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A growing body of evidence has established that ESG (environmental, social, governance) principles are good for business. The U.S. Department of Defense (DoD) is also applying similar principles to decarbonize its operations and plan for the impacts of climate change. A new solar project in Hawai‘i illustrates how ESG principles are being put to service for national defense.

The Department of Defense embarks on an energy transition

During the Obama administration, the Department of Defense embraced a high-profile position as a market-mover and advocate for climate action, including solar energy, biofuels, energy efficiency and other clean technologies. Despite the lack of support for climate action by former President Trump,  the DoD continued to invest in decarbonization during the Trump administration as well.

The U.S. Air Force apparently could not wait for former President Trump to finish his term. Just a few weeks before Election Day 2020, the Air Force publicized a carbon-negative goal for itself and the entire DoD. The Army also announced a net-zero goal for itself last February.

New opportunities for U.S. businesses

All of this translates into new opportunities for U.S. firms that do business with the DoD, and the pile is growing. A Pew Research study from 2011 calculated that the U.S. Department of Defense increased its clean energy investments from only $400 million in 2006 to $1.2 billion in 2009. At the time, Pew anticipated that DoD would spend more than $10 billion on clean energy annually by 2030.

At a federal budget hearing last June, the DoD also emphasized the connection between clean technology and national security. “The department is addressing a change of technology operational and policy initiatives to enhance the use of energy and warfighting. To that end, we are requesting $4.3 billion in energy investments, including both insulation energy and operational energy," the DoD said.

The DoD is also pursuing the low hanging fruit of energy conservation, with the help of the Energy Resilience and Conservation Investment Program. The energy conservation program was established under the federal military code in 2006, as part of an agency-wide energy funding initiative aimed at resilience and readiness as well as conservation and cost-cutting. The Defense Department requested approximately $287 billion for the program in the FY 2020 budget.

Clean energy for the community, too

In addition to its interest in the energy resilience and health of its own facilities, the DoD also recognizes that a strong national defense depends on the health and resilience of the surrounding communities. 

That approach is illustrated by a new solar array and energy storage project to be constructed on 131 acres of federal property at Joint Base Pearl Harbor-Hickam's (shown above) West Loch Annex in Hawai‘i, on the island of O‘ahu. The 42-megawatt Kūpono Solar Project broke ground last week. Once up and running in 2024, it will deliver enough clean energy to the grid for 10,000 homes.

Ameresco, the project developer, estimates that the project will shave 50,000 tons of carbon dioxide from the carbon footprint of Hawai‘i.

“This is a great example of climate action, building access to clean, reliable energy sources inside and outside the fenceline,” emphasizes Meredith Berger, Assistant Secretary of the Navy for Energy, Installations, and Environment.

“The Department of the Navy is proud to partner with the Kūpono Solar team and Hawaiian Electric as we enhance mission and community resilience and move purposefully towards Hawai‘i and Navy’s energy goals,” she adds.

Military contractors are on board with ESG

There is clearly some tension between military operations and ESG principles. That has tested the limits of ESG funds, which tend to avoid defense and aerospace stocks.

Nevertheless, military contractors have begun advocating for ESG principles within the DoD. The leading DoD contractor and advisor Noblis, for example, has noted that DoD’s annual Sustainability Report and Scorecard could be expanded.

Specifically, Noblis makes the case for expanding the Executive order that established the Scorecard, to implement science-based targets and other hallmarks of mature ESG reporting.

“Expanding EO requirements involves increased disclosure and planning related to sustainability, climate risks and environmental justice which apply to all DoD program areas as well as the Department’s overall mission,” Noblis explains.

“The DoD has also identified environmental justice as a critical practice while its national defense mission is working to include it as a key consideration in its governance structure. An ESG framework to reporting and planning meets EO requirements, strategically incorporates insights from relevant stakeholders and leadership and advances DoD missions,” the DoD concludes.

Next steps for ESG

The ESG movement has come under fire from Republican office holders, candidates and other allies in recent months. The attacks are as timely as they are political, as the ESG movement is increasingly at odds with the issues selected by GOP leaders to satisfy and motivate their electorate. That includes climate change conspiracy theories and the election fraud lies, in addition to attacking LGBTQ rights and abortion rights, among other issues.

In contrast, the national defense and corporate focus on climate action, human rights, civil rights and transparency dovetails with the positions espoused by an overwhelming majority of Democratic office holders and candidates, and their allied stakeholders.

The political consequences are clear. The ESG movement has cut the Republican Party adrift from both business and national defense. They continue to soothe the shattered nerves of their voters with a barrage of lies about election fraud, because that is the only case they can make.

Image credit: DoD Media

Four out of five cities worldwide faced climate risk in 2022, according to a new report released by CDP. The study tracked almost 1,000 cities from Jan. 1 through August 16, and it found that 80 percent of them faced risks ranging from extreme heat and heavy rainfall to drought and flooding. Additionally, 28 percent of the cities faced climate risk that threatened more than 70 percent of their populations. 

Vulnerable communities face the most dire climate risk 

More than half of the world’s population lives in cities, though cities cover just 3 percent of the world’s surface; 62 percent of them are facing climate hazards that are expected to intensify in the future. Vulnerable groups are at the highest risk of intensifying and increasing climate risk. According to the CDP report, “Between 2010 and 2020, deaths from floods, droughts and storms was 15 times higher in highly vulnerable regions, compared to regions with very low vulnerability.” Because these groups of citizens are the most negatively affected by climate hazards, effective climate action must simultaneously address the risks brought about by social inequalities.

The most vulnerable are also the smallest contributors to global greenhouse gas emissions. Fifty percent of global greenhouse gas emissions are from the wealthiest 10 percent of the world’s population. The poorest 50 percent is only responsible for 7 percent of total emissions. The World Bank estimates that 132 million people will be pushed into extreme poverty due to the impacts of climate change. 

Cities can be hubs of climate innovation

Cities are responsible for 70 percent of total global emissions, but they are also key to climate progress. The new CDP report noted, “Close to half of cities have set a city-wide emissions reduction target… More than three in five cities are taking adaptation actions, while close to two thirds are taking emissions reduction actions.” Climate action in cities has also led to a number of other positive side effects, including economic, social and human health improvements. 

The report found that while climate action produces positive results for all cities that undertake them, cities that center the needs of people in their climate planning and implementation processes see even greater positive co-effects. People-centered climate actions can include engaging with the community to collaborate on climate planning, creating adaptation goals that also target issues like air or water quality, or undergoing a climate risk and vulnerability assessment (CRVA) that considers the needs of the most vulnerable populations in a city. 

For example, Chicago created its climate action plan with the participation of more than 2,000 residents across almost every neighborhood in the city. Organizers developed a series of surveys in order to center community priorities. The survey results showed a community priority of pollution reduction and better air quality, which were incorporated into the city’s Climate Action Plan. 

Putting people at the heart of climate action

“Putting people at the heart of climate action, from planning to implementation, improves lives," said Maia Kutner, CDP’s interim global director of cities, states and regions. "It unlocks social, economic and environmental benefits, enhances equity and inclusion, and ensures a just transition to a low-carbon economy. Cities that identify vulnerable groups, engage with them, and understand their needs to deliver just adaptation strategies see the clear benefits and create a sustainable future for people and the planet.” The CDP study shows that cities implementing people-centered climate actions also saw improvements in air quality, food security, water security, job creation, soil quality and increased green space. 

In its report, CDP calls on cities to set science-based emissions targets and to undertake a CRVA that considers their most vulnerable populations. Approximately 63 percent of cities surveyed are currently taking a people-centered approach to climate strategy, which will become increasingly important as cities face new and intensifying climate hazards. 

Image credit: Yohan Cho via Unsplash

Many people attend auto shows to learn about the latest innovations within the automotive industry, but attendees who stop by the Subaru booth might end up leaving with a new family member. 

Since 2018, Subaru has partnered with auto shows across the country, including the Los Angeles Auto Show, to help find loving homes for adoptable dogs. The initiative is part of the Subaru Love Promise, the company’s philanthropic and social impact mission. Throughout the year, Subaru focuses on five different foundational pillars that make up the Love Promise: helping find loving homes for pets, preserving the environment, giving back to local communities, helping those in need and supporting childhood education. 

“Subaru and our retailers are dedicated to making the world a better place, simply because it’s the right thing to do,” said Julie Campbell, shows and events specialist for Subaru of America. “The Subaru Love Promise is really a commitment to improving the lives of those around us — not just with donations, but also with actions that bring us closer to the community and encourage others to get involved to increase the cumulative impact.”

Dog adoption programs help furry friends find loving homes

Since 2018, Subaru and its retailers have donated $465,000 to aid pet organizations and have helped 867 pets find loving homes at the LA Auto Show and other auto shows across the country. Plenty of dogs are finding loving homes thanks to Subaru Loves Pets, a pillar of the Subaru Love Promise, but these happy occasions also come as the result of thorough planning and collaboration with the show’s organizers. 


“We figured out everything from the logistics of poop bags to everything else you need to do a dog adoption at an auto show,” said Terri Toennies, president of the LA Auto Show. “We know that the puppies get tired, so we bring in the dogs in shifts to let them take naps throughout the day as needed.”

When the partnership first started out, it was a bit of a challenge to gain traction with local pet organizations and animal shelters. After all, pet organizations are not exactly accustomed to fielding dog adoption requests from auto shows. That’s all changed in the last few years as shelters across the nation have perked their ears and heard about the automaker’s work.

“Now that people have seen what this is and seen coverage about it on the news, they’re saying, ‘I’m happy to help!’ ‘Can I get on board?’ ‘We’d like to sign up,’” Campbell said.

From COVID-19 slowdowns to rapid expansion 

The pandemic disrupted the growth of the dog adoption effort, but Subaru bounced back in 2021. “This past show season, 2021-2022, was when we really got our legs under us,” Campbell said. “We participated in 43 shows, and we had 279 dogs adopted.”

With animal shelters eager to participate and a full schedule of 45 auto shows booked for the 2022-2023 season, the Subaru Loves Pets auto show adoption program shows no signs of slowing down. “We have actually had a few people that were specifically coming to the show because they wanted to adopt a dog,” Campbell said.

The dogs aren’t just entertaining for customers. Toennies said that amidst a bustling auto show, with thousands of people milling about, having an area to briefly relax with the adoptable dogs is also therapeutic for auto show employees. “From our standpoint it’s really cool, because the Subaru booth is right underneath our show office,” Toennies said. “I can look down on the booth all day long and see the dogs coming and going.”

Because the dogs have been such a smash hit, Subaru has explored the idea of expanding the program to other pet species, but the team doesn’t want to bite off more than they can chew.

“We have looked at the idea of having other animals,” Campbell said. “Cats would probably be a little bit more doable, but they’re still escape artists. So, the concern would be a cat getting out, running all over the auto show, getting into the cars and just being a little bit difficult to recapture.”

Cats and cars may sound like a plan fated to go awry, but they aren’t the only critters deemed too chaotic for the auto shows. “We just got a call this last week that an exotic reptile company wanted to exhibit,” Toennies said, “and we said ‘No, thank you!’”

The dogs are the stars of the show, and it doesn’t sound like they will be losing their spot to cats or lizards anytime soon. Nearly 70 percent of Subaru owners have pets, and at least half of those are dogs, so focusing on canines makes sense. Soon, the auto show adoption events will have helped over 1,000 dogs find homes, demonstrating the program clearly resonates with Subaru’s consumer base.

“The thing that is so special to me about these events is seeing how much joy they bring to so many people, the look of anticipation on the faces of these people,” Toennies told us. “They’ll wait in line to get into the dog park, and they will wait for the opportunity to love on these dogs.”

Most car salespeople want to put you in a new car, but the team at Subaru wants to put a new dog in there with you. Check out the Subaru booth at your next local auto show, and you just might find a new set of wheels and a four-legged friend to boot.

This article series is sponsored by Subaru and produced by the TriplePundit editorial team. 

Images courtesy of Subaru of America, Inc.

Over the past several years, the global impact investing field has expanded like never before. Looking ahead, it is worth considering what impact investing’s further growth and mainstreaming could mean for philanthropy and foundations and the dynamic role they have long played.

Informed by almost 40 years and more than $700 million of impact investing, the John D. and Catherine T. MacArthur Foundation sees three main ways that philanthropy should continue to engage.

First, grant funding is needed to support further development of sound, widely accepted standards and policies for impact measurement and verification. Second, foundations provide critical support to the networks, experts, and thought leaders who help investors, investment advisors and asset managers connect, learn, and innovate. Third, philanthropy can practice impact investing directly.

By example and through partnership, foundations help advance growing engagement in values-aligned and sustainable investing. And, by leveraging our rich legacy of catalytic capital leadership, foundations help the impact investing field expand and accelerate its progress toward a more just, resilient, and inclusive world. Pioneered by the Ford Foundation and followed by the Packard and MacArthur foundations in the early 1980s, catalytic capital is patient, risk-tolerant, and flexible investment that seeds, scales, and sustains impact-generating organizations, usually with the goal of mobilizing capital from other sources, often in large multiples. This can happen by shifting risk and return through a guarantee or blended finance structure, or by making an early bet that helps an unproven but promising enterprise build its scale and track record to attract more investors over time.

Our experience as an early investor in the U.S. field of Community Development Financial Institutions (CDFIs) demonstrates the important role of catalytic capital and its lasting, outsize impact. In the early 1970s, pioneering, community-focused development banks and loan funds arose in Chicago and elsewhere, often in direct response to the devastating policy and practice of redlining, which denied Black and under resourced communities access to mortgages, insurance, and other essential forms of capital for decades. The early impact investments made by the Ford and MacArthur foundations throughout the 1980s and 1990s helped seed and scale dozens of promising new loan funds, banks, and credit unions. By 1998, CDFI leaders made the case for a new U.S. Treasury program which accelerated the industry’s spread and development nationwide.

When the COVID-19 pandemic reached the U.S., roughly 1,300 certified CDFIs were at work nationwide, managing more than $222 billion in assets. Through fast action and collaboration, backed by foundations and mission-driven family offices, they provided critical financial support to hard-hit small businesses—during the pandemic’s early days and as mainstream lenders implementing the federal government’s massive Paycheck Protection Program left out thousands of eligible nonprofits and small businesses, many led or owned by women and people of color.

Next, when the murder of George Floyd, nationwide protests, and a widespread racial reckoning motivated corporations, foundations, and individuals to finance Black and Brown communities and entrepreneurs, CDFIs met the moment again, with established capacity and ready opportunities.

Ultimately, these recent events and other developments helped to draw billions of dollars in new public and private capital to CDFIs over the past few years, including major donations from philanthropist MacKenzie Scott and both grants and investment from Google and other firms.

As an early and longtime CDFI investor, we found this surge of engagement and new resources incredibly exciting. It showed us that $300+ million in catalytic capital, provided to the earliest CDFI pioneers and to other promising groups over time, had ultimately helped build a durable infrastructure for impact at a scale we never imagined originally—with strong potential to continue multiplying the results of our original catalytic capital investments in the decades ahead.

The trajectory of a pioneering “triple-bottom-line” impact capital manager, now known as SJF Ventures, illustrates the lasting and outsize impact of catalytic capital invested in a for-profit, growth equity fund. In 1999, MacArthur made a $1 million investment to help this unproven, mission-driven fund manager seeking to find companies that could generate quality jobs and a greener economy as well as outstanding financial returns. If SJF could successfully demonstrate its innovative approach, its later funds should prove compelling to endowments, pension funds, and other institutions with relatively conventional risk-return objectives and capacity for sizable investments.

Today, SJF has raised and managed five funds, launching its most recent one in 2021 with $175 million in capital from dozens of leading endowments, pension funds, and accredited individual investors seeking risk-adjusted, market-rate returns and authentic social and environmental impact.

Along the way, it has invested in 81 companies which have created more than 12,000 quality jobs across 25 states and that mitigate more than 3 million metric tons of CO2 annually. The positive ripple effects of MacArthur’s $1 million investment in SJF have continued well beyond anything we could have predicted all those years ago.

MacArthur’s 20 year affordable rental housing initiative also shows how catalytic capital can fuel social innovation, strong organizations, and infrastructure for ongoing impact. Abt Associates, in a 2020 evaluation, found that direct enterprise loans MacArthur made to support leading, nonprofit housing developers from 1999-2011 helped these organizations accelerate their growth, strengthen their finances, and generate substantial impact. The affordable rental properties they preserved and improved while our loans were active, plus remarkable results they have continued to achieve, benefit tens of thousands of lower-income seniors, families, and individuals with special needs in communities across the country. Likewise, the New York Housing Acquisition Fund and other, multi-investor funds that MacArthur helped establish have demonstrated how catalytic capital can drive innovation, mobilize other investment through a blended finance structure, and yield lasting impact. Since launching 17 years ago, the fund has deployed $533 million help preserve or create more than 14,000 units of affordable rental housing.

Looking ahead, we anticipate similar long-tail impacts from other elements of our current $500-million portfolio, including a growing set of climate-related investments, over $100 million dedicated to Chicago, and ten funds and NGOs chosen for investment through our Catalytic Capital Consortium initiative.

To help the global impact investing field expand its reach and deepen its impact in the years to come, philanthropy must help catalytic capital secure a strong and enduring role: fueling innovation, cultivating both promising and proven institutions, and supporting enterprises with exceptional impact but moderate returns and/or outsize risk. By working with today’s dynamic, fast-growing community of catalytic capital practitioners, and with other investors across the capital spectrum, we can use catalytic capital to help unleash additional resources and powerful impact to meet our world’s current and future challenges.

Previously published on the Green Money Journal.

Image credit: Michael Schwarzenberger via Pixabay

With cooler temperatures, it’s tempting to head outdoors. Maybe visit one of the many state or national parks in the U.S. But for people of color, heading to public lands can be a fraught experience — or maybe one you don’t consider at all.

The barriers to feeling welcome at national parks 

U.S. National Parks have an ugly, racist past. And while the U.S. National Park Service (NPS) is grappling with its legacy and working to make its spaces more inclusive, layers of generational trauma make many visitors feel unwelcome. Reasons given for people of color not visiting state and national parks include affordability, access, historical trauma, fear for personal safety and discrimination. 

People of color make up only 22 percent of U.S. National Park visitors and 22 percent of U.S. National Park Service employees. Further, only 24 percent of national parks and monuments memorialize marginalized communities such as Indigenous people. 

During the first two years of the COVID-19 pandemic, visitations to state and national parks increased, as people often found the outdoors the only safe place to go. However, the numbers declined for marginalized groups not living near a park, including Black and Indigenous Americans. All to indicate that lack of access and awareness continue to remain problems.

Overcoming the obstacles for a more inclusive experience on America's public lands

While the NPS works on diversity and inclusion in its workforce and programs, companies and individuals are also working to get more people of color into parks. Entrepreneur Kween WerK (nom de plume of Parker Bushman) recently took her mixed-race family on a 17-day road trip to highlight how inclusive public spaces, including parks, are to people of color (or are not). Referring to it as the Liberation Tour, she reviewed sites and places in the Inclusive Guide she helped create. The guide has been referred to as a “digital Green Book” — the travel guide that helped Black Americans find safe places to eat and stay in the U.S. — and as a Yelp for inclusivity. 

Kween — short for Keep Widening Environmental Engagement Narratives — is a vocal advocate for environmental issues and sees getting people of color into natural places as part of that advocacy. She has stated that she wants “Black, Fat, and Femme” folks like her to be seen in and included in natural spaces. Bushman’s TikTok covers a wide variety of issues to educate, inform and entertain — from hiking and whitewater rafting to how not to be a “Karen” and the intersection between climate and banking. 

Bushman’s Liberation Tour covered various issues, such as places where she felt like she had to code switch, places she was followed and sundown towns, as well as places that were open and accepting. She has also partnered with companies to increase her reach. For example, on Public Lands Day (Sept. 24), she partnered with Clif Bar & Co. as she hiked Great Sand Dunes National Park (shown above) and Arches National Park to educate her audience on public lands and bring attention to accessibility and access issues at the parks.

@kweenwerk Happy Public Lands Day! Public lands provide significant benefits to people and the environment. Let's work together to make sure public lands are safe and welcoming for all people. #clifcreator ♬ original sound - 👑 Kween werK 👑

Why inclusivity at national parks, and all public spaces, matters

Studies have shown that being in nature can have a positive impact on mental health. People of color have long had to deal with the microaggressions of systemic racism, but in the aftermath of Black Lives Matter, Asian-American attacks related to COVID-19, the politicization of critical race theory, and other conflicts, open hostility has made many exhausted. Spending time in nature could bring some solace, but not if people do not feel welcome or safe there. 

Research has also found that more time in nature increases people’s inclination to protect nature. In addition, climate change’s impacts disproportionally affect communities of color and low-income communities. Spending time in nature could help make that connection between activism and survival — not to mention a chance for people to breathe some clean air. 

The bottom line is that public lands are for the public. The systemic barriers built into access to public lands should be removed, but additional work remains to raise awareness of the benefits of that access. Black and Latino voters are more likely to be alarmed about climate change than white voters — likely because they already live on the front lines. Because of their lived experiences, they also bring diverse solutions to the climate action table. Environmental activists like Kween WerK help raise awareness that they deserve access to the public lands they help pay for.

Image credits: Matt Noble via Unsplash

The world’s top polluting companies are not placing meaningful actions or strategies behind their net-zero commitments, according to the latest assessment from Climate Action 100+.

The group of 700 investors with over $68 trillion in assets under management monitors the top 166 global companies that are responsible for 80 percent of global corporate greenhouse gas emissions. According to its most recent report, the vast majority of the focus companies’ net-zero announcements are not accompanied by decarbonization strategies or any meaningful change to business practices. 

The report found that 75 percent of the world’s top polluting companies have made commitments to achieve net-zero by 2050 or sooner, up from 69 percent in a March 2022 assessment, but only half of those companies include critical Scope 3 emissions in their net-zero plans. Scope 3 emissions are important to understanding actual impact, because Scope 3 emissions include a company's entire value chain and are, for most industries, the largest category of emissions.

Additionally, only 20 percent of the companies analyzed have set medium-term emissions reduction targets that cover all scopes and that align with a 1.5 degrees Celsius warming scenario. Only 10 percent of the companies have established short-term emissions reductions targets that align with that 1.5-degree limit, which scientists agree is critical to avoid the worst impacts of climate change. 

“Companies are making net-zero commitments, but investors want those companies to turn intentions into concrete short- and medium-term actions to provide the confidence they can get to net-zero,” said Rebecca Mikula-Wright, CEO of AIGCC and IGCC and current vice-chair of the Climate Action 100+ steering committee, in a statement. Only 19 percent of companies have created quantified decarbonization strategies. Additionally, the assessment found that many of the companies' climate engagement tactics and trade association affiliations impede the creation of a robust climate policy. 

The new assessment from Climate Action 100+ comes on the heels of a different review from nonprofit Carbon Tracker that found 98 percent of high-emissions companies did not adequately report effects from climate-related risks and net-zero emissions plans into their financial statements, keeping essential decision-making information from investors.

“Of the 107 companies that we reviewed, over 70 percent did not indicate that they had considered climate matters when preparing their 2020 financial statements," Carbon Tracker found. "This is despite the fact that significant institutional investors have identified these companies as highly carbon exposed, and most are included among the Climate Action 100+ investor focus list.”

Carbon Tracker also noted that auditors responsible for assessing the financial statements of the companies in question did not adequately consider climate-related risk or potential effects from net-zero commitments.

The Climate Action 100+ assessment highlighted some of the key failures of specific industries. Only 17 percent of automobile companies are on track to produce enough electric cars to meet net-zero by 2050 commitments. No companies in the steel, aviation or cement industries are in line with scenarios that limit warming to below 2 degrees Celsius. Less than a third of electric utilities have coal phase-out plans aligned with limiting warming to less than 2 degrees Celsius, and 94 percent of these utility companies do not have plans to build out renewable power capacity. At current emission intensities, the global warming pathway of the utilities in focus is greater than 2.7 degrees Celsius. 

While the report notes that an increasing number of companies are making climate disclosures and net-zero commitments, the number of companies that are aligning their actions and strategies to their public statements remains low. Without relevant, transparent interim targets on their journey to net-zero and appropriate climate-related financial disclosures, investors and consumers will not be able to hold the biggest corporate polluters accountable. Companies must grow the speed and scale of their decarbonization process to keep the goal of limiting warming to 1.5 degree Celsius alive.

Image credit: Chris LeBoutillier via Pexels

Corporate purpose has made the leap from nice-to-have to materially important: Companies that enable employees to fulfill their personal purpose through their work reap a multitude of benefits in the form of improved loyalty and retention, higher levels of engagement and achievement, and improved health and personal resilience, according to a McKinsey study on the role of purpose in the employee experience. 

But fewer than half of executives believe that purpose makes a difference, according to an earlier McKinsey survey. More recently, research from MIT Sloan Management Review found that half of the executives they surveyed believed that the role of purpose has been overlooked in driving business performance.

Where’s the disconnect? 

To realize the benefits, connect people to purpose

Before we go any further, it’s worth noting the opportunity at hand for leaders to engage their employees more fully in their organizations’ purpose. 

In the aforementioned McKinsey study, 70 percent of the employees surveyed said their sense of purpose is largely defined by work. However, a significant gap exists between executives and frontline employees when it comes to how people perceive the impact of their work on purpose: 85 percent of executives and upper management believe they are living their purpose at work, whereas only 15 percent percent of frontline employees agreed. 

Worse, nearly half of these employees disagreed, compared with just a smattering of executives and upper management.

Keep these data in mind as we consider how purpose contributes to profit. 

How corporate purpose contributes to profitability 

Corporate purpose drives profitability from multiple angles. Research from Gallup gets even more granular, finding that improving employees’ connection to purpose by only 10 percent delivers an 8 percent decrease in turnover and a 4.4 percent increase in profitability. 

The bottom-line savings a company would realize from improving employee retention are obvious. The influence of purpose on consumer behavior may be less visible, but the impact is potentially even more significant: According to research from PwC, a huge majority of consumers — 76 percent — would not hesitate to vote with their wallets and cease doing business with a company that treats its people, the environment or the communities in which it operates poorly. 
 
Less visible to the naked eye is the profound impact purpose can have on providing clarity to the organization.    

Guiding and motivating people 

Claudia Gartenberg, a preeminent researcher on corporate strategy purpose, and her coauthors offered this definition of purpose — “ a set  of common beliefs that are held by and guide the actions of employees” — in the paper titled, “Corporate Purpose and Financial Performance.”
 
Gartenberg and her fellow researchers surveyed approximately 500,000 at a sample of U.S. firms, and concluded that “high purpose” firms come in two forms: 

• Firms that are characterized by high camaraderie between workers
• Firms that are characterized by high clarity from management 

The researchers found that firms exhibiting both high purpose and clarity “have systematically higher future accounting and stock market performance, even after controlling for current performance, and that this relation is driven by the perceptions of middle management and professional staff rather than senior executives, hourly or commissioned workers. Taken together, these results suggest that firms with employees that maintain strong beliefs in the meaning of their work experience better performance.”

Operationalizing purpose

The opportunity to operationalize purpose is front and center at the upcoming 3BL Forum: Brands Taking Stands, taking place on October 25, 2022, at New York City’s iconic Pier Sixty. 

Candid discussions about the role of corporate purpose within an organization, and the effect of the headwinds we’re experiencing today on brand commitments, are on tap. Learn from (and network with) senior leaders at top-tier brands as they address meeting stakeholder expectations for ESG, sustainability and diversity during this period of constant change. 

TriplePundit readers can receive 35 percent off their in-person tickets using the code 35FORUM2022 when prompted.

REGISTER HERE

Image credit: Czapp Árpád via Pexels

Billionaire philanthropy has been big news as governments, corporations and individuals alike awake to the immensity of the dawning climate crisis. Michael R. Bloomberg and Bloomberg Philanthropies recently committed $85 million to combat pollution from petrochemical plants in the U.S. and $204 million to further marine preservation through the Bloomberg Ocean Initiative, as well as hundreds of millions more towards sustainable energy transitions across the globe. Likewise, the Bill and Melinda Gates Foundation pledged $1.27 billion toward the United Nation’s Sustainable Development Goals (SDGs). Overall, the 25 biggest philanthropists in the U.S. had donated a cumulative $149 billion as of January of last year, according to Forbes.

Giving it away hasn’t hurt them any, however, as together they were still worth just under $800 billion when their assets were tallied by the business magazine. With more wealth than the majority of the U.S. population combined, billionaires have the financial power to affect change in a way that no other group of people does. With this unique position comes not just the moral imperative to use billionaire philanthropy to repair the damage done by the unfettered consumerism upon which their fortunes have been built, but also a responsibility to their fellow inhabitants of planet Earth.

Humanity took giant strides and accomplished massive collective feats in order to arrive at the place we are today. Together, we have achieved what our ancestors would see as unfathomable technological advancement and an unimaginable accumulation of wealth. The very conditions that billionaires rely on to even exist were borne out of the sum total of human endeavors — not their individual contributions. But — while it has taken all of us to get us where we are — the environmental costs and financial benefits have been so unequally distributed that, overall, billionaire philanthropy appears paltry in comparison to the bulk of issues facing humankind.

Recent comments by Bill Gates seemingly peeled back the curtain —  exposing his aversion to degrowth and motivation to maintain the status quo through yet-to-be-invented technologies. This willingness to sacrifice the Global South on the altar of profit and overconsumption in the Global North begs the question — are billionaires really donating toward the benefit of society, or are they just investing in their own future markets?

Considering the immense fortunes that they continue to amass regardless, it’s a fair inquiry. The U.N.’s predictions on the severity and immediacy of the climate crisis make it clear that life on Earth is at a crossroads. Humanity can choose sustainable and equitable resource distribution across the globe or we can continue on the path to disaster with our hopes pinned to those who seem to be seeing the impending crisis as an investment opportunity. For all of the tangible and financial help that the billionaire philanthropy class has given back, by shoring up the systems that keep their profits rolling in instead of supporting massive societal change, they’ve made it clear where their loyalties will always lie.

Although most billionaire philanthropists continue to get richer while giving away small percentages of their exorbitant wealth, there are a few ex-billionaires who stand out from the pack. Among them, Yu Pengnian and Andrew Carnegie — who gave away all of their wealth before they passed — and Charles “Chuck” Feeney. Now in his 90s, Feeney lives a modest, fortune-free lifestyle after donating all but $2 million in retirement.

Feeney is living proof that billionaires can give back to society without expecting a return on their investment. Unfortunately, while his de-fortuning may have moved Bill and Melinda Gates along with Warren Buffet to form the Giving Pledge, his fellow billionaires have failed miserably at following in his footsteps. If only more of them would take his advice: "I cannot think of a more personally rewarding and appropriate use of wealth than to give while one is living — to personally devote oneself to meaningful efforts to improve the human condition." We would stand a much better chance at fighting climate change if the wealthiest among us finally recognized their responsibility to the people and the planet that made them that way, after all.

Image credit: Adobe Stock

Plant-based protein is having a moment, and right now it’s not quite a good one. Sales are down in the U.S., punctuated by the meat giant JBS’ recent decision to shutter its Colorado-based Planterra Foods. The price of plant-based alternatives is still too pricey for many American consumers, especially after the cost of meat has largely flatlined, and even declined, after pandemic-induced supply chain problems sent the cost of beef and other meats soaring during 2020 and 2021. Then there was last month’s saga about Beyond Meat’s COO and his Mike Tyson moment: It was a allegedly a nose, not an ear, but that didn’t exactly spark a public relations lift for what analysts largely describe as a beleaguered segment within the global food industry. 

But the plant-based protein industry, even here in the U.S., isn’t beleaguered, and investors should be confident in their current and future stakes in these companies if they’re seeking long-term returns. Sure, Beyond Meat’s recent struggles have taken up a lot of the oxygen in the room, and Impossible Foods did recently lay off about 6 percent of its workforce. On the latter point, the company responsible for reinventing Burger King’s Whopper claimed many of those roles were redundant or unnecessary under its reorganization plan, and says its retail sales have kept surging year after year.

The long-term fundamentals for the plant-based protein sector are sound

But not everyone is bemoaning the current trials and tribulations of plant-based protein companies. One of them is Bloomberg’s Amanda Little, who in a recent op-ed says investors should shake off what is now appearing as a bear market and be bullish on the future of these alternatives to meat. She points to a BCG report from 2021 that predicts plant-based alternatives to meat and dairy will comprise 11 percent of the global protein market — in the event she’s off by a few percentage points, that amount will still be sharply up from what is now about 2 percent today.

“Remember, too, that alternative meats are competing against a subsidized industry that has had more than a century to achieve good economics,” Little writes. “Even in the U.S., we can expect a price advantage for faux meats to arrive soon enough. The rising costs of water, feed and supply chain disruptions in the climate change era will increase the cost of livestock production and, eventually, consumers will be paying a green discount for alternative products rather than a green premium.”

Oddly enough, this vegan fast-food chain is ignoring all the polemics about meat alternatives

One company that is ignoring the current chatter over the state of the U.S. plant-based protein market is Toronto-based Odd Burger. Five years after opening Canada’s first vegan fast-food eatery, the company says it plans on launching franchises in 25 U.S. states, and no, California, New York, Oregon nor Washington are on the list: States currently in the company’s crosshairs include Alabama, Iowa and Wyoming. 

While the company offers its own vegan takes on fast-food standbys such as the Big Mac, Egg McMuffin and Whopper, meat-free gyros, chicken sandwiches, tacos, milkshakes and even Nanaimo bars are on the menu. The company has operated its own manufacturing plant since 2018.

"We could not be more excited to initiate our U.S. expansion and extend our brand to millions of people in the U.S. market," says James McInnes, Co-Founder and CEO of Odd Burger, said in a public statement. "We have already received hundreds of inquiries from potential franchisees in the U.S. and now we will begin the process of finding the perfect franchise partners to work with."

McInnes joins Little in viewing the future of plant-based protein as on that is bright. Part of such optimism stems from two undeniable trends: The taste, texture and quality of these alternative to meats keeps improving, while the environment for the global meat industry will only become a more difficult one in which to operate. “The rising costs of water, feed and supply chain disruptions in the climate change era will increase the cost of livestock production and, eventually, consumers will be paying a green discount for alternative products rather than a green premium,” concludes Little. “For all the difficult headwinds plaguing the plant-based industry today, there are still more powerful tailwinds pushing it forward.”

Image credit: Odd Burger via Facebook