(Christopher Furlong/Getty Images)
As the first week of COP26 draws to a close, it’s becoming clear how much the conversation has shifted to incorporate the financial and corporate worlds.
Former Bank of England chief Mark Carney announced that his Glasgow Alliance for Net Zerohas as much as $130 trillion committed to hitting net zero carbon emissions by 2050. The group comprises “more than 450 banks, insurers, and asset managers across 45 countries” and includes top JUST performers Bank of America, BlackRock, and Citi. Janet Yellen, the first U.S. Treasury Secretary to attend COP, said that the private sector needs to play a bigger role, and sent a clear message: climate change is an economic issue, and the costs of insufficient action far outweigh the investments needed for an energy transition, for both governments and business alike. “Private capital is essential to our success,” she said, adding that as the U.S. government, investors, and corporations make progress, job creation will be paramount.
As I mentioned last week, corporate climate policy standards are seen as being critical to achieving these broader goals. A new piece from JUST’s Laura Thornton shows why even though companies like COP sponsors Microsoft and Salesforce can make impressive climate-related commitments, proprietary terminology and reporting makes it impossible for investors and other stakeholders to fully compare where they stand in relation to each other.
This is gradually changing. Building on last week’s net zero standard announcement from SBTi, the International Sustainability Standards Board launched yesterday and said it is consolidating existing major frameworks (VRF, SASB, the IIRC and the CDSB) into a single reporting body to serve regulators and investors around the world.
Building confidence in corporate reporting – not just on climate, but on all stakeholder performance issues – is critical. The market can only begin to reward (and punish) companies for their actions when the results are both seen and also believed.
This Week in Stakeholder Capitalism
Apple adds 100 more suppliers committed to using clean energy, helping it get closer to a carbon-neutral supply chain by 2030.
Citigroup announces a $1 billion social finance bond to advance social initiatives globally.
Colgate-Palmolive announces a EUR 500 million 8-year sustainability bond to support its 2025 sustainability and social impact strategy.
Facebook plans to shut down its facial recognition system and delete the face scan data of more than one billion users.
McDonald’s workers strike in 10 cities to combat workplace sexual harassment.
Starbucks plans to boost wages to at least $15 an hour – up from $12 currently – for all partners by the summer of 2022, aiming for an average of $17 with rates ranging between $15 to $23.
Walmart increases educational opportunities for Black Americans by adding three HBCUs to its 100% tuition-paid college offering, alongside investing several million in education grants.
Zillow shuts down its home buying business and lays off 25%, or about 2,000, of its employees.
What’s Happening at JUST
It’s clear more companies are investing in diversity, equity, and inclusion (DEI) programs, but how are they doing? Our latest polling looks at where employer and worker perspectives align and diverge on motivations, communications, goals, progres, and more. Some topline stats: While 90% of workers and employers believe their organizations are taking DEI seriously, only 49% of workers think their company has established clearly defined DEI goals. Explore the insights here.
Ahead of the COP26 UN Climate Summit, we spoke with HP CEO Enrique Lores for our latest Quarterly JUST Call, covering the company’s outstanding work on climate action and digital equity, and how its sustainability initiatives have generated more than $1 billion in revenue for two years straight. Read the takeaways and watch the replay here.
And, as the conversation at COP26 focuses on standardization in climate targets, JUST’s Laura Thornton explains why the language companies use with these goals can be misleading to employees, customers, shareholders, policymakers, and other key stakeholders – ultimately lessening corporate accountability.
Zachary Conway, CEO of Seeds (which utilizes JUST data to deliver impact insights to advisors and the clients), spoke with Adrian Grenier on the importance of impact investing, and where the winds are headed for the ESG market.
“At Patagonia, we don’t use the word ‘sustainable.’ Why? Because we recognize we are part of the problem. Previously, we set ourselves the target of carbon neutrality by 2025. But purchasing offsets to get us there doesn’t erase the footprint we create and won’t save us in the long run. We must first put the weight of our business behind drastically cutting emissions across the full length of our supply chain.”
- Beth Thoren, Director of Environmental Action at Patagonia Europe, outlining some of the problems undergirding carbon neutrality efforts.
“We are seeing more hydrocarbons moving away from public entities to private entities. If we’re serious about this . . . we have to ask all of society to move forward or we’re lying to ourselves, we will not get to a net zero.”
- Larry Fink, CEO of BlackRock, on the need to focus on private as well as public companies’ net zero goals to decarbonize the economy.
“There’s no comparable feat that mankind has ever achieved to what we need to do for climate change…green cement costs twice as much, green aviation fuel costs twice as much. Through innovation, the rich countries have to bring that down so dramatically. [We have to do that] so that we can turn to India and say, OK, yes, you’re still building basic shelter for your citizens. And we can’t tell you to do that at half the rate because you’re buying expensive cement.”
- Bill Gates, Former CEO of Microsoft, explaining the dramatic challenges in scaling green solutions that rich countries must solve in order to ensure developing countries can utilize them.
Must-Reads of the Week
With COP26 in full swing this week, here additional stories you may have missed:
- The U.S., U.K, Norway, Germany, and 17 funders, including the Ford Foundation, Bezos Earth Fund, Bloomberg Philanthropies, and others, will give $1.7 billion to help Indigenous and local communities protect tropical forests.
- More than 100 foreign leaders agreed to end and reverse deforestation by 2030.
- Western Nations agreed to a deal to invest $8.5 billion into South Africa to help the country move away from coal at a quicker pace.
The Financial Times looks at the consistent problem with companies struggling to set and understand net zero goals for themselves and their industries thanks to a lack of common standards. To help, SBTi launched the first net zero global corporate standard last week.
Insider releases its second annual list of DEI Trailblazers, highlighting 16 diversity executives who have helped to change corporate culture. Read the whole list and delve deeper into our conversation earlier this year with JPMorgan’s trailblazer, Brian Lamb.
Help us build momentum for our #GivingTuesday by making an early gift to support JUST’s mission!
Chart of the Week
This chart comes from our latest DEI survey analysis, and points to one of the most interesting splits – near equal amounts of workers think their company is “going above and beyond on DEI efforts” and that “there is more work to be done.” Explore this another key insights and takeaways for corporate leaders looking to deepen their work.