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It’s 2018 – Does Wall Street “Get It” on Corporate Sustainability and Sustainable Investment? A Noted Author Explores the Question... Does Wall Street finally care about sustainability? A noted sustainability author (Andrew Winston) muses about this in the pages of the influential journal for the C-suite – the Harvard Business Review. Yes, we think – more and more asset owners and managers are getting aboard the train...but there is work to do. And what about corporate boards and CEOs...” (Sigh), this narrative begins with the common refrain we all hear at conferences and in conversations with IR and CFO and other financial folk: “Even though climate change is already creating material risks and opportunities for companies, and expectation from stakeholders about social responsibility are clearly rising, investors are not asking CEOs about their sustainability performance.” Here’s the interesting question then posed by author Andrew: “But could that finally be changing?” He cites the importance of the recent CEO-to-CEO letter by BlackRock’s Larry Fink and defines it as a “full-throated defense of both long-term value creation and corporate purpose.” But... another sigh here from us – as he points out, this is the fourth year that Mr. Fink made the pitch for long-term thinking and sustainability and then analyzed the 2017, 2016 and 2015 letters to CEOs from BlackRock – largest asset manager in the world. (Hint: ESG, sustainability, are constant themes.) There are certain words that are consistent across the communications: climate; diversity; value; long-term... Andrew Winston picks up on an important element that we’ve been talking about with our clients at G&A Institute: Trillions’ of investor dollars being managed by BlackRock are in “passive” investments (index funds, etc.) and so the old 1990s “Wall Street Walk” is increasingly a thing of the past. You cannot easily walk away from a large-cap investment that in an important holding. So, the conclusions for investor is: stand in place and make your stand; that is, for expecting more demonstrated societal responsibility and actions in societal issues by companies in your portfolio; by demanding more information about the issuer’s climate change policies, views, actions; and, in asking for the information about the company’s political contributions and lobbying fees (payments that are made with shareholder money) -- and whether these are really in the owners’ interests... and more. Do the recipient CEOs read and care about (and respond to) the Larry Fink letters? Especially this year’s “social purpose in focus” letter? Andrew Winston says one CEO he spoke to “gave me a kind of a shrug.” The capital won’t leave the stock is the thinking. But there are rays of hope: Noted New York Times financial columnist Andrew Ross Sorkin suggests: “...If index funds can move their capital, they can vote directors off the board...”Andrew Winston observes: [Larry] Finks’ intentions and his letters do matter. But votes matter more…” Sorkin wrote a positive report on the Fink letter as a message to companies to “...contribute to society or risk losing our support...”
Note: For more on Harvard Business Review / sustainability content – there is valuable content, including a number we’ve focused on in this newsletter, visit: https://hbr.org/topic/sustainability Andrew Winston is the author of the seminal work, “Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value and Build Competitive Advantage,” with Daniel C. Esty; and, “The Big Pivot – Radically Practical Strategies for a Hotter, Scarcer and More Open World” and “Green Recovery.” Follow him on Twitter: @AndrewWinston
Our Top Story For You... Does Wall Street Finally Care About Sustainability? About Sustainability: Progress Is Being Made - We See Forward Momentum! For Your Attention: The Editors' Scans Region’s first sustainability-focused startup accelerator launched in Abu Dhabi (Tuesday - January 23, 2018) Source: Sustainable Brands - For those of you who have never studied what it was like pre-Earth Day in 1970 and how we benefit from what has transpired since then — let me share a little story... S'pore firms fall behind in sustainability journey The World's Most Sustainable Companies, 2018 Blended' finance is key to achieving global sustainability goals, says report (Wednesday - January 24, 2018) Source: Green Biz - The energy ecostructure and electricity system are on the brink of massive disruption. Energy is becoming decentralized, and new technologies are enabling businesses to both produce and consume energy like never before. Companies... Balancing Capitalism, Modernization And Sustainable Development For Future Generations What you should know about setting ambitious yet realistic sustainability goals Resilience crucial in advancing sustainability Businesses leading with sustainability see growing returns New Study Shows Next Gen Solutions to Be Sustainability Keys
Our Focus This Week on A Range of ESG Topics & Issues – More Things to Think About… 'World's richest 1% get 82% of the wealth', says Oxfam Biggest U.S. East Coast Oil Refinery Files for Bankruptcy Cape water crisis: Who is to blame? The weather, residents, farmers or government? News for You From the Corporate Sector -Both Positive & Negative - Headlines Philips CEO Eyes an Even Bigger Sustainability Goal H&M and Zara Commit to Sustainability How To: the PGA Crafts Its First Sustainability Report, Solves Unique Challenges Greenpeace Slams Coca-Cola Plastic Announcement as ‘Dodging the Main Issue’ HSBC to pay $101.5m to settle currency rigging probe Bob Lutz And Tesla: The Difference Between The Old Economy And The New And the news about “employee windfalls” from the tax reform... Disney to give $1,000 bonuses to 125,000 workers 22,000 JPMorgan employees to get raises from bank's tax windfall Starbucks boosts worker pay, gives bonuses after tax cut Home Depot to Pay Up to $1000 Bonuses for Hourly Workers And the firms affected by industry-sector upheaval and disruption... Walmart Is Cutting Up to 500 Corporate Jobs This Week Kleenex, Huggies maker to cut up to 5,500 jobs, close 10 plants Toys R Us to close 180 stores across the US EU Commission Hits Qualcomm With $1.2 Billion Fine After Apple Exclusivity Probe Intel shares top 17-year high in late trading after earnings, discussion of security challenges News & Opinion: Asset Managers, Sovereign Wealth Funds, Pension Funds Theresa May vows to stop private sector 'pension abuse Are Politics and Proxy Firms Killing Your Investment Returns' |
G&A's To The Point! is a businesss intelligence web-platform resource. This management briefing service offers timely insights and perspectives on Corporate Sustainability, Responsibility & Citizenship.Click here to request a trial subscription. Below are links to a sampling of three recent briefs:
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