On Monday, June 8, we will be holding our latest Quarterly JUST Call featuring Bob Swan, CEO of Intel. We’ll be talking about some of Intel’s ambitious environmental goals – such as reaching 100% renewable energy and zero-waste by 2030 – and the efforts the company has made to keep its employees and communities safe through COVID-19.
Tune in to CNBC at 8:30AM ET for an interview with Andrew Ross Sorkin and the Squawk Box team, followed by an interactive webcast later in the day where we’ll unpack these policies in more detail.
To register for the interactive webcast, click here.
ABOUT THE QUARTERLY JUST CALL
The Quarterly JUST Call builds on the traditional quarterly earnings call, providing a platform for CEOs to speak directly with investors about the ways in which they are creating value for all their stakeholders – workers, customers, communities, the environment, and shareholders – over the long term. Specifically, it taps into growing demand for a high value, reputable channel for investors interested in ESG and sustainability, which represents over $12 trillion in AUM in the United States. Even amidst the crisis, ESG investing has remained a bright spot through the downturn, with investors pouring $12 billion into ESG funds in the first four months of the year.
The Quarterly JUST Call Schedule for June 8, 2020:
CNBC: Tune in between 8:30AM EST for the segment on Squawk Box.
Quarterly JUST Call Webcast: Join the live discussion from 4:30-5:00PM ET / 1:30 to 2:00 PM PT
If you have questions you’d like to submit for them to answer, please send them to corpengage@justcapital.com. Intel shareholders can use Say to ask and upvote questions for Intel CEO Bob Swan to answer during the quarterly call on June 8th, 2020.
At JUST Capital, we have always worked to engage corporate America in our mission of building a more inclusive, stakeholder-driven economy. That mission becomes simultaneously more clear and more complicated as the depths of the inequity in our economy are put on stark display.
This week, we had an in-depth discussion with JUST Capital board members Xavier De Souza Briggs, distinguished visiting professor at NYU and senior fellow at Brookings Institution, Dan Hesse, former Sprint CEO, and Alison Omens, our Chief Strategy Officer. Together, they unpacked key insights from the Forbes Corporate Responders List, which used our data to highlight what “good” can look like in dire times, and came up with ways we might just be able to emerge from this crisis with a more just and equitable economy for all.
You can view the full video below:
Karen Keogh is head of global philanthropy at JPMorgan Chase. (JPMorgan Chase)
By the time JPMorgan Chase’s Karen Keogh had her last day in the office on March 13, she knew that the coronavirus pandemic was going to reshape her role as the bank’s head of global philanthropy for the rest of the year.
“Pretty immediately we knew that this was going to have a significant impact on employees, communities, customers – everyone,” she told JUST Capital in a recent interview. Keogh and the leadership team recognized that philanthropy was going to play a major role in JPMorgan’s response to the pandemic, which would lead to an economic shutdown that saw more than 40 million Americans file for unemployment, at the latest count.
Under CEO Jamie Dimon, the team determined that $250 million would be deployed in communities, with $200 million set aside for low-cost capital for small businesses through Community Development Financial Institutions (CDFIs) in communities hit hardest by the crisis, and $50 million for nonprofits serving those communities.
The bank announced Wednesday that it was deploying the final $35 million of that $50 million portion, following an initial $15 million investment in immediate emergency relief, including medical supplies and funding for its nonprofit partners. The question for their relationship with those partners now, Keogh said, is “how do we make sure that they have the resources to continue to focus on this inclusive economic – now – recovery,” noting that we are in a new phase of the crisis.
JUST has focused its regular surveys of the American public on the corporate response to the crisis since March, and our survey from late that month found that nine in 10 Americans want companies to support the communities they operate in for the duration of the crisis.
Keogh said there was not a question of whether or not the bank would lend that support, and that it quickly tapped into crisis response protocols for that initial $15 million investment. Now, Keogh said, “Our top priorities are looking at vulnerable, hard hit individuals, folks that have lost their jobs, experienced reduced income, businesses that are teetering on closure.”
Examples of how the new $35 million round is being used include: $250,000 in emergency loans to small businesses in Atlanta; $1 million in educational and career resources in Chicago neighborhoods racked with job loss; $500,000 to fund coaching for struggling entrepreneurs of color in Columbus, Ohio; nearly $2 million across a variety of causes in Los Angeles and $1 million both Detroit and Washington, D.C.; $750,000 toward eviction and homeless prevention services in Houston; $500,000 to small business assistance in New Orleans; and $500,000 toward resources for workers of color in Seattle.
JPMorgan is deploying that capital through existing partners, specializing in assisting entrepreneurs and workers in low-income areas, many of whom advocate for minorities.
Last month, National Urban League president and JUST board member Marc Morial spoke to us about unequal access to adequate healthcare and business relief in minority, especially African-American communities. “These discrepancies in society have been with us a long, long time, and yet what COVID has done is shine a new light on it,” he said.
Morial also happens to be on JPMorgan’s AdvancingCities External Advisory Committee. In our April call, Morial was angry that relatively large public companies used existing relationships with big banks to receive the government’s Paycheck Protection Program funding intended for small businesses. It turned out that JPMorgan, as the country’s largest bank, had financed almost a third of those loans in question, and the bank and those companies received backlash. “It is inconceivable that these micro-enterprises can compete with the larger enterprises that have pre-existing banking relationships,” Morial told us in that interview, speaking to the situation in general.
Many of those public companies returned those loans in the face of public pressure and the government amended its PPP distribution guidelines to prevent a repeat scenario. Keogh said her team recognized Morial’s concerns, and pointed us to her team’s $200 million in low-cost loans, which includes $50 million for the New Development Council’s CDFI, the Grow America Fund.
Dimon addressed the issue in a public memo last week, as well, writing, “We know that many small businesses are at risk of being locked out of the resources they desperately need to stay afloat,” and he highlighted the firm’s commitment to communities in response.
He also shared the latest PPP results: “Since the beginning of PPP, we funded a total of more than $30 billion to over 250,000 businesses, helping to support more than 3 million employees. The average loan amount was roughly $122,000 and half of those loans went to companies with fewer than 5 employees.”
Under the leadership of Dimon, the Business Roundtable – a lobbying group of around 200 CEOs of America’s largest companies – released a statement last August that set aside its embrace of shareholder primacy in favor of a stakeholder approach. Critics debated the efficacy of a non-binding, arguably ambiguous letter, but it was nevertheless a decision that took a growing movement (that JUST has been part of) and accelerated it into the business mainstream.
When Dimon has talked or written about it, as he did in that recent memo or this year’s annual letter, the stakeholder approach is simple: If you forego maximizing short-term profits at all costs and instead invest in stakeholders like communities, you’re creating long-term value for all, including, of course, your shareholders.
And before he was using these terms to denote it, Dimon was building out this community element of the stakeholder approach through Peter Scher’s corporate social responsibility team, which Keogh joined as head of philanthropy in 2016. Over the past 12 years, the team gradually moved toward a new approach of corporate philanthropy, where money spent was understood as a philanthropic investment, with the return being not only increased goodwill in communities across America, but stronger localized economies in which to do business. It has in recent years approached both the scale and scope of top foundations.
JUST has found that JPMorgan Chase has taken this stakeholder commitment seriously. It ranked No. 1 among banks in last year’s JUST 100 list, and placed first among banks and ninth overall in the new Forbes Corporate Responders list, powered by JUST’s data on how America’s 100 largest public employers responded to the first phase of the coronavirus crisis.
As for what’s next, Keogh told us that a “COVID lens” will be placed over all of her work for the foreseeable future, given that building an inclusive recovery will take the rest of the year and potentially many months more.
The past few months have been instructive.
“We’ve learned that we have to be adaptable, that we have to look at the gaps of where folks may not be getting the support and help that they need, that bringing the full force of JPMorgan and the force of the firm is really critical and important, and that the business community and government working together is how we’re going to get through this,” Keogh said.
Forbes Uses JUST Data in a New Ranking of Top Corporate Responders to the COVID-19 Crisis
Mark Cuban: ‘Shareholders Come Last’ in the Coronavirus Crisis
Clockwise, from top left: Verizon CEO Hans Vestberg, JPMorgan Chase CEO Jamie Dimon, Anthem CEO Gail Koziara Boudreaux, PepsiCo CEO Ramon Laguarta, T-Mobile CEO Mike Sievert, and Bank of America CEO Brian Moynihan. (Verizon; JPMorgan Chase; Anthem; PepsiCo; T-Mobile; Bank of America)
As all 50 states are in some level of reopening and Americans are figuring out what the “new normal” looks like as the coronavirus continues to linger, it can be easy to forget how chaotic the first stage of the COVID-19 pandemic was.
At JUST Capital, our team immediately began watching how businesses responded, and built the COVID-19 Corporate Response Tracker documenting the activities of America’s 100 largest employers, responsible for 13 million livelihoods. Today, Forbes launched the “Forbes Corporate Responders” ranking as part of its “Greater Capitalism” cover feature based on 22 different metrics in our Tracker, including wage increases and bonuses, paid sick leave benefits, community relief funding, price reductions, and customer accommodations.
“The companies on our Corporate Responders ranking are unveiling policies in real time that can serve as inspiration for other organizations looking to navigate this unique moment and do right by their stakeholders,” said Randall Lane, Forbes’ chief content officer.
Each company received a rating of 1 to 5 on these metrics for the time period from the start of the pandemic in mid-March to May 7, with the average resulting in a final score. Verizon, Target, and AT&T took the top three spots.
“These companies are not without controversies,” Forbes’ Ezequiel Minaya wrote, noting that even some companies that made it into the top quartile of the 100 companies JUST tracks had concerning issues around worker safety, and that it remains to be seen if even those lauded today will maintain their dedication as the recovery unfolds.
What the ranking does capture is the large corporations that recognized the severity of an unprecedented crisis and adapted quickly, and often drastically, in the interests of stakeholder capitalism – doing whatever it takes now to ensure the long-term health of the company. The list is from a moment in time, but our team at JUST will not stop tracking and analyzing them and their peers. Our new COVID data will be integrated into our annual ranking of America’s Most JUST Companies, scheduled for release in October.
“The companies featured on this list have been incredibly responsive through this first wave of the crisis, and we hope that they will continue to demonstrate the same leadership as we move into attempting to reopen our economy while protecting the health and safety of workers and communities,” said JUST’s CEO Martin Whittaker.
Below is a collection of insights we received from the CEOs of some of the Forbes Corporate Responders. Please visit Forbes to see the ranking and read Lanes’ cover story.
“This is totally unprecedented and your actions have to be unprecedented. But we’ve remained steadfast in our commitment to our employees, customers, shareholders and society and have continued to make holistic decisions that have positive long term effects on all our stakeholders.”
“I am really inspired to see so many businesses step up to help all of us get through this together. At T-Mobile we have worked hard to do what is right for our customers, to protect our employees and to support our communities. Though I am grateful that the hard work of our teams is being noticed, this has not been about recognition. Our focus has been to keep our customers connected at a time where connectivity is more critical than ever.”
“We serve our customers, employees, and communities in good and tough times. Unfortunately, the COVID-19 crisis has exacerbated challenges facing the most vulnerable in society. We believe that business, government, and community leaders must work together to provide immediate relief to help those hard hit and advance solutions that create an inclusive recovery.”
“At Bank of America, we are committed to addressing this global health and humanitarian crisis by focusing on people – our teammates, our clients, and our communities. Our decade-long focus on responsible growth positions us well to help fight this war against the coronavirus, all while living our purpose to make financial lives better.”
“As part of Anthem’s coordinated response, we have increased access to care and treatment; made it easier for providers to focus on care delivery; and provided resources and relief to aid organizations all while ensuring the safety and wellbeing of our associates. Despite the uncertainty that remains, we see a tremendous opportunity to reimagine what’s possible for our company and for healthcare.”
“We are honored to receive this recognition at a time when many of our team members are on the front lines of the pandemic. They are providing an invaluable essential service at this time of immense societal need, and I am so proud of their genuine concern and caring. At Walgreens Boots Alliance, we are always focused on improving the world around us and helping our communities, according to strong ethical principles, and this commitment is now more important than ever.”
“With COVID-19 profoundly reshaping our lives, it’s important to acknowledge the heroic medical professionals keeping us steady during these turbulent days. At the same time, there is important work being done in other sectors, including our own, to help maintain the supply of foods and beverages around the world. We couldn’t be prouder of our PepsiCo team for the role they play, not only in restocking pantries and refrigerators around the world, but in reminding us that companies and communities are inseparably linked, and that when we work together we can meet any challenge.”
For additional details, check out our COVID-19 content channel where we continue to unpack what’s happening on the ground across corporate America, share weekly polling insights, elevate leadership and best practices, and demonstrate the resiliency of JUST companies to market dynamics.
Harvard Business School professor Rebecca Henderson is the author of “Reimagining Capitalism in a World on Fire.” (Evgenia Eliseeva/Harvard Business School)
When Rebecca Henderson began writing “Reimagining Capitalism in a World on Fire” two years ago, she could not have predicted that the second half of its title would feel so relevant upon publication.
Her new book is based upon the principles she’s taught in her popular Harvard Business School class on the subject since 2012. For Henderson, a “reimagined capitalism” is one true to its classical liberal roots, and exists as a balance between government and markets. She said it’s not about some utopia where workers, executives, and politicians come together “singing kumbaya,” but rather, where they recognize that an interplay of these parties, and not a domination of one over another, benefits all of society.
We checked in with Henderson ahead of one of the classes she’s been teaching virtually, and she was eager to speak about the ways the current coronavirus crisis has made her calls to action feel all the more urgent – it’s exactly what we’ve felt at JUST, as well.
She told us there were three aspects of the crisis that have stood out to her.
In her book, Henderson has an illustration that is deceptively simple, given how it’s contextualized by years of partisan battles: “Free Government” and “Free Market” is balanced by “Rule of Law, Free Press, Respect for Minority Rights, Real Democracy, A Voice For Labor.” The primary reason for a new version of capitalism, she believes, is that these two sides have not been balanced, but rather in a struggle, where each is the other’s enemy. And business has had the edge for decades.
As she writes, “The belief that government is actively destructive – that it means unresponsive bureaucrats, high taxes, and endless regulation – has thus been at least partially constructed by a more than 50-year campaign.”
For Henderson, this movement led to a U.S. that was unable to adequately respond to the threat of the virus. “Having the government capacity and the ability to say, ‘Oh my goodness, a pandemic, we need to move. We need to get the tests in place.’ I mean that’s the most obvious piece, right?”
“The second thing that jumps out is how a reliance on markets at inappropriate moments is just nuts,” she said. “And here my poster example is asking the states to bid against each other for vital emergency equipment.”
She’s not a socialist, of course – “I’m a professor at Harvard Business School,” she said, laughing, and thinks markets are great. But that we turned first to the markets to allocate resources like personal protective equipment, she said, is “like a fable for what’s wrong in our current moment.”
“The people we claim are essential are the people we hardly pay,” and are requiring to put their health at risk, Henderson said, noting how so many lack access to paid sick leave or adequate healthcare.
During the 40-year reign of shareholder primacy, workers became another piece of data, Henderson said. “COVID really lays out the limits of thinking of people as solely interchangeable units and not as human beings, treating them with dignity and respect as an integral part of the production enterprise.”
It goes against common sense, she said, and we need a spark that’s essentially, “Wait, wait, the goal of the whole system is to make people prosperous and free!”
Mark Cuban: ‘Shareholders Come Last’ in the Coronavirus Crisis
National Urban League president Marc Morial. (Courtesy of the National Urban League)
As the head of one of the oldest civil rights organizations in the United States, Marc Morial is focusing his attention on the needs of African Americans, and communities of color in general, throughout the coronavirus pandemic. It’s a crisis that has been disproportionately hitting these communities hardest in America.
Morial has been the president of the National Urban League since 2003, and before that was mayor of New Orleans. He’s also a board member at JUST. Through his career, Morial’s been able to successfully work with members of both sides of the aisles, and in a phone interview with JUST, he always explained how his suggested actions would benefit everyone – a healthier population with equal opportunity meant a stronger economy.
It’s why, as the country considers when to reopen the economy, he’s calling for large corporations to “do everything possible to protect their employees and save their employees’ jobs.” And after our call, he shared with us a draft of a letter he’s sending to big banks (the list of recipients was not finalized), in which he implores them ahead of a new batch of federal small business loans to reach out to minority communities and reduce barriers of access to these funds.
When asked if he thought the pandemic was a civil rights issue, as some activists have said, he said that the crisis has of course to be understood as universal, but it is indeed a matter of civil rights in that “it brings into focus the disparities of American life.”
“These discrepancies in society have been with us a long, long time, and yet what COVID has done is shine a new light on it, shined a spotlight on it,” he said.
Though the data from the federal Centers for Disease Control and Prevention (CDC) and state governments is incomplete, Kaiser Family Foundation report found, for example, that as of April 17, black Americans accounted for 34% of the reported cases of COVID-19. The foundation found similarly disproportionate numbers for Hispanic and Asian populations in some states, as well.
Morial said that minorities also have disproportionate representation, relative to population, in the jobs that have become “essential,” like frontline medical workers, grocery store staff, and civil servants. For African Americans, that exposure is coupled with a higher tendency for pre-existing conditions most severely affected by COVID-19, and on average less access to quality healthcare.
He also pointed to the controversy around the rollout of the first batch of the Paycheck Protection Program, where $243.4 million of the $349 billion went to public companies, including some with market caps of over $100 million and more than 1,000 employees. As the Small Business Association said ahead of the rollout of a new $310 billion batch of PPP loans, public companies have access to credit and capital that mom-and-pop businesses – the intended target of the loans – simply do not. It was a first-come first-serve rollout, and there were countless reports of small business owners across the country frantically unable to acquire a loan through a bank. JUST CEO Martin Whittaker wrote on LinkedIn that, “It is the definition of unjust business behavior to take money away from those that need it most.”
Morial pointed to analysis of U.S. Census Bureau statistics that found that 81% of all small businesses in the country have no full-time employees aside from the owner, and that the number was 90% for black-owned small businesses.
“It is inconceivable that these micro-enterprises can compete with the larger enterprises that have pre-existing banking relationships,” he said.
The extension of the government stimulus plan includes $60 billion earmarked for minority-run small businesses, which Morial is very happy about, but he felt compelled to write a letter to big banks.
Here are excerpts from the draft Morial shared with JUST, highlighting his calls to action:
“As our nation continues to grapple with the evolving economic fallout created by the COVID-19 pandemic, I write to express concern that our nation’s largest financial institutions are not adequately prepared to engage extensively with the nation’s minority-owned small business owners and the community-based infrastructure best positioned to support these small businesses. … I urge you to voluntarily release the lending, demographic, and revenue data of all of the small business owners whom your banks decide to extend current and future PPP loans, and to ensure that your institution is adhering to existing federal fair lending laws throughout the implementation of this program. …
“As the PPP loans are structured as a first-come, first-serve product with few guardrails, we remain concerned that this creates an easy-out incentive for lending institutions to prioritize their largest customers rather than businesses with the greatest need. I urge you to address this issue moving forward by implementing clear and transparent need-based triage requirements and to ensure that bias is not driving your institutions’ loan processing priorities. We endorse a best practice framework of tracking, compiling, and releasing to the public all PPP loan data on the race, ethnicity, and revenues of the small businesses that receive PPP loans from your institutions, as well as data on the number of loans rejected and the basis for that rejection. …
“While the most recent round of funding directed $60 billion … to lending institutions that provide banking services to underserved communities, including MDIs [Minority Depository Institutions] and CDFIs [Community Development Financial Institutions], it is no less important for your institution to take affirmative actions that illustrate a strong commitment to serving the many creditworthy small business owners of color in the communities in which your banks are chartered to serve. Moreover, during this time the provision of safe, affordable and productive banking account is more important than ever – and the data continues to show that Bank On accounts have the potential to attract new customers to the financial mainstream. To this end, we urge you to set aside resources for getting the word out through messaging applications and social media.
“In my view, our nation’s largest lending institutions now more than ever must embrace an ethos of inclusivity and community service. The double bottom line business axiom of doing well and good will be put to the test for institutions like yours during the coming months.”
Whether it’s the data point that according to the Federal Reserve, only 23% of black small business owners reported acquiring a loan, compared with 46% of their white counterparts, or that minority communities have less access to healthcare, Morial doesn’t want the coming days to see an argument over facts about the effects of institutional racism.
He said that the leaders of corporate America must not “go on ad finitum debate about whether they exist, but be willing to make a commitment to address them.” If companies care about racial inequities in the U.S., Morial explained – and they should, he noted, because even aside from the moral case, these inequities inhibit growth across the entire system – they will take action. It’s in the hands of big banks to assist the government in reducing barriers to loans, but all leaders, regardless of their industry, can prioritize, above all else, their workers’ health as they navigate the crisis and plan a recovery. “Reality, the more you ignore it, the worse the situation gets,” he said.
