Wall Street’s 2018 push for purpose

February 01, 2018 | Robert Schermers

On Monday morning the 8th of January, the board-members of Apple had probably just recovered their iPhones from their kids who had been using them for gaming throughout the weekend, when they read the message from two major investors. The investors want Apple to take action against smartphone addiction amongst children.

“To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society”, Larry Fink, Chairman and Chief Executive Officer of BlackRock writes in the open letter he published a week later, on the 16th of January. BlackRock manages more than $6 trillion in investments, which makes it the biggest investor in the world. In the letter, he urges the corporate world to take their role in society. If not, they might lose BlackRock’s financial backing.

The week after, on the 22nd of January, Bloomberg announced that 104 companies joined the 2018 Bloomberg Gender-Equality Index (GEI). “As investors continue to seek more information on companies’ approaches to environmental, social and governance (ESG) factors, the 2018 Bloomberg Gender-Equality Index allows investors to compare companies’ commitments to gender equality across industries,” Kiersten Barnet, Deputy Chief of Staff to the Chairman at Bloomberg was quoted.

Five days ago, on the 25th of January, the New York Times published on article on how the World Bank’s president, Jim Yong Kim, is aiming to revitalize the institution, seeking cooperation with Wall Street-investors on for example projects to protect coastal shores in West Africa, to back geothermal energy in Indonesia or to bet on electric cars in India.

Four recent examples of how the Wall Street investor-community is taking or might be contributing soon to a role beyond driving short term financial results, urging companies to live up to what society expects from them. They do so, not because investors suddenly have become philanthropists, but aware that their return on investment increases when companies positively contribute to society.

Whether we like it or not, money is the oxygen for the business world and investors will have a major influence on what sectors and companies will flourish and which will have a hard time surviving. If investors continue to mandate and/or contribute to change, this will be a powerful accelerator for businesses to accept the fact that sustainable business growth and societal responsibility are inseparable.

We need more Paul Polmans, Unilever’s CEO who has become the epitome of vision on the role of the corporate world. We need more Emmanuel Fabers, the CEO of Danone who is fiercely defending food as a human right rather than a commodity and who in 2017 announced to design a roadmap for Danone to obtain BCorp-certification, showing his commitment to live up to a clearly defined set of business principles. We need increased and rapid change from within companies to take a responsible role for the communities in which they operate.

But let’s also celebrate investors driving change from the outside. Let’s help Wall Street find its purpose in investing in business with purpose. The brokers would for sure feel better at night knowing that they make money whilst encouraging their investments to drive positive societal change. But more importantly: the world would be grateful.

Let’s hope the examples of the first weeks of January 2018 are a sign of what is to come for the rest of the year.


Posted By Robert Schermers

Robert has a bachelor´s degree in business administration and a master´s in law. He started his career in the Netherlands and built his expertise over 18 years at Unilever. He worked in challenging marketing and business positions in various European countries as well as in South Africa and in Brazil. Robert knows from experience the massive positive impact on both business results and society of really putting people first in brands and teams, and is a true ambassador for humanizing business in the widest sense of the term. He loves exploring new cultures, leaving the beaten track. He has spent months traveling India and Malaysia; he has climbed Aconcagua (the highest mountain in the Americas at about 7,000 meters); he has spent weeks with indigenous families in the jungle of Colombia; and he loves to take the more adventurous routes when skiing, hiking, or diving. As a student, he already felt strongly attracted by the positive spirit, culture, beauty, and opportunities of Latin America, and his stay in Brazil made him decide to make this beautiful country his home. He currently lives with his wife in São Paulo, Brazil.

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