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The JUST Report: How Will Stakeholder Capitalism Fare Under a Biden Administration?  

Photo by Adam Schultz

When last week’s newsletter went out, we were a day away from the AP calling the election for Joe Biden. It’s worth noting that Biden will be the first president to embrace “stakeholder capitalism” by name. As I told Business Insider for a Q&A on the subject, the president-elect will find a private sector poised to step up, an investment community increasingly on board, and an American public substantially united behind the idea. Importantly, the Business Roundtable and other business groups have already signaled their intent to work with a Biden administration, and sent a clear message. “Our country faces great challenges in the months ahead to defeat the pandemic and rebuild our economy,” the BRT wrote. “We will meet them only by working together.”

Critical to doing this is rethinking how business and government might work together. The traditional model holds that public and private sectors are locked in a constant struggle, with the pendulum swinging between regulation and taxation on the one side, and free enterprise and profits on the other. For the good of the country, this has to change.

What’s needed now is a new vision for harnessing the power of the private sector to tackle society’s most intractable problems. That vision is stakeholder capitalism. To be clear, this is not about partisan politics. And it’s not about socialism, wealth redistribution, or regulatory reform. It’s about incentivising companies to create meaningful, lasting value for all their stakeholders and in doing so, growing the pie for everyone. One thing that is crystal clear from our research during 2020 is that whereas the United States is still very much divided politically, when it comes to what we want from the economy we are on the same page: good jobs, fair pay, a liveable wage, the right to be treated equitably and with respect, strong communities, a clean environment, and a path to upwards economic mobility. These are the hallmarks of a just economy, and in that, the public, business and government can be united.

The Biden Administration has a once-in-a-generation opportunity to chart a new, better, more inclusive course for capitalism. Brad Smith, president of Microsoft, three-time America’s Most JUST Company, phrased it perfectly in his open letter to the president-elect; “we believe that Americans share more common ground than many pundits acknowledge,” noting, “there is an opportunity to separate policies from politics so we can make a real difference in people’s lives.”

The American people agree.

Be well,
Martin Whittaker

This Week in Stakeholder Capitalism

Amazon pledges to double its number of Black leaders this year and ban non-inclusive language from documents.

Estee Lauder announces that it has achieved net-zero emissions ahead of schedule, sourcing 100% renewable energy globally for its direct operations.

VF Corp acquires the clothing brand Supreme for $2.1 billion.

Twitter announces a $100 million investment in community development financial institutions (CDFIs), in a new initiative aimed at combating “racial injustice and persistent poverty.”

Whole Foods’ CEO defends its wage transparency policy, explaining how it provides employees with a path to move up the ladder by working harder.

JUST Events

Join Martin Whittaker, Byron Loflin, and David Motley – President & CEO, MCAPS LLC, and Founder of the African American Directors Forum-Pittsburgh – for an engaging conversation around racial diversity in the boardroom, the rise of stakeholder capitalism in improving diversity and inclusion, and more. Register here to join the conversation.

Our own Steffen Bixby will be speaking at Pittsburgh CFA Society along with members from Goldman Sachs on ESG Investing Strategies. Sign up to join here.

What’s Happening at JUST

Martin spoke to Marguerite Ward at Business Insider on what a Biden presidency might mean for stakeholder capitalism, ESG regulations, and more. 

Last week, NYSE and JUST Capital joined forces for a virtual event exploring how companies and investors can lead in building a more just and inclusive economy that works for all Americans.  Watch the replay here.

At the Forbes JUST 100 Virtual Summit we discussed why worker financial wellness must be a priority for corporate leaders, now more than ever, in conversation with PayPal CEO Dan Schulman, JUST Capital Co-founder & Chairman Paul Tudor Jones, and Chief Strategy Officer Alison Omens. View the talk and key takeaways here.

Must-Reads of the Week

Quartz is going independent once again. Their mission? Make business better.

Yahoo Finance reports that in a stark shift from just a few years ago, companies are three times more willing to hire remote workers.

Chart of the Week

Our latest ESG Chart of the Week comes from Bloomberg Green. As companies increasingly face the prospect of needing to incorporate carbon emissions and emission reductions when doing internal cost-benefit analysis for new projects, Bloomberg takes a look how they’re dealing with decarbonization targets.

Have questions about our research and rankings?  We want to hear from you!