Building Long-Term Value and Trust is Essential for Business Leaders.

June 02, 2022

Building Long-Term Value and Trust is Essential for Business Leaders.

Notes from the Council | Newsletter May 2022

 

Members of the Council for Inclusive Capitalism understand that taking action and following through on our commitments is essential to earning the trust of society. This month, we’ve been discussing how companies can transition to net zero so that the benefits are broadly shared with business and global leaders in Davos, learning how to reduce food waste with Niels Lorijn, Co-Founder and Managing Director of Capdesia, and exploring how gamifying financial inclusion can drive big impacts with Fundación Capital CEO Yves Moury. Trust matters, and our members are following through on their commitments in innovative and interesting ways.I was fortunate to join Edelman for the launch of their 2022 Edelman Trust Barometer to discuss this simple yet critically important concept.  If you haven’t already, I invite you to explore its insights.  During the conversation, I made the point that we must be attuned to how customers, employees, and investors are viewing corporate obligations on inclusivity, sustainability, and even geopolitics. “Corporations are created by society.  We get limited liability as investors because society wants to give it to us – that is a huge give.  And if we lose that trust, we could lose our license to operate.  That’s not God-given. That’s why we have to be true to who we say we are.”

It has never been more important to be concrete in our actions and to ensure that capital rewards those taking action. That’s why I am excited to share with you the ESG investing tools newly released by the Pension Fund Coalition for Inclusive Capitalism, with support from the Coalition for Inclusive Capitalism and the Millstein Center at Columbia Law School.  These open source tools developed over the past year help pension funds create more legal responsibility for asset managers to commit to and demonstrate concrete execution of their ESG impact priorities. Read more about this work and how you can make use of the tools below.

Read on for the latest on Council members’ work. The Council for Inclusive Capitalism team and I hope you enjoy reading about our recent work. I invite you to learn more about the community you are building with us on our website.

Thank you for all that you do,

 

Lynn Forester de RothschildFounder and Co-Chair

 

View 100+ actions supporting responsible consumption and production. Explore actions

 

Investors and companies are invited to join Ceres and the Council for Inclusive Capitalism on June 20, 2022 from 12-1pm EDT to learn about the Just Energy Transition Framework for Company Action. This Framework is the first-ever guide for companies on concrete actions they can take to implement an energy transition that advances both social and environmental goals. The Framework’s building blocks for action are tied to Climate Action 100+’s Net-Zero Benchmark Just Transition Indicator.Marcie Frost, CEO of CalPERS, and Lynn Forester de Rothschild, Founding and Managing Partner of Inclusive Capital Partners will introduce the Framework, while Anne Simpson, Franklin Templeton Global Head of Sustainability and Climate Action 100+ (CA100+) Steering Committee member, will demonstrate how its areas of actions map to the Climate Action 100+ Just Transition Indicator. Collaborating partners on the Framework, Sharan Burrow, General Secretary of the ITUC, and Mark Carney, UN Special Envoy on Climate Action and Finance, will discuss the worker perspective and the need for a Just Transition. This webinar will feature case studies from participating company CEOs. Bernard Looney of bp and Mark Cutifani of Anglo American will share the practical applications of the Framework within their corporations.

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Sharing progress isn’t always easy. People are demanding greater responsibility from the organizations they work for, buy from, or invest in. Measuring the impact companies have on people and the planet is essential to creating long-term value, yet public and private stakeholders have struggled to make clear progress amongst a number of competing standards, frameworks, and initiatives.

The Council is launching a new learning series for members on key trends, issues, and practices that advance inclusive capitalism. We invite our members to join us on June 10 for this webinar on why metrics matter.  We’ll introduce attendees to the World Economic Forum’s Stakeholder Capitalism Metrics and discuss how to apply them to improve reporting and business performance.To register contact Libby Goodell at [email protected].

 


Delivering a Just Energy Transition

Sharan Burrow, General Secretary, ITUC; Cardinal Turkson; Lynn Forester de Rothschild, Founder, Council for Inclusive Capitalism; and Rich Lesser, Global Chair, BCG. Photo credit: Ulrich Christian Christoffel/HandshakeThe Council and Goal 17 Partners were proud to host an in-person event during the World Economic Forum’s annual meeting in Davos, Switzerland. The discussion focused on delivering a just transition and featured our Just Energy Transition Framework for Company Action. Click below to learn more about the event and watch the recording. Join Council members in putting forth your own just transition ideas and make a commitment.


Watch: Shrinking waste in food services with Council Steward Niels Lorijn and Capdesia

As they nurture business of all scopes and sizes, investors have a unique opportunity to provide not only capital, but also guidance to help a company perform at its best. Brussels-based investment firm Capdesia, lead by Co-Founder and Managing Director Niels Lorijn, supports branded European restaurant chains and works with them to develop effective environment, social, and governance (ESG) strategies.Focused on reducing waste from the restaurant sector, Niels spoke with Council this month about Capdesia’s method for engaging its portfolio companies in ESG planning and highlighted examples of their best innovations — from specialty salmon products to no-plastics service.“We regard sound ESG practices really as an investment rather than a cost. Why? Because they’re a crucial component of driving value in our portfolio companies. When you source responsibly… or you try to enhance your brand profile by being involved in the community… that helps you sell more,” he said. Watch the full conversation between Niels and Council CEO Meredith Sumpter.

 


Market Imperative: New open source ESG investing toolsThe pension fund coalition for inclusive capitalism. Download the Resources

Public pension funds hold powerful levers for global change, investing more than $23 trillion globally for the long-term interests of retirees, across markets and portfolios facing future environmental and social challenges. Yet, many pension funds lack standard legal tools to direct how — or whether — their asset managers consider environmental, social, and governance (ESG) criteria in investing their capital in sustainable businesses for long-term value creation. The Pension Fund Coalition for Inclusive Capitalism convened public pension funds, technical, and legal advisors, to create open-source model contract language establishing minimum ESG guidelines for use by pension funds in their investment relationships. Flexible across a range of scenarios and available for public and private markets, the model offers portfolio and legal teams pragmatic ESG tools for:

  • Model mandates
  • Voting rights
  • Reporting requirements
  • Sample ESG factors and criteria

 

 


🕊️Moral imperative: Pope Francis marks Laudato Si’ Week

Pope Francis has invited the world to celebrate Laudato Si’ Week from May 22 to 29, in celebration of the seventh anniversary of his encyclical on care for our common home. The pope pointed to this moment as an opportunity “to listen to—ever more attentively—the needs of the earth.” The Vatican Dicastery for Promoting Integral Human Development invites people across the globe to participate in a Laudato Si’ Week event and to submit a Laudato Si’ Plan to the Dicastery’s Laudato Si’ Action Platform.In response to the call of Laudato Si’, the Council developed a Just Energy Transition Framework for Company Action to provide concrete guidance for companies of all industries to lead an energy transition that is focused on workers, communities, and consumers. We invite company leaders to join the Council and make a Just Energy Transition commitment that serves both people and the planet.

 


🖱️Click to share

​​​​​As business exists as part of society, what is its role in that society? Cardinal Turkson discusses his views on profit and purpose in this important discussion. #inclusivecapitalism #purposeandprofit #ESG #business #society

 


🕹 Level Up: Gaming economic citizenship with Fundación Capital

Nonprofit Fundación Capital promotes sustainable economic citizenship globally using technology and data science to develop opportunities for all individuals to attain their full potential and fully participate in the financial system. CEO Yves Moury sat down with the Council to describe the challenge of financial inclusion and highlights one of Fundación’s playful projects to overcome it.How do you define economic citizenship/financial inclusion and how does it contribute to the Council’s vision of an inclusive economic system?We define economic citizenship as people’s access, opportunity, capability and right to fully participate in a country’s economic life. That implies not only having access to economic resources, but to a broader well-being, which is not only related to “living the lives people want, achieving valued ways of ‘being and doing’” that includes the right and the duty to live in a healthy environment.The concept of economic citizenship is inextricably linked with women’s equality, in which economic empowerment is one step towards broader well-being, requiring the transformation of social norms and challenging persistent practices that hamper women’s growth.Much of Fundación’s portfolio of work is with adults who have never had lessons in personal finance, but you also have taken on initiatives to engage school-aged children. Tell us about the Guardians of Savings (“Guardianes del ahorro”) initiatives in Peru and Mexico.We came up with the Guardians of Savings idea after the success of our LISTA initiative — an app for teaching financial skills — and the need, identified in the field and confirmed by research studies, to develop an equivalent App targeted at children. In Mexico, over 30% of the country’s population is young, and in a nationwide survey conducted years ago by the Mexican government, the need to incentivize a savings culture came up among the priorities identified by the youth. We also wanted to have a multiplier effect, by leveraging the fact that our tablets were already rotating among vulnerable households (recipients of CCT programs). We could see how the kids were naturally attracted to the tablets and we wanted to take advantage of that interest by teaching them basic financial skills, especially savings habits, that we knew would be beneficial throughout their entire life.

 

Reflect and Share With Us

What do you see as the greatest challenge facing business leaders — in your sector or broadly — in the next 1-3 years? How do you believe we should meet that challenge?

Submit your thoughts and allow the Council to amplify your forward-thinking leadership. We will contact chosen authors for permission to publish their ideas.

 


Council Steward: New Majority Capital helps under-represented entrepreneurs start a business legacy

woman wearing a hijab stands at a workbench and uses a powered drill to cut holes in disks of woodNew Majority Capital is taking action to close the racial wealth gap in the United States by creating pathways for qualified entrepreneurs from under-represented groups to acquire and grow small businesses. Roughly 10 million small businesses will be sold in the next two decades as their founders and owners reach retirement age, according to New Majority Capital, and this represents an opportunity to transition assets to those who have been barred from ownership by financial ability, systemic racism, or lack of a support network. Smart transitions can ensure good, living wage jobs are maintained and created within communities. Over the next five years, New Majority Capital willprovide investment capital, acquisition services, and business support to 30 aspiring operators to buy and build successful local businesses. Learn more about their impact model and programs on New Majority Capital’s website.

📅 Upcoming events

Stakeholder Capitalism Metrics: What They Are & How to Use ThemJune 10, VirtualEarlier this year, the Council introduced an updated process to allow members to provide greater detail on their actions shared publicly on the Council’s commitments platform. With the help of close partners, these suggested measures have been mapped against leading curated metrics from existing standards, including the World Economic Forum’s Stakeholder Capitalism Metrics. We invite you to join us on June 10 for this impactful webinar on why stakeholder capitalism metrics are important and how to implement them to improve reporting and business performance with featured speakers Mary K. Cline, Senior Policy Advisor, Office of the Global Chairman and CEO at EY, Joe K. Goodwin, Senior Vice President, Public Policy Executive at Bank of America, and Emily Bailey, Head of ESG and Private Sector at the World Economic Forum. Reach out to Libby Goodell for the registration link.Members onlyJust Transition: Investor and Company PerspectivesJune 20, VirtualJoin Council leaders including founder Lynn Forester de Rothschild, CalPERS CEO Marcie Frost, UN Special Envoy for Climate Action and Finance Mark Carney, ITUC General Secretary Sharan Burrow, bp CEO Bernard Looney, and Anglo American chief executive Mark Cutifani for a Climate Action 100+ virtual event for companies and investors on concrete actions to advance a Just Energy Transition. Registration details will be available from CA100+ soon. Reach out to Libby Goodell for the registration link.Members onlyGreenFin 22June 28-29, New York CityHosted by Council Ally GreenBiz Group, GreenFin convenes an invitation-only audience of 600+ sustainability, finance and investment leaders to share insights, address the key challenges and showcase leading sustainable financial products and services. On June 29, Council founder Lynn Forester de Rothschild and Steering Committee co-chair and BCG global chairman Rich Lesser will lead a discussion around company action for a Just Energy Transition. Learn more and request an invitation.Council Midyear DialogueJuly 21, VirtualThe Council welcomes all CEO-level members to join us for a virtual mid-year leadership gathering that will feature remarks from representatives of the White House and Church of England. For more information about attending, please contact Engagement & Outreach Associate Vaughn Sayers, [email protected].Save the dateMembers only

 


🤝 Welcome New Council Members

Naina SubberwalCEO, AVPNRavi ChaudhryFounder and Chairman, CeNext Consulting GroupFernando Gabriel Quiroz NajeraManaging Partner, Consciencia por México, A. C. Ivor TuckerCEO and Founder, Hopes Sustainability C.I.CFather Eric SalobirPresident, Human Technology FoundationKarina CadyManaging Director, Nandina Partners

 

📰 Inclusive Capitalism in the News

Financial Times | Inclusive Capitalism Comes Down to the Fine PrintACEN Renewables | Eric Francia: ACEN pioneers energy transition financing to enable more renewablesMcKinsey & Company | Lynn Forester de Rothschild: Author talks: Tomorrow’s capitalist is socially consciousDeloitte.com | Pubit Renjen: Deloitte launches DEI Institute™ to shape the future of equity in business and societyForbes Africa | Collaborating to fast forward Africa’s energy transitionEni.com | Claudio Descalzi: Eni publishes 16th voluntary sustainability report that describes the main sustainability results and targets reached by the companySSE.com | Allistair Philips-Davies: Power sector joins forces to deliver a fair and just net zero transitionHRBlock.com | Jeff Jones: CEO Jeff Jones announces measurable actions and commitments by H&R Block to help create a more inclusive and sustainable economyFortune | Investors are taking a second look at the middle of AmericaBloomberg | Hiro Mizuno:  Asia starts its journey out of the ESG ‘desert’CFA Society New York | Coalition for Inclusive Capitalism: How to close the remaining gaps in ESG mandates for asset ownersIPE Magazine | Coalition for Inclusive Capitalism: Pension fund group develops model ESG contract languageCinncinatiChamber.com | Audrey Treasure: The Workforce Innovation Center announces alliance with Council for Inclusive Capitalism

 


 

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