Carolyn McMaster | December 18, 2019
Business is hitting an inflection point for sustainability, turning a corner from extractive business as usual toward business with a net positive impact. I felt it this fall at the annual B Corporation conference and at SOCAP (the high holy days for the impact investing space), where mainstream actors were a much bigger presence than in the past. My colleague Anya felt it at the VERGE clean economy conference.
Outside those bubbles, I see a quartet of positive trends that show no sign of slowing and every sign of growing as we head into a fraught election year.
Big business looks to all stakeholders. In August, 181 CEOs of some of the biggest U.S. corporations signed the Business Roundtable Statement on the Purpose of the Corporation, committing to lead their companies for the benefit of all stakeholders.
Dick’s Sporting Goods stopped selling assault rifles at all stores, took all guns out of 125 stores (destroying $5 million in existing stock), and is considering stopping all gun sales at all stores. There’s been some blowback, but sales are doing fine, and profitability is up.
B Corporations get big. Danone North America is the world’s biggest B Corp, and the parent company is determined to certify the entire corporation. Interest from other global brands is so strong that B Lab, the nonprofit that certifies B Corps, is developing criteria for them. There are now more than 3,100 B Corps in 71 countries.
Investors go for ESG and impact. And they’re doing quite well, thank you. There are products from big conventional players, like Bain Capital’s Double Impact Fund, and high-impact upstarts like Nia Impact Capital’s Global Solutions Fund (which is beating the market), plus a lot in between. Major houses all have portfolios based on environmental, social and governance factors, and many are at least dipping a toe into impact investments, which target big world problems.
Business is bullish on climate action. Huge corporations (Walmart, Salesforce, Microsoft et al.) are united in their support for carbon-cutting measures in the Paris Climate Agreement, with 87 of them worth a combined $2.3 trillion committed to setting science-based climate goals aligned with limiting global temperature rise to 1.5 degrees Celsius. And at COP25, more than 600 institutional investors (collectively managing $37 trillion in assets) called on governments to take action in support of clean energy and end subsidies for fossil fuels.
In its roundup of 2019 purpose activities, Triple Pundit says purpose has become the new normal. I won’t say that—it’s mostly a lot of talk so far. But there’s a collective “let’s do this thing” attitude we haven’t seen before, the commitments are big, and customers are increasingly likely to hold companies accountable. Altogether it’s been an outstanding year for corporate activism and sustainability, and momentum will continue to build into the new decade.