An interview with Charlie Mahoney, Director of ESG Business Development at JUST Capital. JUST Capital firmly believes that the world needs more just companies. Those that believe in fair pay, equal worker treatment, strong communities and a healthy planet. JUST is dedicated to measuring and ranking companies on the issues Americans care about most so you can then act on that knowledge with your voice, purchase decisions, or your investments.
Q: Can you tell us about your background and how you ended up at JUST Capital?
Charlie: I’m Charlie Mahoney, the director of ESG business development at JUST Capital. Before I joined JUST, I spent six years at Morningstar, where I was focused on strategic partnership working with a large array of distribution channels. During my six years at Morningstar, I really developed a passion for sustainability as Morningstar held 40% of Sustainalytics. I was able to work closely with Sustainalytics and see how ESG data can be integrated into the investment process and made me want to fully dedicate my time to the sustainability space. I found JUST and really resonated with their goal of advocating for the end American. JUST Capital is a non-profit focused on polling the American public and what’s important to them. JUST then packages that data up to the corporate level and investor level to drive tangible change.
Q: What is JUST Capital’s Mission?
Charlie: JUST Capital’s mission is to drive stakeholder capitalism forward and to create corporate change by way of the American public’s opinion. We are focused on polling the American public to gauge what issues are most important to them and we aim to quantify and measure the underlying metrics that roll up to those various issues. From there we help surface that data and play it back at the corporate level across the Russell 1000 universe we cover. We also serve investors by packaging the various rankings and data that we have to create meaningful investor products that represent the American public’s voice
Q: Can you talk about JUST Capital’s ranking of America’s Most Just Companies, and specifically what happened with that research?
Charlie: We have just released our fifth year of JUST Capital’s rankings. We rank the Russell 1000 to catalyse change through our corporate engagement teams. We’re not trying to call out companies that don’t have a pay equity policy, that don’t have paternal and maternal leave in place. What we’re really trying to do is to surface all the data we collect, particularly around social issues, and work with them closely. Due to the fact that we are a mission-driven non-profit, in the most transparent way to really say ‘Hey, we can help you implement programs to see if you’re paying your employees a living wage’. The rankings are a method to engage and hold companies accountable. As our ranking gains more and more momentum and press there is an increasing, heightened value that is placed on our rankings and movement up within the rankings by the companies we work with.
Q: How do you feel like the ‘S’ in ESG has been influenced by the events of 2020?
Charlie: The ‘S’ has seen a reckoning in 2020. It has fully accelerated the social aspect. I believe at the beginning of 2020 we were totally focused on the ‘E’, environment, and different organisations were really driving forward on carbon neutrality, but once Covid-19 really came into place in the middle of March, we have seen a rapid acceleration of social issues around workers’ rights, how companies are interacting with their communities, treating their customers. And then, with the resurgence of the BLM movement, we see this increasing need to address the systemic inequities within organisations. Many companies have workforces that are making different amounts of money in the same roles and are still seeing discrepancies in hiring, not giving similar opportunities across ethnicities. There is so much more that needs to be done for companies’ workers, customers and their communities.
Q: Do you think as we move past Covid-19, that this will be a long-term feeling and change?
Charlie: Yeah, it has to be. If you’re an organisation and you’re not addressing these issues, you’re not investing in your workforce, taking time to understand where the inequity is from a racial and gender perspective, you’re going to lag behind. There’s been so many different statements from the large corporations on what they’re doing on these issues and they are going to be held accountable. JUST Capital is going to make sure of that. As we move into the future this is something that is not going away and is something that we need to measure.
Q: How can companies do a better job of effectively measuring the ‘S’?
Charlie: This is a question we get a lot. Year on year, the most important issues to the American public are the ones that are the most personal, and those are the social issues.
This year I believe the ‘S’ makes up about 76% of our overall rankings model and we do this to showcase how this needs to be a continued point of emphasis for companies. We have an initiative that we just launched with PayPal a few weeks ago called the Financial Wellness Initiative that is really a joint engagement going out to different companies to help them implement financial distress tests to see if they are paying their employees a liveable wage. We’ve also launched the Blueprint for Racial Equity in partnership with Policy Link and FSG to help CEOs begin to address the systemic inequities within their workforce and implement action steps they can take to get started.
The Covid-19 Tracker we launched in mid-March 2020 to track the 100 largest employers and what they were doing for their employees and communities. Whether or not they were providing PPE, whether or not they were furloughing employees when they had cash on hand that they were investing in dividends or stock buy-backs. We’re trying to hold these different companies accountable to invest in their workers and advance stakeholder capitalism within their organisations.
Source: JUST Capital
Q: How do you showcase your polling to investors?
Charlie: In terms of bringing the American voice to life for investors, we see year to year the same issues rise to the top. For example, whether or not a company is paying a living or fair wage has been the number one issue for the last three years. Other important issues include whether or not a company is acting ethically in leadership, whether or not a company is creating and retaining jobs in their communities. What we’ve seen over the past five years is that the companies that treat their workers, customers, and communities with the most importance rank the best. We then take our rankings data and all the underlying issues and data we can then package that up into ways we serve the investor and serve the American public through investing.
JUST Capital has 8 active investment products. We have the JUST ETF with Goldman Sachs, which is available via any brokerage to purchase with no investment minimum, and really what that does is that showcases the most ‘just’ companies in the top half of each industry rank, looking at a broad diversified, equity basket. And then we have seven other investment products from separately managed accounts to unit investment trusts. We’re always looking to partner with different asset managers to drive our mission forward. We believe through a two-pronged way of serving investors through data licensing and investment products we can really bring that American voice to Wall Street
Q: How effective do you think Wall Street and corporates are at bringing the American voice to life?
Charlie: I think this year has really shone a light on the companies that have always been an advocate for their workers. Looking at Covid-19 as an example, there’s a number of different companies that have really gone above and beyond raising minimum wage permanently, such as Target. They have done an amazing job at advocating for their front-line workers, providing PPE, and now addressing systemic inequities and workforce diversity issues that persist in the organisation. Covid-19 has shone a light on the companies that are doing a great job at advocating for all their stakeholders versus those that are purely focused on the short-term.
Source: Wall Street Journal
Q: Any other topics you want to talk about?
Charlie: The last thing we want to be at JUST is a data provider. We don’t want to be seen as another ESG research firm. We’re all about driving stakeholder capitalism forward in the ways that work for Americans. We obviously poll Americans on the various issues that matter to them, but ESG is personal, and sustainable investing is personal. Building transparency around all these different policies and how companies are operating is ultimately what we are advocating for. Especially given Covid-19 and BLM, this heightened need for transparency is more prevalent than ever. Issues like workforce demographic disclosure, covered by the EEO1 report, are mandated to be filed by companies with over 100 employees by the Department of Labour, but are not mandated to be released to the public. As companies are filing that and preparing that already each year, we’re really trying to push for the largest companies in the US to disclose that information, because the EEO1 report is really the eye into how a company breaks down in terms of race, ethnicity and gender. Starting there by disclosing that to the public, considering it has already been completed by the organisation, is an amazing first step to creating equality within the workplace. Only 32 companies of the Russell 1000 have actually disclosed that to the public. We have a long way to go in terms of addressing inequities in the workforce and so that’s something I am very passionate about and am trying to drive forward.
Q: Thank you so much Charlie. Do you have any final thoughts?
Charlie: If you would like to partner on corporate engagement, investor products, data licensing, or D&I research please reach out as we’re always open!