Titles Matter to Provide Context and Direction - for Corporate Leaders and the Providers of Capital

Shorthand terms do matter – the “titling” of  certain developments can sum up trends we should be tuning in to.  Some examples for today: Sustainable Capitalism  - Stakeholder Primacy – Sustainable Investing – Corporate Sustainability. Corporate ESG Performance Factors.

These are very relevant and important terms for our times as world leaders grapple with the impacts of the coronavirus, climate change challenges, conditions of inequality, have/have not issues, questions about the directions of the capital markets, issuer access to long-term capital…and more.  And, as influential leaders in the private, public and social sectors consider the way forward.

The concept of shareholder primacy was more or less unchallenged for decades after World War II with the rise of large publicly-traded corporations – General Electric! -- that dominated the business sector in the USA and set the pace other companies in the capital markets.

But as one crisis followed another – the names are familiar -- Enron, WorldCom, Wells Fargo, Lehman Bros and Bear Stearns, Purdue Pharma – investors began to seriously adjust how they evaluate companies they will provide vital capital to. 

Investors today in the time of great uncertainty are focused on: whose equity issue to put in portfolio that will stand the test of time; whose bonds will be “safe”, especially during times of crisis; which corporate issuer’s reputation is not at risk; where alpha may be presented as portfolio management practices are challenged by macro-events.

This is about where the money will be “safer” overall, and provide future value and opportunity for the providers of capital – because there is great leadership in the board room and executive offices.

As we think about this, the questions posed in context (virus crisis all around) are:  Why has sustainable investing gone mainstream?  What can boards and C-Suite do to exert leadership in corporate sustainability?  Where is sustainable capitalism headed?  How do we identify great leadership in the corporate sector?

Our choice of featured stories up top for you this week provide some interesting perspectives on these questions.

And, illustrate the embrace of sustainability as a fundamental organizing principle today of great corporate leaders.  As well as explaining the continuing embrace of sustainable investing approaches of key providers of capital as a risk management discipline and proof of concept of acceptance of stakeholder primacy / sustainable capitalism in the 21st Century.

The other stories we’ve curated for you this issue help to broaden these perspectives that are offered in these challenging times from thought leaders. 

As the ancient blessing/curse goes:  May we live in interesting times.

This is just the introduction of G&A's Sustainability Highlights newsletter this week. Click here to view the full issue.