The JUST Report: Latest Returns Data Make Powerful Case For Just Investing
This week, we saw some powerful numbers that support the investment case for just business leadership.
First, our own data. As of June 30, 2024, our flagship broad-based index of top companies in every sector – the JUST U.S. Large Cap Diversified Index – has out-performed the Russell 1000 cap-weighted benchmark by 1.5% year-to-date and by 13.8% since its inception almost 8 years ago. The JUST 100 (the top 100 companies in our overall rankings) has outperformed its benchmark by 6.7% this year and by 44.8% since its launch in 2019. The spread between the top 10% and bottom 10% of companies in JUST Capital’s rankings is especially impressive, and we’ll be releasing those numbers soon. As a reminder, these are companies that, compared to their peers, invest more in workers, pollute less, give back to communities more, create more jobs, and do right by all their stakeholders. Companies that are more just, in other words.
Second, a new report this week by Bain & Company determined that over a 10-year period, companies in the S&P 500 that created the most value for customers, employees, suppliers and communities also had the highest shareholder returns. The chart below summarizes the data so I won’t repeat it here, but it makes a compelling case for stakeholder value creation.
Finally, a word on fund flows. Even with ESG seemingly in decline and out of favor, it was fascinating to read in Axios this week that ESG funds made up 21% of all alternative capital raised this year as of April. Whereas US ESG stock-market funds saw $8.8 billion of outflows in the first three months of 2024 (and $13.2 billion of outflows in 2023), U.S. alternative asset firms raised $27 billion for ESG funds in 2023, and another $17 billion in the first four months of 2024. European firms reportedly raised $98 billion in total over the 16 months.
For investors, the search for superior risk-adjusted returns transcends pretty much everything. Whether it’s in more passive index investing, active trading, or strategic alternatives, applying a just, stakeholder-based lens can be the key to future success.
Be well,
Martin
Quote of the Week
Rather than our traditional “Quote of the Week”, we want to highlight that in the wake of the assassination attempt on former President Trump, CEOs across sectors are speaking out on what this means for America, the election, and business. Read anonymous interviews from Fortune or a collection of statements from Axios.
JUST Events
August 6th 2024: Investing in Care: Proving the Payoff of Caregiving Benefits
Join us for a candid discussion about the challenges and opportunities of investing in caregiving benefits and potential payoffs for doing so. How are companies currently leading on caregiving benefits? What do you need to know about your workforce to create quality offerings? Learn first-hand from a company’s journey to significantly expanding their caregiving benefits.
Speakers:
Donnebra McClendon, Global Head of Culture and Inclusion, Dayforce
Joseph Fuller, Professor of Management Practice, Harvard Business School
Nicole De Santis, Partner, BCG
Ashley Marchand Orme, Director of Equity & Stakeholder Leadership, JUST Capital
JUST AI
Fortune looks at how, across the board, bosses and employees differ in their perception of how much time and productivity will be saved by AI.
PwC estimates that AI will add over $15 trillion to the global economy in 2030, through productivity increases and consumption-side effects. Learn more here.
Must Reads
Axios reports that The Society for Human Resource Management (SHRM) dropped the word “equity” from DEI strategy, stating, “by emphasizing inclusion-first, we aim to address the current shortcomings of DE&I programs, which have led to societal backlash and increasing polarization.” While DEI continues to be under fire, USA Today reports that the majority of companies are standing by their commitments.
Similarly, Axios argues that ESG is not going away.
Marathon Oil agrees to pay $64.5 million in fines for violating the Clean Air Act, the largest penalty of its kind so far. The Washington Post has the full story.
Good news: There are fewer low-wage workers in America than ever before. Axios has the story.
Chart of the Week
This chart comes from a 10-year study from Bain & Company that found that companies that saw high financial value and high stakeholder value delivered the highest shareholder returns. Explore the data here.
