Hello everyone – Alison here, filling in for Martin.
The ESG blowback is here, and it’s real. So it’s more important than ever that those of us working to measure what matters ensure that we’re identifying real leadership, and we’re using that assessment to encourage change for stakeholders, and in our case, on the issues most important to the American people.
So that’s our lens as we release a new ranking encapsulating many people’s top issues, from wages to career mobility and diversity, equity, and inclusion. The list, supported by the Annie E. Casey Foundation, is looking at which companies are walking the walk when it comes to building equity and upward mobility for their workers. Salesforce, Mastercard, Microsoft, and Bank of America are at the top.
We’ll be spotlighting leadership examples over the next few weeks, and we started with an interview with Bank of America’s head of DEI, Cynthia Bowman. Bowman said BofA defines success when it comes to equity and mobility as, “about creating processes that diminish bias, allow you to promote within, generate more inclusion in our everyday practices from the time you hire, how you onboard, how you conduct calibrations, how you retain talent, how you recognize talent, and how talent leads your organization.”
Our team also talked to HBS Professor George Serafeim about his new book, “Purpose and Profit,” out this week (JUST makes a couple cameos). He’s the leader of the Impact-Weighted Accounts Project at HBS, which develops an evolving set of principles that measure the business impact of nonfinancial metrics – in other words, making sure there’s real impact behind the metrics. “As a society, do we want the people that manage not only financial capital, but also human, natural, social, and intellectual capital, to be accountable for their impact on all of those elements? That’s the only way to have actual meritocracy,” he told JUST in an interview.
Have a great weekend,
This Week in Stakeholder Capitalism
Chipotle to pay $20 million in a settlement with NYC over violating scheduling and sick-leave laws.
Eli Lilly, Cummins and other Indiana-based companies criticize the state’s new abortion ban, with Eli Lilly stating that it will “be forced to plan for employment growth outside of the state.”
Ford announces that by 2025 every vehicle manufactured in Michigan will be assembled with the equivalent of 100% carbon-free electricity, 10 years earlier than its global goal.
H&M faces a class-action lawsuit over its misleading product environmental impact scores.
What’s Happening at JUST
With support from the Annie E Casey Foundation, we released our 2022 Workforce Equity and Mobility Ranking. Salesforce, Mastercard, Microsoft, and Bank of America are at the top – see who else is leading the way inside. Alongside the ranking, we did a deeper dive into the individual hiring practices and career development policies of the leaders to see what best practices can be learned. Read that analysis here.
Speaking of mobility leaders, we had Cynthia Bowman, Head of Diversity & Inclusion at Bank of America, give us a closer look at how the company is broadening its employee base through smart, inclusive hiring practices. We also talked to HBS Professor George Serafeim about his new book, “Purpose and Profit,” out this week, and about many of the latest ESG controversies.
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(Bank of America)
“This process starts at the top, with our board of directors and CEO. Our CEO and management team set the diversity and inclusion goals of the company. Each management team member has action-oriented diversity goals, which are subject to our quarterly business review process, talent planning and scorecards reviewed by the board. … [O]ur skills-first and knowledge-based hiring approach trump any degree requirement and allow for more equitable hiring practices for traditionally marginalized groups.”
- Cynthia Bowman, Head of Diversity & Inclusion at Bank of America, explaining to JUST how hiring for skills over degrees and having buy-in from the top helps them diversify their employees and give opportunities to more people.
“I can actually see why somebody like Elon Musk would be very frustrated if a best-in-class framework ends up with a portfolio that includes an oil and gas company and excludes Tesla, where he would be like, ‘What are you talking about?’ Tesla is certainly a firm that I would include in a sustainable investing portfolio. While they need to work on the ‘S’ and the ‘G’ sides, the potential impact of the “E” effect seems to me to be an overwhelming one.”
- George Serafeim, Harvard Business School Professor, explaining in our latest JUST Interview why he understands Elon Musk’s anger at Tesla’s exclusion from S&P’s flagship ESG fund.
“I don’t like the idea that if you’re a Republican, you have to bank with this company, and if you’re a Democrat, you have to bank with that company. We already have a lot of divisions in this country.”
- Noah Friend, a Republican lawyer who previously worked for Kentucky’s treasurer, responding to the push to ban climate action in several states by blocking investment firms from doing business with companies divesting from coal.
Must-Reads of the Week
The New York Times discusses the uneven impact of the inflation between high- and low-income households and the challenges the Fed faces in trying to tamp down inflation without causing a painful recession where “poorer families will almost certainly bear the brunt again, because low-wage workers are often the first to lose hours and jobs.”
Morningstar’s global head of sustainable investing research, Jon Hale, writes it’s time to “cut through the nonsense around ESG” and focus on three key points relating to communication, approaches, and desired impacts.
The Wall Street Journal investigates why the gender pay gap appears so early – often within three years of men and women gaining their first job.
With Nasdaq’s board diversity rule set to in effect this month, Fortune looks at why it’s a great first step instead of a gold standard.
Chart of the Week
This chart from Morning Consult shows an interesting issue with strategic communications regarding key environmental issues – a majority of U.S. adults have no idea what “carbon-neutral” means, despite significant commitments from corporations across industries to push towards it.