2020 promises to be a defining year whichever way you look at it. Building on what we’ve learned over our years of polling the public and analyzing corporate behavior, we’ve picked out five major areas we think it’s worth paying special attention to as the year unfolds.
1. An Early Pulse of the Nation.
The voice of the public is going to be heard loud and clear this year. At JUST, we always do our survey and polling work early in the year, and 2020 is no exception. Although we never poll on politics, we do pick up on how people across the nation prioritize critical economic and social issues.
In 2016, our polling work provided a clear initial signal that, for the majority of people, jobs and individual economic security would be touchstone election issues. Fast forward to 2020, and I would expect the same kind of guidance to be provided by this year’s polling work. Will it be wages, taxes, healthcare, climate change, or equity in the workplace? We will be polling roughly 10,000 Americans again in 2020, and will be releasing the findings of that effort over the course of the year.
2. Clash of Ideologies.
With the stakes so high, we expect the “socialism versus capitalism” debate to intensify. It is a defining one, that searches the soul of the nation. Misinformation and misunderstanding about what these things really mean will undoubtedly flourish, particularly when it comes to how Wall Street, corporate America, and markets need to be addressed. Stakeholder capitalism will come under particular scrutiny. Is it really free market capitalism, or is it socialism through the back door? Expect a highly partisan debate.
Our view is clear. This is not about wealth redistribution or government intervention, as some would have it. It is about leveraging the innate power of markets to do what they do best: innovate, solve problems, and grow the pie for more people. Much will depend on how voters – particularly those in key swing states – feel the President has performed on meeting his early-term promises of creating jobs, raising wages, and improving the lot of working- and middle-class Americans. JUST will be releasing data on all of this over the course of the year.
3. Convergence of Standards & Frameworks.
The alphabet soup of ESG and sustainability standards, metrics, frameworks, and programs is frequently cited by corporations and investors as a barrier to action when it comes to embracing the stakeholder model and driving real change. Over the second half of 2019, several efforts began to bring these standards into greater alignment and we expect this process to materially accelerate in 2020. The onus is on proponents of corporate sustainability to proactively push this process forward and meet corporations where they are.
JUST is doing its part. We have allied with B Team, B Lab, CECP, and others to establish Imperative 21, a coalition of organizations seeking to provide business with a unified framework for driving stakeholder performance. The swing factor will be the extent to which the SEC pushes companies toward required ESG disclosures, which will itself be heavily affected by politics. That said, giving corporations and investors what they want – a simple, unified ESG framework – is critical to progress.
4. A Reckoning on Stakeholder Value Creation.
If 2019 was a big year for declarations and commitments, 2020 will be a big year for data and performance measurement. “Show me” will be the operative phrase. The Business Roundtable’s embrace of stakeholder capitalism has established a path forward that all business stakeholders can unite around. However, as we have said before, it’s deeds not words that ultimately count. CEOs making public commitments to the stakeholder model and seeking to become trusted leaders on the big picture social, economic, and environmental issues will need to take concrete action, measure what they are doing, and share their successes and failures.
A consequence of this will be increasing scrutiny on the quality, veracity, and meaning of performance data made available. For this reason, ESG ranking organizations will also be under the microscope, as too often the data they produce lack context and insight, and are gleaned via opaque and outmoded processes. When it comes to the really thorny issues of wages and inequality in America, paying taxes, climate change, and how to create good jobs for employees and contractors, reliable data is especially critical. Our rankings, our data, and our toolkit will be available to anyone wishing to track such things on an ongoing basis.
5. The Year of The Worker.
2020 may well be the year that the tide finally changes for America’s workers, in various ways. First, we anticipate a major debate about wages in America, and the role companies should play in ameliorating the economic insecurity of their lowest-paid workers, reducing dependencies on government support, addressing the plight of contract workers, and giving workers more of a stake in their financial success.
Second, as corporations become more invested in the stakeholder approach, we also expect workers to become more engaged on the underlying issues their companies are tackling. 2019 saw some major employee activism moments, with walkouts at Google, a strike at GM, continued change from #MeToo, and an ever-increasing focus on purpose when it comes to talent attraction and retention. Harnessing this energy, rather than controlling it, will be the challenge. Finally, we expect investors will get much more serious about the “S” of ESG, and specifically the risks associated with workers’ economic insecurity, as well as broader inequality issues. This will increase the demand for metrics and performance disclosure on human capital issues relating to the business case for leadership and ultimately begin to redefine the concept of “return on human capital.”