Sustainability Matters:How Business can Foster Inclusive

Growth in the United States

Sustainability Matters Webinar

November 30, 2016

• Vice President, BSR

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Laura Gitman Susan Winterberg

Today’s Speakers

• Associate Director,

Inclusive Economy,

BSR

3

Our Agenda for Today’s Webinar:

1. BSR’s Framework: Business Leadership for an Inclusive Economy

2. Economic Inclusion in the U.S.: Key Issues and Challenges

3. Business Action on Inclusion: Cases and Stories

4. Question and Answer and Discussion with Audience

1. BSR Framework Business Leadership for an Inclusive Economy

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Inclusive EconomyBusiness Leadership for an Inclusive Economy is BSR’s strategy to work

with business to enable the emergence of an inclusive economy.

GOOD JOBS

ACCESS TO

ESSENTIAL GOODS

AND SERVICES

INVESTMENTS FOR

PROSPEROUS LOCAL

COMMUNITIES

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02

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• Respect and Livelihood

• Well-being

• Diversity

• Mobility

• Availability

• Accessibility

• Affordability

• Acceptability

• Infrastructure

• Economic Livelihoods

• Social Capacity

and Institutions

An inclusive

economy enables

all individuals and

communities to

participate in, benefit

from, and contribute

to global and local

economies.

2. Inclusion in the U.S.Key Issues and Challenges

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Good JobsEmployment in the U.S.

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What do Americans want from Business?

Employee Pay, Benefits &

Treatment, 49%

Creating Jobs in U.S., 6%

Product Quality & Customer Treatment,

13%

Leadership & Ethics, 17% Supply Chain & Human

Rights, 4%

Environmental Protection, 5%

Investor Alignment , 4%

Community Well-Being & Philanthropy, 2%

Other, 11%

Source: Just Capital, July 2016, National survey, Margin of Error: +/- 2% 8

Half of Americans say good employment is most important

1. Creates Jobs in US

2. Pays a Fair Wage for

Industry/Job Level

3. Doesn’t Discriminate

1. Creates Jobs in US

2. Pays a Fair Wage for

Industry/Job Level

3. Has leaders with

integrity

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Very Liberal ModerateLiberal

Conservative Very Conservative

Across the political spectrum – good employment practices are what

Americans want most from business

Top 3 Priorities for Business

1. Pays a Living Wage

2. Pays a Fair Wage for

Industry/Job Level

3. Doesn’t Discriminate

1. Pays a Fair Wage for

Industry/Job Level

2. Doesn’t Discriminate

3. Pays a Living Wage

1. Pays a Fair Wage for

Industry/Job Level

2. Doesn’t Discriminate

3. Creates Jobs in US

Source: Just Capital, July 2016, National survey

What is a Good Job?A Good Job has a balance of three dimensions

Source: OECD, “How Good is Your Job? Measuring and Assessing Job Quality,” 2016. 10

Good Jobs

Earnings

Job Security

Quality of Working

Life

Earnings

Source: Economic Policy Institute 11

Wages have been flat for four decades and are falling for

those at the bottom

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Loss of Stable Jobs

Creation of new jobs has been disproportionately in part time, contractor,

and temporary agency positions

Job Security & Quality of Working Life

• 1 in 4 Americans were laid off during

2008-2013

• Wages on re-employment are on

average 30% lower

• Precarious jobs grew 50% in last

decade

• 1 in 4 part time workers in the U.S.

want a full time job

Decline in Management Quality

• 70% of U.S. workers are ‘not-

engaged’ at work

• 60% of millennial workers are

currently looking for a different job

ProductsAccess to Critical Products & Services in the U.S.

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In the U.S. the most critical products are also the most unaffordable

Products

• In U.S. for-profit companies play a major role in

providing basic public goods and services including in

higher education, prisons, human services and social

welfare programs

• In U.S., the most critical goods are also the least

affordable

− Higher Education

− Health Care

− Child Care

− Housing

− Food

− Financial Services (for low income earners)

Change in Consumer Prices

in U.S., 1996-2016

Source: American Enterprise Institute, Bureau of Labor

Statistics, 2016

CommunitiesLow Income and Marginalized Communities in the U.S.

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• Rising housing costs

and displacement risks

• Limited public

transportation options

to access jobs

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Housing &

TransportationPublic Safety

Physical & Financial

Health

Inner city communities face displacement, segregation and public safety

issues

Urban Communities

• Limited access to

healthy foods

• Limited access to

affordable financial

services

• Drugs and gun violence

• Police-Community

relations

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Many small cities and rural working class communities have been

devastated by globalization and automation

Small Cities & Rural Communities

Factory Closures

• Mass migration

• Home values collapse

• Small businesses close

• Vacant properties accumulate

Local Government Fiscal Crisis

• Property Tax Revenue Loss

• Layoffs of Teachers, Police, Sanitation Workers

Community Decline

• Physical Disinvestment

• Crime Rates increase

• High School Drop out rates increase

Intergenerational Poverty

3. Business Action Cases and Stories

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Inclusion in U.S.: What can Business Do?

2 Access to Critical

Products & Services

Develop new products and

pricing models that lower

costs & improve access in

critical areas:

• Health Care

• Housing & Transportation

• Higher Education

• Child Care

• Healthy Food

• Financial Services

1 Good Jobs

Re-examine business models

to create higher quality jobs:

• Commit to paying Living

Wages

• Wage Raises, Benefit

Coverage & Profit-Sharing

• Invest in Training &

Operations Improvement

• Expand Diversity &

Inclusion Programs

3 Community

Investments

Develop place-based

strategies for inclusion:

• Locate facilities in places

that are accessible to

marginalized populations

• Engage in outreach and

recruitment in communities

• Invest in retraining workers

& revitalizing communities

when closing facilities

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Improving wages, benefits, and career mobility for retail workers

Good Jobs: Starbucks

• Situation:

− Retail workers often have low wages, unpredictable

schedules, low benefit coverage, and few opportunities

for learning and advancement

• Action:

− Raise wages across board by 5% or higher

− Increase participation in employee profit sharing

− Offer benefit coverage to workers 20 hrs/wk or more

− Free college tuition program with Arizona State

− Improve workplace communications & culture

• Outcomes:

− Among lowest turnover rate of employees in industry

− High customer satisfaction and job satisfaction relative to

peers

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Providing affordable and nutritious food in inner city communities

Access to Products: Daily Table

• Situation

− U.S. inner cities are ‘food deserts’ without easy public

transport access to grocery stores

− Healthy food is least affordable and obesity epidemic is

growing among low income individuals

• Actions

− Founded by Doug Rausch, former President, Trader Joes

− Buys excess inventory from 40+ food brands & retailers

(including Wegmans and Whole Foods)

− Membership based customer system focusing on low

income zip codes

− Cooking classes and education on nutrition

• Outcomes

− First pilot store opened in Boston’s Dorchester

neighborhood in 2015

− Plans to scale to other cities

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Revitalizing local communities during facility closures

Communities: Nokia Bridge Program

• Situation: Nokia exited mobile devices business in

2011-13 in divestiture to Microsoft

− Close factories & R&D facilities in 13 countries (including

3 facilities in U.S.)

− 18,000 employees laid off

• Outcomes:

− 60% Rate of no unemployment

− 1,000 new companies started

− Full job replacement in vulnerable communities

− Successful transition of R&D portfolio, no labor actions

• Actions: Goal was to minimize days of unemployment

and replace jobs in vulnerable communities

− Career Fairs and Coaching, Job Training Grants

− Entrepreneurship Training & Start-up Funding

− Recruit new manufacturing firms to communities

Q&A and Discussion

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