Corporate Climate Pledges Proliferate  

Yesterday was Earth Day, so naturally we’re focused on how corporations are meeting their environmental commitments. Our 2021 Rankings of America’s Most JUST Companies, based on disclosed performance data in categories like emissions, air pollution, waste, recycling, and renewable energy usage, are a good place to start. Dell, AptarGroup, IBM, Mastercard, and Microsoft stand out, as showcased on a segment last night on CNBC’s The News with Shepard Smith. You can see the top 10 performers on our website.

Of course, climate is the defining environmental challenge of our age. At the White House yesterday the Biden Administration pledged to cut U.S. carbon emissions by around 50% (from 2005 levels) by 2030, and tied the goal to the creation of “good paying union jobs” and U.S. leadership on clean technology. According to John Kerry, Biden’s climate envoy, “U.S. banks have committed $4.15 trillion to finance low carbon projects by 2030, while U.S. asset managers have made more than $19 trillion in commitments.” House Republicans, led by Minority Leader Kevin McCarthy of California, rolled out a climate change platform of their own – there’s a strong debate over how to tackle climate change, but whether it’s worth doing so is no longer a question.

For corporations, however, bold action on climate is already a must. Net-zero commitments – essentially, a promise to balance GHGs emitted with GHGs removed and/or avoided – are everywhere. We counted at least eight in the last month, including Visa, Vanguard, BlackRock, Etsy, and PayPal. Ford Motor Company, for example, has set a target of becoming carbon neutral by 2050, and is investing more than $11.5 billion in electric vehicles through 2022. Others are joining the Open Source Climate initiative to “solve data & analytics challenges required for investment to achieve Paris Climate Accord goals.” Increasing attention is even being paid to the emissions intensity of cryptocurrency mining, and the establishment of the Crypto Climate Accord.

As we’ve reported here before, the role of the SEC, now that Gary Gensler has been confirmed as Chair, as well as activist investors, will be critical in driving (and enforcing) disclosure standards on climate risk and emissions, as well as holding companies to account on ESG more broadly. Shareholder proposals demanding disclosure around climate-related lobbying are way up – 13 already compared to last year’s four – and the year’s biggest proxy battle, between Engine No. 1 and ExxonMobil will come to a head on May 26th (you can read highlights from my interview on this with Charlie Penner from Engine No.1, and Aeisha Mastagni from CalSTRS, here). It feels like we’ve reached an inflection point.

Be well,
Martin Whittaker

This Week in Stakeholder Capitalism

Chipotle has expanded its debt-free degree program to include degrees in Agriculture, Culinary, and Hospitality for qualifying employees.

Goldman Sachs discloses workforce demographic data for the first time, revealing that out of its 1500 executives, only 49 are Black.

GM is instituting a new remote work plan for employees. Its guiding mantra for how to use it? “Work appropriately.”

JPMorgan Chase has set a goal to fund $2.5 trillion in initiatives to combat climate change over the next 10 years. Citigroup will also back $1 trillion in similar efforts over the same timeframe.

PepsiCo is expanding its regenerative farming programs to 7 million acres, or roughly all the land used to grow crops for its products.

Salesforce calls for mandatory climate disclosures for U.S. companies as part of its 2021 Stakeholder Impact Report.

State Street is joining other investment firms in pushing for net-zero emissions by 2050 among its portfolio companies.

Walmart is moving more of its employees to full-time work and creating more consistent scheduling in order to improve retention.

What’s Happening at JUST

Our Corporate Racial Equity Tracker has been picking up steam in the media, including an appearance on Cheddar, inclusion within an important round of corporate accountability actions by Bloomberg, in a session with NBC NY exploring how “Leaders Need to Create Brave Space, Not Safe Space, for Diversity and Inclusion Conversations,” and a deep dive by Triple Pundit.

The Forum

(State Street Global Advisors)

“COVID was the pop quiz for existential crisis, and climate change is the final exam.”

  • Cyrus Taraporevala, CEO of State Street, speaking on a Ceres webinar on the future of climate

“When corporations talk to policymakers, talk to Congress, and say, ‘We are trying our best to address the climate crisis here’s what we need from you as far as a policy framework,’ that is really powerful…Corporations say ‘No, actually, go faster.’ That is transformational.”

“We’re not trying to say it’s time to shut off the pipes and start putting solar panels up on the roof. We understand Exxon is an oil and gas company and will be for quite some time. This is about where their long-term trajectory is headed.”

  • Charlie Penner of Engine No 1, explaining why they’re pushing a shareholder campaign against Exxon Mobil in our latest LinkedIn Live

“The largest financial players in the world recognize energy transition represents a vast commercial opportunity as well as a planetary imperative. As countries around the world move to decarbonize, the large sums these institutions are dedicating to climate finance also reflect a growing understanding of how critical a low-carbon global economy is to their business models. Ultimately, their commitment… will accelerate the transition to this new economy, create a massive number of new jobs, and increase our collective ability to tackle the climate crisis.”

  •  John Kerry, U.S. Special Presidential Envoy for Climate, speaking on a Ceres webinar on the future of climate

Must-Reads of the Week

Fortune’s CEO Daily featured a collection of CEO statements in response to the Derek Chauvin murder conviction, acknowledging the ongoing road ahead to combat racism in America. Quartzanalyzed them, reporting that 21 of the 200 largest U.S. companies made a statement, with half made directly by CEOs or other senior executives.

A group of 140 racial justice leaders called on asset managers to ensure their votes in the 2021 proxy season follow through on their recent statements in support of racial justice via five key actions, from opposing all white boards to supporting shareholder demands for racial equity audits.

The Financial Times reports on Chipotle’s earnings call this week, where CFO John Hartung shared that the company is ready for wage increases, saying “So all of that is very, very manageable. And we feel like if there is going to be significant increased inflation because of market-driven or because of federal minimum wage, we think everybody in the restaurant industry is going to have to pass those costs along to the customer, and we think we’re in a much, much better position to do that than other companies out there.”

For some Friday feel-good news: The Hill reports that the CEO of Gravity Payments – who famously gave every employee a $70K minimum salary – has tripled the company’s revenue since the move.

Axios posits that the boom in bond issuance and buybacks is the latest example of how “the Fed’s policies are underpinning and perpetuating economic inequality and the K-shaped recovery.”

Chart of the Week

This week’s chart takes a look at an intriguing correlation we found in our data – that companies with diversity and inclusion policies and targets also tend to produce less greenhouse gas emissions. We unpack what this could mean here.

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