ESG Viewpoint: JUST Capital

# RepRisk interviews Martin Whittaker, CEO, JUST Capital

Martin Whittaker: I’m the founding CEO of JUST, hired by the original board members in July 2014 to bring the dream of JUST Capital to life. We are now an established force in the corporate and investor world, helping to channel the voice of everyday Americans to drive real change on stakeholder performance in the U.S. It’s about systems change, and we see ourselves as catalytic to the vision of making capitalism work for all Americans. The bottom line is that business can and must play a role in addressing the critical issues of our time and that creating value for and investing in your stakeholders is also the best path to building and running a great business.

MW: JUST Capital is an independent nonprofit dedicated to building an economy that works for all Americans by catalyzing companies to take action on the issues that matter most to the American public.

Every year we poll the American public to identify what issues matter most when it comes to just business behavior, and those issues become the foundation by which we track, analyze, and galvanize corporate behavior change, including our Rankings of America’s Most JUST Companies.

In addition to our Rankings, we produce data-driven insights and programmatic initiatives, partnerships, and products to directly encourage and support corporations to adopt more just business practices including the JUST Jobs Scorecard, Worker Financial Wellness Initiative, Corporate Care Network, Corporate Racial Equity Alliance, as well as our ongoing investor solutions related work and index concepts that demonstrate the power of investing in companies at the forefront of stakeholder value creation.

MW: Our annual Rankings of America’s Most JUST Companies incentivizes companies to increase transparency and improve performance on the issues most important to the American public – and helps to redefine corporate success and drive capital to leaders. It’s all about creating a race to the top by demonstrating what good looks like in a new stakeholder-focused economy. It’s not about “naming and shaming.”

In 2022, we tracked, analyzed, and ranked 951 companies across five stakeholder groups, 20 issues, and 245 data points. Of these companies, 501 registered for our corporate portal and 350 engaged with our data review period, representing 14 million workers, 9% of the total U.S. workforce. Importantly, 54% of companies who engage with JUST Capital say they’ve changed behavior because of their engagement with us.

Companies want to understand their performance and learn from our analysis at a detailed level. We have held well over a hundred detailed Rankings debrief conversations this quarter walking through specific data and drivers of performance. We are seeing the impact of these conversations in greater transparency and improved performance on the metrics we track in our Rankings year over year, like pay equity, workforce diversity, gender board diversity, climate disclosures, etc. For instance, over 120 Russell 1000 companies have lifted wages (up from 47 in 2018), benefiting 6.5 million workers. You can explore details on the impact section of our website.

MW: Despite rising rhetoric and growing ESG pushback, the public is consistent in what they want companies to prioritize. Across every demographic group we survey, whether political affiliation, race, gender, age, or income group, Americans are united in wanting companies to prioritize employees’ economic security, through paying a living wage, offering adequate hours and providing quality, affordable, health insurance. Workers are the most important stakeholder and “pays a fair, living wage” remains the #1 priority of the public as it has for the last few years. In fact, fair wage has more than doubled in priority over the last two years.

Over the last seven years, Worker Issues have consistently commanded the highest share of priority among the 20 stakeholder-related issues we track, and this year is no different. Four of the five Worker Issues regarding wages, health, training, and benefits are among the top six priorities of the public. Americans also want companies to prioritize creating jobs in the U.S., which has remained the second most important issue for several years.

The political pushback against “woke CEOs” may compel some CEOs to say less, but the data tells us that companies continue to do more. This isn’t political; it’s just good business.

MW: The majority of underlying data in the Rankings relies on corporate disclosure of policies and performance. Although evaluating the nature and scope of policies and assessing relative performance is the industry standard, it may not capture the full extent of the underlying reality.

Feedback from multiple stakeholders has confirmed that incidents, events, controversies – especially those that reveal behavioral patterns and potential or recurring management problems – are useful in evaluating the broader picture of business behavior and activity and may not be disclosed by the companies themselves. RepRisk’s risk data helps ensure that our model remains alert to capturing real world events and stakeholder sentiments from sources external to the companies.

On issues that have been prioritized by the American public, we identify relevant topics within RepRisk’s incident coverage and develop those into data points. We specifically take into account incident severity, relevance, and prominence, and scale by a company’s global revenue to account for the increased attention that large companies experience with media and other stakeholder attention.

MW: The most significant challenges are resources and the prevailing business narrative of the past 40 years. The teams that lead this work are balancing the development and execution of their sustainability, ESG, and stakeholder strategies with tracking, reporting, and communicating their progress and goals to various stakeholders, and ultimately, driving change. This work necessitates alignment of work streams across different departments and business units, and convening colleagues across communications, investor relations, legal, human resources, public affairs, etc. It requires time, resources, and an organization-wide commitment to make holistic, sustainable decisions. It requires people to be willing to think and act differently, to be courageous in tackling inertia, and to shift orthodox thinking. But the rewards are there; there’s a compelling business case for investing in all stakeholders and you can see that in our index concepts and the outperformance of the JULCD.