Posts Categorized: Issue

JSFB November Edition: “Proximity”

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With this edition of the Cornerstone Journal of Sustainable Finance and Banking (JSFB), issued in such close proximity to the rather astounding US Presidential election, we see investors driving a dramatic downward move in bonds and a strengthening dollar based upon expectations of fiscal stimulus driving more rapid growth and the prospect of inflation. How close we are to these trends actually materializing is another story entirely. “Proximity” is a central question for so many sectors and for the capital markets.

Proximity Ignites Change

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To succeed, the UN Sustainable Development Goals must be clear, digestible, and emotionally resonant—and they must be known across every corner of the planet. To achieve this aspiration, we must not just lean on government, but also mobilize business. By harnessing the power of commerce towards achieving the goals, we will drive impact with brands, executives, corporations, employees, and ultimately consumers.

The Gender Equality Gap: A Problem Too Big to Tackle?

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Closing the gender equality gap is among the priorities of the United Nations Sustainable Development Goals (Goal 5), along with end ending poverty and hunger, and ensuring quality education. In short, it is, has been, and will continue to be one of the most tremendous challenges of our times. What precedes this article is a… Read more »

Social Equity Investing Demands Greater Proximity Between Investors and Beneficiaries

Unity symbol as an eternal knot of trust made from the roots and trunks of growing trees as a community or business friendship concept for the power of teamwork and solidarity working together for solid success and growth.

There are financial and social costs to excluding the ultimate beneficiaries of investments. Not only is the process of engaging beneficiaries helpful in its ability to assure passage of regulatory hurdles, it also mitigates against costly mistakes that can be avoided by bringing beneficiaries into the impact investing process early and often.

Place-Based Impact Investing: How to Invest in Your Own Backyard

San Francisco six sisters

Interest in impact investing concepts that combine financial returns with a positive social or environmental impact have been growing in appeal.   What seems to be lacking is a model to encourage broad-based place-based impact investing across all asset classes.  For fiduciaries of place-based organizations’ funds, like those at community foundations, pension plans, endowments and many… Read more »

The State of LGBT Entrepreneurship in the US

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In August of 2016, StartOut delivered its inaugural study investigating the state of LGBT entrepreneurship in the United States. Focusing exclusively on emerging high-growth companies with a sample size of 140 LGBT entrepreneurs, this study is the most comprehensive of its kind, and is intended to paint a clearer picture of the LGBT entrepreneurial experience in the US.

Systems Thinking in Impact Entrepreneurship

Central networking and network connection business concept as a group of diverse circle ropes connected to a central rope loop as a metaphor for connectivity and linking to a centralized support structure in a 3D illustration style.

We recently attended the SOCAP conference in San Francisco and came away invigorated by the hive of activity occurring within the social entrepreneurship space. New businesses are proliferating and tackling some of the world’s most daunting challenges. However, we noted that systems thinking was often absent from the discussion. It is important for impact entrepreneurs to incorporate this mindset into their business models from the outset, in order to maximize the scale and scope of the impact that they can create.

Cornerstone Contributes to FAIRR’s Investor Case Studies Report

FAIRR Report 9.6.16

The Farm Animal Investment Risk & Return (FAIRR) Initiative has issued a second booklet of case studies that showcases how leading investors and investment service providers from around the world are integrating issues relating to factory farming into their investment processes. Cornerstone’s Michael Shavel was asked to contribute to the booklet regarding his work on antibiotics and animal farming.

To “B” or Not to “B”: The Power of Corporate Form

William Shakespeare - The Tragedy of Hamlet

Corporate form has the power to effect significant and desperately needed change. Corporate form serves as the very backbone of our society, shaping the actions of the most powerful institutions of our time (corporations) and providing the functional framework for the behavior of virtually all men and women who work around the world. Therefore, I believe that corporate form can be a very effective extra‑governmental tool for solving the crises.

Hillel’s Voice

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In reflecting on the future of capitalism, we draw from wisdom of the great scholar Hillel, who was said to not only advance his own thoughts, but those of his opposition. It is in that context that we revisit an article first published in Forbes a couple of years ago: “Sustainable Capitalism… If not now, then when?”

Solving for Nonfinancial Data as Part of the Investor’s Mosaic: Meeting with the NYSSA and CFA Institute

Colorful mosaic on the wall abstract glass background.

Bloomberg, the NYSSA and The CFA Institute recently held a sustainable investing conference titled “Sustainability and Value – Using Data and Valuation to Drive Returns.” The day included panel discussions from a variety of participants including the Chief Investment Officer of the State of Connecticut, institutional asset managers, a partner from Jeff Skoll’s family office, Capricorn Investment Group, a professor from Yale and Stanford Universities, and sustainability professionals from Waste Management, Huntsman Corp. and Lockheed Martin.

A Video Interview with BlackRock’s Edkins on “The Shareholder Alignment Frontier” (SAF)

Japanese Zen stone garden - relaxation, meditation, simplicity and balance concept  - pebbles and raked sand tranquil calm scene

We are pleased to share a recent video interview with Blackrock’s Michelle Edkins and Cornerstone’s John Wilson in which we discuss the value of the “Shareholder Alignment Frontier TM (SAF).” The SAF is a tool inside Cornerstone’s proprietary framework which was specifically developed to help companies make the business case for improved stakeholder relationships through shareholder engagement thus building value for the long term

JSFB Summer Edition: “Explorations and Aspirations”

cover image shutterstock_344500526 Maksim Shmeljov

This month in the Cornerstone Journal of Sustainable Finance and Banking (JSFB), we consider an array of subjects ranging from “smart contracts” in the blockchain to empowering investors with sharper measurement tools. And ultimately, we hope to go beyond “sustainability,” and move towards value creation and regeneration through capitalism.

Exploring the Challenges in Maritime Financing

container ship in import export ship yard use for comercial freight cargo and logistic industry business

What would happen if the traditional investors in maritime financing downsized their commitment to funding the construction or secondary sale and purchase of the ships that the global economy relies on for international trade? It could be reality, if the current apathy towards the industry continues and alternatives are not sought. In this article we explore the possibilities, including the role alternative finance may play.

Decision-making in a Context of Uncertainty – Why Investors Should Look at Forced Labor in Their Portfolios

paper chain gang chackeled together ready for forced labor concept for slavery or slave work convict prisoners in jail doing time

Forced labor is a risk that can affect shareholders drastically, in light of increasing regulation, litigation, media and consumer attention. In order to make informed investment and active ownership decisions, investors need access to information on how well companies are addressing forced labor risks.

Exploring Ways to Close the ESG Info Gap: Perspective from Canada

A young businessman crossing the drawn bridge between two cliffs hand drawing the bridge blue sky at the background. A concept of bridging the gap.

A growing body of research confirms that investors around the world are incorporating environmental, social and governance (ESG) issues into their investment decision-making. Adding to the evidence, a recent study of institutional investors in Canada found that investors do consider ESG issues when making investment decisions.

JSFB May Edition: “Relativity”

Dave Jarvis gravitational-lens-01

This month in the Cornerstone Journal of Sustainable Finance and Banking (JSFB), we consider the issue of “Relativity” in the capital markets. Einstein showed that even though the laws of physics are the same everywhere, people experience time and space differently. It follows that individual perspectives on change are relative to one’s own current position.

The Power—and Danger—of Suggestion

Forces of Nature series. Interplay of colorful paint and abstract shapes on the subject of modern art abstract art expressionism and spirituality

  There is ample evidence that our minds consistently distort our perception of the world when making decisions under uncertainty, even within our own constructs of reality. Distortion in perception can stem not only from differences in experience and education but also the necessary use of heuristic judgments. We use heuristics[1] — mental shortcuts that… Read more »

Responsible Innovation for Health Technology

Medical Testing and Body Checkup of a Human Male

Health is becoming personal, predictive, and preventive through advanced technologies – wearable devices, embedded sensors, artificially intelligent robots, and virtual reality headsets. A deluge of data and feedback generated by these technologies nudge consumers to engage in healthier activities, or are aggregated and analyzed for insights about diverse populations across geographies. Major technology companies are investing in solutions powered by “big data” that promise to improve the health of populations worldwide. The opportunities appear boundless.

Well-Being Is Taking Business for a Run

Businessman meditating in lotus pose against stocks and shares on black background

Beyond explicit sustainable investing, more and more stakeholders are expecting companies to marry purpose with profits and to do more good for society. When it comes to the betterment of human health, such as raising the state of physical, mental and social well-being, this responsibility looms large, and the inputs, outputs, and impacts may be difficult to pin down.

JSFB March Edition: “Leadership & Learning”

Leadership and Synergy Concept Illustration : A number of Swans flying against a Evening Orange sky background lead by a big dark leader swan

In this edition of the Journal of Sustainable Finance & Banking (JSFB), we highlight ideas that foster “Leadership & Learning.” Leadership is a process of continually absorbing information and transforming it with strategic and tactical clarity. The commitment of business leaders, from the Board room through operations, in understanding their vital role in innovating for… Read more »

Sustainable Sweden: Innovation and Investments Grow a Small Giant in the North

Christmas and New Year in Stockholm, Sweden

The pacemaker, the three-point seatbelt and ultrasound—these life-altering inventions all originated in a country that 100 years ago was among Europe’s poorest. Today, Sweden is renowned for its culture of innovation, strong global brands, and a social system that encourages risk-taking and responsibility. For investors seeking to make tech and sustainable investments, as well as for corporations and funds seeking to raise capital from sustainability-focused institutional investors—Sweden is a natural first pick.

The Power of Responsibility – Making Sense of the UN Global Compact

Business Plan Word Cloud Glowing

The United Nations Global Compact is the world’s largest voluntary corporate responsibility initiative. Currently it has more than 8,000 business participants from more than 145 countries. Participants are required to support ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption. 

The Monetization of Misery

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On December 18, 2015, the eve of the Christmas holidays, the University of California announced that it was withdrawing roughly $30 million worth of its investments in private prison companies. U of C was not the first institution of higher learning to do so; Columbia University had divested itself of all of its shares in the private prison industry the previous June. In both cases, the Trustees’ decision to divest came after months of pressure from black student groups. By their action, Columbia and the University of California joined corporations like General Electric, Scopia Capital…

Investing Together: Creating Investment Opportunities for Generation Selfie

Hipster teenage girl with smart phone and takeaway coffee

This last July, over 500 young adults, representing an estimated wealth of $750 billion, gathered at the United Nations headquarters in New York as part of the Nexus Global Youth Summit to discuss social entrepreneurship. They did not send their wealth or philanthropy advisors, but instead chose to spend three summer days cooped up in conference rooms to learn how to better use their capital and business acumen to make the world a better place.

Unlocking the Closet: The Economic Imperatives Driving Multinationals to Create LGBT-Inclusive Workplaces

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Forward-looking multinational corporations understand that they need to create inclusive work environments in order to recruit and retain top talent, and stay competitive in the global marketplace. But they face a significant hurdle to doing so globally: Many countries still host significant levels of societal discrimination against LGBT people. Discrimination creates hugely significant negative impacts on economies.

What the Investment Sector Can Learn from the Agility of Veterans

Kate Kohler

What do you do when you don’t know what to do? Leaders create order out of chaos. This ability to calm the storm can be seen across professions and functions, but it is acutely observed in military men and women leaders. Key to managing through ambiguity is learning agility. In fact, today learning agility is often seen as the No. 1 predictor of leadership success, more accurate than IQ, EQ (emotional intelligence), education level, or even leadership competencies.

January Edition of the JSFB: “Order & Chaos”

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Complexity and volatility seem to be the defining characteristics for global markets as we experience an extraordinarily challenging start to 2016.  In this season of extremes, we digest China macro concerns,  the trajectory for commodity prices, and an evolving geopolitical and economic landscape.  All the while, we try to assess how the capital markets can… Read more »

“Legitimacy” in the Banking Sector – Revisited

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In January 2015, we published a report introducing a framework to enable analysis of the “legitimacy” of an institution by understanding its relationships with stakeholders. We used the banking sector as our test case given the recency of the Global Financial Crisis, but the framework can be applied to any industry or institution. Given this edition’s focus on “Order and Chaos,” we felt it would be relevant to revisit our previous work. This article is an excerpt from the report.

Philanthropy, Markets and Transparency

Strong foundation concept as the roots of a plant shaped as a butterfly and the leaves of a bush in the shape of flying butterflies as a creative base symbol and the power of freedom and imagination.

Part private, part public, philanthropic foundations live in a twilight world in which their desire to have impact while keeping a low profile increasingly collides with growing public expectations for transparency. How this tension is negotiated will be crucial to the future of how private wealth contributes to the public good in America and around the world.

Ordering the Unknown

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Order and chaos – given the choice, humans would usually choose order. Sure, we love to explore, but as we do so we also love to categorize, to organize, to create boxes and silos of knowledge. M.C. Escher summarized these tendencies by noting, “We adore chaos because we love to produce order.”

December Edition of the JSFB: “Through a Health Lens”

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As the Federal Reserve deftly orchestrated a short-term rate rise for the first time in nearly a decade, there is less clarity on the pace of the normalization ahead. Clearly, both Janet Yellen and Mario Draghi have articulated that progress will be predicated upon the health of their respective economies.  And so in this month’s… Read more »

Our Principles of Corporate Engagement

Consistent with our mission as a purpose-built, research-driven sustainable finance platform, Cornerstone Capital Group engages with asset owners, asset managers, and companies to help them integrate environmental, social and governance (ESG) considerations into their capital markets activities.  The specific objective of our corporate consulting business is to encourage companies to adopt best disclosure practices that… Read more »

Placement Power: How Tesco Is Helping Curb Customers’ Sweet Tooth

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We are facing major global health challenges that have potential consequences for shoppers and for retail companies. The obesity issue, which is forecast to get worse, is already contributing to high rates of chronic conditions like diabetes and cardiovascular disease. Consumers are actively looking for supermarkets to take a lead in helping them live healthier lives, and external stakeholders expect us to play a role as well.

Novo Nordisk: Rethinking the Challenge of Diabetes

Cities Changing Diabetes Summit 2015, CCD2015

Almost 100 years ago, Novo Nordisk set out on a journey to change diabetes. Today we supply close to half the world’s insulin and are the largest private investor in the research of diabetes, including the search for a cure for type 1 diabetes. Our founders could hardly have envisioned the company we are today, but neither could they have grasped the way diabetes would turn into one of the 21st century’s most pressing public health challenges.

A Vision for Innovative Health Care Delivery

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We face a unique opportunity in growth markets today, a by-product of the profound demographic shifts occurring at the confluence of a growing middle class, urbanization, ongoing challenges in battling infectious diseases and the rise in non-communicable diseases. These shifts are driving the need for substantial investment in infrastructure and innovation to enable the delivery of quality healthcare that is both accessible and affordable.

How Life Insurers Can Support Healthy Living

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A natural alignment exists between consumer health and longevity and the goals of the life insurance industry.  In fact, life insurers have been strong proponents of healthy living and disease prevention for more than 100 years.  After all, longer, healthier lives are in everyone’s best interest; individuals who live longer support the financial goals of life insurers and can lead to a society that’s more productive.

Healthy Heart Africa: A Business Plan for Tackling Non-Communicable Diseases

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AstraZeneca launched Healthy Heart Africa in October 2014 to support the governments of Africa in their effort to reduce the burden of heart disease – specifically hypertension. In doing so we recognized that we could not achieve our mission solely by increasing access to high-quality medicines through an in-kind contribution program. Instead, we approached it as a market-creating effort, one which would strengthen local healthcare systems, help build our own capabilities and, most importantly, benefit patients.

Health, Happiness, Performance: Formula for Success

Business People Walking Commuter Corporate Travel Concept

A wealth of evidence points to the fact that the health and happiness — and, in turn, motivation — of a company’s workforce have a direct correlation with its performance. The holistic range of programs offered at Unilever were inspired by our company mission to help people look good, feel good and get more out of life. This sentiment applies to our employees as much as it does to our customers and consumers.

Doing Right, While Doing Well: The SDG Opportunity

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For more than a decade, the UN Millennium Development Goals (MDGs) harmonized, energized, and expanded the first collaborative agenda to help the world’s most vulnerable populations. While unfinished business remains, the MDGs succeeded in spurring governments and the private sector to donate billions of dollars, and to cooperate along with civil society in ways that could not have been imagined just a few years earlier. Now the Sustainable Development Goals (SDGs), launched this year by world leaders, offer business a more comprehensive array of new ways to “do right, while doing well.”

A Model for Collaboration

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Twenty five years ago, McDonald’s and the Environmental Defense Fund (EDF) worked together to develop a groundbreaking model for industry and nongovernmental organization collaboration. It was the first partnership between an environmental group and a Fortune 500 company in an era when environmental and business interests were typically not aligned. The focus was not on philanthropy, the traditional model at the time; rather, the focus was on improving business practices.

Transforming Tobacco

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The negative health effects of smoking are top of mind when society looks at Philip Morris International (PMI). For us, this translates into a societal mandate to transform our business by developing and offering to adult smokers an innovative range of alternative tobacco and nicotine products that have the potential to reduce risks for smokers and in turn reduce population harm compared to continued smoking. We refer to these revolutionary products as “Reduced Risk Products” (RRPs).

“Wellness:” More than Healthcare Dollars Saved

Ken Mehlman - Stockasso

At KKR, we focus on improving a company’s operations and enhancing its value over a number of years. A longer time horizon allows us to look beyond quarterly earnings and instead focus on long-term value creation. Using this approach, we work to identify multiple ways to enhance a business. Workplace wellness is an evolving area of focus for us with multiple benefits for companies – and the communities where they operate.

American Voices on Health & Wellness

Health care costs in the United States of America.Concept of the cost of health care and medical expenses in the USA over the old glory flag.

A man in North Carolina said: “Health care is a human right. Companies should not cut corners on this aspect.”

A woman in Idaho said: “Most companies now hire workers part time so they don’t have to provide insurance.”

A woman in Pennsylvania said: “When firms were required to provide health insurance to full-time employees, they cut the hours of full-time employees so they became part-timers. That was manipulative.”

PoeticInvesting.com

TREES

Poetry seems to be rather difficult to define. Traditionally, the term refers to literary works with distinctive style and rhythm that somehow evoke intense emotion; therefore, what is considered to be poetry is as varied as the people who read it. To me, Adam Smith’s The Wealth of Nations is poetry. This work, the first… Read more »