World Reimagined

World Reimagined: A Reckoning for Companies

Apple store during coronavirus
Credit: Brendan McDermid / Reuters - stock.adobe.com

In 2010, corporate citizenship took a major step forward when the International Organization for Standardization (ISO), an international nongovernmental organization made up of national standards bodies, released ISO 26000, a set of voluntary standards meant to help companies implement corporate social responsibility.

While the notion of corporate citizenship dates back to the 1950s, the challenges presented by both the COVID-19 pandemic and Black Lives Matter movement ushered in a new era of corporate citizenship in 2020 that went far beyond the realm of philanthropy. Companies rallied to do good in the face of the coronavirus and stepped up efforts for diversity, inclusion, and belonging. In many respects, 2020 will be a year worth forgetting, but for corporate citizenship, it will be a year to remember.

In early March, the World Health Organization’s (WHO) estimated 89 million medical masks would be required for the Covid-19 response each month, along with 76 million examination gloves and 1.6 million goggles. To help fend off the coronavirus and protect medical workers treating those infected as well as address potential shortages of key products, companies altered their production lines to help how they could. Here are just a few examples:

  • A wide array of companies, including General Motors (GM)Ford (F)Tesla (TSLA)3M (MMM), Dyson, and Toyota's (TOYOF) North American business, pitched in to provide ventilators and respirators.
  • French carmaker Renault SA (RNL:GR) used its 3D printers to make medical visors for health workers in Spain.
  • SmileDirectClub (SDCused its 3D printers to produce respirator valves and medical masks.
  • Gap (GPS)Hanesbrands (HBI)Ralph Lauren (RL), and Canada Goose (GOOS) shifted production lines from making apparel to manufacturing face masks, scrubs, and gowns.
  • Apple (APPL)Facebook (FB), and Salesforce (CRM) donated millions of masks for healthcare professionals in the U.S. and Europe.
  • Fashion company Burberry Group (BBRUFrepurposed its trench coat factory in England to make non-surgical gowns and masks. Giorgio Armani dedicated its Italian production plants to the production of single-use medical overalls. Brooks Brothers, the New York-based fashion retailer, produced gowns and up to 150,000 masks daily.
  • L’Oréal (OR:FP), Estee Lauder (EL)LVMH Moet Hennessy Louis Vuitton (LVMHF) re-tooled production facilities to create hand sanitizer as did breweries and distilleries, including Anheuser-Busch Inbev (BUD)Brown Forman (BF.B)Molson Coors (TAP), and Pernod Ricard (RI:FP).
  • Unilever (UL) donated €100 million worth of soap, sanitizers, bleach, and food to support emergency efforts and supporting suppliers and customers with €500 million of cash flow relief.
  • Krispy Kreme (KKD) and Starbuck (SBUX) gave away food and coffee to people serving on the front lines of the pandemic.
  • Uber (UBER) delivered several hundred thousand free meals to hospital workers.
  • JetBlue (JBLU) worked with non-profit partners, like the Red Cross, Americares, and Doctors Without Borders, and NGOs to transport medical professionals and supplies to underserved areas.
  • Delta Air Lines (DAL) utilized its cargo flights to transport medical supplies between China and the U.S., and flew healthcare workers to states experiencing a surge of COVID-19 cases.
  • The American Hotel and Lodging Association (AHLA) noted that more than 6,500 hotel properties adjacent to medical facilities across the U.S. offered temporary housing for health care workers, noncritical patients, and/or the homeless.

While it may be trite to say, when the coronavirus got tough, the above companies and scores of others got going.

The same was true with Black Lives Matter following the May 2020 killing of George Floyd by Minneapolis police officer Derek Chauvin, which led to protests that were astonishing in their size and scope, sparking a national conversation about race. An estimated 15 million to 26 million people participated in the 2020 Black Lives Matter protests in the United States. According to the U.S. Crisis Monitor report, 7,750 protests in 2,400 locations across all 50 states and Washington, DC that were linked to the Black Lives Matter movement took place from May 26 through August 22. Roughly 93% of those protests were peaceful with no injuries and no property damage.

A June 2020 Pew Research Center poll found that the majority of Americans, across all racial and ethnic groups, expressed support for the Black Lives Matter movement, as did companies big and small. Companies ranging from Dropbox (DBX) and Fitbit (FIT) to Unilever and Microsoft (MSFT) donated Black Lives Matter Global Network Foundation. In addition to those efforts, IBM (IBM) announced in June it will stop developing and selling general-purpose facial recognition technology, citing concerns about racial profiling. Amazon (AMZN) and Microsoft decided to stop selling facial recognition solutions to law enforcement. Policing is a clear example, but companies may also evaluate their dealings with the financial, housing, and security sectors, making sure they’re not supporting or participating in harmful practices such as loan discrimination.

PayPal (PYPL) created a $500 million fund to support Black and minority businesses by strengthening ties with community banks and credit unions serving underrepresented communities as well as investing directly in Black- and other minority-led start-ups. Apple is creating an entrepreneurship camp for Black software developers to promote their best work and ideas and said it would increase the number of Black-owned suppliers that provided materials for its operations. Target (TGTdonated 10,000 hours of consulting services for small businesses owned by Black people in the Twin Cities to help with rebuilding efforts. Walmart (WMT) announced it would invest $100 million over the next five years to create a Center on Racial Equity to support philanthropic initiatives that address systemic racism in American society, including job training and criminal justice reform.

The bottom line is that for corporations to thrive in a community, that community needs to thrive. The sheer volume of companies that have stepped up for those in need or for those who have faced unnecessary hurdles is worth celebrating.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Chris Versace

Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.

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Lenore Elle Hawkins

Lenore Elle Hawkins serves as the Chief Macro Strategist for Tematica Research. With over 20 years of experience in finance, her focus is on macroeconomic influences that create investing headwinds or tailwinds. Lenore co-authored the book Cocktail Investing and in addition to her Tematica work, provides M&A consulting services for companies in Europe looking to expand globally. She holds a degree in Mathematics and Economics from Claremont McKenna College, an MBA in Finance from the Anderson School at UCLA and is a member of the Mont Pelerin Society.

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