Tag Archive for: sustainability

Why the E in ESG Matters Environmental ResponsibilityWhile Earth Day serves as an annual reminder to appreciate our planet, the escalating effects of climate change highlight the importance of prioritizing environmental stewardship year-round. Corporations and businesses are increasingly focusing on integrating more innovative Environmental, Social, and Governance (ESG) criteria in their decision-making and investment strategies. While each component plays a vital role in sustainable business practices, the “E” in ESG is significant in driving a positive environmental impact while also creating long-term value for businesses.

Recent News in Business and Environmental Responsibility

According to the Morningstar report for the last quarter of 2023, “global sustainable funds experienced net outflows of USD 2.5 billion, marking the first time they entered negative territory. Despite the overall decline, European sustainable funds remained resilient and attracted USD 3.3 billion of net new money in Q4, primarily driven by passive funds. On the other hand, U.S. sustainable funds saw net outflows of USD 5 billion, contributing to a total of USD 13 billion outflows for the year.”

Interestingly, 2024 has already been a hotbed of progress and reversals with four leading banks announcing that they are leaving the Equator Principle formally due to Risk and Antitrust issues, but will continue to follow the tenets of the principle as a guide. Political backlash and special interests have cost BlackRock a self-disclosed revenue loss of $4 billion dollars with the recent example this past month whereby the Texas School Fund pulled away from Blackrock in support of Big Oil, stating Blackrock’s fund to be against state law which forbids boycotting fossil fuel.

While the volatility of the political landscape continues, there is no doubt that there are career opportunities forming from investment jobs to deeper compliance nuances for risk, legal, and compliance roles. The broader participation for ESG inside firms goes beyond the CTIO seat to every C-suite member with the consulting firms benchmarking and pitching to get companies ready for current and future legislation such as the ISSB standard IFRS S2. And the Global Stocktake is underway as countries plan for COP28 where they will assess the progress made toward mitigating global warming since the Paris Agreement in 2015. The results from the first-ever global stocktake will be discussed at COP28.

Navigating Environmental Challenges: Innovation, Trust, and Market Trends

Apple recently released a carbon neutral Apple Watch, the first in their lineup in working towards the ambitious goal of making every product carbon neutral by 2030. Technology and AI and startups in the space are driving innovation and fostering competitiveness. And it is innovation that can prevent or warn us of risks of climate change, including increased severe weather events, rising sea levels, and changes in temperature that can disrupt supply chains, cause infrastructure and property damage, and increase insurance costs, posing a significant threat to business operations and financial performance. The impact on the supply chain is long and deep with an example being that a 2022 drought in southwest China led to reduced hydropower production, cutting power to factories that supplied electronics and auto parts, and ultimately curtailed production for companies like Toyota, Volkswagen, and Foxconn.

As consumers and investors become more environmentally conscious, the value of brand reputation and stakeholder trust is particularly relevant. By showing a track record of environmentally responsible goals and outcomes, companies can gain the trust and buying power of consumers and investors. On the other hand, “greenwashing”, or making misleading claims about a company’s environmental impact, negatively impacts brand reputation and customer satisfaction. Showing a commitment to environmentally responsible practices is not only important for gaining consumer trust, but also in hiring and retaining employees. Like consumers, employees are interested in more than just paying lip service to “going green”, they also want to see tangible outcomes and be engaged in the process. Leaders can do more to address sustainability concerns transparently, building trust and credibility with stakeholders like consumers, employees, and investors.

The market is clued in to the mounting tide of support for environmentally responsible business practices, with investors and shareholders increasingly looking at companies’ environmental performance in considering their investment decisions. According to Morgan Stanley, more than half of individual investors say they plan to increase their allocations to sustainable investments in the next year, while more than 70% believe strong ESG practices can lead to higher returns. This shows that aligning with market expectations of environmental responsibility enhances companies’ attractiveness to investors and shareholders.

Wise Words from Top Women in ESG

Sustainability magazine named the Top 10 Women in ESG for 2023 who are worth checking out. The list of course is not exhaustive with so many great women having a role in the “E” in ESG, as it continues to play an important part in shaping corporate strategy, decision-making, and performance.

Ultimately change takes great negotiation skills and understanding. We recently profiled Susan Nickey, Executive Vice President and Chief Client Officer at HASI who astutely captures the nuance of the industry.

“When you’re trying to come up with a solution or break down a wall, it isn’t simply saying, ‘it needs to happen.’ You have to spend a lot of time thinking about creative solutions to make it work for an incumbent who might say ‘no, I don’t want that’, or ‘I’m not going to do that.’ It’s how you listen to both sides of an argument and come up with a creative solution. Thoughtfully parsed risk allocation, for example, can enable both parties to move forward in a way that they both deem is balanced and fair for them.”

The “E” in ESG is a fundamental aspect of corporate sustainability, responsible leadership, and long-term value creation. In the words of another of our recent profiles, Geneviève Piché, Head of Sustainable Finance and Advisory, Corporate Investment & Banking at Wells Fargo:

“Sustainability and climate efforts are about value creation. They are not check-the-box exercises. It’s about developing strategies that can drive value for companies while making the world a better place.”

Geneviève Piché - feature“Many people have idea ‘sparks,’ small or large, and too many people squash their sparks. But it’s with those sparks that you can improve organizations and improve yourself,” says Geneviève Piché. “It could be as small as a change in process or as massive as complete transformation. Being able to embrace the spark is the essence of organizational and personal development.”

After studying economics and international studies at Macalester College, Piché joined Wells Fargo. That was 23 years ago. As a French Canadian who briefly lived in Australia growing up and chose a college with an international bend, Piché cultivated a wide world lens. At Wells Fargo, her international passion was flamed as she moved into emerging markets and finance. It’s become critical in her sustainability work, where ethics, global and regional dynamics are inextricably linked.

The diversity of opportunities and organizational culture at WF have supported her to stay inspired and grow. She recently returned from a two-week trip focused on understanding sustainability and energy transition in the Asia-Pacific region.

From “Idea Spark” To New Strategy And Role

“Embrace the sparks because they can catalyze organizational progress and develop careers,” iterates Piché. Back in May of 2020, she experienced an idea spark “that turned into a raging fire.”

Piché was leading the asset management coverage team and many of her clients were changing the way they allocated capital – moving towards ESG integration in the investment process and raising funds for specific thematic objectives – such as green infrastructure or circular economy.

“I could see there was a business need for a financial institution like ours to support those growing flows of capital, but simultaneously there were some interesting socio-economic developments happening,” recalls Piché.

Covid had revealed weaknesses in the supply chains and laid bare the unequal access to healthcare. Social justice themes had been brought to the forefront. Massive fires had been burning in Australia, consuming millions of acres of eucalyptus forest and wild lands, reminding Piché of a childhood experience at a farm where she was tending to the burnt paws of baby koalas who were fleeing or rescued from the fires.

“That was the first time I witnessed the interactions of climate change and biodiversity in my community, and it stuck with me. Now, the effects of climate change are spread way beyond Australia,” she says. “So it was a galvanizing moment for me that occurred at the same time as a call-to-action on the part of Wells Fargo leadership, when many leaders were saying we needed to do something differently and that they were all ears for ideas.”

So with the momentum of her spark and a receptive context, Piché developed a business strategy for Wells Fargo’s Corporate & Investment Banking division (CIB) around sustainable finance within ten days. Next was nurturing that spark.

“Having been at Wells Fargo for so long, I understood how things work intuitively. But for those who may be newer to an organization, knowing who understands the unwritten rules is an important part of networking,” she says. “Observe those people sitting at the right tables who communicate in a way that you like and get looped into email discussions. It’s important for career development to identify those strong and competent organizational players, even if you don’t exactly know the ropes.”

Along with knowing how things work, utilizing sponsors and mentors was also essential to fueling the spark. Piché ran the strategy across a sponsor who had organizational savvy but was not in her direct reporting line.

“First, it gave me the confidence that my idea was directionally correct because that person did their own research, too. It also allowed me to navigate our organizational structure to get the idea in the right place in the right way to build buy-in among leadership teams,” she notes.

After a couple of months and some refining, she received the call to leave her role as head of asset management and begin the new role she’d proposed.

Sustainability is a Win-Win

When it comes to a legacy of impact, and especially on Earth Day, Piché wants to convey the message that sustainability is a win-win for organizations, not a win-lose or compromise.

“Sustainability and climate efforts are about value creation. They are not check-the-box exercises. It’s about developing strategies that can drive value for companies while making the world a better place,” she says. “With a financial institution like Wells Fargo, we have a very big megaphone because we talk to so many different constituents and millions of customers, so I want people to be able to acknowledge and understand that developing strategies around environmental practices and social practices are extremely beneficial to companies in the long-term and in the short-term.”

She continues, “Once we are able to understand that, we will be more able to effectively unlock impact, drive large-scale change, support the industrial transformation that’s underway, and elevate and provide opportunities to those who have historically had fewer.”

Aligning Your Personality to the Role

Piché prefers to be a generalist who does many things at once – even picking two majors instead of one, and realizing that has helped.

“There are certain jobs that require you to be focused and narrow. Today, I know those jobs do not suit my personality. Roles that are broader and more entrepreneurial do,” she says. “One of the reasons I love my role now is that it’s rich in content, themes and opportunities and has many facets to the work. It allows me to juggle many things all at once and play to my strengths.”

Before she realized what job roles matched her, Piché would often supplement more narrowly-focused roles with side initiatives and projects or looking to travel to provide diversification. Perhaps only with the benefit of hindsight has she realized this, because when in a less-suited role you may normalize the feeling.

“But when you have the right job, you look forward to waking up in the morning. You’re excited about the people you’re working with and the work,” she says. “I often encourage people to think about their personalities and learning styles in finding the right role. Are you drawn to multiple threads of thoughts and projects? Do you like to travel far and wide but more shallow, or to go deep and seek real expertise in one particular area?”

Piché has further compatibility advice for people evaluating their first job or next opportunity: “It’s really important that you choose those opportunities based on the people that you will work with more so than the job itself,” she says. “Because I find the people that you are surrounded with are the defining characteristics of your experience. Developing a particular job skill is cumulative, but you want people who will support you on that journey and who inspire you.”

Piché also warns against burning those bridges. “I have found that my career path has wound in many different directions and people keep coming back into my life professionally. We say ‘don’t burn your bridges’ but really what that means is always be respectful and kind to the people who you work with. Be transparent and authentic and do your best,” she says. “When you do that, you manage those relationships and it can be that they keep on giving and building upon themselves as you progress in life.”

The Power of Storytelling

As she has become more senior, Piché’s love of writing, ability to communicate powerfully and storytelling have become greater strengths. It’s what helped to create her role. Another expression is the quarterly newsletter she sends to all Wells Fargo CIB employees to inspire and engage them in the sustainability initiative.

“Storytelling in a business context can be extremely compelling in driving leadership buy-in. It’s a great leadership skill when you can tell stories that are relatable and demonstrate expertise and thoughtfulness and authenticity,” she says. “On the flip side, great storytelling is also important in our customer relationships. What is the client looking for and what is the most compelling thing they are interested in? It’s really important to tell a story that is both quantitatively and qualitatively justified and compelling.”

Choosing to Plant Where You Can Thrive

“In the first ten years of my life, I had a very strong impression that organizations were meritocratic. Now, we understand there’s a tremendous amount of unconscious and institutional bias in all organizations, and it’s perhaps not so meritocratic beneath the surface,” she says. “There’s a lot that is challenging women’s careers and the careers of people of different backgrounds.”

At various times in her life, Piché has seen entrenched social networks that permeate professional life and make it challenging to navigate. She never doubted her competence, but it was evident some situations were more conducive to her success than others.

Those experiences underlined the importance of DEI, because breaking down institutional social barriers does not happen overnight, even in an organization where it is happening. These days, she is absolutely thriving in the broader context of sustainability where she interacts with all walks of life, geographies, races and ethnicities, while enjoying the work and feeling empowered.

Positive Impact in Every Sphere of Life

Piché wishes to impact positively in five areas: work, motherhood, partnership, self and friendship.

From weekend art challenges to bike rides to trips to school and bedtime stories, she loves creating special moments with her eight year old son. She intentionally nurtures her relationship with her husband through regular date nights. As a family, they enjoy collecting junior ranger badges through visits to U.S. national parks while building experience and knowledge around the natural and historical patrimony.

To care for herself, she does things she loves to do – whether playing music (the piano), cooking, reading or taking hikes. Also while she may have less to extend at times, she values being a thoughtful friend to the people in her life that need support.

Similarly, Piché leads her work teams authentically and transparently while demonstrating passion, enthusiasm and competence. And laughter.

“I think when you demonstrate those traits, it empowers teams and individuals to do the same. Then you have much higher performing teams and make a greater impact on people’s individual careers and sense of feeling inspired,” she says. “As leaders in the corporate world, if we can have positive impact on people’s well-being and joy and have a positive impact in the world, then I think we’ve accomplished something pretty awesome.”

By Aimee Hansen

Ruth Harper“Getting comfortable with uncomfortable conversations is an ideal way to prepare for a job interview, whether it’s going for a position at a new job or putting your hat in the ring for an opportunity with your current employer,” says Ruth Harper.

Harper speaks to the thread that has motivated her all along, supporting women at work and unleashing the opportunities that work can provide.

The Joy Of Empowering Lives

“I witnessed firsthand how the economy can thrive or not, subject to how the world of work works for people or doesn’t. I grew up in a neighborhood in a time when industry was declining, and so there was industrial action and people were out of work, impacting families in a significant way,” says Harper. “My own father had to travel for work. I learned very early about the power of work in somebody’s life, and what happens when you take it away. It’s closely connected to what drives me today.”

Harper grew up in Northern England, an industrial powerhouse, and now lives in Milwaukee, yet another industrial powerhouse. One of the first in her family to go to university and then postgraduate studies, both in human and economic geography, she became a geography teacher – including a stint in the girl’s school once attended by Margaret Thatcher, who became the first female prime minister in the UK.

Curious about what else lay beyond teaching, Harper moved to London and worked with a ‘temp agency’ to figure out how to reinvent herself in work. She was able to transfer her skills to influencing and motivating employment policy, helping unemployed people get back to work and bridging the public and private sectors. It felt meaningful and gratifying, and she was learning a lot while figuring out how to set up public-private partnerships.

“I was working with purpose-driven people who were determined to create opportunities and results that would change people’s lives,” reflects Harper. “The privilege of working on that pulled me into ManpowerGroup. Here I am, 20 years later, still having a nearly first-hand opportunity to create impact. For example, through Manpower’s MyPath program which provides the guidance, support and training people need to build their confidence and employability.”

She notes that while the changing world of work can be exciting, it can be daunting for people in fast-changing industries whose job security feels more volatile: “Being able to address that anxiety and unleash ambition, and to help layout pathways to work for people feels like a thread back to what I could see when I was growing up.”

Supporting Women To Thrive At Work

Harper notes that ManpowerGroup’s Chairman & CEO, Jonas Prising, originally from Sweden, has publicly declared a measurable goal of 50% women in leadership by 2025. Getting familiar with the factors and barriers that can drive women away or block women from the workplace is critical.

“I think organizations need to look at how they help women continue to progress in their career, even when they are part-time or take a break,” says Harper, who spent her own maternity leave in Europe, where she had a year with both of her sons before returning. “Otherwise, we’re never going to get 50% women in leadership because organizations will keep churning out great female talent, who will seek opportunities to balance life and work elsewhere.”

Back in her early days, working in the field of employment policy and government relations with ManpowerGroup, it was not unusual for Harper to walk into rooms full of 55+ year-old white men. They were as likely to assume she was there to take the notes versus contribute to the discussion.

“I learned from a 55 year old male boss at the time to get in there early with a contribution to the discussion. Number one, other people feel relieved and appreciate it when somebody says something first and are likely to even build on it,” advises Harper. “And I learned that contributing early liberates you to relax and enjoy the discussion, because you’re not beating yourself up about not having said anything yet. You may find you are building up to something even bigger to say, but at least you feel good because you’ve contributed.”

She advises the same with networking: “Lots of people don’t love networking. Most people will welcome somebody else walking over to them and saying something; being the first person to put other people at ease is good for you and good for others. It’s a great icebreaker and network builder.”

Navigating Your Desires and Career Journey

Harper likes to surround herself with smart people who bring different perspectives. Curiosity has always pulled her to ask the question ‘what next’. Humility has supported her when she didn’t know that answer.

“Raise your hand, take stuff on and see where it leads you,” advises Harper. “But more importantly, and what I did not always do, is to be confident about articulating where you might want to go, even if it’s not exactly where you might end up, so people have a comprehension of your ambition.”

She encourages women to ask themselves: Am I good with this? Or do I want something different or more? Do I know what that is? How might I get it? Who should I talk to that can help me hone in on what I want?

“Be comfortable with these open-ended questions and then know where your mentors and your people are so that you can have those discussions to help shape your own thought process,” says Harper. “Each person will give you a different set of questions, and that can help you shape a full viewpoint.”

Whether it’s her very supportive husband, or peers inside and outside of the organization, somebody will be able to reflect in a way that helps brings clarity – and sometimes, that means waiting not jumping.

“This is way more of a jungle gym than it is a ladder, so don’t always think that it’s only the vacancy or the opportunity right now that is your opportunity,” says Harper. “Keep going and working it out, until you find or create those opportunities for you.”

Taking On Bigger Leadership Roles

Accordingly, Harper points out that her role of Chief Sustainability Officer did not even exist a couple of years ago.

“There’s nothing more socially impactful than having the dignity to go out and earn a decent living and bring that back to the family and contribute to the community,” says Harper. “At ManpowerGroup, we believe meaningful, sustainable employment has the power to change the world. So, I’m asking how do we, as one of the largest organizations in our industry, set the highest standards and then bring others into that?”

As she’s moved up the ranks, it’s been about “getting out of the weeds” to keep a strategic overview while developing and trusting others. And that means giving people the freedom and safety to do things differently to her (and perhaps even better). “That’s also how I can continue to progress to new and different things – by bringing others with me, so we all rise together and have opportunities.”

Considering herself a talker from a family of talkers, she’s fairly direct in cracking how to get things done. Getting better at deep listening to others, and allowing the pauses in their expression, has been a valuable growth zone.

A mentor of 20 years taught her that leadership style must be versatile and individualized to whoever you are leading. It means both equipping and giving someone the opportunity to run with a project and keeping just enough of an eye to help point them back on track if they are going off-course.

In the spirit of fostering a growth culture at every level, Harper is herself inspired by leaders who are willing to reveal their human side, admit they don’t know something or ask for advice on an idea that is not fully baked.

“I’m really inspired when someone in a senior position puts work in front of me and invites me to build on it, because it shows openness that I might be able to add something to make it even better,” says Harper. “That always motivates me to find really good and constructive input.”

Expressing gratitude at the stage of asking someone to do something, even before they’re delivered (“thank you for…”) is an approach she’s also picked up along the way, showing trust and humility.

Being Purpose-Driven and Making Impact

Harper finds when there is genuine camaraderie in the workplace, people pull together for great things. One of her most humbling and rewarding experiences has been ManpowerGroup’s response efforts to the Ukraine crisis, especially in the Central and Eastern European offices.

“Our Ukraine planning call was the hardest I’ve been on in my 20 years here, but the most inspirational leadership I’ve ever seen, watching people who are really purpose-driven go above and beyond, every day but also on days when it’s needed most,” she says. “And, then how do we continue to do that for refugees or underrepresented groups, too, and find ways to make more impact?”

Recently reflecting on her 20 years at ManpowerGroup, Harper realized she’d moved through many different opportunities and roles, and it hasn’t been a linear journey. What has run through everything is the red thread of getting more people into work and impacting individual lives.

She has two boys, ages 15 and 12, who play American football, soccer and hockey, so being a part of what they love is important to her. She values being present and enjoys traveling, getting outside and good food.

By Aimee Hansen

Latina

Guest Contributed by Lawler Kang, CEO, League of Allies

Socially responsible and impact investing models have been around for decades (centuries, in fact).

What has changed is the amount of money that is being managed to these ends. CalPERS and CalSTRS, two pension funds for the State of California employees that manage upwards of $550 billion, are on the forefront of integrating ESG factors into their investments and the NYC and NY State pension funds, worth roughly $350 billion combined, are nipping at their heels. And European pension and sovereign wealth funds, some with a trillion in the bank, are considerably ahead of the United States.

Larry Fink, CEO of Blackrock’s recent clarion call to capitalism that managing “environmental, social, and governance [ESG] matters demonstrates the leadership and good governance that is so essential to sustainable growth” should not fall on CEO deaf ears. The proxy shareholder voting power in those companies in which it actively or passively invests (with $6 trillion under management) means companies who don’t make concerted and palpable efforts to service their communities as well as their stakeholders they could find themselves with a new board, and management team, who will.

What is behind this shift in thinking? Doing the “right thing” aside, immense amounts of research from organizations such as Sustainable Accounting Standards Board (SASB) reveal that proactively coming up with ways to either minimize or mitigate businesses’ impacts related to ESG issues can have material positive effects on financial performance, traced down to the level of income statements, balance sheets, and costs of capital. And while there are a few frameworks companies can use to measure and report, leveraging women and talent appear across the board in the mix of proscriptions companies should use to deliver these performances.

What has this got to do with women at work?

In the returns context, McKinsey estimates a $12 trillion bump in global GDP by 2025 if management gender parity were realized. A Credit Suisse study of 3,000 listed firms reports companies with 50% senior front office management who are female outperformed the growth of the market index from 2008 to 2016 by upwards of 60%. A MSCI review of 1,600+ public firms has correlated companies with three women on their boards in 2011 as outperforming those with none by median gains of 37% EPS and 10% ROE over the last five years. Certain prescient asset managers, such as Boston Common Asset Management, founded by a woman, have been generating market-beating returns for 15 years.

It can be argued that there is no other singular factor can have such a pronounced impact on company performance, again irrespective of industry, as gender parity. And what’s more, women are not only accretive to financial performance, they are at the core of the sustainable and ethical part of the equation.

A study by the UC Berkeley Haas School of Business of 1,500+ traded firms concludes that companies with women on their boards are more likely to address a litany of ESG factors. A research paper coming from The University of Toronto’s Rotman School of Management found that women bring six important skills that have been lacking in board composition and that are vital to decision-making: corporate governance, an eye for regulatory/compliance issues, human resources, sustainability, politics/government relations, and risk management. Of note, the last four are presently the least represented of all skills on boards. Another report from MSCI cross-referenced gender board composition with a likelihood of “fewer instances of governance-related controversies such as cases of bribery, corruption, fraud and shareholder battles” and general overall reductions in risk. Dealing with these issues, many of which result in fines, can be distracting and expensive, in both outlays and reputation/brand. Findings published in the Journal of Financial Economics noted that female directors have better attendance, can actually increase men’s attendance, and are more likely to be assigned to committees that monitor performance. The same study found that boards with more gender diversity are more likely to hold CEOs’ feet to the fire for sub-par execution.

Where are the women going to come from?

A recent Lean In/McKinsey report reveals that while 45% of the entry level workforce is female, only 37% are Manager level, 27% are Vice Presidents, 17% occupy C-level positions, and the vast majority of these roles are in Administrative functions: Human Resources, Legal, etc. Women run only 5% of the S&P 500 and represent 22% of those companies’ Board seats. To say that opportunities for advancement aren’t abundant is akin to postulating our climate is not changing. The problem is the pipeline: the entire system, from recruiting to manager training to development and succession planning, is institutionally biased in a variety of unconscious and conscious ways. Expanding and re-weighting our definition of leadership and the skill sets required to succeed, per the afore-mentioned Board study, is a great example of a change that will have profound ripple-down effects on the entire system’s mechanics. And there are many more dials that can be turned, levers pulled, that will increase the flow of diverse talent that increase profit and valuations.

In his February letter Mr. Fink stressed the importance of diverse boards, and in that same month BlackRock requested all companies on the Russell 1000 in which it has positions and that have less than three female board members to share their rationale. State Street, with $2 trillion in assets under management, made similar Board-related waves when it unveiled its Fearless Girl statue last year and a similar call to action. And organizations such as The 30% Coalition and Paradigm 4 Parity are making great strides in signing up backers from both the investment and corporate communities who are taking the pledge to increase female representation in executive and director ranks. The stage is being set.

Mainstream momentum for sustainable and ethical business is growing. PE shops and hedge funds are now donning ESG garments and are flaunting them to both investors and the general public. Mutual funds and ETFs with organic flavors are flooding the market; Barron’s recently had a cover article on the top 200 sustainable funds, though marketing and reality must be further examined.

We must let women lead, because if parity is left untested, we have much to lose financially and otherwise.

Disclaimer: The opinions and views of guest contributors are not necessarily those of theglasshammer.com