The JUST Report: Can Reshoring Manufacturing Spur Environmental Innovation?
“One lesson of the backlash [to ESG] is that executives must anchor their actions more firmly in a business case”. So wrote Andrew Edgecliffe-Johnson in this week’s edition of the always-insightful Semafor CEO Signal newsletter. He’s 100% right. I have been talking to CEOs, executives, and corporate board members over the last few weeks about how they see stakeholder matters in the current climate and this is a universal position.
On environmental issues, the case for leadership is compelling, especially as the potential for reshoring accelerates. Our polling shows the public supports the creation of more jobs in the U.S. At the same time, Americans across the political spectrum value clean air, water and soil. A majority is worried about the impacts of a changing climate. As one of our focus group participants (Republican, male) put it, “If [companies] post record profits, but pollute a river or lake, those profits come from the public.” The very definition of an economic externality, in other words.
Safeguarding the health of our natural environment becomes particularly critical for businesses seeking to reshore manufacturing activities. Hershey’s commitment to reduce water usage by 20% at priority sites in water-scarce regions will reduce the company’s operating expenses and support the future sustainability of its domestic manufacturing capacity (which was already at 70% prior to a $1 billion announcement to boost its supply chain in Pennsylvania through 2026). The recent announcement by Microsoft (#1 on Environment in our 2025 Rankings) of a $3.3 billion investment in Wisconsin for cloud computing and AI-infrastructure will require the company to surpass its already industry-leading efforts on water conservation and energy efficiency if it’s to meet its target of becoming carbon-negative, water-positive, and zero waste by 2030.
Other companies leading in JUST Capital’s assessment of environmental performance
include Aptiv (Automobiles & Parts), Graphic Packaging Holding Co. (Industrial Goods), Hewlett Packard Enterprise (Computer Services) and Johnson & Johnson (Pharma). To Edgecliffe-Johnson’s point, the business case here is clear. As of April 14, 2025 Environment Leaders have outperformed the Russell 1000 Equal Weighted Index by 5.6% since inception (December 31, 2021). As domestic manufacturing grows, so the opportunity for real innovation in protecting domestic natural capital also grows.
Be well,
Martin
QUOTE OF THE WEEK
“And what I said…we’ve been in business for over a century. Political winds blow in all different directions, particularly when you operate in almost 150 countries. But there are fundamental truths that have guided this company for 98 years: We welcome all to our hotels, and we create opportunity for all at our company…the next day I got 40,000 emails from Marriott associates around the world just saying, ‘thank you’.”
– Marriott CEO Anthony Capuano speaking to Fortune about the statement he made on Trump’s sweeping changes to DEI and the response it garnered from his employees.
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JUST AI
Johnson & Johnson is changing its AI strategy after learning only 10-15% of AI test pilots it had created were creating 80% of the value. The Wall Street Journal has more.
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