Business for Purpose Network (B4PN) Weekly Announcement.
Update #17 — March 19, 2021
1.0 SHAREHOLDER ACTIVISM. This is certainly a trend we are watching and there was big news this week at Danone (this is creating so much buzz online) and on the other side, important news from Exxon. How are you feeling about this?
· The fall from favour of Danone’s purpose-driven chief. Ousting of Emmanuel Faber underlines challenge of pursing profits and ESG goals. Financial Times. March 17, 2021. Subscription may be required to access content. “It was a victory for the activist funds which since January have laid siege to Danone, pushing for a radical overhaul to fix what they called its chronic underperformance. But it marked a loss for those who prized the 57-year-old as a powerful advocate of the view that businesses must become more sustainable and forge a purpose alongside making profits”.
· Exxon, after pressure from activist investors, is investing in carbon capture technology. As reported in The JUST Report from JUST Capital, March 12, 2021. Original article in The Wall Street Journal from March 3, 2021.
2.0 TREND WATCH. Executive Performance Linked to Company’s Social/ Environmental/DEI Performance. Hopefully these incentives will pull us more towards the purpose economy.
· Nike to tie exec pay to progress in deepening diversity and helping environment. “Our Purpose 2025 Targets are not just aspirations. They are a call to action — with clear goals, strategies and accountabilities. We are also redefining what responsible leadership looks like. For the first time, we will tie executive compensation to Nike’s progress in deepening diversity and inclusion, protecting the planet, and advancing ethical manufacturing,” Donahoe said.
· TD Releases their 2020 Environmental, Social and Governance (ESG) Report, Adapting with Purpose, outlines how the Bank accelerated its efforts, elevated its contributions and enhanced its oversight and measurement of ESG practices. The 2020 TD Ready Commitment Report highlights the progress and impact TD has achieved through its corporate citizenship platform with a focus on financial health, social inclusion, equitable health outcomes and the environment to create the conditions for everyone to succeed in an ever-changing world. “Commencing in 2021, TD will link senior executive compensation with the Bank’s ESG performance, further reinforcing the importance of ESG as a core component of TD’s business globally.”
· Chipotle will link executive compensation to environmental and diversity goals. “The burrito chain is following in the footsteps of Starbucks and McDonald’s, both of which recently announced that performance for racial and gender diversity goals will impact executive compensation plans. Individual investors and large asset managers like BlackRock are increasingly picking stocks with strong environmental, social and corporate governance in mind, pushing companies to make changes to become a more attractive investment”.
3.0 GREENWASHING. Calling out greenwashing from a financial industry insider. Financial world greenwashing the public with deadly distraction in sustainable investing practices “As the former chief investment officer of Sustainable Investing at BlackRock, the largest asset manager in the world with $8.7 trillion in assets, I led the charge to incorporate environmental, social and governance (ESG) into our global investments. In fact, our messaging helped mainstream the concept that pursuing social good was also good for the bottom line. Sadly, that’s all it is, a hopeful idea. In truth, sustainable investing boils down to little more than marketing hype, PR spin and disingenuous promises from the investment community.” USA Today. Opinion. March 16, 2021 by Tariq Fancy.
4.0 AUTHENTICITY. And what HBR suggests we can do about it. An ESG Reckoning Is Coming. HBR. March 02, 3021 “Token programs and philanthropic side projects erode the public’s trust and invite backlash against the reform movement itself. A movement meant to benefit the public good risks becoming a buzzword coopted to keep maximizing short-term profits”.
The authors suggest three ways to align the work of corporations with creating a more sustainable, inclusive, and prosperous economy. (1) Companies should be required to publicly report on their social and environmental impact with clear, standardized and easy-to-understand metrics; (2) We all need to hold companies accountable; and (3) Companies who are serious about becoming more sustainable, inclusive and socially responsible should consider putting their purpose into their charter and becoming benefit corporations.”
5.0 TALENT. Checking in on public servants and their interest in Purpose. aPolitical in their March 10, 2021 email, indicated they asked their members: “What policy area excites you the most?”
· Equality and social purpose (31)
· Sustainability (23)
· Tech and digital (21)
· Health and social care (11)
· International relations (11)
While there are no events listed this week, we remind you to sign up for the RW Institute Webinar Roundup. This week the listing features such corporate citizenship events as the flagship event at Boston College — April 16th to 28th. RW Institute is a Founding Member of the B4PN.
Enjoy the reading and enjoy the week-end … on purpose
Allyson
What is the Business for Purpose Network? The B4PN is an initiative catalyzed by the JW McConnell Family Foundation and the MaRS Discovery District to help build a movement engaging companies to put purpose at the core of their work.
Past editions of the B4PN Weekly Announcements are available on LinkedIn and on Medium.
Interested in joining this movement? Please contact Allyson Hewitt, VP Impact at MaRS at ahewitt@marsdd.com to indicate your interest in this work, to join the mailing list or to unsubscribe. We’d also love your comments on anything you read here or to promote any relevant articles you would like to share with others.
