August 22, 2019



The Business Roundtable is an organization of CEOs of the largest companies in the U.S.A. -- firms that generate a combined US$7 trillion in revenues, employ 15 million people, invest $ 147 billion annually in R&D, and provide healthcare and retirements benefits for tens of millions of Americans.

Member companies operate in every one of the 50 states and through the organization top business leaders work to influence major societal issues (tax policy, infrastructure needs, trade and other issues).

This is where many institutional and retail investors place their bets on the economic future and enjoy some of the fruits of the efforts of the enterprises they invest in.  Investors provide much of the capital that make the wheels go ‘round for the BRT companies.  And, investors in the BRT member companies received almost $300 billion in dividends.

And so investors have been a priority concern for the CEO members for the almost half-century existence of the Business Roundtable.  The guiding philosophy traces back to the period four decades ago when influential economists such as Milton Friedman of the University of Chicago advised the CEOs that their duty was to look out for the shareholders…and all else would fall in place.

In 1997, the Business Roundtable issued its statement of the purpose of the corporation:  “The paramount duty of management and of boards of directors is to the corporation’s stockholders.”

No more.  This week, the Business Roundtable moved beyond the long-term “shareholder primacy” operating principle, releasing its revised “Statement on the Purpose of a Corporation” -- a dramatic course change in the principle operating philosophy of this powerful, CEO-led organization.

The almost 200 CEO signatories pledged to: invest in employees; deliver value to customers; deal fairly and ethically with suppliers; support communities in which they work; and, generate long-term value for shareholders.

Each of stakeholders is essential, the Purpose Statement reads.  We commit to deliver value to all of them, for the future success of our companies, our communities, and our country.

Jamie Dimon, CEO of JPMorgan Chase is current head of the BRT and played an important role in the dramatic shift of attitude in the official stance of the organization.  He sees this as “an acknowledgement that business can do more to help the average American.”

Adding to this critical public re-positioning:  “Society gives each of us a license to operate. It’s a question of whether society trusts you or not,” Ginni Rometty, CEO of IBM told Fortune.

On its web site, the organization states “as leaders of America’s largest corporations, BRT CEOs believe we have a responsibility to help build a strong and sustainable economic future in the United States.”

ESG and Sustainability basic principles are now “officially recognized” by the members of the CEO association and enshrined in the declaration of the purpose of the U.S. large corporation.

The Purpose Statement does touch on numerous concerns of the sustainable investor – a good step forward for this powerhouse organization.

Our Top Story is the excellent Fortune feature on all of this by veteran business writer Alan Murray. It’s a great summary of the dramatic move by the CEO signatories this week.

Click here to read the Business Roundtable’s “Statement on the Purpose of a Corporation” and see the list of corporate CEO signatories. 

The Top Story

America’s CEOs Seek a New Purpose for the Corporation
Source: Fortune - For more than two decades, the influential Business Roundtable has explicitly put shareholders first. In an atmosphere of widening economic inequality and deepening distrust of business, the powerful group has redefined its mission…

Sustainability Standards Setters & Policy Makers

SEC urged to tackle companies’ ESG boasts
Source: Corporate Secretary - The SEC has received the latest request to act on ESG-related disclosures, although agency officials have indicated caution over prescriptive rulemaking in the area. 

Why the EU's ESG taxonomy matters to Asian asset managers and investors
Source: The Asset - When it is implemented in 2020, the European Union’s (EU) taxonomy on environmental, social, and governance (ESG) will be the first time 28 countries belonging to a common area will have clear and defined rules on ESG investing... 

EC tenders studies to advance sustainable finance action plan
Source: IPE - The European Commission has launched tenders for studies on sustainability-related products and services and on the integration of environmental, social and corporate governance (ESG) risks by EU banks. 

Summary of the 50th Session of the Intergovernmental Panel on Climate Change
Source: Intergovernmental Panel on Climate Change - The SRCCL represents the first ever comprehensive look at the whole land-climate system, addressing land as a critical resource, desertification and land degradation, food security, and land and climate change responses. 

The Ceres Roadmap for Sustainability
Source: Ceres - The Ceres Roadmap for Sustainability is a resource to help companies re-engineer themselves for success in a world beset with unprecedented environmental and social challenges that threaten the economy and local communities. 

Opportunity zones could provide major boost for clean energy, sustainable development
Source: GreenBiz - A provision of the Tax Cuts and Jobs Act of 2017, the Opportunity Zones (OZone) program seeks to spur investment of patient capital in low- and moderate-income communities across the United States. 


ESG / Sustainable & Responsible Investment

How to Make ESG Investing Work  
Source: The Motley Fool - Investing in companies that do good for the world doesn’t mean sacrificing big growth. 

ESG: How do fund selectors cut through the greenwash of gradualism? (Part 1)
Source: Investment Europe - In a recent Morgan Stanley survey of institutional investors, 70% said they are integrating sustainable investing into their investment process, signaling just how quickly the environmental, social and governance (ESG)...

What makes an ESG investment is becoming unclear, warns Morningstar
Source: IR Magazine - As sustainable investment across Europe continues to grow, investors face a major problem in the form of unclear information about just how investments are adopting ESG metrics, according to a new report published by data and... 

How to approach ESG investing
Source: International Adviser - Over the last decade, environmental, social and governance (ESG) investing has gone from a niche into the mainstream. Today, the complexities around the definitions of ESG and the concept of greenwashing have become prominent... 

‘We must remove the idea that ESG means charity,’ says Eurizon’s Chelini
Source: City Wire Selector - Asset managers should embrace the idea that sustainability analysis and better financial returns are tied together. That is according to Simone Chelini, who was recently appointed sustainability and corporate governance head at... 

Why a lack of definition for ESG is problematic
Source: International Adviser - Socially responsible investments have been gaining a lot of attention and have started to become very popular among investors who wish to not only get returns on their investments but also support environmental, social and...

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