For Justin Lagasse, CFO of leading sustainable energy company Avangrid, using a stakeholder model for decision making is just as much about driving business outcomes as it is about doing what’s right for customers, workers, the environment, and shareholders.
Despite pushback against Environmental Social and Governance frameworks, or ESG, Lagasse said that applying a broader stakeholder model, where decisions prioritize sustainable business practices, is not purely about compliance, but about driving long-term value.
“What’s really happened on the ESG front is it’s become about disclosures and compliance and I think because of that, it’s dissociated the value attribution that it provides,” Lagasse said at JUST Capital’s 2024 Annual Leadership Summit earlier this month. “We use ESG to drive business and financial outcomes.”
Avangrid ranked highly in JUST Capital’s 2024 Annual Rankings of America’s Most JUST Companies at No. 12 overall and No. 1 in its industry. It earned these designations through a variety of investments, including supporting the career development of its workforce and demonstrating a clear commitment to climate leadership, such as pursuing an aggressive 1.5-degree net zero climate target.
Speaking with JUST Capital President Alison Omens, Lagasse noted that in today’s economic climate, a company’s investment in its workers not only serves as a catalyst for individual prosperity and job satisfaction but also contributes significantly to a business’ resilience and sustainable growth.
On Wednesday, Avangrid announced it was joining The Worker Financial Wellness Initiative, a part of JUST Capital’s corporate leadership network implemented in partnership with PayPal, Financial Health Network, and Good Jobs Institute. Joining the initiative will help Avangrid continue supporting employees’ financial security and health.
Since Avangrid was formed in 2015 by joining multiple utility companies together, its leaders have placed a concerted emphasis on creating a unified corporate culture, where employee well-being is a core tenet. Leveraging data for a more personalized approach to employee benefits is central to their strategy, as they continue to work alongside a cohort of companies dedicated to improving the financial health of workers nationwide.
And while Avangrid continues to invest in improved employee financial well-being, it has already taken substantial steps to drive its employees’ overall well-being, implementing initiatives that focus on work-life balance, career development, and diversity, equity, and inclusion.
By joining the Worker Financial Wellness Initiative, Avangrid looks forward to building upon its investments in its workforce, which will underscore and build on solutions for customers and continue to create value for shareholders.
As Lagasse said at JUST’s Leadership Summit, he’s focused on investments that will build on the company’s success “not only tomorrow, but for the long term.”
March 6, 2024 — Avangrid, Inc. (NYSE: AGR), a leading sustainable energy company and member of the Iberdrola Group, is continuing to prioritize their employees’ financial security and health by joining The Worker Financial Wellness Initiative by JUST Capital and PayPal. The Initiative, established in collaboration with the Financial Health Network and Good Jobs Institute, offers resources to help companies assess and improve workers’ financial health.
“We want to be a company that attracts top talent to build long-term careers,” said Pedro Azagra, Avangrid CEO. “We do this by not only helping our employees grow professionally, but also supporting their well-being. The Worker Financial Wellness Initiative will cement us as a benefits leader and help us continue to enhance our programs and resources.”
The Worker Financial Wellness Initiative was launched in 2020 and engages directly with corporate leaders to promote the business value of financial health investment and empower them to perform worker financial health evaluations. Today, the initiative includes companies such as Chipotle, Chobani, Even, Prudential Financial, Synchrony, and Verizon, representing one million American workers. Since joining the initiative, participating companies have expanded and enhanced benefits, increased wages, created new ownership opportunities, and more.
Joining this initiative builds upon Avangrid’s commitment to caring for its people by providing diverse, equitable, and inclusive benefits that focus on their total health—physical, emotional, mental, and financial. This includes providing a leading 401(k) employer match, paid parental leave, comprehensive employee assistance program (EAP), and fertility and family forming benefits. Avangrid has also continued to expand its holistic benefits package by recently launching new programs such as a student loan debt repayment benefit, an emergency savings program, and mandatory financial training.
“Now is the right time to take our benefits to the next level by focusing on individual wellness,” said Kyra Patterson, chief human resources officer at Avangrid. “By leveraging data, we can take a more granular and personalized approach to the benefits we offer to take care of our employees. The Worker Financial Wellness Initiative will help us take this next step by leveraging research, tools, and a diverse network of subject matter experts dedicated to optimizing employee health and well-being outcomes.”
Tolu Lawrence, Chief Impact Officer at JUST Capital, an independent nonprofit dedicated to demonstrating how just business – defined by the priorities of the American public – is better business, noted that Avangrid’s participation in this insightful network of executives is monumental.
“Our polling of the nation’s public shows time and again that Americans of all backgrounds want CEOs to prioritize investing in workers,” said Lawrence. “And our research shows that companies that prioritize the well-being of their workers out-perform those that don’t. Avangrid is on a journey that will not only deeply impact the lives of its workers, but also has the potential to inform the trajectory of the energy industry at large. We look forward to welcoming them into the network and collaborating with our partners to drive impact with Avangrid and for its workers.”
Sarah Kalloch, executive director of The Good Jobs Institute echoed the sentiment, saying, “Research has shown how meaningful investment in employees can create productive, engaged, and motivated workforces that not only create better lives for workers, but also deliver real, sustained value for customers and shareholders. We are excited to support Avangrid on this journey.”
Media Contacts:
Sarah Warren, Avangrid
sarah.warren@avangrid.com
585-794-9253
Marguerite Ward, JUST Capital
mward@justcapital.com
In our 2024 Rankings of America’s Most JUST Companies, we remain committed to capturing companies’ commitment to all of their stakeholders. We also recognize the importance of addressing the whole of each stakeholder, which in a practical application can mean the entirety of a company’s workforce – including workers who aren’t legally or technically considered employees.
Prior to last year’s 2023 Rankings, we employed an “Under Review” designation for companies that meet two criteria: business models that center gig workers and self-identification as members of the Flex Association. This amounted to three companies in our Russell 1000 universe: Uber, Lyft, and Doordash.
Beginning with last year’s 2023 Rankings, we reached out to the same qualifying companies to more accurately capture the experience for gig workers and to ensure that these companies’ scores are more reflective of their entire workforce. In our outreach to Uber, Lyft, and DoorDash, we requested public company sources with information about the share of gig workers in their workforce population and the benefits/policies that are accessible to them. Using the information provided, we proportionately discounted the scores of these companies across our Workers stakeholder data points when there was no evidence that gig workers are covered by the benefits or workplace policies that are tracked in our model.
We recognize that our work in capturing the workplace experience of the many Americans who work in the gig economy, or more broadly as contractors, remains in progress, but we believe that continuing this approach is a step in the right direction. Our team will work to further refine our methodology to ensure that we best capture companies’ commitment to all their workers.
JUST Capital’s annual Rankings of America’s Most JUST Companies score corporate performance of the Russell 1000 against the priorities of the American public. Throughout the year, we monitor any unique events not captured by our current metrics that should theoretically have an effect on a company’s score and rank. Our analysts identify those events as instances resulting from a company’s actions or inactions that are: (1) considered material to just business behavior as defined by the public, (2) have the potential to affect a company’s standing outside the normal architecture of our ranking process, and (3) are sudden, extreme, or unusual in nature. This year, ten companies received a unique event treatment.
Our team screens possible events that fit the above criteria. The methodology involves a formal process of monitoring media coverage related to companies under consideration through platforms such as RepRisk, as well as consultation with the public, independent specialists, and other neutral third parties.
The details of each event, and how a company has or hasn’t responded to it, determine the type of treatment given to the company’s Ranking performance. These treatments, in order of increasing severity, are Serious (I), Severe (II), and Most Severe (III). Each step of the process, including the final results, are reviewed by independent specialists and other neutral third parties.
This year, the screening process identified 36 incidents, which were cross referenced along geographical and legal considerations among the full Russell 1000. Independent specialists evaluated the incidents to identify events that meet JUST Capital’s definition of a unique event. From there, 10 incidents and their related companies qualified for unique event treatments and assigned one of the three treatments listed above. Further details on the screening process and evaluation criteria can be found in our 2024 Rankings Methodology.
The ten cases JUST executed the unique events protocol in the 2024 Rankings are as follows:
Hawaiian Electric Industries Inc
Hawaiian Electric is a holding company with its principal subsidiaries engaged in electric utility and banking businesses operating mainly in the State of Hawaii. In 2023, the island of Maui experienced a deadly wildfire that resulted in destroyed towns, burned homes, and killed many residents. Three lawsuits allege that power lines owned by Hawaiian Electric, the main energy provider for the state, should have shut down to avoid this outcome. Due to the alleged negligence of the company with respect to this event and the company’s response and offerings of aid to the communities affected, they received a Severe (II) treatment resulting in the lowest score for the Community Development Issue.
Norfolk Southern
Through its freight railroad subsidiary, Norfolk Southern is engaged in rail transportation and transport of overseas freight in the United States. Norfolk Southern’s train equipment in Ohio experienced a major derailment that affected the local community’s health and safety due to the hazardous contents spilled in the derailment. Upon further investigation, it was found that a pattern of negligence and disregard of safety warnings led to the derailment, according to reports by theNational Transportation Safety Board. Norfolk Southern agreed to take responsibility for the cleanup, which affected the community’s soil, air, and water. This event resulted in the implementation of a Severe (II) treatment, yielding the lowest score in the Pollution Reduction Issue in the Environment Stakeholder.
Fox Corp
Fox Corporation is a media and entertainment company that produces and distributes news, sports, and entertainment content. At least one lawsuit alleged that coverage of the 2020 Election by Fox Corporation included misleading and false information. Some shareholders allege that by not monitoring the defamation risk of these broadcasts, it opened up the company to great risk with respect to its profits and stock prices. The alleged spread of misinformation and its negative impact on shareholders of the company has resulted in a Severe (II) treatment resulting in the lowest score for the Ethical Leadership Issue.
3M Co
3M is a global technology and materials company with products in industrial, health care, electronics, energy, and consumer industries. A subsidiary of 3M, Aearo, manufactured military earplugs that did not meet the standards for protection required by the government. 3M had tried placing Aearo into Chapter 11 bankruptcy, but a federal judge rejected that attempt in June, per reports.The company’s actions resulted in a Severe (II) treatment resulting in the lowest score for the Ethical Leadership Issue.
Tesla Inc
Tesla designs, develops, manufactures, and sells electric vehicles and energy storage systems along with installation, operation, and maintenance of solar and energy storage products. Tesla’s vehicle technology, specifically its driver-assistance system, has been involved in a number of crashes. This year it was found that the amount of crashes and fatalities related to the system is far higher than previously reported, which resulted in an investigation into possible fraudulent marketing, per reports Tesla recently recalled 2 million vehicles to address this technology specifically. Tesla will receive the Most Severe (III) treatment resulting in the lowest score in the Shareholders Stakeholder due to the role of company leadership in this issue.
Johnson & Johnson
Johnson & Johnson makes a range of health and well-being products in three business segments: Consumer, Pharmaceutical, and Medical Devices. Johnson & Johnson has been subject to lawsuits since their talc baby powder was linked to various forms of cancer. A subsidiary of Johnson & Johnson, LTL Management, was formed for the express purpose of holding legal liabilities, filed for bankruptcy. A court dismissed this filing. Johnson & Johnson halted the global sale of talc powder in 2023. They received the Most Severe (III) treatment, resulting in the lowest score for the Shareholders Stakeholder.
Wells Fargo
Wells Fargo is a financial services company that provides retail, commercial, and corporate banking services through branches, the internet, and other channels to individuals, businesses, and institutions across the U.S. and in other countries. Wells Fargo was found to have opened up millions of accounts without the authorization of the customers. A Wells Fargo executive pleaded guilty in 2023 to obstructing the investigation of the remediation of this fraudulent activity. The Bank’s history of labor and banking violations extended into recent findings on employee usage of personal messaging for legal matters. The Most Severe (III) treatment will be reflected by giving Wells Fargo the lowest score in the Shareholders & Governance stakeholder.
The final three cases are carried over from the unique rankings treatment in our 2023 Rankings. Altria, Meta, PG&E all received a Most Severe (III) treatment last year in our Rankings.
Altria is a manufacturer and seller of cigarettes, machine-made large cigars and pipe tobacco, smokeless tobacco products, and wine in the U.S. We assigned a substantial penalty to companies in the Industry Classification Benchmark (ICB) Tobacco Subsector, following results from our 2016-2019 survey research. Our survey research has consistently revealed that most Americans believe that companies that make and market tobacco products are extremely harmful, less just, and should be in the bottom quartile of JUST Capital’s Rankings. Altria receives the lowest score in the Customers stakeholder.
Meta is a social media conglomerate with billions of active users worldwide and owns Facebook, Instagram, WhatsApp, and Oculus, among other products. The company has faced growing reports of its involvement in the spread of misinformation, hate speech, and other discriminatory and incendiary content on its platforms. This event is reflected in the Customers stakeholder. Meta receives the lowest score in the Customers stakeholder.
PG&E is the holding company for Pacific Gas and Electric Company, a public utility involved in the sale and delivery of electricity and natural gas in California. They became notorious nationwide in 2019 for the bankruptcy connected to its wildfire liabilities in California. In 2021, the state determined that PG&E’s alleged negligence sparked or contributed to regional wildfires that resulted in human deaths, widespread destruction of property, and endangerment of local communities. PG&E receives the lowest score in the Communities stakeholder.
Since our initial unique event treatment, there have been no substantial changes in business practices by any of the above companies that would result in the removal of this treatment. Barring any significant changes in business practices specifically related to these events, this treatment will remain in effect for a maximum of three years. If another event or development occurs after the three-year period, the event can be evaluated and, in appropriate cases, treatment can be reinstated.
As part of its 2024 Rankings, JUST Capital is proud to present its list of Industry leaders, or companies that receive the highest overall rank within each of our 36 industries.
Of this year’s 36 industry leaders, 23 companies remained the leaders of their industry, while 13 new companies moved in to take the industry leader spot this year. Below is the full list of industry leaders for 2024. Industry leader shifts can be explained by both improved year-over-year performance of individual companies as well as shifting industry compositions.
Among the industry leaders, the following saw the biggest increases in their rank.
This year, 32 out of the 36 industries were represented in the JUST 100: In other words, four industry leaders are not part of the JUST 100 this year, including Baker Hughes (111), CVS Health (126), eBay (143), and Cummins (123).
Though there are 32 industries represented in the JUST 100, some industries make up a higher share of the JUST 100 than others. There are:
Certain industries tend to perform better than others, on average. Companies in the Utilities and Semiconductors & Equipment industries rank, on average, the highest at 320 and 341, respectively. When breaking industry average rank down by the five Stakeholders, we find that:
Companies in the Restaurants & Leisure and Food, Beverage & Tobacco industries saw some of the largest average gains in rank, rising 115 and 82 ranks, respectively. Companies in the Consumer & Diversified Finance and Banks industries saw the biggest average declines, dropping 118 and 88 ranks, respectively.
For more information on our Rankings, to engage with us on our corporate initiatives, please reach out to us.
We are proud to release our JUST 100 list, in partnership with CNBC, today as part of the 2024 Rankings of America’s Most JUST Companies. Each year, we take our polling of what the American public most prioritizes when it comes to just business behavior – including paying a fair, living wage, creating jobs in the U.S., and supporting workforce retention and training – and see how the largest public corporations in the United States stack up.
This year, out of the 937 companies we ranked based on their performance across stakeholders, Hewlett Packard Enterprise (HPE) tops the list for the first time, with Bank of America, Accenture, Intel, Citigroup, Cigna Group, Ecolab, Elevance Health, Advanced Micro Devices (AMD), and Micron Technology rounding out the top 10.
We believe that business can play a role in creating an economy that works for all Americans, and that the evidence shows the best way to build and run a great business comes through a stakeholder-focused approach. Here are some ways that all stakeholders – workers, communities, customers, the environment, and shareholders and governance – are linked, as shown through outperformance of JUST 100 companies.
As of January 25, 2024, The JUST 100 Index (JUONE) that tracks the top 100 ranked companies outperformed the R1000 Equal Weighted Index by 38.4% since inception.
For this year’s Rankings, our survey research team asked a representative sample of 3,001 Americans to prioritize which Issues matter most. The following chart, pulled from our 2023 Issues Report, shows the probability that an individual would choose an Issue as most important to defining a just company, and serves as the weighting for this year’s Rankings.
Over the last seven years, Worker Issues have consistently commanded the highest share of priority among the 20 stakeholder-related issues we measure, and this year is no different. As you can see, four of the five Worker Issues – including paying a fair, living wage, supporting workforce training, protecting worker health and safety, and providing benefits and work-life balance – are among the top six priorities of the public, and the collective prioritization of all five worker issues comprise 42% of a company’s score this year.
And despite the ongoing political polarization in the U.S., Americans are united when it comes to just business behavior. Among every demographic group – liberal, conservative, high-income, low-income, men, women, young generations, older generations, and white, Black, and Hispanic Americans – the Workers stakeholder is the top priority. And for nearly all of these demographic groups, the most important Issue is “Pays workers fairly and offers a living wage that covers the cost of basic needs at the local level,” which comprises a significant 17.7% of companies’ scores in this year’s Rankings.
The second-highest ranked Worker issue, “Focuses on workforce retention and employee advancement by providing training, education, and career development opportunities,” now comprises 8.3% of a company’s score. In the past two years, we’ve seen the issue of retention and advancement steadily increase in importance among the public. It’s important to note that this increase occurs alongside the rapid evolution and adoption of AI by many employers, bringing fears of how his technology could replace, or diminish, certain jobs.
This year is HPE’s first time in the top spot, after being recognized as a JUST 100 leader every year from 2018 through 2024. HPE’s standout leadership on issues like having verified SBTi 1.5-degree Net Zero commitment, providing apprenticeship programs for caregivers and the formerly incarcerated, and ensuring both women and people of color earn 100% of what similarly situated peers earn, helped propel its performance.
CNBC will delve into the data, highlighting trends and spotlighting corporate performance stories about this year’s JUST 100 leaders across the network’s broadcast and digital platforms at cnbc.com/just100. Tune into Squawk Box at 8:15am EST on Feb. 5 to see our co-founder and chairman, Paul Tudor Jones join HPE CEO Antonio Neri, interviewed by Andrew Ross Sorkin.
