This week’s Conscious Capitalism In The News:? #MeToo activates investors to support women, a little environmental app with a lot of power, Trump’s trade war threatens global sustainability, and more…
Investing in companies based on their treatment of women is not new. The first ?gender-lens fund? appeared in the 1990s. But the current spotlight on women in the workplace and equality has excited renewed interest from retail investors, while opportunities for putting investment funds to work have also recently increased.
Since the #MeToo movement gained traction last fall, 12 new funds have emerged that focus on women’s issues, adding to the 22 already existing. This is in addition to dozens of other options in mutual and exchange traded funds, whose investments are made at least partly based on things like the presence of women in C-level positions, including board of directors.
“In the last six months or so we definitely had an uptick in people asking if there’s a way they can invest more in companies that focus on female leadership and governance.” –Stephen Rischall, 1080 Financial Group
Do videos and images of trash in the environment make you feel powerless? Imagine a free app that has the power to:
- Raise awareness of global environmental destruction
- Provide insight to all and an incentive to take action
- Force all businesses to pay attention to their packaging
- Change consumer behavior at the supply level
Litterati is a free app that allows users to flip the script and become engaged in cleaning the planet. Everywhere we go we see litter. Litterati encourages users to take a photo of the litter, tag it by type and brand, and then upload it to a ?digital landfill? that geotags and time stamps the photo. The result is a global database documenting both the types of litter in the world and what brands are using unsustainable packaging. By noting the brand via hashtag, users are creating the largest database of branded debris on the planet.
Litterati founder/CEO Jeff Kirschner was hiking with his daughter when she asked about a cigarette butt. They took a photo of it and uploaded it to Instagram. Kirschner continued to take photos of trash, tagging them by brand, time and location. Today Literatti is a stand-alone application with 70,000 users and it is shining a light on both consumer behavior and the sustainability of a brand?s packaging. For brands that are positioning themselves as a steward of the planet, this can bring up an inconvenient truth.
Litterati provides insight that provokes action. A group of 5th graders used it while cleaning up their school and the insight they gained from using the app showed them that the most common piece of litter on their school grounds was plastic straw wrappers. Armed with this insight, the kids took action and persuaded the school to stop buying plastic straws. Think about that for a minute. 10-year-olds.
If 10 years olds can do it, we can, too.
When you can show somebody that by taking an action?that is, crowd-sourcing litter, it leads to insight (data) that drives change in behavior, that?s when the light bulb goes off…Data is critical to creating change. – Jeff Kirschner, CEO and founder, Litterati
Litterati allows users to be a part of the solution, provokes communities to make an impact, and may even force brands to take a closer look at what they deem ?sustainable packaging.?
The fallout from Trump?s insistence on raising tariffs on steel and aluminum imports will affect Americans in a variety of ways:
- Steel and aluminum imports become more expensive.
- US steel and aluminum manufacturers will raise prices because they can.
- Any company requiring these raw materials will be hit with higher costs including those in the steel and aluminum industry. As there are more companies in the?US that use these materials than produce them, more companies will be hurt than helped.
- Higher costs = fewer jobs
- Higher costs = higher prices all the way down the supply line to the consumer
- Europe, Canada and Mexico, and others will retaliate choosing the product that will cause the most political and economic damage to increase tariffs in kind.
- Farming, agriculture and dairy industries in the US suffer.
How is this a good idea?
There?s every reason to expect that this will result in a trade war ? and in a trade war, everybody loses and nobody wins. – Emily Blanchard, professor of economics and business, Dartmouth University.
Americans will surely suffer. And so will the planet, its people, and economies. Trump?s attitude coupled with Brexit brings to light a recent wave of protectionism that threatens sustainable global trade. At a time when global trade should be focused on global efforts for initiatives such as the U.N. Sustainable Development Goals (SDGs), how can it be ensured that unnecessary regulatory barriers are not imposed on the policy side, and that sustainability remains a key driver of economic growth?
Amfori , a leading global business association for open and sustainable trade whose members include over 2,000 retailers, importers, brands and associations from more than 40 countries, believes that we really can?t fathom global trade without a sustainable approach that addresses social and environmental aspects.
All trade should deliver social, environmental and economic benefits for everyone.
Amfori addresses the rise of protectionism by saying that it may mean that we will have to better demonstrate the benefits of open trade. At the political level protectionism means less trade and fewer opportunities to promote sustainability goals. Meanwhile, the private sector will have less leverage to promote global standards and best practices throughout their global supply chains because they will lose close relations with their business partners, factories, and farms in sourcing countries.
The U.N. Sustainable Development Goals (SDGs) are not a wishlist. They are a necessity that represents a ?previously unseen universal commitment of the planet.?
If we are to see a future in global trade at all, it must be a sustainable one. There is no place for protectionist paranoia in our race against time. For if we do not change the way we do business, there will be no business left to do.
JP Morgan has announced that the firm will invest $3.1 million in San Francisco and $2 million in the South Bronx, with the goal of helping local minority-owned small businesses, as part of its $150 million Small Business Forward program to help women, minority, and veteran entrepreneurs.
The purpose of the funds is to provide underlying capital for community lending partners to both make loans and provide technical assistance and personalized servicing. The funds will support both entrepreneurs in the startup stage of their business in addition to existing, legacy businesses which will allow more businesses to stay local in spite of the threats of rising rents and higher operating costs.
In a letter to Connecticut State Senator Gayle Slossberg, Connecticut State Treasurer Denise Nappier announced that her state will step up its shareholder activism with respect to its ownership of stock in firearm manufacturers. The State Treasurer stated that, as the primary fiduciary of the Connecticut Retirement Plans and Trust Funds (CRPTF), she carries ?sufficient authority to divest following a period of engagement with (their) portfolio companies, consistent with the State?s divestment laws.?
As Nappier lays out, CRPTF?s exposure to gun manufacturers is $16.5 million, or .05% of the assets of the CRPTF. The assets of the CRPTF are invested in five companies that manufacture guns, as follows:
- CIE Financiere Richemont SA, $7.19 million;
- Daicel Corporation, $1.65 million;
- Olin Corporation, $879,071 and fixed income valued at $915,255;
- Orbital ATK Inc., $1.02 million and fixed income valued at $784,437;
- Vista Outdoor, Inc., $4.04 million.
Nappier ?believes that common-sense gun control measures and whether investment in gun companies will deliver returns that meet the long-term interests of the plans? beneficiaries are really two sides of the same coin, neither of which can be ignored.?
When companies in which we are invested fail to manage potential business risks, legal and/or regulatory actions, or reputational harm arising from the misuse of firearms, it also puts at risk our long-term shareholder value. – Connecticut State Treasurer Denise Nappier
Nappier concludes that divestment ?represents the last of a series of options that shareholders can employ to effect change. Indeed, responsible ownership requires shareholders to engage the companies in which they invest to ensure that the boards are effective stewards of a viable, sustainable business strategy. If those efforts prove unsuccessful, then (she) agrees that divestment is an appropriate course of action.?
The full letter can be downloaded here.