Sustainable Future News speaks with Meredith Sumpter, CEO of the Council for Inclusive Capitalism, around how entrepreneurs and organisations are aligning sustainability and dynamism in their operations, and key attributes forward-thinking leaders need to possess.
When it comes to corporate sustainability, it is very easy for one to nod their head at the right times and speak the language of placating platitudes, homespun homilies and business buzzwords. Yet frameworks, rather than fine words, are what is needed to bring about real change.
The Council for Inclusive Capitalism aims to change this with its Just Energy Transition framework (JET). The Council is a membership group which describes itself as a ‘global movement of leaders doing business in ways that benefit people, communities, and the planet’, represents more than 200 million workers and $10 trillion (£8.09tn) in assets under management. The JET offers a framework for company action, committing to a community-specific approach with social consensus, diversity and transparency, alongside universal carbon neutral energy access for consumers.
So, what is the Council’s mission, and how does it achieve it?
Tell us about your career to date, current role as CEO of Council for Inclusive Capitalism and the work the council does?
I’m a public servant at heart, dedicated to enabling greater economic opportunity. My career began to take shape when I landed a job in the U.S. Senate as a legislative aide to Senator Lisa Murkowski who represents my home state of Alaska. That kickstarted a career that led to onward roles, including in diplomacy, analysis and economic advisory spanning the U.S., China and Asia, and beyond, working with Fortune 500 corporate leaders, global investors, governments, and policy experts. Before coming to the Council for Inclusive Capitalism, I oversaw the global research platform of Eurasia Group, the geopolitical risk consulting firm.
For the past two years, I’ve been the CEO of both the Council for Inclusive Capitalism and its sister organisation, the Coalition for Inclusive Capitalism. The Council for Inclusive Capitalism, is a global community of business leaders committed to taking — and sharing on our public commitments platform—concrete actions to build more inclusive, sustainable, dynamic, and trusted companies. We work with hundreds of small and large businesses from every sector and across the world, supporting the work they are doing both within their organisations as well as collectively to intentionally practice capitalism in a way that creates value for people and the planet. The Council then shares these actions and best practices with our community and the general public to advance learning and adoption of inclusive capitalism.
Can you define inclusive capitalism in your own words and give some tangible examples?
Inclusive capitalism is business at its best. It’s when companies pursue profit in ways that meet peoples’ needs while addressing the climate change and inequality risks of our time. Council members’ actions are tied to the UN Sustainable Development Goals (SDG) on our commitments platform so you can see all the different forms in which the private sector can act to harness its value creating powers for a profit that produces a much broader benefit, strengthening our economies and societies in the process.
We are increasingly seeing what happens when we narrowly focus on short-term profits over sustained, long-term value creation: environmental degradation, with increasing risks and costs to companies; rising inequality that hammers consumers and workers; and governance failures that breed corruption, incompetence, and waste. It’s clear from poll data that the public broadly expects companies to do more and to be more than just profit as they are conducting their business. Inclusive capitalism is about meeting this market demand for business that is profit and broader value creation, driving business excellence in the process. Companies that practice inclusive capitalism can simultaneously strengthen the economy and society while turning a profit.
I often point to the story of Patricia Nzolantima, an entrepreneur in the Democratic Republic of the Congo and Council for Inclusive Capitalism member, who started a ride sharing company that employs women drivers. Her company addresses a market need while advancing financial inclusion and wellbeing of people by providing women with sustainable employment while offering women and other customers at risk of violence safe transportation, all while making a profit.
Bank of America is a founding Council member and the first major bank in the U.S. to walk back from overdraft fees, making the argument that enabling those with too few resources to be more active economic participants and grow their own wealth produced healthier profits for the bank in communities across the country. This kind of approach is what inclusive capitalism is all about.
What examples can you give of interesting work/initiatives currently being done?
There has been a lot of focus on the need for a just energy transition—in other words, a transition to net-zero that doesn’t leave behind at-risk customers, communities, and workers, particularly in emerging markets. But there is still a lot of confusion on what a just transition looks like in practice. So the Council for Inclusive Capitalism developed the Just Energy Transition Framework for Company Action, the first private sector guide for use by companies, investors, and governments that defines 20 areas of business action to transition justly.
Since launching the Just Energy Transition Framework during COP26 in 2021, we’ve worked to identify, develop, and share new examples of our members taking action to transition this way, with an emphasis on both the “E” and “S” in ESG (Environmental, Social, and Governance). M&T Bank, for example, is allocating $250,000 over the next three years through its charitable foundation for workforce development programs that will meet climate and energy standards while also increasing access for BIPOC (Black, Indigenous, and people of colour) communities. Brazil’s Vale is promoting sustainable development in the territories where it operates and has committed to helping to lift 500,000 people out of extreme poverty. Japan’s Suntory is working to develop the country’s largest 16 MW green hydrogen power system at one of its facilities, where it plans to use the energy produced as fuel in surrounding communities. Scotland’s SSE, an electricity and gas provider, is helping employees transition to low-carbon careers through its STEM Returner program. In fact, many of their oil and gas workers are now pivoting to new career opportunities at the company’s Beatrice Wind Farm.
Make no mistake: these companies are doing this not only because it is the right thing to do, but because it is good for their business. I believe they will succeed and become a model for other companies that have similar scale and impact.
What are the key opportunities in achieving the Council’s goals – and what are the key roadblocks potentially hindering them?
Public and private capital markets are increasingly expecting companies to operate in ways that create value not just for shareholders but for a broader range of stakeholders—customers, workers, communities, even nature and the environment—that are the building blocks of our economy and economic activity. According to PwC, 83% of consumers believe companies should actively shape ESG best practices, while 86% of employees want to work for companies that engage in these practices. The leaders at these companies—more than 90 percent, in fact—also recognise that ESG action is their responsibility.
There are tremendous opportunities for companies ready to respond to this market demand. The Council exists to be the platform for these businesses to share their ideas and best practices for capitalism to produce both profit and broader value. Companies that lean into inclusive capitalism will be the most valuable companies of the future. Their work to meet climate and inequality risks today place them in a much stronger position vis a vis their peers to create value over the long term.
They will not only mitigate their long-term business risks but also meet market demand, deliver immense social value, and differentiate themselves in crowded marketplaces while uncovering new innovations that drive shareholder value. They will also provide a pathway for others to follow.
How was COP27 in your opinion? What did you discuss? Was the event overall beneficial?
COP27 further aligned world leaders in taking on the climate crisis and rightly emphasised the need for governmental leadership. At the same time, it also highlighted the urgent need for everyone — especially business — to stop waiting for the right answers and start doing. I was encouraged to see how much traction the idea of a just energy transition gained since COP26.
One of the events we cohosted, alongside the World Business Council for Sustainable Development (WBCSD) and PwC focused on accelerating the just energy transition in food and energy systems. I also had the pleasure of participating in a roundtable with Ceres and the World Benchmarking Alliance where we discussed the financing of a just energy transition and the role of policymakers, investors, and corporate executives. We hosted a separate roundtable, also with WBA, to highlight company actions on a just transition.
As I said, our focus is on action, and our aim is to continue to bring this work as a means to drive further concrete steps to deliver a just energy transition. I’m optimistic that next year’s COP will have even more companies entering this space.
What roles do business leaders play in incorporating inclusive capitalism? What can CEOs, MDs do to help lead a cultural change and why?
They are the leaders, so they set the tone and have the greatest say as to what will or won’t happen. Incorporating inclusive capitalism must start at the top — with the CEO determining and setting that strategy at the board level — before it is socialized internally and then externally. Reorienting business models and investment practices to produce profit and broader value is not light work—to be done well, it must be intentional and integrated across the business lines.
Business leaders and board members should start by asking themselves, “What is our environmental, social, and economic impact on our customers, employees, and the communities we serve? Who will be most affected by our actions or by our decision not to act? How do climate and inequality risks affect our company or impede our ability to produce value? What can we do to address that, over the next year, or the next two, five, 10, or 20 years? How do we bring diverse voices to the table as we determine what steps we can and should be taking to ensure we take the most optimal approach?” No one company can do it all, but it will also be increasingly difficult—and costly—for companies not to do something.
If you were to give one piece of advice to someone reading this feature who is interested in sustainability through inclusive capitalism, what would it be?
Focus on progress, not perfection. Business leaders—particularly of companies who are new to ESG and inclusive capitalism—can sometimes get overwhelmed and think they need to figure it all out at once.
My advice is to just start with what’s both practical and possible. Focus on one or a few areas: for example, reducing your energy use or setting a target to hire more employees from diverse backgrounds. Over time, you’ll gain important insights about what works and what doesn’t, realise the additional value you are creating for shareholders, stakeholders, and your bottom line, and eventually be in a position to do even more.
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