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
Twice this week, JUST friend and Fortune Media CEO Alan Murray wrote about how challenging it is for CEOs to navigate today’s highly politicized world. JUST Board member Alan Fleischmann was quoted as saying “The CEO has to be able to articulate how he or she leads in this environment.” A hat tip to Alan, and to take it one step further: CEOs also need to be able to convincingly articulate how their strategy fits into their overall business strategy.
This is where our work comes in. Our Annual Rankings show which companies are making meaningful investments in their stakeholder leadership. And the platform we’ve created, as well as the stakeholder framework that underpins it – backed by 9 years of polling, 8 years of corporate performance data and over 1.3 million individual data points – cover many of the critical stakeholder issues that matter to CEOs today. It serves as a dynamic roadmap that can help any corporate leader navigate today’s political waters and take action on the things that matter most.
Throughout it all, the connection to financial performance remains pivotal. According to a piece released this week by Mona Patni, our quantitative financial analysis lead, “JUST Capital found that two of the five stakeholders we track delivered positive performance in Q4 2023. Over the longer term from January 2018 to December 2023, the leaders in corporate stakeholder performance across all five stakeholders have outperformed the laggards by 66.6% as measured by JUST Overall Score.”
With the pushback on ESG and ‘woke’ companies now maturing, we think there is room in America today for a more objective, data-driven framework that supports values-led business leadership, drives positive societal change and connects directly to business strategy. In other words, we think JUST’s time has come.
Be well,
Martin
“Media headlines about the creation and then elimination of corporate diversity, equity, and inclusion (DEI) positions at Big Tech companies have generated plenty of buzz. This kind of coverage can raise doubts about whether companies are committed to DEI in the long term. But these headlines aren’t telling the whole story […] In fact, our recent ‘Expanding Equity retrospective report’ suggests the opposite. Companies are doubling down on DEI as an essential part of their business strategy.”
CNBC Correspondent Sharon Epperson highlights our latest corporate data around diversity, equity, and inclusion policies in two on-air spots as part of the network’s ongoing coverage of the JUST Rankings.
On the podcast “Purpose 360,” hosted by business and nonprofit consultant and former Global Practice Chair of Edelman Business Carol Cone, JUST CEO Martin Whittaker explores JUST’s recently released 2024 Top 100 Rankings.
In his podcast, “The Mentor’s Radio,” JUST Capital Board Member Dan Hesse – former CEO of Sprint and current chairman of Akamai Technologies – discusses employee ownership and its contribution to economic justice and American competitiveness.
JUST Capital re-promotes its analysis on companies supporting diverse pipelines through investments in Historically Black Colleges and Universities. Separately, JUST Quantitative Research and Analytics Lead Mona Pati pens our latest review of quarterly stakeholder performance.
NVIDIA skyrocketed to a near $2 trillion-dollar market cap this week, riding the success of its expanding AI-focused chip production. Meanwhile, Google is working to fix its Gemini AI technology after it produced historically inaccurate images, which CEO Sundar Pichai has called “unacceptable.”
There’s pushback against the ESG pushback. This week Axios reports that a major climate advocacy group is launching a campaign to push back on the growing anti-ESG rhetoric, starting first in Arizona, which has become a hotbed of anti-ESG investing bills.
With companies fearing headlines about layoffs, more and more employers are turning to “quiet firing” – actively making employee jobs worse to encourage them to leave. Business Insider runs down the ways companies are trying to force employees out without having to explicitly lay them off in this recent piece.
It’s not just you – CNBC reports that Americans are spending the biggest share of their income on food in three decades due to grocery prices that just won’t fall. Data For Progress confirms that when voters say they are worried about the economy, their concern is almost entirely concentrated on the price of groceries. And while consumers wait for falling prices, many companies are actually fearing the drop.
Axios takes a close look at a major cybersecurity attack that affected the ability for millions of Americans to get their prescription medicine, revealing a major technology weakness in the healthcare industry that major companies are struggling to deal with.
Sony Playstation is laying off 8% of its workforce this week, joining a sweeping wave of layoffs affecting the video game industry. As of now, the first two months of 2024 have nearly matched the entirety of 2023 in layoffs.
This chart comes from our latest review of quarterly stakeholder performance. In Q4 2023, two of the five stakeholders we track delivered positive performance, and the Customers stakeholder delivered the strongest performance with a long-short spread of 3.01%. Dive deeper here.
On Monday, February 5, JUST Capital and CNBC unveiled the 2024 JUST 100. The comprehensive list spotlights America’s Most JUST Companies by analyzing how companies comprising the Russell 1000 perform across the 20 Issues the American public believes corporations should prioritize in their business practices.
The event, which took place at the NASDAQ MarketSite and was sponsored by the Stakeholder Impact Foundation and BCG, opened with introductory remarks from JUST Capital CEO Martin Whittaker and a speech from Sushmita Banerjee, Senior Partner and Managing Director at Boston Consulting Group (BCG). Two panel discussions followed. The first featured a macro-level conversation between JUST Capital co-founder Paul Tudor Jones II alongside Hewlett Packard Enterprise (HPE) CEO Antonio Neri, moderated by CNBC’s Andrew Ross Sorkin. JUST Capital’s President Alison Omens then moderated the second panel with HPE Board Chairman Patricia Russo, Avangrid CFO Justin Lagasse and Accenture’s Northeast Market Unit Lead Stuart Henderson where they discussed in further detail what just business behavior actually looks like, what are the challenges and tradeoffs that companies face.
Banerjee set the tone for evening speaking about what she has seen working with some of the most successful companies in the world. “Just companies – in my experience – have leaders who exercise their responsible, ethical muscles every day, versus waiting for their grand moment where they could prove to the world they are doing something great,” she said.
Just actions, Banerjee said, lead to something every business needs to thrive: trust. She highlighted BCG’s Trust Index as an example of how companies can measure and decode trust among stakeholders by focusing on four dimensions: competency, fairness, transparency and resilience.
The companies that top JUST’s rankings prioritize building trust across stakeholders and their business performance benefits. ”When we look at the top 100 companies in JUST’s database, what we see is that they generate 2.5x more value than comparable businesses—their valuation multiples are also up to 47% higher,” Bannerjee said.
Sorkin kicked-off the first panel conversation by prompting Jones to reflect on how far the conversation around stakeholders in American business has come over the last decade.
“If you rewind to 2014, no one would even know what stakeholder business meant,” Jones told the panel. “There was nothing but shareholder governance at that point in time. Of course that was why business was very narrowly focused on nothing but profits. That is one of the reasons why we started JUST Capital.”
Turning to Neri, Sorkin gave the HPE CEO an opportunity to speak on why his company was able to secure the number-one spot in JUST’s 2024 rankings. This year is HPE’s first time at the top of the list after being recognized as a JUST 100 leader every year from 2018 through 2024.
“Our job is to create value and my measure of value is not just shareholder value,” Neri said at JUST’s 2024 Leadership Summit on Monday. “It’s about value for the people who participate in the ecosystem where we deliver business results or other types of outcomes for our customers and employees. Ultimately, stock price is a reflection of how you do things and what you deliver. One of the sayings we have at the company is ‘you have to win the right way.’”
The discussion delved into the correlation between this inclusive approach, business success, and positive societal impact. Additionally, Jones emphasized the need for other companies to adopt a similar mindset, underlining the significance of leadership in today’s dynamic economic and social landscape.
The second panel focused on the strategic investments C-suite leaders have undertaken that have led to top-ranking performances. HPE Board Chairman Patricia Russo, Avangrid CFO Justin Lagasse and Accenture’s Northeast Market Unit Lead Stuart Henderson gave practical examples to illustrate how they approach prioritizing stakeholder value to achieve business success.
“It’s really important that boards have clarity around what a reasonable timeframe is and I want to use an example from Merck,” Russo said. “There was a time when Merk’s TCR was not competitive with other pharma companies, because Merck had decided–as a company committed to science–that they were not going to cut back on R&D in order to get their profits up, they were going to continue to invest in medicines. And today, Merck has the largest cancer drugs on the planet as a result of what they invested in and their stock is now trading at $126 a share. So there is a time-horizon around when value creation for shareholders is the natural follow-on to all the other good things you’re doing for people, customers and communities.”
By aligning their strategies with the values prioritized by all of their stakeholders, these leaders exemplify the potential for businesses to thrive while making meaningful contributions to society. The emphasis on stakeholder value creation showcased the alignment between business success and ethical decision-making, reinforcing that a just approach is morally sound and strategically advantageous in the long run.
When asked what their advice would be to other companies, the panelists each provided their own poignant perspective. Henderson encouraged leaders to steer clear of politics and lean into the business case for transparency, diversity and sustainability, which would deliver good outcomes for shareholders and stakeholders. Lagasse rounded out the panel with a reminder to keep it simple—over-complicating how to empower and enable stakeholders to thrive is where the disconnect comes from. Russo emphasized the importance of focusing on managing human capital just as well as financial capital.
“I don’t get into debates about DEI,” Russo said. “I think the pushback is based on a myth of what it is. If you have a conversation with someone who is rational and intelligent, and you say, ‘Do you believe that different perspectives lead to better discussions?’ the answer will be yes. ‘Do you believe in a work environment where people feel like they can come to work and they can be their best selves because they are part of a team and valued?’ Absolutely. ‘Do you believe we should pay people fairly and the same for the same work?’ Oh, absolutely. Okay, well that’s DEI.”
On Monday, JUST Capital and CNBC announced that Hewlett Packard Enterprise (HPE) took the 2024 title for America’s Most Just Company. For HPE CEO Antonio Neri, the recognition is evidence of his team’s meticulous work to deliver positive outcomes on worker, environment, community, and other issues Americans care most about. Neri underscored it’s all about results.
“Our job is to create value and my measure of value is not just shareholder value,” Neri said at JUST’s 2024 Leadership Summit on Monday at the NASDAQ. “It’s value for the people who participate in the ecosystem where we deliver business results or other types of outcomes for our customers and employees. Ultimately, stock price is a reflection of how you do things and what you deliver. One of the sayings we have at the company is ‘you have to win the right way.’”
HPE blazed past its peers and other industry leaders in JUST’s rankings of the Russell 1000 (approximately 937 companies when you account for mergers, acquisitions, and delistings). While HPE has been in the JUST 100 every year from 2018 through 2024, this is HPE’s first time in the top spot.
The company’s standout leadership on issues like fair pay, climate change, and offering apprenticeship programs, such as its Cyber Career Reboot program, helped propel its performance. Other notable data points include the following:
“I take great pride in HPE’s recognition as a leader by JUST Capital on the issues vital to Americans,” Neri said in a previous statement. “Our purpose is to advance the way people live and work, which is evidenced in our commitment to reducing environmental impacts throughout our value chain, supporting our team members with exceptional benefits and talent programs, and investing in our communities and supply chain.”
During a panel discussion on Monday, Neri and JUST Capital co-founder and chairman Paul Tudor Jones responded to questions about the recent pushback against ESG, and underscored that stakeholder issues aren’t about politics, but about promoting better long-term business practices.
“I differentiate between just behavior and ESG, because they do overlap in part, but they are really different,” Jones said. “What we’re doing with our rankings is reflecting what the American public says.”
Neri said he plans to continue investing in areas that JUST Capital ranks, saying it’s good for shareholders, as well as other stakeholders.
That assumption is buoyed by real financial data. The JUST 100 Index has beaten the Russell 1000 Equal Weighted Index by 38.5% since inception and 3.1% YTD. And JUST’s worker-focused index – meaning companies that rank most highly on worker issues – has outperformed the Russell 1000 Equal Weighted Index by 103.75% since 1/1/2018.
“It starts with a purpose,” Neri said on Monday. “What is our purpose? Why do we come to work every day? That purpose is to enhance the way people live and work. And how do we do that? By engineering an experience that will unlock your full potential, whether you are a business, shareholder or employee.”
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.
