CSR 5.0. I must have missed 2.0 through 4.9… focused on corporate governance and ESG. This was my first Skytop Strategies conference (agenda) or one specifically on the topic of CSR. It was billed as presenting “the evolution of corporate social responsibility from its initial shared value paradigm to its current form. The program will track the growth of CSR as a sector, examine the multi-dimensional ways that CSR programs are implemented in corporations today, and present cutting-edge ideas that will shape the future of CSR as an industry.” CSR 5.0 lived up to its billing.
I missed several of the presentations/panels because I was too busy networking. We took our conversations to the farthest corner of the room to avoid disturbing the main event. It was a great program but the networking was even better. The following are a few sketchy notes. I cannot guarantee they reflect actual reality. What I heard was heavily filtered by my own thoughts at the time and since.
Ms. Chegar emphasized that sustainable companies are less risky. In 1975 intangibles made up about 15% of the average company’s value. Now 85% are intangibles. PwC found big gap between what companies report and what investment professionals want/believe (1, 2, 3). For example, carbon dioxide emissions: only 60% of companies report.
BlackRock has a $50B Sustainable platform. Another $450B has client driven screens around sustainability. Chegar is also involved in developing an integrated strategy for ESG across the $6T of BlackRock’s total portfolio. BlackRock aims to deliver portfolio returns. Sustainable platform involves assessing tail risks, with the aim of creating better value for clients.
Her group also has a global public policy function. Interesting Letters and Viewpoints on ESG here. UN SDGs – are companies asking BlackRock? Yes, they want portfolios aligned to SDGs. BlackRock has an ETF focused on that. BlackRock’s Approach to Sustainability. Add a layer to sort for sustainability and you do not automatically hurt returns. In fact, returns are more likely to improve. That is different from the thinking of 25 years ago. Still, ESG questions are not asked on quarterly investor calls. Companies should do a better job of telling investors what they ought to focus on. Put it out there regardless of demand.
The best part of my interaction with Chegar happened before her presentation. I got to complain to her about BlackRock not voting proxies as investors in “sustainability” might expect. (See just a few of many critical posts: Morningstar Direct Uncovers ESG Hypocrites, Internet Will Drive Public Opinion and Proxy Voting to Reflect American Values, Main Street Investors: Battle Coming, Strine: Big 4 Responsible to “Forced Capitalists”. Like everyone else at BlackRock, she emphasized their ability to negotiate with companies but acknowledged that voting against shareholder proposals while negotiating in favor of similar changes reduces the ability of such proposals to meet minimum thresholds for resubmission. That conversation alone was well worth my time and effort to attend.
CSR 5.0: Think Globally—Act Locally – CSR and Sustainable Communities
Nancy Gillis, moderator.
Sara Broadbent. Avaya – Video conferencing, AI call centers. Their Chinese office gave Save our Shores in Santa Cruz their $2,000 award for helping them with their beach cleaning project. Did a video for Save our Shores. India requires companies to donate 2% of pretax profits to charity. Company has helped teaching across classrooms. Methodologies helping girls. Funded two schools in Mozambique (adopted by local communities) Gave free services to economically disadvantaged small businesses owned by women.
Business to business company. 10,000 products. Helping companies move for tariff avoidance. Establish ties to communities they operate in. Clean and affordable energy, responsible circular solutions. Providing good pay to factory workers in India. Bus transportation, onsite child-care. 86% uplift even though paying 31% more than “fair” wage. 45,000 employees in Mexico. Efforts tied to Sustainable Development Goals. Summer camps to allow children to join their families. Providing safe drinking water to villages where employees come from.
CSR 5.0: Quick Takes
As I write I realize I am too busy with the beginning of proxy season to post much more, so here a just a few quick takes.
All photos in this post are courtesy of Boone Bergsma, CEO of WeThinkItMattersInc.com. Elevate your marketing with a company that acknowledges, “91 percent of global consumers believe companies should do more than just make a profit, they also should work to address social and environmental issues.” WeThinkItMatters Inc. unveils Nonprofit-Fundraising PaaS & Advertising SaaS at CSR 5.0.
Paul Klein, CEO & Founder, Impakt Corp. spoke of the importance of involving beneficiaries (people with “lived experience”) in the decision making processes. Start with the people who work on/with the problem and involve them from the beginning. Involve the people impacted in measuring success. Community informed assessment. Meetings in the community, daycare, compensation, listen.
Shelley Gitomer, MGM Resorts Internationalnoted that contrary to my impression gaming is only 30% of the company. She discussed their philanthropy, diversity, and environmental programs. 84,000 US employees. Lots of service employees. Volunteerism deeply imbedded. Management bonuses are tied to volunteer activities. Helps retain employees. Great for recruitment. Largest employer in NV.
Mark Tulay, CECP. First employee at Ceres, then at ISS, GRI. Strategic investor Initiative. $25T. Tackling short-termism. Investors causing us to be too short-term. Not enough standardization. Investors like SASB, companies like GRI SII Model. DE law on long-term planning. Get every company to present their Long-term Plan: Content Framework. Financial Performance, capital allocation, Trends, Competitive positioning, Risks and opportunities, corporate governance, corporate purpose, human capital, long-term value creation. 3-7 years out.
Data Obsessed: Does Data Really Drive Investment into CSR? Cynthia Figge, CEO & Co-Founder, CSRHub points out there is little standardization of ratings. CSRHub will help you make sense of it.
Shareholders: The Power of Institutional Investors in Company Transformation
As Andrew Behar of As You Sow and Christie Stephenson of UBC discussed their efforts regarding sustainability, I kept thinking of how boring my own work must sound. They had countless examples of real impact on the society and the environment, while I have been working to declassify boards, elect directors by majority vote standards, allow shareholders to hold special meetings, etc. Dry, dry. Still, As You Sow’s invest your values campaigns, such as Gender Equality Funds and Fossil Free Funds feel like back to the future, with an emphasis on screening that was so popular with SRI funds decades ago. Maybe that is meeting the public where they are at. Of course, both also had several stories of successful engagement around E&S issues.
Philip Mirvis, Global Network on Corporate Citizenship. Worked with hippies who wanted to change the world. Ben & Jerry’s (triple bottom line), Anita Roddick The Body Shop, Seventh Generation, Patagonia. Shell Driven to Social Responsibility – we are engineers, the world is political. Shared Value Initiative; Conscious Capitalism, UN SDGs. Social entrepreneurship gaining. Start with a purpose. Interface carpets: Nonpetroleum-based, replaceable tiles, biomimicry (gecko glue). Novo Nordisk goes live with customers for a while to learn the needs. Ferrovial – zuritanken – great idea (power floor – walking on floor powers lights.
CSR 5.0 by Skytop Strategies was a very small conference packed with great information and interesting people doing important work. I will look for opportunities to attend future conferences.