Data shows Americans’ values make good business sense
November 17, 2020
Purpose Inc. episode 9: Alison Omens of JUST Capital
Key takeaway: Companies that are making environmental, social, and governance issues central to the way they do business are outperforming their peers—and investors are taking note.
In this episode of the Purpose, Inc., podcast, host Michael Young speaks to Alison Omens, chief strategy officer at JUST Capital. JUST Capital helps companies improve how they serve workers, customers, communities, the environment, and shareholders. Alison, who formerly worked as an advisor to U.S. Secretary of Labor Tom Perez, oversees the New York nonprofits’ programs and partnerships.
JUST Capital’s work is driven by data, Alison tells Michael, from public opinion surveys to indexes that measure corporate performance.
The organization’s consumer polls consistently show that the public cares about how companies treat their workers, how they treat customers, and what kinds of products they create. More and more, investors care about all those things, too. Non-financial metrics that assess corporate performance are becoming increasingly important to investors. That’s because environmental, social, and governance (ESG) issues such as diversity and inclusion and environmental performance aren’t merely external risk factors. “Companies that are making these types of choices everyday operationally are also outperforming their peers—and investors are taking note,” she says. “It’s a virtuous cycle that we’re increasingly seeing.”
“It turns out the values of the American people also make good business and investment sense,” she says.
Analyzing the Russell 1000
Alison talks about how JUST Capital has conducted in-depth analysis of 200 companies in the Russell 1000 Index, the thousand largest publicly traded companies in the United States. Her organization combines data such as 10-K filings and corporate social responsibility reports with its own modeling to evaluate the company’s treatment of workers and environmental impact.
The goal is to lift up best practices and case studies for companies outperforming their peers. JUST Capital is also talking to underperforming companies behind the scenes about how the data suggest they make improvements.
JUST Capital makes its work public through its relationships with Forbes, CNBC, and Goldman Sachs, which launched a social-impact fund that incorporates the nonprofit’s data two years ago. “It’s performing above the benchmark,” Alison says.
“The connection you make between data and real-world performance is a significant move,” Michael tells her. “There are data sets out there that demonstrate ESG in one lens but don’t always take the real-world business performance and consumer sentiment into account.”
The lessons of COVID-19
The COVID-19 pandemic has offered a stark example of the links between corporate mission and performance. Are companies investing in worker safety? Are they offering hazard pay and offering more sick pay? JUST Capital is tracking Russell 1000 companies’ response.
“We at JUST Capital see this as a real opportunity to see (the pandemic recovery) as a reset,” she says. “Are your operational choices in line with what people want them to be? And if not, why not?”
She takes heart in the fact that the CEOs of major companies are talking more and more about stakeholder capitalism. At the same time, employees and consumers are agitating more and more for change. “That social norm shift also contributes to the potential of creating something better,” Alison concludes. “It says this is going to be the nail in the coffin of putting shareholders first and, instead, creating something that is more sustainable.”