In my early days on Wall Street, my manager spoke of “twofers”—meaning one action that simultaneously provided two solutions. The term was used in pitching the desirability of a specific approach to helping a client solve a problem, with the added benefit of solving a second problem as well.
Not to make light of either climate-readiness or talent retention—both top concerns for organizations today. But it is no surprise that the leading firms in climate also seem to be a magnet for employees—certainly a great twofer for any organization, both in playing its part in climate readiness and addressing human talent so in demand.
As a practical observation, many organizations which previously have not embraced ESG in their business practices start with the E—as in environment and climate sustainability—as their first toe dip into ESG.
Organizations in asset management are making powerful strides in climate sustainability. JP Morgan Asset Management and BlackRock come to mind. The leaders communicate their strategy and commitment throughout the entire organization—fully aware that “bolt-on strategy” seldom works. They integrate climate into purpose—and across stakeholders, including employees, knowing clear alignment from top to bottom aligns purpose.
Increasingly, employees care about the vision of their company. And in our time of the “great resignation”, more employees are looking to work in an organization that has a sustainable approach to business as well as a footprint in their community.
So companies are seeing their climate strategies help their talent retention and acquisition. We sense the start of a sustainability revolution—with education and employee interest—and the best companies creating a “feedback flywheel” to allow employee suggestions/change to bubble up within their organizations.
On a related topic, we also see groups of competitors collaborating on change around climate sustainability. A few months ago, CalPERS and Carlyle organized a group of investment firms representing over $4 trillion of private investments to standardize information and provide transparency on private firm data. Over two dozen large investors, including Blackstone and the Canada Pension Plan Investment Board, have joined them. The group’s focus includes standardizing data and reporting in their portfolio companies/investments on climate sustainability and greenhouse-gas emissions, board diversity, and hiring demographics. And investors such as CalPERS seek to further expand these metrics to include reporting in areas such as employee retention and C-suite diversity.