Environmental, Social & Governance Briefs

The numbers are staggering: More than 65 million people around the world have been forcibly displaced. Only a small number of refugees—less than 1 percent of 17.5 million in 2016—will ever be resettled. In Syria alone, more than 5 million people have fled their war-torn country since 2011, 1 million of whom have settled in Lebanon. Nearly a quarter of those refugees are children not enrolled in school. Behind each of these numbers is a life that’s been put on pause.

Companies should now consider using engagement models dependent on investor preferences. An ESG-centric paradigm is being challenged by portfolio-management-centric engagement.

What if companies were able to communicate—in clear financial terms—the total value they create for society? While still very much in a nascent stage, such attempts at total impact valuation are being piloted by more than a dozen major companies across an array of sectors and geographies. A new report finds significant promise in these approaches, but a range of challenges remain to be tackled. Above all, standards for definitions and methodologies are needed to facilitate meaningful comparison.

Summer is upon us. Unfortunately, so is disaster season. Last year was unprecedented, with eight major disasters occurring within just a few short months of one another. Forecasters estimate hurricane activity to be higher than normal this year for the United States, and crises such as floods and volcanic eruptions have already devastated communities in Guatemala and Hawaii. Companies need to get strategic now to prepare for the next disaster.

In this piece, corporate culture is defined as an intangible asset driving company value. A culture of trust and support is found to be the best way to foster success in the workplace. To create this environment, boards and executives must focus on engagement, financial success, recruiting, and retention.

Whether it’s the 24-hour news cycle, social media, annual reports, internal messages, or stakeholder requests, the need for clear, understandable, and relatable corporate social responsibility (CSR) information from companies is increasing. Some stakeholders want metrics, others want stories. Either way, timeliness and transparency are key. So, which data and disclosures are relevant and/or required?

China’s new Environmental Protection Tax Law (EPT Law) came into effect on January 1. It replaces the old Pollutant Discharge Fees System. Taxation could increase, as more headroom for localities allows to set higher tax rates. Some leveling of the playing field is possible, as non-compliance and tax evasion are addressed. Supply chain costs may be impacted.

Larry Fink, CEO of BlackRock, started the year with a provocative challenge to the CEOs of the world’s biggest and most influential companies: What’s your purpose? As Fink framed it in his open letter, companies need to have a compelling long-term vision for how their business will sustainably benefit all of its stakeholders, including shareholders, employees, customers, and the community.

The Bottom Line, a podcast on social progress, spoke to thought leaders associated with The Conference Board on the letter that BlackRock CEO Larry Fink wrote calling for companies to positively contribute to society.