this order include supporting the development and deployment of EV charges throughout the country and increasing domestic manufacturing of EV batteries.

EV production slowed down during the Covid-19 pandemic as the entire auto sector severely hindered by decrease in demand and supply chain disruptions. Still, in 2020 the global EV stock increased 43% from 2019. China continues to lead the EV market, accounting for half of all EV sales. Europe has seen significant growth within the industry, more so than in many other regions. This is due to some substantial government propositions, such as the UK proposing a sale ban on all polluting vehicles by 2035.

The U.S. has overall had lower EV sales than in many other major regions, with Tesla being responsible for almost half of EV sales in the country. However, that trend can easily change with the new government regulations in the pipeline and car manufacturers vowing toward a more electric future. With the nationwide deployment of more charging stations and EVs being supplied at more affordable rates, car buyers can expect EVs to become more accessible. Global trends project an ongoing increase in demand and supply for EVs for the coming decades.

About the Author

Noelani West is a G&A Analyst Intern and currently a senior at Columbia University in the City of New York, pursuing her undergraduate degree in Sustainable Development. Through an array of interdisciplinary coursework, she has been able to explore how sustainability is applied to in various fields and sectors. This has reinforced in her just how crucial and relevant these topics are.

She hopes to launch a career in corporate sustainability, helping companies develop and implement ways to become more equitable and sustainable. Noelani is especially passionate about environmental sustainability as well as sustainability technology.

Why Sustainability Must Be Centered On Environmental Justice

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Part 2 – Companies Doing it Right

By Gia Hoa Lam, G&A Institute Analyst-Intern

Sustainability and environmental justice are interdependent. In the same manner as sustainability solutions, environmental justice solutions are specific to a company’s unique operations and community, encompassing a wide range of environmental, social, and economic considerations. Following are a few examples of companies that are incorporating environmental justice in their ESG and sustainability programs.

These companies combine their business goals with equity goals in a manner that reinforces one another. This way, environmental justice and sustainability become defined by the opportunity to expand and innovate rather than solely focus on risk mitigation and compliance.

Timberland

Timberland has been in partnership with the Smallholder Farmers Alliance (SFA) of Haiti for over 12 years. Haiti is one of the most deforested countries in the world, with an estimated 1.5% tree cover (by comparison, the Dominican Republic has 48% tree cover and U.S. cities have an average of 27% tree cover).

This deforestation has major ramifications for Haiti’s biodiversity, vulnerability to natural disaster, and economic potential. Through its partnership with SFA, Timberland has planted over 7.5 million trees and supported programs to train local farmers.

The cooperative model has led to a 50% increase in farmer income and 40% increase in crop yield. With the help of Timberland, cotton has been re-introduced to the island with potential of becoming a major export. Timberland is seeking to expand the program and gain additional support from parent company VF Corporation.

Timberland, in supporting Haitians, is practicing environmental restoration and economic development. Timberland also supports the work of several NGOs focused on supporting local communities, including the Great Green Wall, Trees for the Future, the Green Network, Las Laguna Ecological Park, Justdiggit, and Treedom. Partnership with local support ensures Timberland’s efforts are connected with on-the-ground experts.

Microsoft

Microsoft has consistently been a leader in ambitious environmental goals with a commitment to carbon neutrality by 2030 and net zero by 2050 (removing from the environment all carbon the company has emitted either directly or by electrical consumption since it was founded in 1975). To meet these ambitious goals, Microsoft is seeking aggressive carbon reductions through its operations and scaling carbon removal. Its 250-megawatt power purchase agreement with black-owned Volt Energy shows the possibility of combining environmental goals, sustainable procurement, and racial justice.

Volt Energy also commits to “invest[ing] a portion of the revenue from the Power Purchase Agreement in community impact funding initiatives, which will support programs that bring the benefits of renewable energy closer to communities that have not been significantly included in the wave of clean energy initiatives undertaken by the private and public sectors.” In this manner, supporting a sustainable economy can also mean supporting an equitable economy.

CVS Health

CVS has committed $1.5 billion to social impact investment with an understanding of racial disparities in health outcomes and environmental health. To achieve the company’s goal of healthy communities, CVS is focusing on access to health care, social determinants of health like housing and food security, and supporting local health organizations.

CVS practices a multi-stakeholder approach by mapping the most vulnerable to disparate health outcomes, senior citizens, Black communities, and Hispanic communities. Initiatives such as partnership with the Conference of National Black Churches to improve immunization rates shows a commitment to meeting underserved communities where they are and understanding historical contexts to disproportionate health outcomes.

Project Health is another program that provides basic screening services such as blood pressure, body mass index, and glucose testing to the uninsured, along with information for customers looking for mental health and follow-up care resources. CVS thus aligns its expansion strategy with an environmental justice goal, understanding the economic and restorative opportunities within health care.

ABOUT THE AUTHOR

Gia Hoa Lam is a G&A Institute Analyst-Intern. Due to his previous work as a corporate sustainability intern at Ceres, a sustainability nonprofit, Gia Hoa has sustainability consulting experience across multiple industries from sustainability planning for the apparel industry to analyzing human rights policies for investment banks. On campus, Gia Hoa is a founding member of Bentley University’s Green Revolving Fund, facilitated the Bentley 2026 Sustainability & Climate Action planning process, and is currently advocating for endowment stewardship.

Gia Hoa centers people in his sustainability work with a deep passion for climate justice, DEI, and climate refugees. Initially interested in psychology, Gia Hoa realized mental wellbeing was directly linked with access to environmental and social resources. Thus, he began his journey to be a change leader through stakeholder engagement and facilitation. He believes the corporate world has the capacity for compassionate and collaborative change.

An Overview of Corporate Diversity, Equity & Inclusion

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By Janis Arrojado – G&A Institute Analyst-Intern

Diversity, equity, and inclusion (DEI) initiatives are integral to creating a positive working environment. Diversity refers to increasing representation from marginalized groups, while equity means ensuring all individuals have what they need to succeed, and inclusion is creating an environment where different people and perspectives are valued and integrated into an organization.

Companies benefit from DEI efforts, and it has been found that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns higher than their competitors.

Companies incorporating DEI into their actions align with the United Nation’s Sustainable Development Goals (SDGs) — specifically SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reduced Inequalities).

Representation and inclusion are important for underrepresented identities, and it is important to understand barriers in the workforce for different communities. Companies seeking inclusion should consider obstacles in place for various identities:

  • Ethnicity/Race – Many companies struggle with racial and ethnic discrimination, with US $74.8 million collected from employers in the U.S. in 2020 due to racial discrimination violations. As company leaders in the U.S. are overwhelmingly white, long-standing company culture, norms, and policies can cause isolation, microaggressions, job dissatisfaction, and a lack of support for members of underrepresented races and ethnicities.
  • Gender – In the workforce, women continue to be underrepresented in every level of career progression. As organizations endeavor to have more gender representation throughout, it is important to recognize the barriers that women face in the workplace. Women often face discrimination in hiring, bias in performance evaluation criteria, and prejudice in navigating professional settings, and women of color in particular are more likely to experience these issues.
  • LGBTQ+ – The LGBTQ+ acronym encompasses members of the lesbian, gay, bisexual, transgender, and queer community. Although many consumer brands have publicly supported the LGBTQ+ community and have partnered with LGBTQ+ pride events, there is still a long way to go. Only four CEOs who are openly LBGTQ+ lead America’s top corporations, with only one who is female. In the workforce, people with LGBTQ+ identities face issues with sexual harassment, isolation, inappropriate comments, and career progression.
  • Age – Age is often left out of DEI efforts, with more than half of 6,000 global employers answering in an AARP survey that they do not have a specific DEI policy for age. Age discrimination can be for people considered “too young” or “too old” for a role. For older members of the workforce, harmful stereotypes about older workers not being skilled with technology and being closed off to change lead to an age bias.
  • People with Disabilities – Research has shown that one in four Americans have some type of disability, which can be visible or invisible. To truly create a diverse and inclusive company, corporations need to focus on employing and providing support to people with disabilities. People with disabilities are severely under-employed and are twice as likely to be unemployed than people without disabilities. People with disabilities have many barriers in the workforce, including lack of accommodation, hiring discrimination, and exclusion.

Looking Forward

It is becoming increasingly important that corporations reflect the diversity of the population of America. Having DEI initiatives is a start to creating an equitable environment for underrepresented identities.

Author

Janis Arrojado is a senior at the University of North Carolina at Chapel Hill, studying Environmental Science and Geography.  Her interests include corporate sustainability, environmental justice, and sustainable development. She currently is an analyst-intern at G&A Institute.

 

 

 

Sources / References for More Information

Why Sustainability Must Be Centered On Environmental Justice (Part 1)

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By Gia Hoa Lam, G&A Institute, Sustainability Analyst Intern

Alok Sharma, president of the COP26 climate summit, held back tears in his closing speech at the climate change conference in Glasgow last November. Many environmentalists felt dejected by late changes that seemed to weaken climate agreements, such as the “phasing down” rather than “phasing out” of coal or the delay in 1.5 degree C commitments.

However, commitments to environmental justice and supporting adaptation projects were strengthened and many nations doubled their contributions to adaptation funds and funds for developing countries.

Some businesses seem to have the opposite approach. Corporations today are leading the charge on GHG emissions reductions and disclosure, but we often see shortcomings on commitments to environmental justice. Environmental justice refers to the fair treatment of all people, regardless of race, color, national origin, or income, with respect to equal environmental protection.

Oftentimes new projects or plants that pose environmental impacts—regardless of industry—are located in areas where businesses believe there will be the least resistance from the community or are the cheapest to implement.

In the effort to avoid delays or to be cost-effective, vulnerable communities often bear the burden of environmental effects. These environmental effects can be anything from increased air and water pollution leading to respiratory issues to decreased land value and community deterioration.

In the U.S., the environmental justice movement first gained national attention with the demonstrations of hundreds of Black Americans in 1982 at Warren County, in the State of North Carolina.

The state bought land in Warren County to build a landfill to store 31,000 gallons of polychlorinated biphenyls, a known carcinogen and endocrine disruptor. The county’s citizens were predominantly Black and low-income. Nonviolent protests barring trucks from beginning construction of the landfill and marches to the state capitol led to 520 arrests. National attention and mobilization from environmental groups revealed the disproportionate health risks that minority and low-income communities face.

Researchers collaborated with environmental groups to begin studies into this disproportionate risk and found preliminary evidence that a majority of Black and Hispanic communities live in close proximity to one or more uncontrolled dumps.

The mainstream environmental movement finally responded to environmental justice action after an open letter was sent in 1990 to the directors of the ten largest environmental groups, charging them with a history of racist and exclusionist practices and a failure to support environmental justice efforts.

Today, more than 30 years later, systemic racism and inequity continue to affect disadvantaged communities greatly, beyond the scope of proximity to waste. Current risk assessments by federal agencies for programs do not effectively factor in procedural equity or identify vulnerable communities.

Infrastructure that pollutes local areas are often in close proximity to disadvantaged groups. Policy is therefore needed to curb emissions from vehicles and plants, while also avoiding latent issues that may harm the environment or long-term sustainability.

Cancer Alley refers to the predominantly Black and poor populations around the Mississippi River in the southern U.S. who are at greater risk of cancer, such as 30% higher risk for leukemia.

A study published in 2020 considered Louisiana to be, “one of the most toxic states, annually discharging 7.2 tons of hazardous waste per capita, and accounting for 12.5% of the country’s hazardous waste from only 6.5% of the nation’s chemical facilities”.

This toxic waste is often dumped into the Mississippi River from petrochemical plants, leading to high nitrates. Emissions from petrochemical plants have also led to high concentrations of formaldehyde and benzene.

The Clean Water Act does little to tackle non-point sources of effluence. The nitrates in the Mississippi River cannot be traced to any one petrochemical plants, or its proportional contribution to air pollution. Citizens looking to report these plants find it hard to sue because of this shared cause of damages.

Public policy changes are needed to ensure vulnerable communities are not withstanding the worst of environmental effects due to a lack of political resources that leads to zoning and land use decisions without proper input from those affected.

The growing body of evidence shows the largest determinants of environmental and public health are tied to the color of one’s skin. Additional inequities include higher risk for unsafe drinking water, less access to recreational areas, and fewer environmental grants.

The Institute of Environmental Science and Technology at the Universitat Autonoma de Barcelona have constructed an Environmental Justice Atlas, mapping environmental injustices across the world.

What Can the Private Sector do?

ABOUT THE AUTHOR

Gia Hoa Lam is a G&A Institute Analyst-Intern. Due to his previous work as a corporate sustainability intern at Ceres, a sustainability nonprofit, Gia Hoa has sustainability consulting experience across multiple industries from sustainability planning for the apparel industry to analyzing human rights policies for investment banks. On campus, Gia Hoa is a founding member of Bentley University’s Green Revolving Fund, facilitated the Bentley 2026 Sustainability & Climate Action planning process, and is currently advocating for endowment stewardship.

Gia Hoa centers people in his sustainability work with a deep passion for climate justice, DEI, and climate refugees. Initially interested in psychology, Gia Hoa realized mental wellbeing was directly linked with access to environmental and social resources. Thus, he began his journey to be a change leader through stakeholder engagement and facilitation. He believes the corporate world has the capacity for compassionate and collaborative change.

SEC Focuses Efforts on Climate-Related Corporate Disclosures

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By Noelani West, G&A Institute Analyst-Intern

The last decade has seen a surge in sustainability reporting among the largest U.S. companies. Recently published research from G&A Institute revealed that in 2020, 92 per cent of S&P 500 Index® companies published sustainability reports or disclosures, compared to just 20% in 2011.

G&A’s research also determined that sustainability reporting within Russell 1000 Index® companies has been steadily increasing, with 2020 seeing 70% of those companies publishing sustainability reports, compared to 60% in G&A’s 2018 analysis.

This is an encouraging trend, especially considering that until now, sustainability reporting in the U.S. has been voluntary. This is not the case in other countries around the world, with the UK, Japan, New Zealand, and Singapore mandating that publicly-traded companies disclose climate-related information as well as diversity and human rights data.

Many of these countries use the Task Force on Climate-Related Financial Disclosures recommendations (TCFD) as a foundation for their mandatory disclosure policies.

In the U.S. the U.S. Securities and Exchange Commission (SEC) requires publicly-traded companies to disclose certain material business and financial information, but currently mandates very little ESG disclosure. However, in 2021 it was confirmed that SEC staff are developing ways in which climate and ESG-related disclosures can be enhanced among public companies.  These new policies are expected to be announced in 2022, so let’s take a look at some key statements from SEC staff to help companies know what this may mean for them:

  • In February 2021, the SEC’s Division of Corporation Finance announced an enhanced focus on climate-related disclosures in public company filings. This enhancement would build off guidelines established in the SEC’s 2010 Guidance Regarding Disclosure Related to Climate Change, which only require listed companies to disclose ESG issues that are deemed “material” to that company.
  • In March 2021, the SEC announced the formation of a Climate and ESG Task Force, whose primary focus is to identify ESG-related misconduct. The SEC also opened up a forum for public comments as they apply to potential new SEC disclosure requirements and how or if current regulations should be modified. SEC Chairman Gary Gensler reported in July that, “Three out of every four of these responses support mandatory climate disclosure rules.”
  • In June 2021, the S. House of Representatives, in a move backed by President Joseph Biden, approved a bill that would support the SEC’s efforts to require public companies to disclose climate-specific metrics. The bill, called the Corporate Governance Improvement and Investor Protection Act, would require publicly traded companies to periodically disclose information related to ESG performance metrics and would support the SEC by providing discretion to amend securities laws to build ESG disclosures into their standards. A section of the bill, titled the Climate Risk Disclosure Act of 2021, is directed at the SEC and requires the disclosure of information regarding climate change-related risks posed as well as strategies and actions to mitigate these risks. Specifically, issuers would be mandated to report direct and indirect greenhouse-gas emissions and disclose fossil fuel-related assets.

These proposed bills have not passed the U.S. Senate and while the specifics of a final bill are unknown, we have some idea of the impending changes and adaptations companies may need to make to their standard operating procedures relating to ESG reporting.

Companies that don’t already provide more holistic means of reporting their ESG data will need to prepare themselves to begin doing so.

To stay ahead and ensure they are best prepared for the upcoming new mandates, companies should first make the decision about which reporting metrics to use. Many companies opt for a combination of the Sustainability Accounting Standards Board (SASB) industry-specific metrics and those disclosures listed in the Global Reporting Initiative (GRI). The combination of the two frameworks provides a broad and standardized way for stakeholders to analyze data and make informed decisions. After metrics and reporting frameworks have been chosen, companies should next identify the gaps in the data they have already collected and the data they should disclose (as outlined in the different reporting frameworks).

The push for mandatory ESG reporting should not come as any surprise, as human rights and climate risks are at the forefront of society’s concerns, and investors are no exception. Investors are becoming increasingly more interested in ESG metrics of public companies so that they can make rational and informed investment decisions.

With societal ESG concerns continuing to grow, 2022 is sure to bring even higher percentages of corporate sustainability reporting. Whether it will be mandated by the SEC or not, companies should expect and be prepared for more stringent reporting requirements.

ABOUT THE AUTHOR

Noelani West is a G&A Analyst Intern and currently a senior at Columbia University in the City of New York, pursuing her undergraduate degree in Sustainable Development. Through an array of interdisciplinary coursework, she has been able to explore how sustainability is applied to in various fields and sectors. This has reinforced in her just how crucial and relevant these topics are. She hopes to launch a career in corporate sustainability, helping companies develop and implement ways to become more equitable and sustainable. Noelani is especially passionate about environmental sustainability as well as sustainability technology.