Running in a Blizzard: Where Stakeholder Capitalism Is Headed in 2021

“I prefer to be a dreamer among the humblest, with visions to be realized, than lord among those without dreams and desires.”  – Kahlil Gibran

A few nights ago, I went for a run in a heavy snowstorm, wearing a headlamp to light the way. If you’ve ever done this, you’ll know that the light bounces off every falling snowflake to produce a frenetic, almost claustrophobic effect that makes it almost impossible to see more than a few feet around you.

After about a mile, I switched off the headlamp and let my eyes adjust to the darkness. I gradually began to see beyond the swirl immediately around me, and a sense of depth and perspective returned. As I ran on, I was enveloped by a strong feeling of calmness and clarity. 

2020 felt a bit like running in a blizzard. It was a chaotic, discomforting, and occasionally out-of-body experience where turning off the beam and seeing beyond what was right in front of you often felt impossible. 

For those of us working in the field of stakeholder capitalism, ESG, and corporate purpose – guided by the belief that markets and economic forces must be harnessed if we’re to seriously address our most intractable societal problems – regaining that sense of situational awareness is critical. As we look forward to what 2021 might bring, here’s where I think we are, and more importantly where we’re going.

Stakeholder Capitalism’s Pregame Is Over

This will be the year stakeholder capitalism gets real. The American people, desperate to put the woes of COVID-19 and its economic impacts behind them, will demand a recovery that benefits the majority, not just the few. 


It’s why we’ve partnered with PayPal PYPL on the Worker Financial Wellness Initiative, creating a coalition of companies that will assess whether any of their workers are struggling to get by, so that these companies can adjust accordingly. Through work like that from us and others, we will start to find out which companies really embrace meaningful stakeholder value creation and which pay lip service. 

Corporate actions will increasingly be viewed through this lens – the recent furor over GE CEO Larry Culp’s  $47 million bonus being the latest case in point. Company boards will judge, and be judged, against emergent stakeholder-based performance criteria. More companies will follow the Starbucks route, and tie executive compensation to non-financial metrics like diversity goals. As we transition into a more high-stakes “show me”’ phase of stakeholder performance, where the rewards and risks are that much greater, the forces opposed to change will strengthen. A crucial battleground will be the narrative over whether stakeholder performance is about politics or about wealth creation and growth. Business leaders will need to be crystal clear about what stakeholder performance means, and how it should be measured.

Investor activity will likewise intensify. According to Morningstar, total net funds flowing into sustainable or stakeholder-oriented funds in 2020 pushed above the $40 billion mark, more than doubling the 2019 numbers and up 10x from 2018. In 2021, investors will demand to know whether their ESG and impact capital is actually making a difference, which will increase accountability. Engagement and tracking impact, will become more important. 

Shareholder activism on stakeholder issues will escalate, particularly on climate, fair wages, worker wellness issues, and diversity, equity, and inclusion (DEI). Engine No. 1’s campaign to pressure ExxonMobil XOM toward more clean energy for the sake of shareholders is a harbinger of things to come, indeed, 2021 may bring high profile examples of multiple opposing shareholder activism campaigns. Greater engagement by passive investors, especially the Big Four – BlackRock BLK , Fidelity, Vanguard, and State Street – will be the major focus of attention due to their sheer size and influence. 

Measuring What Matters, Not What We Can

We’ve long needed to  simplify the “alphabet soup” of ESG, sustainability, and stakeholder standards, metrics and reporting frameworks, and I expect some major breakthroughs in this direction in 2021. 

Greater transparency and increased disclosure on key ESG and stakeholder issues – particularly living wage, pay equity, climate risk, and DEI – will elevate the role of the Securities and Exchange Commission, and potential new disclosure requirements there. The World Economic Forum’s initiative on universal ESG metrics; Harvard Business School’s Impact-Weighted Accounts Project; and the collaboration among the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), and the Task Force of Climate-Related Financial Disclosures (TCFD) will all help bring things to a head. 

Hopefully, however, we will also see increased attention on the meaning and quality of the data being gathered. Major institutional investors have expressed legitimate concerns about single-issue ratings, the validity of current ESG data, and the fact that corporate disclosures today are based primarily on policy statements versus actual performance information. Substantial opportunities await those capable of driving the kind of data, research, and analysis that the market needs to make more informed decisions, and I expect new tools and frameworks to emerge during the year (including from JUST Capital). Greater transparency and reliable data are also important for another reason: to build trust. In an age where truth and trust are in short supply, it’s important we measure what matters, not what we can. Only this way can we truly know if we are, in fact, building a more just economy

A New Policy Frontier?

The incoming Biden administration clearly opens up a fresh policy frontier for stakeholder capitalism, but with Congress divided and the bitter, partisan atmosphere expected to continue there will clearly be a need for creative policy thinking on how public and private sectors can work together in partnership. Bipartisan action on shareholder primacy is real and serious – Sen. Marco Rubio’s “Common Good Capitalism,” Sen. Elizabeth Warren’s “Accountable Capitalism,” and the working group of Sens. Mark Warner, Tom Carper,  Tammy Baldwin, and Warren on corporate governance spring to mind. 

Major business and investor groups have already signaled their support for action on wages, racial equity, good jobs, worker wellness, climate, community health, and other areas of policy concern, so the question will be whether and how these forces – market and political – come into greater alignment. The urgency that drove the government and private industry to work together and develop the COVID-19 vaccines may provide a good case study. 

I expect early White House action on orchestrating a cross-cutting strategy for systemic private sector policy engagement and reform. High on the immediate agenda is likely to be action on corporate accountability, transparency, and investor disclosure. Efforts to roll back barriers preventing ESG funds from being included in retirement plans are also highly likely. However, the real prize is creating the foundation for inclusive and just economic growth. With the ratio of debt to gross domestic product soaring past 100 percent for the first time since World War II, we must play a long game and develop creative new policies that incentivize mainstream corporate America to drive real solutions on major national challenges at scale.

Staying on the Path

Of course, none of this will happen without real leadership. Fortunately, one of the silver linings of 2020 was the lessons we learned about leadership, and the importance of putting people and relationships first. Here’s hoping we can keep that spirit alive as we get to grips with building a more just, inclusive economy that works for all Americans.

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