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Business leadership in society

HMI launches database of global corporate responsibility initiatives

BOSTON – High Meadows Institute is excited to announce the launch of the Business Leadership in Society Database, a comprehensive new resource for tracking and assessing industry associations and partnerships promoting responsible business leadership. Developed by High Meadow Institute, with support from KKS Advisors, the database profiles over 200 initiatives, operating both nationally and globally and will officially launch June 3. Self-regulatory initiatives that address major Environmental, Social and Governance (ESG) issues have become an increasingly important contributor in setting standards for corporate social responsibility in the 21st century. While the number of these initiatives is rapidly growing, there is…

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BlackRock drives a tipping point on climate action

Larry Fink’s 2020 CEO letter and his commitment that BlackRock will now be front and forward on climate change across all of BlackRock’s assets under management represents a critical turning point in the climate fight. As the world’s largest asset manager, with $7 trillion under management, BlackRock’s leadership will now put pressure on State Street and Vanguard, the other two members of the big three asset managers, to follow suit. Together, these three firms are the majority shareholders in 88% of the S&P 500, with the power to dramatically influence corporate behavior and ensure climate change is on the agenda of every corporate…

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Modernizing modern portfolio theory

The following blog by HMI Senior Fellow Jon Lukomnik and Jim Hawley, the Head of Applied Research at Truvalue Labs, is a modified version of an article requested by the Principles for Responsible Investment. It is a “preview” of the book the two are researching and writing for Routledge. The anticipated publication date is late 2020 or early 2021. Modern portfolio theory (MPT) – the dominant investment paradigm across the world – is in major need of a refresh. Simply put, MPT is not up to the challenges that confront today’s investors. Although this widely-accepted Nobel Prize-winning financial theory enriched…

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Is It Time to Rethink Corporate Governance?

  For the last fifty years, the mandate and role for corporate governance have been set within well-defined boundaries, in which the business of business was business and the well-being of society was the responsibility of governments. This paradigm was summed up succinctly in 1970 by economist Milton Friedman who noted, “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” Today, thanks to globalization and the international economy, we live in a world in…

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BlackRock’s Larry Fink Redefines the Rules of the Game for Business

For the last 47 years, since September 1970, financial markets have been guided by the maxim articulated by Milton Friedman on the “rules of the game” for business. “There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” On January 18th this maxim was overturned by the CEO of BlackRock, the world’s largest institutional investor. In his letter to CEOs, Larry Fink said, “Society…

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Fighting climate change with active engagement

With a stroke of his pen, President Donald Trump took a major step toward eliminating his predecessor’s landmark climate policy — the Clean Power Plan. Unveiled by President Obama in August 2015, the plan sought to fight global warming by reducing carbon dioxide emissions from power plants. Now, under President Trump, the plan and other environmental policies are in more danger than ever. Some investors might be tempted to approach this new normal by reinvesting in oil and gas. But thus far, the reaction has been more muted. Read more in Pensions&Investments.

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Business Leadership Tackling Big Challenges

Education, housing, healthcare, and transportation. These are the four top challenges the Alliance for Business Leadership attempted to solve during last Monday’s Leader Lab. The conference was the first in a series of convenings of progressive civic and business leaders set on finding solutions to the key issues effecting cities throughout Massachusetts. High Meadows Institute staff and a board member participated in the brainstorming sessions on all four challenges and found the following recurring themes emerged from the discussions. Increasing business participation in tackling these challenges is crucial. Governments and communities cannot do it alone. Business would benefit financially from improvements…

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Can Sustainability Help Companies Outperform?

In recent years, the perception that companies that integrate sustainability in their corporate strategy and operations will do so at the cost of financial performance has finally been put to rest.  As a recent study by mainstream investment advisory firm RBC Asset Managers concludes, investors “can pursue a program of socially responsible investing with the expectation that investment returns will be similar to traditional investment options.” The real challenge in attracting mainstream investor interest in sustainability, however, is not to simply prove that sustainability is not a drag on financial performance, but rather that it enables companies to financially outperform…

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