 I'd like to welcome everyone to this roundtable discussion entitled Exploring New Models of Corporate Responsibility, Accountability, and Collaboration to address current global crises. We have an exciting group of speakers who will be engaging the topic from three diverse yet complementary angles. We will hear about the growing interest and involvement of corporations in issues of sustainability, climate change, and other social issues. We will also hear about how corporations interface with other sectors of society, especially non-profit organizations. Finally, we will learn of new initiatives in the investor community that seem to hold promise and are worthy of a closer examination. Throughout these presentations, the speakers have drawn insights from the guidance from our central figure or something from the Universal House of Justice. Each speaker will present for approximately 15 minutes, which will leave us ample time for Q&A. I will now introduce our first speaker and our first speaker today is Nabil Elias. Nabil is faculty emeritus, Belk School of Business at UNC Charlotte, and EBBF Dean of Education. Formerly, Nabil was the MBA director at UNC Charlotte and University of Manitoba, where he was also a professor. He has been a visiting professor at various universities around the world and was the president of the Canadian Academic Accounting Association. Nabil's presentation is entitled from Corporate Social Responsibility to Moral Excellence. Thank you, Jose, for this nice introduction. So pleased to be with you. And this, I'm just having a technical glitch here. Okay. I'll manage without solving the problem. This presentation is inspired by the message from the Universal House of Justice of March 1st, 2017. I'll start with a short quote from this message, which is on the next slide. There is an inherent moral dimension to the generation, distribution, and utilization of wealth and resources. Now, the next point is that we start talking about corporate social responsibility. In fact, this has been almost five decades of corporate social responsibility. In the last three decades, four decades, perhaps it became more popular. So what is corporate social responsibility or, for short, CSR? CSR attempts to reconcile the corporate profit mission with its social and environmental mission. With corporate social responsibility, a company is able to integrate its stakeholders' interests of social and environmental concerns with its typical profit oriented operations, with its main operations to achieve a balance of economic, environmental, and social imperatives. The philosophy behind the triple bottom line is consistent with that thinking. Bottom line refers to profit people and profit people and environment. So that means that CSR attempts to address the shareholders as well as other stakeholders' interests. So why did CSR gain traction? Even though CSR has been opposed by many free market advocates who believe that the business of business is business. In other words, business is to achieve profit. And that's what's good for society. In spite of that, CSR has actually gained a great deal of traction. And the reason for this is that many companies attempt to reverse their negative public image. Some corporations adopted CSR because of its appeal as it reconciled as a profit motive with doing good, pursuing what they perceive as their enlightened self-interest. Particularly during the past two decades, many corporations have opted to use the language of things that really sound great, corporate citizenship, shared value, sustainable business because of their public appeal. So what is wrong with CSR? CSR has achieved some benefits. But overall, many people think it has become a failure. And so let me just explain what I mean by that. The problem with CSR is that it lacks precision. In other words, any company can say that they do corporate social responsibility. But it lacks common principles and common standards. Its applications are perceived as self-interested as a marketing tool, as a PR tool. Its applications tend to be tangential to the company's strategic core mission. For example, a company would gift a charity, but do all kinds of things that are harmful to the environment or to the communities. It's perceived to legitimize the expansion of corporate power to influence the charitable work of not-for-profit organizations. You're going to hear more about this topic from Gene Parker. CSR is also used to divert attention away from corporate social and environmental misdeeds. In other words, it's like whitewash or greenwash. Above all, CSR has proven inadequate in addressing, pressing social and environmental issues such as climate disruption, species extinction, income inequality, human rights violations, job insecurity, and the list goes on. Corporate social responsibility has not slowed down, perhaps accelerated the conversion of natural and human resources, social resources or social capital to financial capital, the benefits shareholders and the expense of other stakeholders. CSR has also facilitated the legitimization of expanded corporate power, the concentration of wealth in the hands of a few, a corporate capture of government regulatory powers through drafting, lobbying and drafting legislation in some the language of corporate social responsibility has been co-opted to advance corporate interests. So what are the assumptions underlying the current economic model? I think the House of Justice tells us that we have to examine these assumptions and contrast them with the Baha'i revelation's assumptions. Implicit in the predominant current economic model are assumptions that human beings are materialistic, that they are predominantly self-interested, insatiable consumers, not concerned about the environment whose happiness comes from constant acquisition and wealth accumulation. It follows that the welfare of society is the product of individual self-interest and that extremes of poverty and wealth depicted in the slide that you see in front of you are the natural order. Competition is the cause of material advancement and the means to achieve excellence. So where are the alternative assumptions based on the Baha'i writings, which are clearly referenced in the Baha'i writings throughout from Baha'u'llah, Abdul Baha'u'llah, Shumi Effendi and the Universal House of Justice, but the latest is the message of March 1st, 2017. I start with a quote from the House of Justice in that message. It says, economic life is an arena for the expression of honesty, integrity, trustworthiness, generosity and other qualities of the spirit. The individual is not merely a self-interested economic unit striving to claim an ever-greater share of the world's material resources. It says so much in that one quote, so I'm going to try to analyze it with some of my own understandings of this, not nothing that is authoritative. But we know that in the Baha'i teachings, human beings are material, yes, but also spiritual beings. Humans are endowed with nobility, which means that they care about others, they care about society and their environment and they're capable of cooperation and collaboration. Contrary to the focus on individualism, the welfare of society and the welfare of the individual are inseparable, they are seen as interrelated. Diversity across gender, race, culture, ethnicity, economic condition, disability and diversity of thought are considered to be essential ingredients of for collective advancement. Moderation in all things is meritorious and work performed in the spirit of service to humanity is equivalent to worship. So contrasting those two is amazing. So let's just go through what the general business environment has come up with to deal with some of the issues, the problems that are so glaring. Some people have decided that they focus on structures, some attempted to change processes. In terms of structures, you know, for profit corporations, sometimes the boards of directors would decide that they cannot do certain things because they'd be sued by the shareholders. So benefit corporations have come into existence. There's the L3C, low profit, low limited liability, which is a legal form in the US. CIC, that's a community interest corporation in the UK for social enterprises. In California, there's something called flexible purpose corporations. And of course, their cooperatives in Baha'is really like the concept of cooperatives. There are also some Baha'is working on some other types like fair shares commons. Baha'i, friend of ours, member of EBBF, is working on a little bit of what he calls it stakeholder justice. His name is Boyd Graham. And just to mention something here that's really important, of the largest 100 economies in the world, 69 of those are corporations. 31 are countries. So corporate power is so immense. This is based on 2017 data. Of 69 of the 100 largest economies are corporations. They establish their own mode of operations within the legal systems that they operate in. So there's been a call for establishing an overseeing regulatory global body such as the proposed World Corporate Charter Organization, the WCCO. In terms of processes, there's stakeholder capitalism, which I believe that's something that Emily will be addressing. And the current literature decrying the ills of corporate power have tried to change corporate structure. For one thing, corporate structure has really not solved the problem yet. Many people say that maybe if they do change a corporate structure, things will change. And I do believe that they could contribute something. But changing corporate structures may help alleviate some of the issues. The question about shareholder supremacy is, is it a problem of structure, a problem of process, or a problem of overall business culture? So where do we go from here? The new paradigm inspired by the high teachings is in its infancy and promises to revolutionize all aspects of economic life and business. So with that paradigm shift that's existing, we see that we're all interconnected, individuals, families, communities, businesses, governments, and nations. Many people fail to see the connection between the various ills that afflict the human condition. For example, such consequences of the current economic model as environmental erosion, extremes of wealth and poverty, lack of economic education or health care opportunities for many people, systemic racism, the lack of gender equality, and others. They're not really unintended consequences of that old model that we operate within. These ills are the product of a system that is intentionally built and based on greed and self-interest. The success of alternative structures and movements towards creating a more just, peaceful, prosperous, and sustainable world requires a fundamental transformation of mindsets, transformation of hearts, and transformation of perceptions about human nature. The world is poised to make that change, but we have a role to play. So how can we create moral excellence? I think we need to have a lot of discussion on that. And this session of EBS is really kind of one way of getting us on that path. I just want to highlight that this material, Jean and I have been offering a course through the Met Institute sponsored by the EBBF and a lot of this material is based on this. So how can we create moral excellence instead of just this verbal idea of corporate social responsibility which sounds really great in concept, but the application is a problem. What we can do is get on a learning curve and study and apply spiritual concepts such as unity, justice, nobility, sustainability. What do they mean and how can we translate those in our specific work or business contexts? The second point that I think we could do is develop the capacity to use and apply processes in the Baha'i teachings such as consultation, collaboration, and accompaniment. Following is to engage in business and academic discourses related to moral excellence in business. I know I taught business ethics for some time. It wasn't my main field but I was sucked into teaching it and I was quite frustrated because ethics in business became a business. It's not really based on the moral excellence that we hope to achieve. We have to learn from those who have attempted to apply spiritual concepts and processes in the workplaces, organizations, and businesses. Now just a final comment about research. I know that as an academic I was always frustrated with the idea that most of my colleagues were dealing with big data because it's available for example market data etc. And when you do that you use old data to validate or refine existing models. You don't create new models. So here's some thoughts and I know ABS has had a number of issues about methodology at this 2020 conference but here's some of my thoughts about this. To re-conceptualize the meaning of knowledge, research, and scholarship. We have to figure out what these really mean. We have to find creative ways to test new models where data is nonexistent. For example case studies, qualitative research, simulation, experimentation. There are a number of Baha'is that are trying to make changes in their businesses and some of it has been documented, some of it has not and I think that's a right field for research. The questions I have also is can we apply the study action reflection consultation cycle as part of the research process and can we identify the role of consultation in research? These are questions I don't have answers for but the presentation here I'll end with this quote from the House of Justice. Again the same message and this is one thing that we can all do. It says every choice a Baha'i makes as employee or employer, producer or consumer, borrower or lender, benefactor or beneficiary, leaves a trace and the moral duty to lead a coherent life demands that once economic decisions be in accordance with lofty ideals that the purity of one's aims be matched by the purity of one's actions to fulfill those aims. Thank you very much. Next is Jean and I think Jose will introduce you. Thank you, thank you very much Nabil for that thought-provoking presentation. So our second speaker is Dr. Jean Parker. Jean is on the Faculty of the Global Non-profit Leadership Program Anderson College of Business and Economics at Regis University in Denver, Colorado. She is an online course facilitator and curriculum developer in the Departments for Social Change at the Wilmed Institute and a lecturer in the Masters of Development Practice at the University of Arizona in Tucson. She's the author of Emergency Preparedness through Community Cohesion, an integral approach to resilience and has served as executive director, fundraiser, board member and frontline staff of numerous non-profit organizations. The title of her presentation is Justice Between the Profit and Non-profit Organizations, Leveling the Playing Key. Over to you Jean. Thank you very much Jose and Nabil, what a wonderful presentation we began with. The relationship between non-profits and for-profit organizations, the relationship is complex and it involves many types of hybrids, way too many for this discussion this morning. And so to put a container, to put this presentation into a container, the scope of my presentation today is going to be small non-profits and it will be about development and fundraising in those non-profits. I define for this purpose a small non-profit as having a budget under one million dollars. I'm using the terms non-profit and NGO interchangeably. NGO of course is non-governmental organization. There are three overall sectors of the economy that people encounter in their daily lives. There are other sectors of course but these are the three main ones, the non-profit, the for-profit or the corporation and the government sector. They coexist but they are not always the best of friends. Non-profits are typically described and perceived as working for the benefit of society but that is also in the eye of the beholder because as demonstrated by the strong opposition to groups like the National Rifle Association which is a non-profit that is a subjective statement often. There are almost three dozen separate non-profit designations in US tax code and so the actual definition of a non-profit is also not commonly accepted. But in general non-profits do not have shareholders or individual beneficiaries. Here are some facts about NGOs. I'll let you read that for a minute. In addition to this there are 1.5 million NGOs in the United States and they employ about 11.4 million people. It's estimated that there are 10 million NGOs worldwide. So we can see how large the sector really is but substantial parts of the NGO sector are informal. It's just people who want to make their community a better place and so it's difficult to actually quantify exactly the size of the sector but we know that it's large. Here's a table comparing for-profits and non-profits. These are very generalized statements. There's a lot of variation in this. This is a very simplified table but it illustrates the divergence in priorities and value systems between a very generalized view of non-profits and a very generalized view of for-profit organizations. Both NGOs and for-profits do contract with government agencies to perform specific work or defined tasks. Small non-profits though get the short end of the stick. So here we're discussing funding of non-profits by for-profit organizations and Nabil spoke about some of this earlier. Here are some of the mechanisms that facilitate that exchange of material benefit between the two sectors. The power equation. So here is where the power disparity lies in in some part. Non-profit organizations spend a lot of staff time chasing corporate support in the form of grants and sponsorships or other kinds of support for their work. Most requests are denied out of hand and often the non-profit doesn't even get a response from the corporation as to why their application was denied. It's a don't call us we'll call you arrangement between the non-profits and between the for-profits and the non-profits. Funders in general tend to be trendy in their giving. When I've been in this situation I cannot count the times that we were in what we thought was a developing a productive relationship with the corporation only to have them say oh well this year we've changed our funding priorities sorry go elsewhere. That isn't a just or equally invested relationship. The corporation gives and the corporation easily takes away. The ethical dilemmas and consequences for non-profits of accepting donations from from corporations are caused by the inconsistency between what the corporation funds and its primary business engagement and Nabil spoke about this also in the context of CSR. This can damage a non-profit's reputation and credibility with other donors and especially with constituents who have an emotional attachment to the non-profit and its work. There's a well-known example where UNICEF had a partnership with the Cadbury Candy Corporation. UNICEF advocates for children's health and development whereas Cadbury sells candy which is kind of bad for children created a substantial public backlash. Another example I'm familiar with personally is an organization I worked for in victims services crime victim services. The organization was approached by a beer company it's well known that domestic violence and other violent crime increases with the use of alcohol and it was only stopped when the volunteers of the organization heard about it they organized and they all threatened to quit and that was the only thing that kept it from going forward. These relationships are particularly difficult for activist groups environmental organizations and those working for economic empowerment and working for social change. Their work often involves confronting corporations who have not been good citizens. So who actually can access this money and can benefit from the kind of giving that corporations have. Unsurprisingly it's those non-profit leaders who look and behave like they work in corporations. We cannot underestimate the influence of economic class, gender, disability and race. Small non-profits by and large still cannot access that money and constituents become ever more resentful adding to the division between the sectors. I said earlier that there are hybrid arrangements among the sectors and there are many of them there are new ones all the time but they are complex and expensive to set up and implement. Regulations are inconsistent they differ from state to state and even local regulations come into play here so it's not just on the federal or central government level. Now let's talk about non-profit staff capacity. In most small non-profits the staff make very low wages sometimes they actually make sub-minimum wage and the board has a very difficult time raising their salaries to even comply with minimum wage laws. They're doing multiple functions that they might or might not be trained to do. Things are makeshift typically and they often have things like uncomfortable offices if they have offices at all. They have old equipment they don't have heat sometimes they don't have air conditioning sometimes the electricity sometimes goes off if you're in a place where that happens and you haven't got the money to pay the bill. This disparity in basic aspects of life causes mistrust of potential collaborators so even if a hybrid is possible there's a lot of baggage there. The value attributed to the non-profit sector in society in general is demoralizing to staff and volunteers. This reported yesterday in The Guardian that nearly half of the UK's small charities working with the world's poorest people are set to close within the next 12 months for lack of funding. This despite seeing huge increases in demand for their services because of the coronavirus. Why is this? Policy changes in quote giving criteria. By contrast it's estimated that there are 1.2 trillion dollars sitting in US private foundations right now but that those dollars are not moving towards the non-profit sector. Even in hybridization non-profits begin to look and act like corporations. They become dominated by professional managers rather than those who advance the program goals that started the non-profit in the first place. They also gain the outward appearance because the offices change to become very opulent and other material expressions making citizen engagement compromised. So what to do? We need to redefine how success is measured. We need to foster collaborations that are relational rather than transactional. We need to form relationships where all the parties view the collaboration as necessary to their end goal. When non-profits join forces with for profits remaining inclusive to constituents becomes a real challenge. This must be prevented. We've discussed a few of the problems. Now let's contrast that with what the Baha'i writings tell us. We've read most of these quotes in either previous presentations or in general but it's good to revisit them in this context. Wealth is praiseworthy in the highest degree if it is acquired by an individual by an individual's effort and the grace of God in commerce, agriculture, art and industry and if it be expended for philanthropic purposes. In this passage the interaction among the actors is relational and not transactional. And finally Shoghi Effendi tells us in philanthropic enterprises and acts of charity in promotion of the general welfare and furtherance of the public good including that of every group without any exception whatever. Let the beloved of God attract the favorable attention of all and lead all the rest. Thank you. Thank you very much Jean for that excellent explanation of some of the challenges of collaboration between non-profit and the corporate sector. A lot of food for thought. So we now are going to move on to our third and final speaker today, Emily Chu who will be presenting on stakeholder capitalism and responding to systematic climate change. Emily is global head of sustainability for Morgan Stanley Investment Management and chairs the firm Sustainable Investing Council. Before joining Morgan Stanley in 2020 Emily was global head of ESG research and integration for Mano Life Investment Management in Hong Kong and Boston where she built an ESG investing program for public market investments. Previously Emily was head of Asia Pacific ESG research for MSCI in Beijing and Hong Kong. She is a member of the principles for responsible investments listed equities integration subcommittee and formerly served as rotating chair of the steering committee of the Climate Action 100 plus investor engagement initiative and as chair of the Asian investor group on climate change. Emily holds an MBA from the University of Oxford and a bachelor of laws and arts with honors from the University of Melbourne. Without further ado please Emily take it away. Thank you Jose and thank you Nabil and Jean for your present very elucidating presentations and quite a hard act to follow. So I'm going to be doing a fairly rapid whistle stop tour through the concept of stakeholder capitalism and drawing from my experience as a practitioner in the financial markets around new initiatives that may be emerging that give some life to this concept of stakeholder capitalism. This cartoon is a somewhat humorous commentary on where we stand today as humanity. The challenges facing us are urgent and complex but more importantly they are systemic meaning that they affect the whole of humanity and require systems level responses. The gravity and complexity of the systemic challenges that are facing humanity are creating space in public discourse right now for a fundamental reshaping of the organizing logic of economics finance and the capital markets. But firstly when we speak about the capital markets I find this diagram a particularly helpful one for illustrating the flow of funds and the the diffusion of decision-making power across a system and I find it particularly helpful for people who perhaps aren't involved in the financial markets every day. What we see here is workers on the far left hand side of the diagram selling their labor to companies or to projects that are operating and competing for resources or access to various assets in order to convert them into financial assets that are essentially securitized and put on to a stock exchange. On the right hand side we have individuals investing their capital through perhaps 401k's pension plans insurance policies or with their own private wealth investing through a variety of intermediaries in that stock exchange. This is just the listed equity markets there's many other forms of this but this is a particularly important part of what I mean by capital markets and obviously implicit in all of this is the surrounding natural environment. Now while these actors have legal obligations to one another the organizing logic of this system is ultimately one of adversarial competition where power and influence is kept diffuse the power is fragmented and each actor is assumed to be operating in their own pecuniary self-centered interest. So cap competition is really the organizing logic of capitalism today this has been critiqued by a number of different economists so David Harvey as an example of a Marxist economist refers to the coercive laws of competition and the crisis prone nature of capitalism essentially the idea of constant competition between all the relationships in this system between labor and capital between capitalists against one another between investors seeking opportunities in new innovation new technologies and really the regulatory support for approaches to monopolies deregulation and financial liberalization these of all aim to keep competition as unfettered as possible and leading to this idea of the coercion the constant pressure to compete within this system Harvey posits that recurrent crises are necessarily a feature of capitalism where boom and bust cycles are considered the norm and that labor and communities are essentially the collateral damage of this constant quest of capitalism to reinvent itself. Joseph Stiglis also very well-known economist also critiques our current day of global capitalism the competition for resources or access to cheaper ever cheaper pools of labor he posits is an example of globalization that's been mismanaged and that actually the inequality that this system tends towards undermines growth and efficiency in the longer term. We also obviously have the Baha'i perspective coming from the House of Justice where avarice and self-interest prevail at the expense of the common good and the Baha'i international community also positing that the classical economic models have been personal markets in which human beings actors autonomous makers of self-regarding choices will not ultimately see serve the needs of humanity as a whole or the ideals of unity and justice. The Baha'i inspired perspective that we have is that a clear direction from Shoghi Effendi that systems that are unsustainable or that no longer promote the welfare of the generality of mankind let them be swept away that they don't have a long-term future in their current form the House of Justice echoing that in their letter that Nabil hopefully referred to earlier and also a clear direction and purpose for systems of wealth which is that wealth is there to serve humanity as Jean mentioned it's relational it's not an object in and of itself its use must accord with spiritual principles and that systems must be created in their light which really brings me to how does all of this kind of get reflected in the current discourse around capitalism and the move away from shareholder primacy so and in my view I think we've seen an evolution perhaps from perhaps the around the decades of the 70s and 80s when the Friedman School of Economics was promoting this idea that really took hold among policymakers that corporations primary focus should be profit the generation of profit that directly benefits shareholders and that it's through this focus that there are various other benefits that flow through to society almost naturally so this this concept was very powerful it then evolved I would say in the 1990s and 2000s where there was growing awareness through a varying number of corporate disasters and reputational issues that occurred that corporations should in fact generate their profit and maximize it but they should make sure they do so in a way that minimizes environmental and social harms and that these externalities could actually ultimately harm profits so it's still a very profit-centric or corporate-centric view but one that started to expand to to better identify the relationships of companies to their surrounding environment a relationship relationships that gene elaborated for us very very well and then what's really emerged in recent years is this language of stakeholder capitalism which is really moving beyond the idea that there are these externalities that need to be managed and really trying to redefine the purpose of the corporation so corporations in this logic should generate economic value and value for society and it's actually society's social needs that define what markets actually are and so this discourse has been put forward by a number of powerful voices in the business and finance field one perhaps one most notably is Michael Porter a very well-known business professor in his article shared value he referred to capitalism being under siege he critiqued companies that continue to view value creation narrowly and and which presumed that trade-offs between economic efficiency and social progress needed to be made and were institutionalized in their decision-making and he put forward the idea of shared value as creating economic value in a way that also creates value for society he posited that the purpose of the core corporation must be redefined as creating shared value not just profit per se and that this will actually drive the next wave of innovation productivity growth for the economy it will also reshape capitalism and its relationship to society so this discourse was put forward by Michael Porter it was a culmination of a number of other currents and threads occurring at that time but really it's taken off in the last I would say 12 to 18 months we had the business roundtable in the US which is a collection of US headquartered company CEOs put forward something called the statement on the purpose of a corporation last year this was last October it was signed by 181 American company CEOs on its launch attracted a lot of media attention as basically a repudiation of this freedmen economics from the 1970s it calls out each company's commitment to deliver value to each of their stakeholders defined as their customers their employees their suppliers their communities and their shareholders the statement is however rather short lacks any mention of metrics or an implementation system several companies that signed this statement in the 2020 several companies that signed this statement in their 2020 annual general meetings they're the meetings of shareholders where the directors are reappointed and and and votes on important matters are held a number of the companies actually blocked shareholder resolutions that were aiming to to to ask the companies for more details or more accountability around their signing of this statement perhaps another source that we can turn to is the world economic forum which put forward at the beginning of this year something called the Davos manifesto this is as perhaps a more ambitious version of the statement on purpose it identifies again a range of stakeholders employees suppliers communities shareholders but provides more specificity around what the expectations are including a range of I suppose values like diversity upskilling and reskilling of employees human rights the duty to pay taxes the data protection as a as a responsibility and also particularly highlights protecting the environment and championing a circular economy and even mentions that intergenerational fairness should be considered and how value is generated so perhaps more radically it also advocates for a shift in view of how companies are measured it states that a company is more than an economic unit generating wealth it fulfills human and societal aspirations as part of the broader social system performance must be measured not only on the return to shareholders but also on how a company achieves its environmental social and good governance objectives importantly they also state that executive remuneration should reflect stakeholder responsibility so this is edging closer towards the idea that there should be metrics and very specific accountability and governance mechanisms for bringing this idea of so a broader social purpose into the way corporates are governed there's also the British Academy with their principles for purposeful business it's it's a very similar document but perhaps you know a more European-oriented one as well but I'll skip over that for now so how does all of this kind of really add up in the context of the systemic challenge of climate change so in the past decade we've seen growing a crescendo of public awareness and alarm around the link between climate change and very tangible financial risks and losses as the science as monitored by the intergovernmental panel on climate change has become increasingly clear and accurate and ever more certain that that climate change is underway and will have a massive impact on our natural environment this is triggering the generate the development of integrated economic models that attempt to measure and project the economic losses over various time horizons the modeling shows an undeniable link between the physical environment and asset values so as chronic and acute changes in weather patterns are coming through and impact the physical environment several categories of real assets are at risk and there's now fairly strong recognition in the financial sector that these risks will be inherited by financial institutions including banks insurers on the front line but also by investors and there's recognition from the investor community that governments alone cannot solve the climate crisis without significant coordination and participation from the private sector so obviously the underlying root cause of all of this I think is summed up very effectively by Michael Carleberg the Bahá'í academic and writer who astutely noted that hyper competitive values in our economy have led to an unprecedented conflict between our own species and most other species on this planet so this recognition is dawning among among the investor community against this context of growing alarm over the climate crisis and again in the context of the emergent discourse of stakeholder capitalism several new initiatives have emerged which are global collaborative and attempting to respond to the call for systemic reform I'm going to review four of these and then wrap up with some observations about how Michael Carleberg's framework that he he's defined can help us understand them in context excuse me so the first initiative I'd like to review is called the task force on climate related financial disclosures this was a 31 member body established under the auspices of the financial stability board to develop voluntary and consistent climate related financial risk disclosures by companies to their various stakeholders and would provide information particularly to the financial community to enable better decision-making their decision their recommendations were finalized in 2017 and the thesis of the TCFD uh affectionately known by this very awkward acronym TCFD the thesis of the TCFD is that better data will enhance how climate risks are assessed priced and managed leading to better decision-making now the power of the TCFD is that it's succeeded in conceptualizing language and a framework that has started to be used quite ubiquitously among corporates and the investor community in in communicating and discussing climate risk so this idea of transition risks and the various and physical risk and climate opportunity profit opportunities and the various channels of transmission to a company's value drivers is a common language now that's being used whereas just a few years ago this language didn't exist the next initiative is the network for greening the financial system another long name with it with an awkward acronym this was launched in December 2017 at the One Planet Summit convened by President Macron in France the NGFS is a collection of central banks and supervisors that aim to strengthen the global response to the Paris Agreement and enhance the role of the financial system to manage risks and mobilize capital for green and low carbon investments they just announced their 70th member this past week with the central bank of the Philippines all major economies central banks and supervisors are participating in this initiative and what it essentially does is define and promote best practice for implementation by central banks which are very important kind of rule rule making bodies in the economy they are encouraging more climate related disclosures in in in economies driven through the banks supervisory roles of each system they're looking to size the economic risks of climate change and define the transmission channels from climate change to the financial system and they're looking to scale up green finance intentionally now one of the useful frameworks that they've put together is on the right hand side and this is essentially a framework to help central banks conceptualize understand and build policy around what is the risk to of an orderly or disorderly transition towards climate policy and what is the risk of adjusting for physical risks where we've met those met met the resilience and the adaptation we need to meet the physical risks or not so we've seen since this initiative announcements from Brazil China Australia Canada the European central bank all related to this agenda in some way in a relatively more coordinated fashion another key initiative i'd like to raise awareness about is the climate action 100 plus this was also launched in December 17 at the one planet summit it's the largest ever in collaborative investor engagement initiative of its kind what this means that investors have signed up to participate to participate in the initiative it now has over 450 investors signatories that represent over 40 trillion in assets under management or a um to put that in context in 2019 institutional assets under management the size of money that was being managed by institutions was 77.3 trillion so uh this initiative represents more than half of that amount participating it's a five-year initiative for investors to engage systemically important corporate greenhouse gas emitters so that basically means the largest corporate emitters of carbon and the idea is for these investors to engage with the companies using their influencers shareholders and bondholders to encourage the companies uh in partnership in some cases or in quite strong worded terms in other cases to align their business model with the net zero carbon aspiration of the Paris agreement this means that they're asking companies for improved governance explicit target setting and improved climate related disclosures so specifically the TCFD so the group was originally formed organically through a collaboration uh by five investor networks and really grew quite rapidly uh to the size that it is today some of the results that climate action 100 plus has contributed towards is Glencore one of the world's largest mining companies committing to a cap in their current coal production so they won't be increasing it and they'll be investing in commodities necessary for the low carbon transition oil and gas major BP committing to a net zero emissions target by 2050 which is in line with the science of the Paris agreement and just this past week they announced an interim goal to actually cut their oil and gas production by 40 percent by 20 by 2030 as an interim goal towards this net zero carbon commitment and southern company which is America's third largest power utility has also set a net zero carbon target by 2050 they just set that target this year in May and they're now 13 among the 13 of the 30 largest US utilities to have set a goal such as that so the power of this initiative is that it's really distilled and focused investor energy around the climate crisis issue and focus companies attention on a very clear set of requests previously because investor action was very diffuse and individualistic companies were able to say well we're not clear what investors really want but now it is very clear and that that that narrative has become a lot more distilled the final initiative I'd like to speak to is the net zero asset owner alliance this launched last year in September it now includes 28 signatories that represent five trillion assets under management which is more than double the number of signatories that they've had last when they launched and the signatories to this initiative are committed to transitioning their investment portfolios to net zero emissions financed by 2050 so that means the actual carbon emissions profile of your investments will on the whole be net zero by 2050 and they've committed to establishing five-year intermediary targets they've committed to working with the climate action 100 plus they're asking for tcfd disclosure so you can start to see how all of these initiatives are really piling up on one another and linking together in order to from their particular seat foster systemic change now what I would argue about the net zero asset owner alliance is that this is actually providing some of the moral leadership needed to achieve the paris agreement these institutions asset owners are large insurance companies they are pension funds they're sovereign wealth funds and from an investor perspective they sit at the at the top of the investment food chain and they have an incredible influence over how asset managers provide their services and how companies also operate they're seeking to actually catalyze decarbonization rather than being passive recipients of the outcomes of whether there is action or no action on climate change they they say that they're aiming to instill in the global investment industry the required level of climate ambition so a very proactive stance so to wrap up I'd like to revisit Michael Carlberg's framework that he put forward in his book beyond the culture of contest Carlberg states that the contemporary contemporary capitalist economy defines human beings as self-interested and competitive creatures and that therefore it structures human relationships accordingly in the economic context this means that economics and finance is largely on in the in the uh on the side of the spectrum here on the left hand side of normative adversarialism in power relations that means that economic power is used against other players in order to achieve more satisfaction of one's personal needs or ends and I would argue that what all of the initiatives I've just elaborated on in response to the systemic challenge that we have they are intuitively moving towards the the mutualism end of power relations so in some cases they're doing so in a way which is unequal in power so perhaps using shareholder power over companies as a way of partnering with or empowering or encouraging companies to move I mean other cases I would say in the case of the central banks for example these are essentially relatively equal players in terms of their role in their domestic context and they're trying to mutually empower each other to move forward towards a climate response so I think that this framework is is very helpful in thinking about not only what are the tactical goals that each initiative is trying to achieve but when we take a step back and we look at the economic system as one that's currently driven by a normative adversarialism what these initiatives are helping to achieve I think is not only their tactical aims but they're helping to build a culture of mutualism and ideally a culture of more mutual empowerment over time at where possible that has the potential to perhaps see new ways of thinking about the economic system so for me as a practitioner I find this framework very helpful helpful for organizing not only the way I behave in relation to each of these initiatives but ultimately how these initiatives can relate to each other and how the the institutions that are involved in these initiatives can relate to one another moving forward in a more perhaps in a way that creates change that's more sustainable and long-lasting so I'll leave my comments there and look forward to the Q&A. Thank you so much Emily for this incredible sort of tour the force over the evolution of the discourse over corporate responsibility as well as those specific examples that are definitely quite promising we have a number of questions for all of our speakers actually and I actually want to start with a question from Emily since for Emily since we have all of your ideas sort of quite present in our mind it's one of the more general questions and maybe later on we can get into the more specifics in the second round so a very general question that I'd like to hear your thoughts on is in your experience with all these and new investor initiatives that sound quite promising what do you feel are some of the major stumbling blocks that they face in order to achieve a visible and lasting impact on the environment for example which is one area that you talk specifically about. Well I mean one of I think the stumbling block is that these initiatives are on the one hand emerging out of the system that exists but they're trying to move towards a system that doesn't yet exist now in order to do that in an orderly fashion you need to have unity of vision unity of ethics you know unity of principles and how you relate to one another and to some degree that intuitively exists I think for the for the initiatives that have emerged but it doesn't exist in an institutional fashion so essentially what that means is for example in the context of the climate action 100 plus while on the one hand all the investors see the need to work together and if through working together that will provide the incentives for companies to move more rapidly towards the Paris goals ultimately each investor is operating with responsibility for their own investment philosophy in their own assets so they don't necessarily share a consistent investment philosophy they don't necessarily they can't share information openly and freely because of legal constraints between one another they also don't speak for one another in the meetings with the companies right and it's very important given the current legal and the kind of assumptions of what an investment institution is and the responsibility the legal responsibilities they have to their clients or to their beneficiaries that those confidentiality are requirements are maintained and that autonomy of decision-making is retained and you see the same thing with the central bank initiatives so it's really about you know promoting best practice and knowledge sharing and tool generation but there isn't an overarching global central bank that's able to push that down and say everyone now do this right everyone we need to move forward united and in a systematic way so you see a lot of very promising sharing of information you can certainly see that the same central banks have been in the same meetings with one another because you can see echoes of the same message and the same initiatives popping up all over but again that the sovereignty of each institution has been maintained and so the challenge really is on the one hand reaching towards mutualism but still being um I suppose locked within legal and economic systems of adversarialism so I'm still very hopeful because I think new systems need to be born out of systems that currently exist but they're certainly testing the boundaries of how far this collaboration can really go in our current context Thank you thank you so much for those thoughts definitely the contradiction between some of these great initiatives and these great intentions and the overarching system in which they operate is a theme that I have seen throughout all of the presentations so with that in mind I'd like to turn to two related questions that I think address Gene's topic primarily so I would like to feel these questions to Gene so Gene I'm going to read both questions because they're quite a complementary I feel and then you can decide how you want to address them so the first question is more of a statement and then a question it says there is something inherently not right about a corporation giving a grant or a gift to a worthy cause it feels like they are passively buying off their conscience with charity instead of becoming full participants and active collaborators in advancing the communities they operate in so that's the first statement so that you can you can address the second one which I feel is complimentary if it's okay because I think that it'll give you more flexibility to combine them however you want the second one asks what is the role of the funded so the non-profits in this case in helping to reshape the way they are funded currently our organization makes a point of talking with for-profit partners and build relationships over time let me know if I need to read these again right thank you so much so let me begin with the first one this idea of buying of of alleviating guilt or conscience by by funding non-profits that is one of the things that has created the problem with corporate social responsibility is that inconsistency there is a lot of evidence that corporations do buy passivity or buy cooperation from non-profits certainly that was the case in the situation I illustrated with the victim service organization where the beer company came to them probably in the midst of bad publicity for something and said well we can provide you with you know so much amount of money the unwritten and unspoken agreement is though we'll do that but you guys you don't want to offend the funder so you won't be talking about our company at least and hopefully not about alcohol either because that's our industry so this happens a lot also with organizations that work in environment protection people's movements some of those have been bought off and co-opted by corporations so yes it does happen and I I think it's not even sometimes it's to alleviate guilt and conscience sometimes it's simply a financially strategic move to preempt something that is building and that they see as a threat and so if they can prevent it by pouring some money into the sector the part of the sector that's causing the problem they can in a sense buy their cooperation and so that they they won't say certain things in public policy so that they they won't say certain things in public and they won't take certain actions also a lot of lawsuits have been diverted by this very thing the role of the non-profit in helping to shape the way that it's funded yeah I sometimes feel like there has been progress with discussions between nonprofits and funders I feel like there's always this barrier there's always this thing between the nonprofits or let me just say it this way between those who need money in order to operate and do their work those who have money to give it so that they can do their work so there's always this kind of invisible wall I remember years ago the association of grant makers was an attempt to bring together activist nonprofits and funders who gave money to to that particular part of the nonprofit sector and that was all very nice and they socialized together and had meetings and so forth but there was always there was always this barrier between them and my experience is that really hasn't shifted a whole lot and it's possible that in individual cases it has and that funding has become more collaborative but by and large it's kind of two sides of money I hope that answers the question definitely definitely and it also gives us a lot to think about in terms of potential solutions that we need to start considering different approaches and so forth thank you very much the next question is is for Nabil we haven't heard from Nabil in a while and we have a question specifically about what corporations can do to measure things differently specifically it says in terms of KPIs how how can corporations create new key performance indicators for businesses and how can we encourage the creation of these new KPIs in order to redefine what it means to be a successful business thank you very much for very thoughtful question well I happen to have been teaching performance measurements and KPIs and balance scorecards and things like that for decades and the question is really not in the measurement the question is in the incentives I would say that you know the best design scheme and the best measurements in the world are not going to make the change I'm not saying that they're not important but you have to follow them you know we have this is this goes back to even you know 1951 with General Electric that developed the concept of KPIs and measured just about everything so it's that long ago 70 years ago and actually GE's VPs were imprisoned for a while because you know in the court they said that the pressure was so much in the bottom line the bottom line meaning profit in other words you have a lot of measurements yes but then at the end people knew that that's not what the company was after so it's a structure of the financial system and this is where I'm very skeptical I like all those initiatives they really are great in concept but when it comes down to implementation is that's where everything breaks down so you know now we focus on very short term returns we focus on yes there are all kinds of beautiful measures and we continue to refine those and actually I served on accounting standards board in Canada and we were focused on environmental measurements as well environmental liabilities and at the end it got thwarted because you know the the powers to be did not want it to be enforced and you always can find in this context and the culture of contests using Karlberg's terminology you will find another group that will oppose something so that counts we're saying oh yeah we want to be really socially responsible we want to propose such and such and then you got the lawyers to say oh we cannot do that because we can't measure such and such with precision you know so you have these powers fighting about what is best from their perspective there's always this this lack of reaching out and taking some chances and some risks and you know I see that with the corporate social responsibility with the stakeholder capitalism the same issues that concepts are amazingly beautiful and consistent with the high teachings how do you implement it and how do you encourage its implementation that's not mandatory it's voluntary the measures are voluntary you don't have to report a specific thing unless of course you have the power to demand it and really want it and so that's yeah I like the idea of we can come up with all kinds of measurements and right now there are an abundance of groups that are trying to measure and they try to report it but does it carry that much weight in the stock market does it carry that much weight and the bonuses that people get that's what's important thank you great answer and I didn't know about your background teaching all these things but it was fortuitous that you had so much experience around measurement of performance measurement your your comments Nabil makes me think that you know just flipping flipping your ideas 180 degrees it makes me think that then the current metrics that we do pay attention to are not necessarily the best ones but the ones that serve the goals that are trying to be pursued it's sort of just a a reflection on one of the implications that if there are great metrics that simply are don't serve the incentives in place that means that the the current metrics that we are looking at perhaps are not ideal in many ways but they are there because they do serve a lot of the interests and the powers that you mentioned please go ahead yeah yeah no the the the measurements are not wrong the the measurements are are really nice the question is what is incentive to fulfill those measures and report them and what difference will it make at the end to the people who have the money or have the financial power that's what's what's critical the idea of stakeholder capitalism is is really very appealing that comes from the investors the question is for me is what the investors will demand actually in terms of the metrics and what are they going to do with those metrics for example if environmental conservation is is is upheld by certain certain actions of a company but their profits are down what the investors will say about that that's that's a kind of issue that i'm raising it's it's it's putting teeth to everything that we do it's demanding those reports and it's following through with them throughout the system not just you know the one-off situation well i would like to hear Emily's thoughts on these last statements because we're now talking about the role of the investors yeah how would you reply to Nabil's thoughts yeah i mean i completely agree i mean i take the point then metrics and metrics sake is not the game changer it's it is the how those metrics are then built into incentives of management teams of companies but then to what extent do investors value that and ask for that and i suppose what i was attempting to illustrate in in my space is that i think at least in the area of climate there is now emerging more baseline norms around what those disclosures should be the language for talking about climate change risk and opportunity there's a clear ground swell over a sustained five-year period from a kind of critical massive investors to ask for that and what we're seeing is that companies are moving and there's now what's been created almost a race to the top like how ambitious companies are actually competing to announce net zero goals or paris aligned goals that are better than the last company which is that just made an announcement a month ago or two months ago so we're starting to see almost a virtuous cycle emerge it's not perfect and there's certainly you know gaps that remain and there's certainly question marks about how valid are some of these goals like if a company announces we're going to be net zero by 2050 on the one hand you can celebrate that and say oh that's so ambitious that's never been done before you know no one knows how they're going to get there the company doesn't know how they're going to get there so that's a moonshot goal fantastic on the other hand you can critique it and say well it's meaningless it's 30 years away companies never you know make projections that are 30 years away and they're just saying it because they know that they're not going to be accountable to it who knows who's going to be asking them what goal to fulfill in in 25 years from now when 30 the 30 year timeline is pending so that's why investors are now shifting their attention to ask for interim goals and targets and that's why BP's announcement this past week around the fact that they're going to wind back 40 of their oil and gas business by 2030 is significant because first of all companies don't normally make announcements about the closure of major business uh business lines they normally only talk about how they're going to grow or consolidate their influence in in a particular business line secondly 2030 is a much closer more real time horizon that you can actually start to build into discount models thirdly it's the kind of goal that you can hold executives accountable to and the most advanced companies companies in this space are starting to build environmental social and government and other corporate governance metrics into executive compensation it's definitely an earliest stage of the discussion but there are some companies doing that and I would just mention that when BP made that announcement their stock price was up seven percent in the week that they in the week that they made that announcement so I think that there is evidence that investors are valuing action on some of these long-term systemic issues more than perhaps they have before excellent excellent conversation I would like to very briefly or slightly shift attention to to the non-profit sector for a second because I think we have seen that there are a lot of promising moves on behalf of corporations and investors that seem to be more than just rhetoric that's extremely promising now jean shifting to the non-profit sector what are your thoughts about small nonprofits and i'm thinking about small examples within the bahá'í community although there's probably others outside of the bahá'í community that are not dependent on corporations given these power disparities do you know of models that's where where nonprofits can actually flourish without this dependency through different means right so in most nonprofits that have a good development program by development I mean fundraising so in most nonprofits that have a good development program they look to diversified sources so they will be doing events they will do some sort of fee-for-service activity they will do some sort of revenue generation through their work often not always that's possible but often it is they will look to government grants they'll look to private foundations family foundations all of those kinds of grant possibilities and they will also cultivate major donors and plan giving plan giving being bequests and so for most nonprofits well if a development strategy is robust and and sustainable corporate funding will be one of many strategies that a nonprofit uses an important strategy for sure but one of many and so there are a lot of nonprofits that never touch the corporate sector they never interact with the corporate sector that doesn't do anything to hold the corporate sector accountable to society or to the cause whatever that nonprofit is working on in the case of Baha'i inspired or Baha'i nonprofits it really depends on the work that the organization is doing a lot of them are educational institutions and so educational institutions again can have a diversified funding strategy going on but I believe that because we adhere to the writings of the Baha'i faith we have a special responsibility to make sure that the people that we get funding from or even request funding from is Baha'i inspired organizations that those corporations are ethical I think we have an extra additional responsibility to uphold the intent of the writings to take care that we're not cultivating funding from unethical sources whether they're corporations or government agencies or whatever so yeah I think we do have an extra responsibility thank you thank you very much for these thoughts so we have a number of questions and unfortunately only a few minutes left in our time span so I'm going to try to combine a couple of these questions that I think can be addressed by each of our panelists perhaps we can go in the order in which in which you presented just for simplicity so somebody's asking as an individual how can we play a part in this shifting towards mutualism in terms of how we invest or in or in any other way so so the person talks about specifically the financial sector but since this is our probably the the last question we have time for we can open it up to how can we shift all of us all of you I'm taking credit I'm saying all of us all of you spoke about the necessity to move towards a more mutual and reciprocal type of relationship so this person wants to know what is the role that individuals can play in this in this way so so maybe each of our speakers can provide some thoughts on this okay I'll start by by uh saying that the question about investing I'll relegate that to Emily but in terms of our our individual involvement as Baha'is we have three components of the plans before us and that is one is community building and so you know community building will go a long way actually in achieving some of the objectives that we have but it could take a long time the second thing is engaging in social discourse and I think that that kind of seminar webinar or roundtable discussion is can be used in public discourse with people that teach business with people that do business and to highlight the really the the flaws and the fundamental assumptions upon which the system is based and to get people to embrace the concepts of unity and what does it mean justice what does it mean you know processes of consultation collaboration accompaniment how can we apply those in our own sphere and finally of course if you can take action for example starting a business founded on those principles that would be wonderful and we have a few examples of that beyond educational institutions you know for example soul.com is is a company that's having a great deal of impact on transforming business converting them from corporations to communities and so there's a lot that we can engage in in terms of investing I mean this is a tough one because I don't have the time to go and you know evaluate each company's social and environmental performance so I actually just go with the mutual funds that I you know my retirement funds are tied in so I'm not going to address that question but there's one paragraph in the message from the House of Justice and it says whether you're a buyer a seller an investor or whatever you have to apply the principles and the means are not justified by the ends that we want. I would like to address that question I have some concrete examples that people could follow I think that it's it is in the everyday interactions that we have with people it's using your sphere of influence whatever that happens to be if it's through your job if it's through your investments if it's through other ways that you not just control assets but control attitudes or have an influence on attitudes where your money is invested is really important but also where it's spent who do you do business with what do they stand for contributing your expertise to organizations that are trying to make a difference in the community and are doing something that you think that that you can lend your expertise to and finally contributing in monetary ways to organizations that you like that are doing good work and that you like. Jose I'll be very quick I know we're at time but I think it's just worth underlining and it was in the bill's presentation this quotation that came from the one March 2017 letter from the House of Justice I think this letter is very important for each individual Baha'i to reflect on it was actually addressed to individual Baha'is it was not addressed to an institution to an assembly it was actually addressed to each one of us and it called on us to actually map out what is your interaction with the economy so you interact as a consumer you interact as an employer or as an employee as a borrower and once you've mapped out your various interactions you can then do an audit as as Jean and the bill have suggested on who is my service provider or who is my partner or who is my supplier for that service right so is my bank a bank that I think is ethical go on their website read about who the directors are read about their corporate purpose have they put out a statement of corporate purpose you know are they involved in philanthropic activities in the community around for natural literacy or whatever that is sustained not kind of subject perhaps to you know fickle um annual funding cycles like Jean pointed out you know look at your bank critically go and speak to your 401k provider ask them why isn't my default option for my 401k a sustainable investment fund and who is the provider of that sustainable fund and what's the methodology for how that sustainable fund has been constructed or is it greenwashed you can go and speak to your fidelity or John Hancock or any one of these providers of your 401k and ask them that question if they don't hear that question from you they won't be incentivized to put those options on the platform they need to hear a critical mass from individuals for those requests you can speak to your wealth advisor have the same conversation about how you're structuring your investments more broadly and then if you're an employer are you paying everyone fairly have you looked at the gender pay gap have you made sure that your hiring practices are sufficiently taking into consideration diversity and the need for diverse individuals to be in your organization you know you can really do this audit quite systematically over a number of months and you can also look at your behavior as a consumer are you buying from companies that you think I know it's a it's a there's an alphabet soup of labels and it's really quite challenging to navigate but you can still attempt and you can still try to move towards rather being paralyzed by a sense of the system is too complex and I don't understand how it works and you know and I'm just one person I think this letter from one March 2017 is really powerful for repositioning the agency of individuals and actually supporting systemic change unfortunately our time is up well we knew up once we started talking about this enormous topic that we would just be able to sort of just raise some provocative questions and and address some issues but of course there's always a lot more to be said so I would like to first of all thank our wonderful speakers and our engaged audience for the participation I think we have seen an approach to investigating corporations role in society that is very aligned with this year's ABS theme beyond critique to constructive engagement clearly the role of corporations in society is in need of a drastically different approach and the crisis that engulf us today have created an openness to considering the broader well-being of society so we hope that the ideas presented here will spur conversations and reading groups are eager to explore these new possibilities in light of Bahá'u'lláh's revelations thank you very much everyone