In this crazy time for the world, in the midst of a pandemic that has brought society to a grinding halt and suspended air travel in a way that we could not have imagined merely six months ago, it can be easy to feel helpless. It can be easy to feel down and hopeless as if there is nothing individually or collectively that we can do to change our current situation. However, the Black Lives Matter movement has shown that there is power in our individual and collective actions. Alexandria Ocasio-Cortez's speech to congress on why no woman should have to be called a "f**king bitch" matters. These actions matter.
These powerful acts are symptoms of change. Because we do have power. All of us have the power to contribute to change with the choices we make on where to spend our money and what we invest in. Now, those decisions will be more important than ever as we try to emerge from this current chaos to create a world that is a little fairer and a little greener.
"The pandemic has acted as a reminder that we are all part of something much bigger and we have to think of others not just ourselves."
Green shoots of hope are springing up in the actions we have seen some corporations taking since the beginning of the pandemic. Whether it was breweries and perfume houses pivoting to manufacture sanitizer, tech companies rushing to assist with contact tracing apps, or the pharmaceutical industry working day and night to produce a vaccine, corporate good is possible, and it's happening.
Can business do good and make a profit?
In the future we are currently creating, businesses will have no choice but to find a way. This will apply particularly to bigger companies and big brand names because both consumers and investors are paying close attention. Do they care about the difficulties society is facing? Are they doing something to make a difference? There are examples of successful, profitable social enterprises that will set a precedent for new businesses that emerge from this pandemic as consumers become more conscious with their dollars.
One such company has already been doing this for years. Since 1985, Patagonia has pledged 1% of sales to the preservation and restoration of our natural environment. Furthermore, the founder of Patagonia, Yvon Chouinard, and Craig Mathews, owner of Blue Ribbon Flies, created a non-profit corporation to encourage other businesses to do the same. 1% for the Planet is an alliance of businesses that understand that profit and loss are directly linked to the health of the plant and are concerned with the social and environmental impacts of industry. Last year when Donald Trump introduced corporate tax cuts, Patagonia donated their share of the cuts—$10 million—toward environmental causes.
America deserves an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity
Another great example of this type of social enterprise leadership is Eat My Lunch, a New Zealand business based in Auckland and founded upon the buy one give one philosophy. When you buy your lunch from Eat My Lunch, which can be delivered straight to your office, a child receives a lunch in school, too. Consumers love the immediate impact of their choice of where to buy lunch. Additionally, during the pandemic with schools closed, Eat My Lunch pivoted to provide food boxes to families in need instead.
One of the most inspiring recent examples that I have come across is the law firm Aria Grace in London—a game-changer in the legal world. Defying the traditional hierarchical pyramid structure with all profits going to the partners at the top, Aria Grace pays all its current partners equally and donates their remaining profits to charity. The lawfirm also plants a tree every time they close a deal. The lawyers are all extremely experienced, having worked at top firms in London and around the world.
The founders of this firm simply decided that they wanted a change and to make a difference in the world. This model blows the traditional law firm structure out of the water! Quality advice is what matters to clients and with its lean structure, this law firm is able to charge much lower fees than its competitors. This is another fantastic example of thinking outside the box and finding a way to give back while still keeping your paycheck in check.
Shopify is a Canadian company that offers software for small businesses to set up an online store. This software has been a life-saver for many small businesses during the pandemic. With Shopify's software, businesses have been able to create an online presence quickly. Tobi Lütke, the founder, originally wanted to sell snowboards online but the company quickly became something else entirely. Now, Shopify enables small businesses to continue to compete against the all-dominating Amazon and enables consumers to find products that are more unique. In his recent interview on Tim Ferriss's blog, Tobi Lütke talked about the importance of community and the personal values that guide his vision for the company.
Businesses has a duty to society
The importance of this shift in consumer choice has not been lost on big business. As Bloomberg reported in 2019, Jamie Dimon CEO of JP Morgan organized a business round table with 181 major multinationals participants included Laurence Fink of Blackrock Inc, Amazon, Goldman Sachs, and Bank of New York Mellon. They all shared the view that business could no longer be driven solely with a focus on short-term shareholder profit but that all stakeholders (including employees, communities, and the environment) have to be taken into account.
They issued a statement saying that the purpose of a corporation is to serve all of its constituents, including employees, customers, investors, and society at large. The statement said that America deserves an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. Laurence Fink pointed out that "Stakeholders are pushing companies to wade into sensitive social and political issues—especially as they see governments failing to do so effectively." It is ironic that this roundtable took place the year before the pandemic emerged. This has never been more true that at the current moment when a lack of political leadership has led to a failure to control the spread of the virus in the US.
Sustainable businesses perform better
Investors, including institutional investors such as pension funds, are also becoming increasingly concerned about how the major listed companies they invest in are performing against environmental, social and governance (ESG) goals. This promises to be a new battleground as pressure starts to mount on asset managers and pension funds to divest from fossil fuels and to ensure that boards of listed companies are more diverse including women and people of color. Shareholders have the power to hold the large multinationals to account and ensure that progress is made on the things that matter to them (including executive pay) by voting at annual general meetings.
The purpose of a corporation is to serve all of its constituents, including employees, customers, investors, and society at large.
BlackRock, which oversees almost $7 trillion in assets, is completely overhauling its investment strategy because of climate change, which it sees as the biggest threat to long-term growth. It has said that sustainability is the company's new focus. Research has shown that sustainable funds are more likely to outperform than standard funds.
As Siobhan Riding reported in the Financial times this June, out of a sample of 745 Europe-based sustainable funds the majority have done better than non-ESG-based funds over 1, 3, 5 and 10 years. "ESG are not just nice to have but drivers of performance," according to Jan Erik Saugestad, chief executive of Storebrand Asset Management. US large-cap blend equity funds that invest sustainably were the best performers, with more than 80% of the funds in this category beating their traditional peers over 10 years.
As Rob Morgan, Pensions & investments analyst at Charles Stanley, said in the Financial Times in June, the current crisis has shone a spotlight on the role good businesses play in society: "The pandemic has acted as a reminder that we are all part of something much bigger and we have to think of others not just ourselves."
We can think of others and not just ourselves, every single day. We can do this by choosing to support businesses that stepped up during the crisis to support essential workers and their communities. We can support local businesses run by our fellow community members. We can invest in companies that are concerned about the environment and promoting diverse employees.
We have the power! We just have to use it.
Email email@example.com to get the advice you need!
Help! My Friend Is a No Show
Dear Armchair Psychologist,
I have a friend who doesn't reply to my messages about meeting for dinner, etc. Although, last week I ran into her at a local restaurant of mine, it has always been awkward to be friends with her. Should I continue our friendship or discontinue it? We've been friends for a total four years and nothing has changed. I don't feel as comfortable with her as my other close friends, and I don't think I'll ever be able to reach that comfort zone in pure friendship.
Dear Sadsies,I am sorry to hear you've been neglected by your friend. You may already have the answer to your question, since you're evaluating the non-existing bond between yourself and your friend. However, I'll gladly affirm to you that a friendship that isn't reciprocated is not a good friendship.
I have had a similar situation with a friend whom I'd grown up with but who was also consistently a very negative person, a true Debby Downer. One day, I just had enough of her criticism and vitriol. I stopped making excuses for her and dumped her. It was a great decision and I haven't looked back. With that in mind, it could be possible that something has changed in your friend's life, but it's insignificant if she isn't responding to you. It's time to dump her and spend your energy where it's appreciated. Don't dwell on this friend. History is not enough to create a lasting bond, it only means just that—you and your friend have history—so let her be history!
- The Armchair Psychologist