journal of sustainable finance and...

The Cornerstone Journal of Sustainable Finance and BankingSM

December 2015 Volume II Issue 11

©18percentgrey / Crystal Graphics

Global Imperatives Paris Agreement: Validates National and Local Actions Sebastian Vanderzeil … p.5

Corporate Governance Our Principles of Corporate Engagement Erika Karp, John Wilson & the Board of Directors ... p.8

Global Market Strategy Regional and Sector Strategy: Monthly Update Michael Geraghty … p. 18

Global Earnings Synthesis Michael Geraghty… p. 19

Global Sector Research Tracking Our Thesis on Automation in Restaurants Michael Shavel, Andy Zheng … p. 20

Accelerating Impact Placement Power: How Tesco Is Helping Curb Customers’ Sweet Tooth Rebecca Shelley, Tesco … p. 24

Novo Nordisk: Rethinking the Challenge of Diabetes Charlotte Ersbøll, Novo Nordisk A/S … p. 26

A Vision for Innovative Health Care Delivery Bobby Prasad, The Abraaj Group … p. 28

How Life Insurers Can Support Healthy Living Brooks E. Tingle, John Hancock Insurance … p. 30

Regional Imperatives Healthy Heart Africa: A Business Plan for Tackling Non-Communicable Diseases Mark Mallon, AstraZeneca … p. 32

Corporate Voices Health, Happiness, Performance: Formula for Success Paul Polman, Unilever … p. 34

Doing Right, While Doing Well: The SDG Opportunity Scott C. Ratzan, MD, MPA, Anheuser-Busch InBev … p. 36

A Model for Collaboration Steve Hilton, McDonald’s Corporation & Anne Ferree, Alliance for a Healthier Generation … p. 38

Transforming Tobacco André Calantzopoulos, Philip Morris International …p. 41

Sustainable Editorial “Wellness”: More than Healthcare Dollars Saved Ken Mehlman, KKR … p.44

American Voices on Health & Wellness Kimberly Gladman, PhD, CFA, JUST Capital Foundation … p. 46

2 / Cornerstone Journal of Sustainable Finance & BankingSM / December 2015

CEO’s Letter on Sustainable Finance & Banking

This month in the Cornerstone Journal of Sustainable Finance & Banking (JSFB), we look ahead to 2016 with the aspiration that it will be a year characterized by an accelerating pace of transformation towards a low-carbon, innovative, inclusive global economy. While there might be dramatic bouts of volatility driven by political turmoil and differences in economic growth rates and monetary policies across various regions of the world (e.g., turmoil in corporate bond markets and a rout in commodities), there does seem to be some measure of convergence in views around the need to address the shared challenges to society.

The agreement out of COP21 in Paris, while imperfect, is certainly a sign of progress to that end. We include a quick summary of the Paris Agreement in our Corporate Governance section of the JSFB this month alongside Cornerstone’s stated “Principles of Corporate Engagement,” recently ratified by our Board of Directors. We believe that true collaboration among all stakeholders, the private sector in particular, is the linchpin which will lead the global economy along a trajectory of sustainable growth and development.

Further on the subject of trajectories, as the Federal Reserve deftly orchestrated a short-term rate rise for the first time in nearly a decade, there is less clarity on the pace of the normalization ahead. Clearly, both Janet Yellen and Mario Draghi have articulated that progress will be predicated upon the health of their respective economies. And so this month, we turn our attention to HEALTH more explicitly — looking at the efforts of businesses to promote sustainable growth and development “through a health lens.”

This edition of the JSFB features a number of distinguished “Corporate Voices” – CEOs and other senior executives from an array of companies and industries – discussing ways in which their firms are incorporating the ethos of “doing good while doing well,” from employee-focused programs to consumer-oriented initiatives.

From the health care sector we feature contributions from Novo Nordisk on its “Cities Changing Diabetes” initiative, which brings the company’s world-leading expertise to bear in public partnerships to focus on the urban lifestyle’s insidious impact on prevalence of that disease, and from AstraZeneca, whose “Heart Healthy Africa” program works hand in hand with governments to combat the burden of heart disease by strengthening local healthcare systems.

From the world of financial services (not a field one would immediately associate with a focus on health), we find that investment management firm The Abraaj Group is engaged in an ambitious program to establish affordable high-quality health systems for low- and middle-income groups predominantly in sub-Saharan Africa and South Asia. Meanwhile, KKR,

Erika Karp Founder & Chief Executive Officer Cornerstone Capital Inc.

December 2015 / Cornerstone Journal of Sustainable Finance & BankingSM / 3

perhaps best known as a leader in leveraged buyouts, offers up a clear business rationale for promoting employee wellness, saying “we believe that wellness programs can enhance employee engagement, strengthen corporate culture, and improve recruitment.” And John Hancock Insurance outlines how a new life insurance product they’ve launched incorporates wellness incentives such as premium savings, brand-name rewards and discounts based on a policyholder’s healthy lifestyle.

Of course, the consumer products sector offers many examples of companies integrating a focus on wellness into their business strategies. Tesco, McDonald’s, Anheuser-Busch InBev, and Philip Morris International (PMI) illustrate the ways in which multinational firms are incorporating a focus on health into their strategies. We also hear from CEO Paul Polman of Unilever on that company’s comprehensive programs, which are based on a simple premise: that business “should serve, not take from, society and the environment which gives it life in the first place.”

Our issue concludes with a Sustainable Editorial by Kimberly Gladman of the JUST Capital Foundation, which recently concluded a significant study of US workers’ attitudes toward corporate responsibility. She writes, “We asked people what it meant for a corporation to be ‘just,’ meaning ‘fair, balanced, equitable’ and ‘doing the right’ thing, whatever you may think that is.’ Corporations’ role in protecting their employees’ health emerged as a key issue.”

Perhaps foremost among the corporate voices featured in this edition is one individual who did not actually pen an article, but whose efforts in curating the content for this issue were invaluable: Cornerstone Board Member Derek Yach, who serves as Chief Health Officer of The Vitality Group, part of Discovery Holdings Ltd, where he leads the Vitality Institute for Health Promotion. We greatly appreciate Dr. Yach’s enthusiasm and insight in steering the content for this issue.

My sincere regards, Erika

Erika Karp Founder and Chief Executive Officer


2

Sebastian Vanderzeil, Research Analyst, Cornerstone Capital Group

5

Erika Karp, John Wilson & the Board of Directors, Cornerstone Capital Inc.

8

Table of Contents CEO’s Letter on Sustainable Finance & Banking

Global Imperatives

Paris Agreement: Validates National and Local Actions

Corporate Governance

Our Principles for Corporate Engagement

Market Summary Overview 10

Market & Global Sector Performance, Monetary Policy & ESG Data 11

Global Market Strategy Regional and Sector Strategy: Monthly Update Michael Geraghty, Global Markets Strategist

Cornerstone Capital Group 18

Global Earnings Synthesis Michael Geraghty, Global Markets Strategist Cornerstone Capital Group

19

Global Sector Research Tracking Our Thesis on Automation in Restaurants Michael Shavel, Global Thematic Analyst,

Andy Zheng, Research Associate, Cornerstone Capital Group

20

Accelerating Impact Placement Power: How Tesco Is Helping Curb Customers’ Sweet Tooth

Rebecca Shelley, Group Communications Director, Tesco

24

Novo Nordisk: Rethinking the Challenge of Diabetes Charlotte Ersbøll, CVP, Corporate Stakeholder Engagement, Novo Nordisk A/S

26

A Vision for Innovative Health Care Delivery Bobby Prasad, Global Chief Medical Officer, Abraaj Group

28

How Life Insurers Can Support Healthy Living Brooks E. Tingle, Senior Vice President, Marketing and Strategy, John Hancock Insurance

30

Regional Imperatives Healthy Heart Africa: A Business Plan for Tackling Non-Communicable Diseases

Mark Mallon, Executive Vice President, International, AstraZeneca

32

Corporate Voices

Health, Happiness, Performance: A Formula for Success Paul Polman, Chief Executive Officer, Unilever 34

Doing Right, While Doing Well: The SDG Opportunity Scott C. Ratzan, MD, MPA, Vice President, Global Corporate Affairs, Anheuser-Busch InBev

36

A Model for Collaboration Steve Hilton, Vice President, McDonald’s Corporation and Anne Ferree, Vice President, Alliance for a Healthier Generation

38

Transforming Tobacco André Calantzopoulos, Chief Executive Officer, Philip Morris International

41

Sustainable Editorial “Wellness”: More than Healthcare Dollars Saved Ken Mehlman, Global Head of Public Affairs, KKR 44

American Voices on Health & Wellness Kimberly Gladman, PhD, CFA, Managing Director for Research, JUST Capital Foundation

46

Upcoming Events: Global ESG Calendar 48 Cornerstone Capital Team 51

JSFB Subscription Form 49 Important Disclosures 54


Global Imperatives

Paris Agreement: Validates national and local actions By Sebastian Vanderzeil, Research Analyst, Cornerstone Capital Group

• We view the Paris Agreement as accelerating the ‘race to the top’ inresponding to climate change. Developed countries will needtechnologies and business models that de-carbonize their existingeconomies. Developing nations will focus on technologies that drivestrong economic growth and improve living standards.

• Going forward, the Paris Agreement solidifies countries’commitments to reducing emissions and adapting to climate impacts.Transparency will spur countries to do more through social pressurewhile investment in innovation will drive the deployment of emissionsreduction technologies.

• India and China, who were reticent to place restrictions on growthduring the last negotiations in Copenhagen, have adopted theAgreement as reducing emissions now generates co-benefits byaddressing serious domestic issues. China can reduce its air pollutionwith new low emission technologies while India can provide power to400 million underserved consumers through solar power and storage. Understanding co-benefits is key to identifying investmentopportunities, particularly in developing countries.

• Outside of the United States — where election season createsheightened risk that the next President could renege on commitments— there is little political risk that countries will abandon their pledges.Differentiation between countries and detailed understanding ofclimate policy is critical for investments in technologies and businessmodels that rely on government support.

Key points of the Paris Agreement: Greenhouse gas (GHG) emissions will peak as soon as possible and then be ‘carbon neutral’ (balance between GHG emissions and sinks) in the second half of this century.

Global temperature increase will be kept "well below" 2°C and parties agree to pursue efforts to limit it to 1.5°C

Progress will be reviewed by each country and progress reported every 5 years

Developed countries have pledged $100 billion to aid the transition in developing countries through 2020, with further financing committed thereafter.

Source: Cornerstone Capital Group

©digitalista / Crystal Graphics


Why are we bullish on the Paris Agreement?

The Paris Agreement (the Agreement) is the first globally adopted agreement on climate change since the Kyoto Protocol in 1997.1 It represents a strengthening global response to climate change, and the resultant ‘race to the top’ on climate-related innovation will create significant investment opportunities.

The US and other developed countries, with legacy assets in energy, transport and manufacturing, have to use innovation and policy to cost-effectively transition their systems. Less developed countries will be able to roll out new technologies faster, assuming that appropriate governance and regulatory structures are in place.

Investment opportunities and risks will vary significantly by region, based on a complex intersection of priority needs, funding sources and methods, degree of government involvement and effectiveness. In our view, investments should include a focus on empowering consumers and facilitating economic growth.

While the broad consensus on the Agreement is in line with our positive view, there are detractors who cite various shortcomings. We summarize those concerns, and what we see as mitigating factors, in an appendix to this note.

Benefits for developing economies

A clear change since the Copenhagen Agreement is the role of India and China in global climate negotiations. Prior negotiations were hampered by the countries’ strong insistence that their economic growth not be curbed by a global climate response. China and India now align with other countries, including the US, on climate response because of ‘co-benefits’. India and China are able to achieve their commitments under the Agreement while addressing critical domestic issues:

• China has severe air pollution issues, and low/zero emission technologiesin manufacturing, transport and energy will be critical for addressing theproblem.

• India recognizes solar as a key technology for cost-effectively providingelectricity to 400 million consumers that the electricity grid has failed toreach or underserves.2

Other co-benefit investments could include food refrigeration systems that are cheap and do not rely on hydrofluorocarbon (HFCs)3 for developing food supply chains in Africa, China and India. The use of HFCs has major climate impacts and food refrigeration reduces food waste in developing countries.

1 The most recent predecessor to the Paris Agreement, the Copenhagen Agreement in 2009, was ‘taken note of’ by delegates and was not adopted. 2 “Millions of people in India have no electricity,” The Economic Times, http://economictimes.indiatimes.com/ new-sections/energy/millions-of-people-in-india-have-noelectricity/lifenologyshow/41089385.cms 3 HFCs, which belong to a category of substances known as short-lived climate forcers (SLCFs), have an incredibly high potential to contribute to global warming, yet a relatively short atmospheric lifetime.

http://economictimes.indiatimes.com/%20new-sections/energy/millions-of-people-in-india-have-noelectricity/lifenologyshow/41089385.cms

http://economictimes.indiatimes.com/%20new-sections/energy/millions-of-people-in-india-have-noelectricity/lifenologyshow/41089385.cms


Understanding these co-benefits will help identify investment opportunities for investors.

Challenges for the US

The political will to adhere to the Agreement is more of a question for the US than other countries. In 1997, the US Congress refused to ratify the Kyoto Protocol and substantially weakened the treaty. While the Paris Agreement does not require ratification, it’s possible that the next President will renege on the US’ climate commitments. Other major economies such as China, Germany and Japan do not face this short-term political risk.

Recommendation

Differentiation and detailed understanding of climate policy is critical for climate related investments. These considerations were identified previously as part of Cornerstone Capital Group’s Statement on Climate Change.

Appendix: Addressing concerns about the Paris Agreement Concerns Considerations

Emission reduction commitments by the 195 participating nations are voluntary

Progress reports on commitments are binding; failure to report will be considered breachof agreement and could impact funding and other incentives

Commitments represent the national aspirations of countries, and changes to targetscould present a domestic political issue

Other globally binding treaties, such as the current Doha Round of the World TradeOrganization, have stalled — so voluntary agreements with compliance incentives andtransparency may be preferable

Five-year reporting periods are too long and do not, by themselves, incentivize emissions reductions

While the mechanism of reporting remains unclear, increased transparency and frequentreporting will develop the trust across countries for further agreements on emissionsreductions

India and China sought 10-year reporting periods but the US led agreement to morefrequent, five-year reporting

No new climate policies It is expected that the numerous polices developed over the last five years will evolve andstrengthen, in addition to new policies being implemented over the next five years

Recently announced policies such as US Clean Power Plan (finalized in October 2015),Alberta carbon tax (announced in November 2015), and the India-led Global SolarAlliance shows that countries and states view the commitments as real targets

China and India still have rising emissions

Even though India and China have committed to reductions in carbon emission per unit ofGDP rather than actual emissions, their participation is critical given their forecastcontribution to emissions to 2050

More urgent domestic issues such as air pollution in China and rural electrification in Indiacan be better addressed by low or no emission technologies such as renewable anddistributed energy

2.7 degree target based on current commitments and an aspirational 1.5 degree target

Countries have committed to reaching 2.7 degrees when a ‘no commitment’ scenario mayhave seen temperatures rise to a median of 3.8 degrees with a low probability, high riskscenario of 7 degrees

If countries are able to cost-effectively track towards 2.7 degrees target, it will show that a2 degree target is achievable

Long-term targets can be reduced due to new governments and changing economic circumstances

Any response to climate change has to be undertaken in the context of global economicconditions

Linking the financial incentives to the targets provides a stronger link for developingnations


http://cornerstonecapinc.com/2014/06/a-statement-on-climate-change/


Corporate Governance

Our Principles of Corporate Engagement By Erika Karp, Founder & CEO, John Wilson, Head of Corporate Governance, Engagement & Research, and the Board of Directors, Cornerstone Capital Inc.

Consistent with our mission as a purpose-built, research-driven sustainable finance platform, Cornerstone Capital Group engages with asset owners, asset managers, and companies to help them integrate environmental, social and governance (ESG) considerations into their capital markets activities. The specific objective of our corporate consulting business is to encourage companies to adopt best disclosure practices that enable capital markets participants to evaluate ESG practices in a way that improves investment decision-making.

Our corporate consulting business affords us the opportunity to engage with corporations about best practices in corporate governance and sustainability. For companies that have already emerged as ESG leaders, we support their efforts to strengthen their existing commitment and communicate it to the capital markets. For companies that are newer to ESG, our partnership with them may help initiate an internal dialogue about the potential value of ESG to the corporation and to frame key questions about ESG risks and opportunities.

While there is a vast continuum of progress across the private sector, there are numerous examples of corporate behavior that is short-sighted, dishonest and harmful, including some “corporate responsibility” efforts that critics reasonably judge to be meaningless or manipulative. Some are concerned that shareholder or stakeholder engagement with certain companies accomplishes little other than to legitimize corporate public relations campaigns.

Mindful of these concerns, we have established the following principles to ensure that our corporate engagements are consistent with our mission and values.

Principles

1. Cornerstone Capital Group seeks to build trust among all stakeholders inthe capital markets. This can only be achieved through tolerance forimperfection, sincere intention to overcome barriers to collaboration, andhonesty about the challenges inherent in bringing this about.

2. Cornerstone Capital Group believes that corporate behavior can beevaluated for its sustainability or its ethics, but people and companiescannot be judged to be exclusively “good” or “bad.” Companies differ intheir overall contribution to societal well-being, but all companies havethe potential for improvement.

3. Consistent with our mission, Cornerstone Capital Group will considerengagement with any company or organization that is interested in


partnering with us. We will not refuse the opportunity to engage with companies based on past behavior or public perception. Where the company is starting matters less than their vision for the future.

4. The format of Cornerstone Capital Group’s engagement may includeanything from a private dialogue to providing long-term consultingsupport to their capital markets strategies. The nature and scope of ourengagement will depend on the opportunity for corporate change, ouralignment with the company’s intentions, and our business interests.

5. Cornerstone Capital Group will collaborate with companies to createobjectives for engagement, which may include: to sensitize managementto stakeholder concerns, including those of their “harshest critics;” toexplore potential solutions; and to assess and provide input on acompany’s own self-assessment and public disclosure. The overridinggoal of all our engagements is to encourage robust discussion of materialissues within corporations and open, transparent engagement withexternal stakeholders.

6. We will continually monitor the progress of our engagements withcompanies to evaluate the tangible progress that is being made. Measuresof tangible progress will differ by company and by industry, but mayinclude transparency in disclosure, operational excellence and/orstrategic transformation. We will also consider the company’s corporategovernance, including management accountability and incentivestructures, and the consistency of the company’s sustainability effortsacross the organization.

7. Cornerstone Capital Group will be careful not to be co-opted for“greenwashing” purposes. We will provide practical support andassistance only if we determine that our engagement partners arecommitted both to continual improvement towards corporate excellenceand to transparency, including regarding challenges that they face. Wemay conclude engagements if we become concerned about thecommitment of our partner in this regard.

8. Cornerstone Capital Group will respect our partners’ confidentialityconcerns, and, particularly in the initial stages of engagement, insist uponit ourselves. When appropriate, we will allow our partners to publicizetheir progress. We will allow our name to be used only in conjunction withefforts that are consistent with our mission and values.

Erika Karp, Founder and CEO

John Wilson, Head of Corporate Governance, Engagement and Research

Cornerstone Capital Inc. Board of Directors

http://cornerstonecapinc.com/bios/erika-karp/

http://cornerstonecapinc.com/bios/john-wilson/

http://cornerstonecapinc.com/board-of-directors/


Market Summary

Overview As 2015 comes to a close, we reflect on a decidedly mixed year for risk assets, categorized by US dollar strength, developed markets outperforming emerging markets, and significant selling pressure in commodities and high yield bonds. On December 16th, in a highly anticipated decision, the Federal Reserve raised its target rate to 0.25-0.5%, a historic move after seven years of near-zero interest rates. While ultra-low rates have benefited equities, the market was reassured by the Fed’s optimistic economic outlook and its plan to raise rates gradually over the next three years. Meanwhile, commodity prices continued to decline, as evidenced by Brent falling to $37/barrel, a level not seen in 11 years. Finally, at COP21, 195 countries reached the first globally adopted agreement on climate change since the Kyoto Protocol in 1997, a landmark event that will create significant investment opportunities.

Over the last month, US equities traded in a range on the back of mixed economic data. The NAHB Housing Market Index dropped slightly to 61 in December from 62 in November, though still indicating moderate growth. Negatively impacted by the strong dollar and low commodity prices, the ISM Manufacturing Index reading fell from 50.1 to 48.6, marking the first month of contraction in the manufacturing sector in three years. Retail sales rose 0.2% in November, below consensus expectation of 0.3%, but the control group which excludes gas, autos and building materials grew by an encouraging 0.6%. On the jobs front, the Labor Department’s November release reported that the economy added 211,000 positions, beating the consensus estimate of 200,000 jobs, while net total employment gains in the prior two months were revised 26,000 higher. Meanwhile, the unemployment rate remained unchanged at 5% and average hourly earnings rose slightly by 0.2%.

As the European economy struggles to gain momentum, the ECB announced additional monetary stimulus, cutting the deposit rate further to -0.3% and extending the €60bn-a-month bond buying program for another six months through March 2017. The ECB’s decision, however, disappointed investors who expected a larger stimulus announcement. In

response, stocks fell and the euro rallied 3% against the dollar, the biggest one-day jump in six years. Meanwhile, Germany’s Ifo Business Climate Index rose to 109.0 in November from 108.2 in October, signaling improved optimism in current and future business situation measures. Boosted by cheap oil, the weak euro and low interest rates, auto sales have been a particularly bright spot: new-car sales in the EU increased nearly 14% year-over-year in November, despite the recent Volkswagen emission scandal.

Elsewhere in the developed markets, third quarter GDP growth in Japan was revised to +1.0% from a prior estimate of -0.8%, thus avoiding a technical recession. The upward revision was well ahead of consensus forecast and was supported by strong growth in capital expenditure, which rose by more than 11% in the three months ended September 30 from a year earlier.

In emerging markets, China’s annual economic growth is likely to slow to 6.8% next year from an expected 6.9% this year, according to the country’s central bank. The PBOC cited overcapacity, profit deceleration, and rising non-performing loans as factors of downward pressure on growth. Separately, Fitch cut Brazil’s sovereign credit rating to junk, a move already taken by Standard and Poor’s in September. The downgrade highlighted Brazil’s increased unemployment, eroding investor confidence, high inflation, and political and policy uncertainties.

On a one-month trailing basis, the MSCI World Index (a developed market proxy) outperformed the MSCI Emerging Markets Index by approximately 3.5%, bringing the YTD relative outperformance to 15.3%. Large-cap equities outperformed their small-cap counterparts by 1.3%, contributing to outperformance of 6.2% on a YTD basis. From a sector perspective, performance was mixed between defensives and cyclicals. In the MSCI ACWI (broad index for both developed and emerging equities), healthcare and consumer staples and information technology outperformed, while energy, materials and industrials lagged. Andy Zheng contributed to this article.


Market Summary

Market and Global Sector Performance

MARKET / INDEX PERFORMANCE

As of 12/16/2015 (local currency) T1M (%) T3M (%) YTD (%) 2015 P/E 2015 P/B Div. Yield

US Equity Indices

DJIA 0.72 5.57 0.97 15.9 3.0 2.5

S&P 500 0.09 3.35 1.66 17.4 2.7 2.1

Nasdaq 0.59 2.75 7.06 22.5 3.6 1.2

Russell 2000 -1.54 -2.91 -4.44 27.4 1.8 1.5

MSCI KLD 400 Social -0.14 2.99 0.68 18.8 3.3 2.0

Developed International Indices

Euro STOXX 50 -3.15 0.47 6.78 14.2 1.5 3.7

in USD -0.86 -2.75 -3.39

FTSE 100 -1.09 -1.88 -3.86 15.3 1.7 4.3

in USD -2.43 -4.89 -7.40

CAC 40 -3.40 0.17 11.76 15.0 1.4 3.6

in USD -1.11 -3.03 1.11

DAX -2.04 2.62 7.03 12.9 1.6 3.0

in USD 0.28 -0.67 -3.62

Nikkei 225 -1.77 5.55 10.93 18.5 1.6 1.7

in USD -0.67 4.56 8.78

ASX 200 0.55 -0.29 -1.27 15.3 1.7 5.1

in USD 2.07 -0.16 -12.99

Emerging Market Indices

IBOVESPA -4.63 -7.98 -10.66 13.2 1.1 4.9

in USD -7.68 -10.95 -40.15

Shanghai Comp -2.51 11.69 10.43 15.1 1.7 2.0

in USD -4.04 9.93 5.89

KOSPI 1.36 -0.31 2.91 12.5 1.0 1.5

in USD 0.96 -0.84 -4.17

SENSEX -1.03 -1.63 -5.98 17.2 2.4 1.7

in USD -1.95 -2.14 -10.84

Bovespa Corp. Sustainability -3.43 -9.55 -11.20 20.0 1.1 4.3

in USD -6.51 -12.46 -40.51


As of 12/16/2015 (local currency) T1M (%) T3M (%) YTD (%) 2015 P/E 2015 P/B

Global Market Indices

MSCI World -1.09 0.14 -1.29 16.5 2.1

MSCI All-Country World -2.20 -1.15 -6.75 13.5 1.4

MSCI EAFE -1.81 -2.57 -2.72 15.0 1.5

MSCI Emerging Markets -4.11 -5.00 -16.46 11.9 1.3

DJ Sustainability World Comp -0.31 -0.80 -4.51 14.9 1.8

FTSE4Good Global -0.28 0.46 -0.06 15.4 1.9

Fixed Income

Barclays US Aggregate -0.04 0.40 0.52

Commodities Levels

12/16/2015 6/16/2015 12/16/2014

WTI Crude 36.00 61.92 59.88

ICE Brent Crude 37.35 66.75 65.96

NYMEX Natural Gas 1.81 3.34 3.89

Spot Gold 1075.44 1182.07 1197.01

LME 3mth Copper 4565 5815 6400

CBOT Corn 375 381 439

ICE ECX Emission 8.23 7.53 7.14 Currencies Levels

12/16/2015 6/16/2015 12/16/2014

EUR/USD 1.09 1.12 1.25

USD/JPY 121.82 123.36 116.41

GBP/USD 1.50 1.56 1.58

AUD/JPY 87.66 95.62 95.67

DXY Index 98.23 95.00 88.13 Source: Bloomberg, Barclays. Equity Returns: All returns represent total return for stated period. Dividends and coupons are not included in the DAX and BOVESPA indices. Bond Returns: All returns represent total return for the stated period. Index characteristics: P/E, P/B, and Dividend Yield are based on Bloomberg consensus estimates for the stated period.


MSCI ACWI SECTOR PERFORMANCE

As of 12/16//2015 1 Month Price Return (%)

Source: Bloomberg. Sector returns are based on GICS methodology. MSCI ACWI is a free-float weighted equity index that includes both emerging and developed world markets.

YTD Price Return (%)

Source: Bloomberg. Sector returns are based on GICS methodology. MSCI ACWI is a free-float weighted equity index that includes both emerging and developed world markets.

US EQUITY STYLE PERFORMANCE Style box returns are based on Russell Indices with the exception of the Large-Cap Blend box, which reflects the S&P 500 Index. All values are cumulative total return for the stated period including the reinvestment of dividends. The index used from left to right, top to bottom are: Russell 1000 Value Index, S&P 500 Index, Russell 1000 Growth Index, Russell Midcap Value Index, Russell Midcap Index, Russell Midcap Growth Index, Russell 2000 Value Index, Russell 2000 Index and Russell 2000 Growth Index.

1 Month

Source: Bloomberg

Year to Date Source: Bloomberg

HealthcareCons Stpl

Info TchCons DiscrMSCI ACWITel SvUtilityFinancalsIndustialsMaterialEnergy

-10 -8 -6 -4 -2 0 2 4

HealthcareCons Stpl

Info TchCons Discr

Tel SvMSCI ACWIIndustialsFinancalsUtilityMaterialEnergy

-25 -20 -15 -10 -5 0 5 10

Value Blend Growth

Larg

e

-1.0 0.1 0.7

Mid -1.9 -0.9 0.1

Smal

l

-2.5 -1.5 -0.6

Value Blend Growth

Larg

e

-3.7 1.7 5.9

Mid -5.2 -2.7 -0.2

Smal

l

-7.7 -4.4 -1.2


SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP

As of 12/16/2015

Company name Ticker Industry Mkt Cap (US$ Bn)

Price (Local)

Total Return YTD % (local)

P/E 2015E

EV/ EBITDA 2015E

Div Yield % 2015E

ESG Disclosure Score

Consumer Disc. Amazon.com AMZN Internet &

Catalog Retail 311.2 664.0 113.9 116.6 28.7 N/A 16.9

Toyota Motor Corp

7203.JP Automobiles 208.6 7612.0 3.6 9.8 10.0 3.0 33.5

The Walt Disney Co

DIS Media 185.4 112.2 20.5 19.9 11.7 1.3 N/A

Home Depot Inc HD Specialty Retail 166.7 131.4 27.8 24.6 13.7 1.8 27.3

Comcast Corp CMCSA Media 142.5 58.2 2.0 17.7 7.7 1.7 23.6

Consumer Staples

Nestle NESN.VX Food Products 236.7 73.3 3.4 22.1 14.7 3.0 55.0

The Procter & Gamble Co

PG Household Products

218.2 80.2 -9.1 21.4 13.7 3.3 N/A

Anheuser-Busch Inbev

ABI.BB Beverages 199.2 113.2 24.6 24.5 14.3 3.2 54.1

Wal-Mart Stores WMT Food & Staples Retailing

192.9 60.2 -27.9 13.2 7.0 3.3 37.8

The Coca-Cola Co

KO Beverages 189.2 43.5 6.4 21.8 17.5 3.0 33.5

Energy Exxon Mobil XOM Oil, Gas &

Consumable Fuels

329.2 79.1 -11.5 20.3 8.4 3.7 60.2

Petrochina Co 857.HK Oil, Gas & Consumable Fuels

226.0 5.3 -36.7 17.5 7.5 3.7 32.0

Chevron CVX Oil, Gas & Consumable Fuels

174.7 92.8 -13.5 27.0 6.9 4.6 52.3

Royal Dutch Shell

RDSA.LN Oil, Gas & Consumable Fuels

140.3 1462.5 -27.5 12.0 4.5 8.4 58.1

Total Sa FP.FP Oil, Gas & Consumable Fuels

112.8 42.2 3.6 11.2 5.2 5.8 55.6

Financials Berkshire Hathaway

BRK/B Diversified Financial Services

331.4 134.3 -10.5 18.9 N/A N/A 13.6

Wells Fargo & Co

WFC Banks 281.3 55.1 3.2 13.3 N/A 2.7 17.5

JPMorgan Chase

JPM Banks 244.3 66.4 8.9 11.5 N/A 2.7 42.1

Ind & Comm Bank of China

1398.HK Banks 242.5 4.6 -14.9 4.9 N/A 7.0 32.0

Bank Of America Corp

Bac.us Banks 181.7 17.6 -0.7 12.3 N/A 1.1 60.1


SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP (CONTINUED)

As of 12/16/2015


Price (Local)


P/E 2015E

EV/ EBITDA 2015E

Div Yield % 2015E


Health Care Johnson & Johnson

JNJ Pharmaceuticals 288.8 104.4 2.8 16.9 11.7 2.9 57.0

Roche Holdings ROG.VX Pharmaceuticals 236.4 270.5 3.4 19.1 12.8 3.0 50.0

Novartis AG NOVN.VX Pharmaceuticals 229.9 84.8 -5.7 16.8 16.2 3.1 64.0

Pfizer PFE Pharmaceuticals 198.9 32.2 6.9 14.8 10.1 3.7 42.6

Merck & Co MRK.US Pharmaceuticals 149.5 53.5 -2.6 15.0 10.1 3.4 46.7

Industrials General Electric Co

GE Industrial Conglomerates

288.4 30.6 24.2 23.5 12.4 3.0 56.2

Boeing BA Aerospace & Defense

98.9 147.6 16.4 18.0 9.7 3.0 35.1

3M MMM Industrial Conglomerates

91.6 148.7 -7.1 19.5 12.1 2.8 N/A

United Parcel Service

ups.us Air Freight & Logistics

88.8 99.7 -7.7 18.9 10.0 2.9 59.9

Siemens SIE.GR Industrial Conglomerates

85.6 88.8 -2.0 13.4 9.6 3.9 55.0

Info Tech Apple AAPL Technology

Hardware, Storage &

615.2 110.3 1.7 11.3 5.7 1.9 45.9

Google GOOGL Internet Software & Services

517.2 761.7 43.5 26.3 15.0 N/A 29.8

Microsoft Corp MSFT Software 443.1 55.5 22.7 20.2 11.3 2.6 35.5

Facebook FB Internet Software & Services

296.3 104.8 34.3 48.4 25.6 N/A 25.6

Alibaba BABA Internet Software & Services

206.7 83.2 -19.9 31.9 25.8 N/A 7.0

Materials BASF BAS.GY Chemicals 71.0 70.6 4.2 14.1 7.4 4.0 60.3

Saudi Basic Ind. SABIC.AB Chemicals 67.6 84.5 8.1 13.2 6.9 7.1 32.6

BHP Billiton Ltd BHP.AU Metals & Mining 62.1 17.2 -33.4 29.1 6.4 14.1 58.7

Dow Chemical DOW.US Chemicals 57.9 50.0 12.6 15.3 8.2 3.7 57.4

Du Pont DD.US Chemicals 57.1 64.6 -5.6 23.4 12.3 2.4 47.9


SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP (CONTINUED) As of 12/16/2015


Price (Local)


P/E 2015E

EV/ EBITDA 2015E

Div Yield % 2015E


Telecom China Mobile 941.HK Wireless

Telecommunication Ser

236.5 89.5 1.9 13.3 4.3 3.2 43.2

AT&T T Diversified Telecommunication

210.2 34.2 7.6 12.7 7.0 5.5 N/A

Verizon VZ Diversified Telecommunication

187.2 46.0 3.2 11.6 6.4 4.9 37.9

Vodafone VOD.LN Wireless Telecommunication Ser

85.2 213.8 0.7 47.5 7.7 5.9 N/A

Ntt Docomo Inc 9437.jp Wireless Telecommunication Ser

83.0 2475.0 44.7 19.4 7.1 2.8 51.7

Utilities National Grid NG/ LN Multi-Utilities 51.6 917.7 4.9 15.3 10.4 5.2 30.6

Duke Energy DUK Electric Utilities 48.3 70.1 -12.3 15.3 9.7 4.7 50.2

Nextera Energy NEE.US Electric Utilities 46.9 101.9 -1.1 18.0 10.3 3.0 45.3

Iberdrola Sa ibe.sm Electric Utilities 44.8 6.5 18.2 17.3 9.1 2.4 70.9

Engie ENGI.FP Multi-Utilities 42.9 16.0 -12.4 14.3 6.1 6.2 51.2

Source: Bloomberg. The securities in each sector represent the largest companies by market cap in the MSCI ACWI in their respective sectors. Sector classification is based on GICS methodology. Equity characteristics: P/E, EV/EBITDA and Dividend Yield are based on Bloomberg consensus estimates for stated period.

GDP / CONSUMER PRICE INFLATION / RATES

Real GDP (% YoY) CPI (% YoY) Official Rates Long Rates Region/Countries 2014 2015E 2016E 2014 2015E 2016E 2014 2015E 2016E 2014 2015E 2016E United States 2.4 2.5 2.5 1.6 0.2 1.8 0.3 0.5 1.3 2.2 2.3 2.8 Euro Area 0.9 1.5 1.7 0.4 0.1 1.1 0.1 0.1 0.1 - - - Japan 0.2 0.6 1.1 2.7 0.8 0.8 0.1 0.1 0.1 0.4 0.3 0.5 UK 2.6 2.4 2.3 1.5 0.1 1.3 0.5 0.5 1.0 2.2 2.0 2.5 Australia 2.7 2.3 2.6 2.5 1.5 2.3 2.5 2.0 1.9 3.0 2.9 3.2 China 7.4 6.9 6.5 2.0 1.5 1.8 5.6 4.4 4.1 3.7 3.3 3.2 Brazil 0.1 -3.0 -1.3 6.3 9.0 6.8 11.6 14.3 13.8 - - - **India 4.7 7.4 7.4 7.2 6.2 5.0 8.0 6.8 6.5 8.1 7.5 7.3

Source: Bloomberg. Estimates are composite of Bloomberg contributor estimates. *Italicized text represents actual data. ** India fiscal year runs to March 31.

MONETARY POLICY

Nov-15 May-15 Nov-14 Monetary Base growth (YoY) 4.6% -1.4% 0.6% M-2 growth (YoY) 5.8% 5.5% 5.9% Money multiplier (M-2/mon base) 3.1 3.0 3.1 3Q15 3Q14 3Q13 Velocity of money (GDP/M-2) 1.49 1.53 1.55

Source: Federal Reserve Bank of St. Louis


KEY ECONOMIC CHARTS

C&I Loan Growth (%) University of Michigan Survey of Consumer Sentiment

Source: Federal Reserve Bank of St. Louis Source: Bloomberg

NFIM Small Business Optimism Index ISM Manufacturing Purchasing Managers Index

Source: Bloomberg Source: Bloomberg

US Treasury Yield Curve US Initial Jobless Claims

Source: Bloomberg Source: Bloomberg

Production Employees Average Hourly Earnings

Source: Federal Reserve Bank of St. Louis

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Global Market Strategy

Regional and Sector Strategy: Monthly Update By Michael Geraghty, Global Markets Strategist, Cornerstone Capital Group

A Little More Cyclical Once Again. Last month we upgraded to Overweight two sectors with exposure to global growth: Consumer Discretionary and Information Technology. This month we upgrade Industrials to Neutral from Underweight. We are also upgrading North America to Overweight. Among the sectors with the largest weights in this region are our Overweights: Information Technology (#1 weighting), Financials (#2) and Consumer Discretionary (#4). We also downgrade the U.K. to Underweight from Neutral. Among the sectors with the largest weights in the U.K. are two we are avoiding: Consumer Staples (#2 weighting), Energy (#3).

Selectively Cyclical. We continue to avoid regions with heavy exposure to commodities, most notably Latin America (Underweight), South Africa and Russia (both ranked Neutral). We remain Neutral on the two sectors that are widely considered the most defensive: Consumer Staples and Health Care. This month we are also downgrading Utilities to Underweight from Neutral.

Figure 1: Regional Over- and Underweights (Arrows Indicate Change vs. Last Month)

Figure 2: Sector Over- and Underweights (Arrows Indicate Change vs. Last Month)

Source for both: Cornerstone Capital Group

©PixelEmbargo /Crystal Graphics

Michael Geraghty is the Global Markets Strategist for Cornerstone Capital Group. He has over three decades of experience in the financial services industry including working as an investment strategist at UBS and Citi.

This article is an excerpt from a Cornerstone Capital Group research report December 1, 2015.


Global Market Strategy

Global Earnings Synthesis By Michael Geraghty, Global Markets Strategist, Cornerstone Capital Group

A New Publication. As a complement to our Regional and Sector Strategy: Monthly Update we introduce a new publication that will examine in detail the outlook for global earnings on a regular basis.

A Positive Outlook for 2016 Earnings. While the current consensus expectation is for double-digit gains in MSCI ACWI EPS in 2016, single digit gains seem more plausible, driven by modest sales growth and some margin expansion.

A Conservative Scenario. After four years of flat EPS, comparisons are easy. A conservative scenario of no earnings growth in the Energy, Industrials and Material sectors and 5-10% growth in the other GICS would support 7% growth in MSCI ACWI EPS in 2016. In terms of regions, Japan seems likely to enjoy a fourth consecutive year of earnings gains in 2016.

Support for our Market Outlook. 5-10% earnings growth combined with stable P/Es would suggest modest gains in global equities in 2016.

Figure 2: A Conservative Scenario for 2016 MSCI ACWI EPS Percentage and Absolute Change in Earnings in $ Millions (Sum of Blue Bars Equals Black Bar)

Source: MSCI, Cornerstone Capital Group

©Sergey Nivens / Crystal Graphics


Global Sector Research Tracking Our Thesis on Automation in Restaurants

By Michael Shavel, Global Thematic Analyst, Andy Zheng, Research Associate, Cornerstone Capital Group

In our March 2015 report, “The Economics of Automation: Quick Serve Restaurant Industry”, we asserted that the twin threats of rising wages and increasingly volatile food prices suggested a more challenging environment ahead. While commodity inflation doesn’t appear to be a threat in the near term, increasing labor cost pressure has emerged as a major theme impacting the industry. We believe wage inflation to be both cyclical and structural: The labor market is tightening as the economy improves, and regulatory and legislative action is driving a step-change resulting in higher wages. The DOL’s observations are consistent with Cornerstone’s publication Sustainable Investing: Addressing the Myth of Underperformance, which identifies several studies that demonstrate that consideration of ESG factors may strengthen investment analysis, and in any case need not detract from risk or return expectations.

Figure 3: Average hourly wage for employees

Source: Bureau of Labor Statistics, Cornerstone Capital Group

In most cases, restaurants can partially offset labor inflation by raising menu prices, but they’re also utilizing technology to automate specific tasks, primarily in the pre-ordering and ordering process. Historically, the industry has been a relatively slow adopter of automation. While other factors are surely at play, this is likely a reason contributing to the industry’s modest productivity gains relative to the broad economy (Figure 2).

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http://cornerstonecapinc.com/wp-content/uploads/2015/09/The-Myth-of-Underperformance.pdf

http://cornerstonecapinc.com/wp-content/uploads/2015/09/The-Myth-of-Underperformance.pdf


Figure 4: Productivity and compensation growth in restaurants (change since 1987)

Source: BLS, Cornerstone Capital Group

As previously highlighted, the key reasons for automating are to drive sales growth, reduce labor costs, or a combination thereof. We note that automation is currently complementing labor, particularly in the ordering process. However, should wage pressure intensify, companies’ focus may shift to labor substitution.

Figure 5: Driving sales or reducing labor?


Company commentary

With calendar Q315 earnings season behind us, we reviewed earnings call transcripts for quick-serve, fast casual, casual dining, pizza and coffee companies. We believe the following excerpts best capture automation and labor cost trends.


Excerpt from earnings call transcript Our Comments

When we were first getting digital ordering going, I will tell you that we expected labor efficiency faster than we saw it. We didn't really start seeing a lot of labor efficiency in the stores until we got to kind of this 15% to 20% digital order range…As it’s gotten higher we started to see more impact from that and we're in the range now with digital sales around 50% that we clearly can see some savings in the store.

– Patrick Doyle, CEO; Domino’s Pizza (DPZ) Q3 2015

We believe a first-mover advantage exists for restaurants that invest in innovative automation technology. Investors shouldn’t expect an immediate recognition of operational efficiencies when restaurants implement new technology.

And we are seeing a direct correlation between reduced partner attrition and our business results. Our comp results are strongest where we are having our greatest success in reducing turnover... So, I think what we've seen is that other companies are reacting and playing catch-up to legislation, where we have always been ahead of it, and the tightening of the labor market is not something that we want to deal with or use as an excuse…

– Howard S. Schultz, CEO; Starbucks (SBUX) Q4 2015

All else equal, companies that are focused on integrating automation technology with an already well-compensated labor force are less vulnerable to rising wages.

Data shows that My Starbucks Rewards customers spend three times as much as non-MSR customers. The Starbucks digital experience is a key enabler of the loyalty program that engages customers and provides us with digital feedback to constantly improve the experience and attract more customers…This quarter we've grown our active MSR customer base in the U.S. by 28% year-on-year, our active mobile users in the U.S. and Canada has grown 32% year-on-year. Mobile payments in October represented over 21% of U.S. tender.

– Kevin R. Johnson, COO; Starbucks (SBUX) Q4 2015

Building an end-to-end consumer digital platform that integrates loyalty is a significant opportunity. Starbucks invested ahead of the mobile technology curve and those investments are now driving growth. Brinker International, owner of Chili’s, hasn’t seen the shift from their direct marketing program to loyalty perform as strongly as expected, but is focused on integrating the My Chili’s Rewards program into the overall digital guest experience.

Digital utilization, which is to say orders that are both digitally placed and digitally paid in our Panera company cafes, has now grown from 10% of sales at the end of Q2, to 12% of sales at the end of Q3. I will add that digital utilization now accounts for 22% of sales in Panera 2.0 cafes. We did our digital capabilities -- that's part of 2.0, to give a better guest experience, it was never about labor. Having said that, it’s a powerful beneficiary. When you're running, 10%, 15%, 20% digital utilization, and with order input, [which] is 30% or 40% of your costs, you can figure it out on your own, you're literally reducing or removing the demand that is assigned to that labor. Labor is going to go down, and as digital utilization goes up...it’s going to benefit larger organizations like Panera, who already have the technology in place.

– Ron Shaich, Chairman and CEO; Panera (PNRA) Q3 2015

This reinforces our view that while automation is currently complementing labor, structurally higher wage rates coupled with increased digital utilization opens the door to labor substitution.

Turning to labor, we continue to see higher wage inflation, particularly in the front of house due to minimum wage increases coupled with an improving job outlook for hourly employees. We are able to partially offset this impact through the utilization of our labor scheduling and optimization tools.

– David Deno, Chief Financial and Administrative Officer; Bloomin’ Brands (BLMN) Q3 2015

Restaurant management are a point of focus. These systems integrate POS (point-of-sales), timekeeping and scheduling, and inventory management and, in turn, drive labor efficiency and reduce food costs.

Self-order kiosks are now in more than 90% of French restaurants, and we’re now offering table service in more than half.

– Steve Easterbrook, CEO; McDonald’s (MCD) Q3 2015

Unsurprisingly, kiosks are being deployed more quickly in markets with higher wage structures.


…Rather than asking our customers to try to predict their arrival time as most brands do, we use the customer's phone as the trigger that tells us that they have arrived, so we can prepare their food fresh. With our unique to the industry beacon technology, our customers do not even need to take their phones out of their pockets to pay. In addition, we are in trials with the payment method CurrentC, which uses similar technology. This lets customers pay using their mobile phone inside the restaurant and integrates offers and coupons directly into the process. And at the pickup window, it doesn't require our customers to hand over their phone and multiple customers in the same car can each pay separately. Our ongoing opportunity in the back-of-the-house is what other manual tasks can we continue to leverage and digitize over time, when you think about things like scheduling and temperature controls.

– Todd A. Penegor, CFO; Wendy’s (WEN) Q3 2015

Along with Panera and Starbucks, Wendy’s appears to be an industry leader from a technology standpoint. Beacon technology isn’t new and doesn’t suffer from a lack of critics (due to the fact beacon networks are fragmented and closed), but it illustrates Wendy’s appreciation of an integrated and customer-friendly technology platform.

Summary and implications

We believe company commentary largely supports our thesis that automation will have a positive impact on the restaurant industry, both by driving sales growth and managing labor costs. All else equal, companies that are focused on integrating automation technology with an already well-compensated and productive labor force are less vulnerable to rising wages.

Among all technologies being implemented, mobile and online ordering and kiosks were discussed most often during the Q3 CY2015 earnings season. The focus of these front-of-house automation applications is to drive sales growth and leverage labor/limit labor deleverage.

There was little discussion on back-of-house automation, though restaurant management systems were highlighted by some management teams. While automating kitchen equipment and processes are not yet commercially viable, we believe technology in the back-of-house will become increasingly important as customer self-order and mobile order drive order volume. Meanwhile, labor will shift around the restaurant operations—likely from order-taking to the kitchen and food delivery.

We believe an early-adopter advantage exists for restaurants that invest in automation technology. Some investors suggest second-stage adopters will learn from the missteps of early-adopters, therefore enabling them to replicate the “best-in-class” platforms. In our view, this stance fails to recognize the time and learning involved in implementing a fully integrated digital platform, and we caution investors that anticipate an immediate improvement in operational efficiencies.

Michael Shavel is a Global Thematic Analyst at Cornerstone Capital Group. Prior to joining the firm, Michael was a Research Analyst on the Global Growth and Thematic team at Alliance Bernstein. He holds a B.S. in Finance from Rutgers University and is a CFA Charterholder.

Andy Zheng is a Research Associate at Cornerstone Capital Group. Andy graduated from Bowdoin College with an interdisciplinary major in Mathematics and Economics and a minor in Visual Arts. He spent his junior year studying abroad at the University of Oxford and the summer prior to that at the Sorbonne in Paris. Andy passed Level I of the CFA Program in January 2014.

This report originally published November 17, 2015.


Accelerating Impact

Placement Power: How Tesco Is Helping Curb Customers’ Sweet Tooth By Rebecca Shelley, Group Communications Director, Tesco

We are facing major global health challenges that have potential consequences for shoppers and for the retail industry. The obesity issue, which is forecast to get worse, is already contributing to high rates of chronic conditions such as diabetes and cardiovascular disease. In the UK, spending on healthcare doubled between 1997 and 2009; if current trends continue the NHS will face a funding gap of £117 billion by 2022.

Consumers are actively looking for supermarkets to take the lead in helping them live healthier lives, and external stakeholders expect us to play a role as well. Tesco has responded with a reformulation program that has removed billions of calories from our product ranges and enabled us to

meet UK government salt targets. However, reformulation — improving the healthiness of what we sell — is only part of the answer. How we sell products is the other.

It is a fact that supermarkets sell all the food required to eat a healthy diet. With weekly promotions on healthier foods including fresh, frozen and canned fruit and vegetables and healthier alternatives, plus healthy product brand ranges and innovative approaches to healthy product development, retailers are continuing to make healthy eating more affordable, convenient and tasty.

It is also true that supermarkets offer customers choices, and most would agree we should continue to do so. But it’s important that we recognize what we can do to encourage customers towards making healthier choices. There are a number of approaches that have been discussed in the public debate about how much retailers can or should do — for example, pricing and promotional activity, merchandising and layout changes, improved labeling and greater availability of further advice and information.

At Tesco, we take the lead from customers. We have set ourselves a challenge: to make it easier to be healthier at Tesco. We want to be the champion of making healthier choices easier while never compromising on taste. Customers want us to demonstrate a helpful and positive attitude to health but they don’t want us to tell them what to eat or to limit choice. They want us to encourage and support them with small but achievable changes.

One of our key strategies in 2014 was to remove confectionery from checkouts. A significant proportion of our customers — nearly two-thirds (65%) — told us that removing confectionery from the checkouts would help them make healthier choices when shopping. At the same time, 67% of parents also told Tesco that having no confectionery near the checkout would help them make healthier choices for their children.

Photo courtesy of Tesco


We announced our intention to remove all sweets off all checkouts in May 2014, with the intention of bringing in the new, healthier checkouts in January 2015. We worked to establish the right range for checkouts that met our customers’ needs and was nutritionally appropriate.

A straw model set of criteria, prohibiting any product high in fat, saturated fat, sugar or salt and therefore carrying a “red” traffic light according to the Traffic Light labeling system, was developed in consultation with key stakeholders. A range was then created based on these criteria and tested with customers in select stores over the summer–autumn 2014. As a result of customer feedback, we adjusted the criteria and the range — for example, we removed all diet fizzy drinks and included some exceptional products that attracted a red traffic light due to naturally occurring sugar and fat (i.e. dried fruit and nuts).

By taking this step, the overall healthiness of our customers’ shopping in convenience stores improved significantly after the first three months, based on the data we have about the nutritional content of our customers’ shopping baskets. Around a third of our customers are aware of the new policy and, of those, a quarter said that since confectionary has been removed from checkouts they have made either slightly or much healthier choices as a result. The move was welcomed by government and received positive comments from influential, well-known stakeholders.

A responsible retailer should strive to understand the approaches that will help make it easier for their customers to make healthier purchasing decisions in their stores. However, retailers cannot bear sole responsibility for tackling these issues. We continue look to government, industry, public health institutions and others to work with us to address the health challenges we all face.

Rebecca Shelley is Group Communications Director for Tesco. She leads and oversees internal communications with more than 500,000 colleagues as well as Media, Government and Corporate Social Responsibility. Rebecca is also the chair of the Tesco Charity Trust.


Accelerating Impact

Novo Nordisk: Rethinking the Challenge of Diabetes By Charlotte Ersbøll, CVP, Corporate Stakeholder Engagement, Novo Nordisk A/S

Almost 100 years ago, Novo Nordisk set out on a journey to change diabetes. Today we supply close to half the world’s insulin and are the largest private investor in diabetes research, including the search for a cure for type 1 diabetes. Our founders could hardly have envisioned the company we are today, but neither could they have grasped the way diabetes would turn into one of the 21st century’s most pressing public health challenges.

Today, 415 million people live with diabetes, corresponding to 8.8% of the global adult population, the majority with type 2 diabetes. What has doubled the incidence of diabetes since 2000? Why is this trajectory seemingly unstoppable with a predicted 642 million with diabetes in 2040, and why is it growing most alarmingly in low- and middle-income countries, home to already three-quarters of all people with diabetes? Unhealthy diet, sedentary lifestyle and resulting obesity are among the leading risk factors, but what we recently discovered is that it is much more complex than that, and intrinsically linked to the ‘risk cocktail’ of city life.

Cities are the frontline in the fight against diabetes

Today, more than half of the world’s population lives in urban areas. So do two-thirds of all people with diabetes. That makes cities an important focal point for tackling the disease. However, there is a need to better understand what drives urban diabetes in particular. For the past 20 months, as part of the Cities Changing Diabetes program, Novo Nordisk has been collaborating in a unique public-private-academic partnership with University College London (UCL) and five study cities — Mexico City, Houston, Copenhagen, Tianjin and Shanghai, collectively representing 60 million people — to understand how urbanization links to diabetes. The results of this pioneering new research were recently presented. They challenge current scientific understanding of the rapid rise of diabetes in cities and suggest that social and cultural factors play a far more important role in the spread of the epidemic than previously thought.

Time pressure, commuting time and where you live play significant roles in diabetes vulnerability. Is it safe to go out, is the water safe to drink, how do local traditions and conventions shape the way we live? Loneliness, perception of self, one’s body and one’s health, and where diabetes ranks in a person’s individual hierarchy of needs are also important factors. The new insights suggest that cities must reconsider public health and city planning strategies to address the rise of the condition.

What we have learned is that if we are to change the diabetes trajectory, a clinical response is essential but not enough. We need to look at the problem differently. We have to turn more of our collective resources, effort and imagination towards social factors and cultural determinants that put people at risk in the first place, and understand why good outcomes are so hard to achieve. Acting on these new insights, we need to bring new combinations of people and perspectives together to design new and different interventions.

That’s why we are working to put urban diabetes at the top of the healthcare agenda — and put it on the agenda of those designing and managing cities for the future, including an exciting new collaboration with the C40 network of mayors. Novo Nordisk has pledged to invest over US$20 million of expert resource and research funds in Cities Changing Diabetes by 2020, and we are happy that

Cities Changing Diabetes Summit. Photo courtesy of Novo Nordisk.

http://citieschangingdiabetes.com/


Johannesburg and Vancouver will join in the fight against urban diabetes in 2016.

As an immediate next step for the program, all five original partner cities have committed to deliver local actions that address the challenges identified by the mapping phase. Areas for focus as voted for by the recent Cities Changing Diabetes summit delegates will include community-level action beyond the traditional scope of clinical care and the integration of health within urban planning and municipal policies.

At the local level, we have engaged hundreds of influential stakeholders including NGOs, faith-based organizations, employers, health providers, and insurers to learn about results at numerous stakeholder gatherings and town hall meetings. These groups have shared their insights and discussed possible actions to address the local challenges in prevention, early detection and better treatment of diabetes.

To quote Dr. Amando Ahued Ortega, Minister of Health in Mexico City: “The insights we have gained

from the Cities Changing Diabetes research have fundamentally changed the way we think about diabetes in our city. This new understanding of sociocultural risk factors will guide the development of increasingly efficient and targeted public health policies to support the health and well-being of our citizens.” Novo Nordisk is proud to be a catalyst for what could be a fundamentally new way of preventing and managing diabetes.

To learn more about urban diabetes and the Cities Changing Diabetes program, visit www.citieschangingdiabetes.com or explore the #UrbanDiabetes hashtag.

Charlotte Ersbøll is Corporate Vice President of Corporate Stakeholder Engagement in Novo Nordisk, a Danish based pharmaceutical company leading in the fight against diabetes. She is responsible for corporate sustainability, corporate public affairs, government affairs and trade policy at Novo Nordisk, as well as setting the direction for the company’s global access to diabetes care strategy.

http://www.citieschangingdiabetes.com/


Accelerating Impact

A Vision for Innovative Health Care Delivery By Bobby Prasad, Global Chief Medical Officer, The Abraaj Group

We face a unique opportunity in growth markets today, a by-product of the profound demographic shifts occurring at the confluence of a growing middle class, urbanization, ongoing challenges in battling infectious diseases and the rise in non-communicable diseases. These shifts are driving the need for substantial investment in infrastructure and innovation to enable the delivery of quality healthcare that is both accessible and affordable. The difficulties in combating Ebola tragically illustrated the urgent need for a collective strengthening of fragmented and strained health systems. The often resource-constrained public sector – the traditional provider of healthcare to poor communities in most growth markets – faces a herculean task in attempting to address these challenges.

We believe that in order to create genuine and long-term impact in lower- and middle-income population segments, there must be a paradigm shift. The organized private sector, including investment fund managers such as Abraaj, Big Pharma, and diversified technology companies must work together with governments, foundations and NGOs, supporting one another in a “new compact,” one that leverages their complementary strengths to deliver truly cost-effective healthcare systems. This can only be meaningfully achieved by a comprehensive realignment of all constituents’ priorities with the broader government health strategy, a focus on the

priority needs of underserved population segments, and an ability to contribute to overall system capacity, capability, and quality.

Changing Health Care Delivery Models

Factors commonly hindering advances in healthcare delivery across growth markets include a lack of financial protection from the catastrophic health expenses forcing people into poverty, and inadequate health system reform. In order to meet some of these challenges head on, Abraaj will establish affordable high-quality health systems for low- and middle-income groups predominantly in sub-Saharan Africa and South Asia. Our focus will be in creating city-based multispecialty “hub-and-spoke” healthcare ecosystems and super-specialty networks that provide a coordinated set of healthcare facilities and capabilities. We believe that in order to achieve sustained impact at scale, it will be critical to implement an innovative approach to diagnostics, clinical delivery and therapy, clinical and workforce training, logistics, and operational knowledge. Innovation and best-in-class practice in these fields provide the potential to address capital efficiency and the availability of medical expertise.

Social Franchise Networks

One of the exciting ways we are trying to link clinical care for the poor to our health care ecosystems is by strategically partnering with NGOs to enhance their social franchise networks. Social franchises are networks of qualified, private sector healthcare providers linked through agreements to provide socially beneficial health services under common franchise brands. The providers retain complete ownership and autonomy over their outlets, and continue to charge reasonable fees for their services. The overall aim of social franchises is to ensure health impact, quality, cost-effectiveness, equity, increased use and sustainability. Applying commercial principles and discipline can be advantageous for achieving public health goals.

©STILLFX / Crystal Graphics


Partnering with NGOs and their franchisees allows us to innovatively help the end-consumer in a number of ways, including:

• Using our global platform and strategic partnerships to help with procurement;

• Reducing diagnostic and treatment costs;

• Promoting the use of low cost medical devices that simultaneously encourage quality and economies of scale;

• Providing access to a wider range of laboratory and imaging diagnostic services within our ecosystems;

• Offering low-cost access to mHealth and IT systems to boost operational efficiency and documentation;

• Lowering medication costs through our partnerships with Big Pharma and major distributors;

• Providing access to a wider range of training opportunities for providers through our learning and development programs; and importantly,

• Creating a viable high-quality local referral facility as an alternative for cases that can’t be managed in primary care and where the patient seeks trustworthy, affordable private care outside of the public sector.

An Ambitious Vision

Expanding trained community healthcare worker programs within appropriately supervised learning

environments and in parallel to the social franchise model benefits can also help strengthen the number of options available to deliver responsible care cost-effectively in low-resource, low-income communities.

Our approach envisages a close partnership with governments, ensuring that opportunities for clinical skill development can be shared across the platform for doctors, nurses, managers and allied health providers, stimulating long-term value creation through capacity building and training. It is our hope that these ecosystems provide a sustainable platform for skills and career progression useable within any public, private or non-governmental organization. Embedding and empowering health workers with the right tools and support will significantly improve patient health outcomes. In order to achieve this, we will invest in scalable and sustainable healthcare services models that provide measurable improvements.

There remains much work to be done but working collaboratively, proactively and in partnership with the wide cross-section of stakeholders augurs well for the

successful delivery of this highly ambitious vision.

Prof. Bobby Prasad is Global Chief Medical Officer for Abraaj and is based in the Group’s London office. He is a Specialist in Gastroenterology and has been in clinical practice for over 20 years, having worked in senior roles in the UK and US including on faculty at Yale. He is a Fellow of the Royal College of Physicians of London and the American College of Physicians.


Accelerating Impact How Life Insurers Can Support Healthy Living

By Brooks E. Tingle, Senior Vice President, Marketing and Strategy, John Hancock Insurance

A natural alignment exists between consumer health and longevity and the goals of the life insurance industry. In fact, life insurers have been strong proponents of healthy living and disease prevention for more than 100 years. After all, longer, healthier lives are in everyone’s best interest; individuals who live longer support the financial goals of life insurers and can lead to a society that’s more productive.

For The Greater Good

It’s no secret that Americans have struggled to maintain their health. In fact, data shows that unhealthy behaviors are causing people to age faster. On average, Americans are 5 years older than their actual age according to the Vitality Institute,1 largely the result of poor health and lifestyle choices. Things like heart disease, cancer, and diabetes are strongly linked to inactivity, poor diet, alcohol use, and smoking.2

We know that these unhealthy trends can be reversed, but it means people must make better choices and improve their health-related habits. That’s where businesses like John Hancock come in. As a life insurer, it’s our mission to protect people, families, and businesses at every stage of life. Although this is our traditional role, we believe we can do more. We believe life insurance can encourage healthy living while also helping consumers build their financial security. And for the first time, we now have the data, tools, and technology to make this a reality.

Motivating Change

There is significant evidence that when you offer immediate rewards for healthy behavior, people make real progress and lasting change in their lives. In fact, one global study found that incentives led to a 22% increase in the number of people going to the gym over a four year period.3 This is consistent with another survey that found incentives would strongly encourage people to walk more, get annual health screenings, and exercise regularly.4

The concept of behavioral incentives is not new to the industry. In fact, many health insurance companies already offer premium savings and rewards to people that take steps toward living a healthy life. Some car insurance companies even offer discounts to customers that are willing to install a device that measures safe driving habits. While this incentive-based approach works

1 The Vitality Institute, “Vitality Age Analysis of Adult National Health and Nutrition Examination Survey Respondents across Three Survey Time Periods,” 5/17/2013. 2 World Health Organization, Non-communicable Diseases Fact Sheet, 1/2015: www.who.int/mediacentre/factsheets/fs355/en/. 3 The Vitality Institute, Vitality Journal, Changing Behavior, 2/2014, Page 16 4 KRC Research, via a nationwide, online survey conducted on behalf of John Hancock, 2015.

©Graphic Photo / Crystal Graphics


well in these industries, it makes even more sense for life insurance given the long-term nature of our relationships.

A New Kind of Life Insurance

With all of these findings in mind, John Hancock has introduced a new kind of life insurance – one that rewards people for living a healthy life. To create the most effective program, we’ve partnered with Vitality, the global leader in integrating wellness benefits with life insurance products. By offering significant premium savings, brand-name rewards and discounts based on a policyholder’s healthy lifestyle, and a free Fitbit® to help track progress, we’ve fundamentally transformed life insurance, and that’s good for everyone.

Along with death benefit protection and greater financial security, the John Hancock Vitality solution rewards members over and over again for the everyday things they do to stay healthy. And since policyholder relationships in the life insurance industry can last for decades, a program like this can have a profound and cumulative impact on a person’s overall health.

The John Hancock Vitality solution is a great example of how business can impact society as a whole. Companies can still make money and be profitable, while also being a positive force in the lives of their customers. This shared value approach represents the next generation of life insurance – one that offers protection and financial security, while also supporting the consumer’s pursuit of a healthier life.

Brooks E. Tingle is Senior Vice President, Marketing and Strategy, with John Hancock Insurance. He is responsible for leading all of John Hancock’s insurance marketing activities and developing and implementing innovative strategies to better engage U.S. consumers and drive profitable growth.

Vitality is the provider of the John Hancock Vitality Program in connection with policies issued by John Hancock. John Hancock Vitality Program rewards and discounts are only available to the person insured under the eligible life insurance policy. Rewards may vary based on the type of insurance policy purchased for the insured (Vitality Program Member), the ownership and inforce status of the insurance policy, and the state where the insurance policy was issued. Premium Savings will apply based on the Status attained by the life insured. Please consult your financial representative as to how premium savings may affect the policy you purchase. Insurance policies and/or associated riders and features may not be available in all states. Insurance products are issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA 02117 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595. MLINY110315026


Regional Imperatives

Healthy Heart Africa: A Business Plan for Tackling NCDs By Mark Mallon, Executive Vice President, International, AstraZeneca

The growing epidemic of non-communicable diseases (NCDs) has emerged in recent years as one of the greatest global public health challenges. The onset of chronic diseases in developing countries impedes economic growth and threatens to drastically increase health care costs. In Kenya, this is not tomorrow’s challenge: the World Health Organization (WHO) estimates that 46% of adult Kenyans have hypertension.

AstraZeneca launched Healthy Heart Africa in October 2014 to support the governments of Africa in their effort to reduce the burden of heart disease – specifically hypertension. In doing so we recognized that we could not achieve our mission solely by increasing access to high-quality medicines through an in-kind contribution program. Instead, we approached it as a market-creating effort, one which would strengthen local healthcare systems, help build our own capabilities and, most importantly, benefit patients.

This comprehensive approach leverages our unique commercial and scientific assets for the greater good. AstraZeneca has a long history of expertise in cardiovascular disease, and we think we have something to offer. But operating in this particular environment is relatively new for us. We cannot do this on our own.

Our approach requires close collaboration with partners who share our vision for making a positive impact on NCDs and are keen to develop a solid understanding of progress against key metrics, fluid program management and, perhaps most importantly, a willingness to learn by doing.

We began by conducting a comprehensive analysis of barriers to care and treatment. This informed the development of a program based on three pillars, currently being tested through an initial series of demonstration projects in Kenya:

• Raise awareness by leveraging community health worker networks to drive education and awareness activities using materials developed with the Kenyan Ministry of Health.

• Train providers and drive care lower in the health care delivery chain by developing and implementing a simplified treatment protocol for hypertension together with a training package for healthcare workers.

• Ensure access to and availability of affordable medicines by implementing up to 90% price reductions for the AstraZeneca medicines being offered through the program and establishing a secure, low-cost supply chain by which to deliver them.

Creating a Sustainable Model

Our ambition is to make Healthy Heart Africa sustainable. This is not a donation program. We view this as part of our business strategy in a manner that will dramatically improve the health of people in sub-Saharan Africa.

Equally, this is also not about short-term profitability. We’re developing this model in order to create longer-term value for all stakeholders. We think about this in the following key ways:

©Weerapat / Crystal Graphics


• It’s helping us to recognize patient needs which are unique to Kenya. Through emphasis on monitoring and evaluation, baseline studies and demonstration projects, we are gaining a deeper understanding of the relative lack of public awareness of hypertension and cardiovascular disease, with a view to strengthening the healthcare system’s ability to provide care, treatment and long-term disease management.

• We are obtaining a greater understanding of distribution models that will work in sub-Saharan Africa. This will help us to ensure our product supply chain is economical, effective, and efficient in delivering quality medicines to the “last mile.”

• We are deepening relationships and sharing knowledge with valued new partners, including key health officials, implementing partners and others who will help ensure that the program is sustainable and, ultimately, stands on its own.

As AstraZeneca improves its capacity, understanding of and ability to navigate the market environment in Kenya, we will be in a much better position to work with our partners to help them keep patients healthy, while also strengthening their broader health system. Although our initial focus is hypertension, we believe this approach will help with the management of many other chronic diseases.

Initial Program Results Encouraging

We believe we are already making good progress. Since we began reaching sites in April 2015, Healthy Heart Africa has:

• Activated 250 health facilities;

• Trained over 2,500 healthcare workers;

• Screened over 1,000,000 people;

• Identified around 130,000 hypertensive patients; and

• Treated over 20,000 patients.

We know that treatment levels are not where we believe they should be in order to manage the condition. Our focus here is to address three big challenges: increasing our ability to identify the right patients, improving linkage across the patient pathway, and addressing issues related to compliance to medication. Initial signs are positive that we are moving in the right direction across each of these areas, but a long-term focus is required.

Ultimately, we aspire to reach 10 million hypertensive patients across sub-Saharan Africa by 2025 in line with the WHO’s goal of a 25% reduction in the prevalence of raised blood pressure by 2025.

This is undoubtedly an ambitious target. However, at AstraZeneca we believe that by working together, we will have a dramatic effect on patient health, raise awareness of hypertension and cardiovascular disease, improve health care workers’ skills in diagnosing and treating hypertension, and increase the number of people receiving treatment and long-term disease management for this major burden on society.

Mark Mallon is Executive Vice-President for the International Region for AstraZeneca and is responsible for the growth and performance of AstraZeneca’s commercial businesses in various geographies, including Asia Pacific, Russia, Latin America, the Middle East and Africa.


Corporate Voices

Health, Happiness, Performance: A Formula for Success By Paul Polman, Chief Executive Officer, Unilever

Alarmingly, a Gallup poll of workers across 142 countries found that a mere 13% of people feel engaged at work (State of the Global Workforce, 2013). Even in advanced economies such as the US, the figure is only 30%.

A wealth of evidence points to the fact that the health and happiness — and, in turn, motivation — of a company’s workforce have a direct correlation with its performance. Harvard Business Review (“The Impact of Employee Engagement on Performance,” 2013) reported that companies with strong health and wellness programs regularly outperform others in the stock market. It all adds up to a compelling argument for safeguarding the physical, mental and emotional well-being of every employee.

This is a concept to which Unilever has long been committed. The holistic range of programs offered at Unilever were inspired by our company mission to help people look good, feel good and get more out of life. This sentiment applies to our employees as much as it does to our customers and consumers.

Shining a Light on Employee Well-Being

Healthy body, healthy mind may be a cliché, but for good reason: it’s true. That’s why I have been such a passionate advocate of the Unilever Lamplighter physical well-being program, which now exists in over 70 of our markets, with 91,000 employees participating globally. Lamplighter offers employees a combination of physiological and nutritional assessments as well as mental resilience tools and bespoke diet and exercise advice to help promote optimal health, well-being and performance. Through the Lamplighter program, Unilever became the first EU company to prove the relationship between health and productivity.

Of course, mental health is a complex condition and can be the source of many other health issues. The holistic program introduced last year in our UK

1 Fast-Moving Consumer Goods

business — which received the prestigious Business in the Community Bupa Employee Wellbeing Award this year — is now being adopted more widely across Unilever.

Last, but by no means least, a sense of purpose at work is increasingly sought after — the idea that we are connected to something deeper than ourselves, or indeed the company at large. This is the philosophy that underpins Unilever’s sustainable business model: by working differently, we can grow our business and be an agent for social change and environmental progress. More than 75% of our employees feel they contribute to our sustainability commitments in their

roles. We are now the Number 1 FMCG1 Employer of Choice amongst university students in 32 of the top 50 markets in which we operate, and the third most “in-demand” employer on LinkedIn, behind tech giants Google and Apple.

Simply put, a company with healthy and happy employees is more likely to benefit from positive work behaviors, reduced absence rates and healthcare costs, and increased productivity and engagement. In fact, we are now seeing a return of €4 for every €1 that

©Rawpixel / Crystal Graphics

http://www.gallup.com/services/178517/state-global-workplace.aspx

http://hbr.org/resources/pdfs/comm/achievers/hbr_achievers_report_sep13.pdf

http://hbr.org/resources/pdfs/comm/achievers/hbr_achievers_report_sep13.pdf


we spend on well-being. The business case is clear: if you invest in others, they will invest in you.

Unilever Sustainable Living Plan: Brands as Ambassadors

However, as one of the world’s largest consumer goods companies, there is no doubt that the biggest impact we can make as a business on improving health is through our brands. With our products reaching 2 billion consumers worldwide every day, we have the responsibility and opportunity to be a force for good.

So in 2010, we set out a new business model with a clear and audacious ambition to decouple growth from environmental impact, whilst having a positive social impact in the communities in which we operate. We call it the Unilever Sustainable Living Plan (USLP). Never done before by a company of our size, it is a total value chain approach — from field to fork — taking co-responsibility for everything that goes on in our name. And it’s based on a simple premise: that business should serve, not take from, society and the environment which gives it life in the first place.

The USLP is founded on three big goals. By 2020 we want to: halve the environmental footprint of the making and use of our products; enhance the livelihoods of millions of people across our supply chain; and help more than a billion people take action to improve their health and well-being.

Specifically, our hygiene brands — Lifebuoy, Domestos, Pureit and Signal — were developed with the aim of improving health through better hygiene and sanitation. Our everyday products (soaps, toothpastes and sanitation products) and our innovative water purifiers can help prevent disease and improve people’s health and well-being. Through these brands we are delivering campaigns at scale, promoting change in everyday behaviors that matter for health, and supporting UN Sustainable Development Goal 6, which ensures availability and sustainable management of water and sanitation for all.

Take infant mortality, for instance. It is morally repugnant that nearly 6 million children die before their fifth birthday, including 600,000 from easily preventable diseases like diarrhea (UNICEF 2014).

That is the equivalent of a jumbo jet of children crashing every hour, every day. The most basic of health practices, hand washing, can significantly reduce this number. We have already achieved real positive change in improving health in many of the countries we operate in.

Lifebuoy soap, one of Unilever’s oldest and proudest brands, has made awareness and practice of hand washing a mission, and played a critical role in addressing this issue, reaching 257 million people across 24 countries over the last four years. We have seen a clear positive impact – in one of the poorest areas of India, the incidence of diarrhea among children has fallen from 36% to just 5%. What’s more, this deeply engrained purpose has been remarkable in driving the success of the Lifebuoy brand and business. This once dated, 100-year-old product is now one of the company’s fastest-growing brands.

Through our Unilever Sustainable Living brands, with purpose and investment in well-being, we will continue to connect with our customers, consumers and employees to effect positive change, supporting our commitment to improving the health and hygiene of more than one billion people by 2020. After all, the world needs it now more than ever.

Paul Polman is CEO of Unilever and Chairman of the World Business Council for Sustainable Development. Unilever has been named as a leader in the 2015 Dow Jones Sustainability Index (DJSI) results.

Lifebuoy “hand-washing day” in Trinidad & Tobago. Photo courtesy of Unilever.

https://www.unilever.com/news/press-releases/2015/Unilever-named-as-an-industry-leader-in-DJSI.html


Corporate Voices

Doing Right, While Doing Well: The SDG Opportunity By Scott C. Ratzan, MD, MPA, Vice President, Global Corporate Affairs, Anheuser-Busch InBev

For more than a decade, the UN Millennium Development Goals (MDGs) harmonized, energized, and expanded the first collaborative agenda to help the world’s most vulnerable populations. While unfinished business remains, the MDGs succeeded in spurring governments and the private sector to donate billions of dollars, and to cooperate along with civil society in ways that could not have been imagined just a few years earlier.

Now the Sustainable Development Goals (SDGs), launched this year by world leaders, offer business a more comprehensive array of new ways to “do right, while doing well.”

AB InBev Global Smart Drinking Goals

At Anheuser-Busch InBev (AB InBev), we have been seeking guidance from our Global Advisory Council and members of the public health community to evaluate how we can best contribute to the SDGs in addition to other global health targets. As a result, we are committing more than USD $1 billion over the next ten years to achieve new Global Smart Drinking Goals, which aim to reduce the harmful use of alcohol globally, including binge drinking, underage drinking and drink-driving.

We will support initiatives to change individual behaviors and social norms governing drinking, and we will empower consumers through choice. This effort represents an evolution from our earlier “responsible drinking” initiatives, which aimed to drive awareness of alcohol responsibility to positively changing behavior by investing in longer-term, evidence based approaches.

To both ensure and measure progress, we will create an independent implementation and monitoring & evaluation framework for our Goals that is transparent, credible, and delivers results. We will also publicly report on progress on our website. We have set four goals for ourselves that aim to empower consumers to make smart drinking choices and reduce the harmful use of alcohol globally:

• Reduce the harmful use of alcohol by at least 10% in six cities by the end of 2020 and implement best practices globally by the end of 2025;

• Influence social norms and individual behaviors to reduce harmful alcohol use by investing at least $1 billion across our markets in social marketing campaigns and related programs by the end of 2025;

• Place a Guidance Label on all of our beer products in all of our markets by 2020 and increase alcohol health literacy by the end of 2025; and

• Ensure no- and lower-alcohol beer products represent at least 20% of our global beer volume by the end of 2025, with which we anticipate a 10% reduction in our average alcohol by volume (ABV) that same year.

“The private sector has the opportunity to play a valuable role in addressing pressing societal challenges. Governments can't do it alone,” said Former Prime Minister Jean Chrétien, Chairman of AB InBev’s Global Advisory Council. “AB InBev is demonstrating its leadership by seizing this opportunity to tackle harmful alcohol use globally over the next 10 years. Their Global Smart Drinking

Image courtesy of AB Inbev


Goals have the potential to make a positive impact on people, families, and communities across the world.”

City-Based Pilot Programs

Our first goal will entail multi-year pilots in six cities where we will explore, together with our partners in government and civil society and with technical guidance from experts, the most effective approaches to reducing harmful alcohol use. Demonstration and control cities in Argentina, Belgium, Brazil, China, Mexico and the United States will be selected based on a robust set of eligibility criteria that optimize the potential for program impact. After the six-city pilot phase, we will extend the most effective approaches to all of our other global markets.

Social Norms Programs

Even while the pilot program is underway, we will begin to influence the powerful social norms that surround drinking across all of our global markets. We will seek guidance from world-renowned public health experts and will put in place programs that have proven effective in influencing social norms and changing harmful drinking behavior. Our advertising, marketing and social media expertise will help promote healthy drinking behaviors, and we’ll also look to those who can reach younger people with a convincing message.

Health Guidance Label

The World Health Organization (WHO) has indicated that the labeling of alcoholic beverages and support of alcohol health literacy is a viable option to influence social norms about drinking and reduce alcohol misuse when part of a comprehensive strategy.

We will place a health guidance label on all of our beer products in all of our markets where permissible and not already required. The label will be developed by an independent group of technical experts using a rigorous process and may include information about alcohol content, as well as other facts about alcohol, that can help to improve alcohol health literacy and positively shift consumption patterns.

Broader Array of No- and Lower-Alcohol Beers

There is a potential public health benefit in shifting consumption to lower-strength alcoholic beverages. With this in mind, we have committed to expanding our no- and lower-alcohol product offerings across all of our markets so that they represent at least 20% of our global beer volume. We anticipate that this will contribute to a reduction in the alcohol by volume (ABV) of our global portfolio of products by at least 10% by 2025; we will be measured against this target.

The Global Smart Drinking Goals are meant to both acknowledge and contribute to a number of critical global targets, including the WHO’s goal to reduce the harmful use of alcohol by at least 10% between the

years 2010 and 2025; the call by the Organization for Economic Co-operation and Development (OECD) for incisive private sector action to reduce the harmful use of alcohol; and the UN’s Sustainable Development Goal 3, which aims to ensure healthy lives and promote

well-being for everyone of all ages, including Target 3.5 to strengthen the prevention and treatment of substance abuse, including harmful use of alcohol.

We are excited about contributing to these global targets and — as the leading global brewer — by the opportunities that lie ahead to help improve the health of people and reduce the harmful use of alcohol worldwide. This work will certainly be challenging. But by viewing our business through a public health lens, aligning our efforts with targets set by global institutions, and basing our programs on the best guidance and expertise from the public health community, we believe we can make a meaningful difference in the lives of people everywhere, and “do right” while also “doing well.”

Scott C. Ratzan, M.D., M.P.A., is Vice President, Global Corporate Affairs, AB InBev. He is the Editor-in-Chief of the Journal of Health Communication: International Perspectives, Adjunct Professor at Columbia University Mailman School of Public Health, and on the Board of Scientific Counselors, Office of Infectious Diseases, Centers for Disease Control and Prevention.

“The private sector has the opportunity

to play a valuable role in addressing pressing societal challenges.

Governments can't do it alone” - Former Prime Minister Jean Chrétien,

Chairman of AB InBev’s Global Advisory Council


Corporate Voices

A Model for Collaboration By Steve Hilton, Vice President, McDonald’s Corporation and Anne Ferree, Vice President, the Alliance for a Healthier Generation

Twenty five years ago, McDonald’s and the Environmental Defense Fund (EDF) worked together to develop a groundbreaking model for industry and nongovernmental organization collaboration. It was the first partnership between an environmental group and a Fortune 500 company in an era when environmental and business interests were typically not aligned. The focus was not on philanthropy, the traditional model at the time; rather, the focus was on improving business practices.

In the first decade, as a result of the joint initiative, McDonald’s eliminated more than 300 million pounds of packaging, recycled 1 million tons of corrugated boxes and reduced restaurant waste by 30%. Since then, both McDonald’s and EDF have maintained partnership and collaboration as the key ingredients to achieving sustainable solutions and continuous improvement. Over time, more companies and non-governmental organizations (NGOs) have adopted this type of model around environmental innovation and other areas of societal concern.

Mission-Driven Groups: A Valuable Corporate Stakeholder

Corporate teams can benefit from the expertise of mission-driven organizations. They complement the knowledge and experience of in-house experts and can challenge their thinking, often resulting in better outcomes. Based on this model, McDonald’s and the Alliance for a Healthier Generation came together in September 2013 to form a partnership on a Clinton Global Initiative (CGI) Commitment to Action to increase families’ access to fruits, vegetables, and low-fat dairy products.

In response to the rapid increase in childhood obesity rates over the last three decades, the Alliance for a Healthier Generation was founded to serve as a catalyst for children’s health. A unique partnership between the American Heart Association and the Clinton Foundation, the Alliance functions on the premise that obesity does not have one single cause, and therefore does not have one single solution. Children’s health is complex, and it will take government agencies, NGOs, and the private sector working together to ensure the best outcomes.

Working with the private sector has been a critical strategy for the Alliance. The Alliance negotiates voluntary agreements with companies based on solid, evidence-based science, defined by clear metrics, and verified through independent data collection and analysis. It is also important to note, though the Alliance welcomes everyone to the table, it does not accept funds from entities with which it is negotiating solutions.

These types of collaborative solutions do not occur overnight. They can be years in the making, as was the case with McDonald’s and the Alliance. They

Photo courtesy of McDonald’s Corporation


require phases of trust building and knowledge sharing. Both organizations need to come to the table with an open mind and a lot of patience. Only by putting biases and presumptions aside can the two organizations begin to work hand-in-glove toward real, substantive solutions. When our two teams reached this phase, we were then able to begin to define shared goals and determine how each of our organizations could contribute.

Alignment of Interests: Challenging but Achievable

Impact is the focus of the partnership between McDonald’s and the Alliance. Yet key considerations of our respective organizations create a natural tension. A corporate organization relies on profit and shareholders to ensure its longevity; the NGO is focused on mission-driven scientific evaluation, ultimately hoping to solve a critical issue and put itself out of business.

Once McDonald’s and the Alliance agreed on what we could impact together, we worked through various options. Of course there is a negotiation process to determine, for example, what constitutes a stretch goal, and what is truly achievable. McDonald’s business model is unique, which brings challenges and opportunities. In terms of impact, our scale and scope are a strength. With 69 million customers a day, a small change can make a big difference, and a significant change, even more so.

At the Alliance, we work across sectors to change policies, systems and environments. Our model is built on creating capacity in community-based institutions and changing corporate practices. And while we bring corporations to the table, we also hold them accountable for taking meaningful actions to advance solutions.

Measurable Results

And so together McDonald’s and the Alliance decided to partner on a CGI Commitment that covers 20 major markets, representing more than 85% of McDonald’s global sales and spans through 2020. Year 1 progress was measured in the U.S. and Italy by a third-party public policy economic consulting firm, Keybridge, with the following results:

Goal: Feature only water, milk and juice as the beverage option in Happy Meals on menu boards, in-store, and throughout external Happy Meal advertising.

Progress: In the first 11 months since sodas were removed from the Happy Meal section of U.S. menu boards in July 2014, milk and juice selections rose 9% points. Before the change, 37% of Happy Meal orders included milk or juice. After the change, that percentage increased to 46%. During the same period, Happy Meal orders with soda decreased from 56% to 48%. Overall, this contributed to serving 21 million additional milk jugs and juice boxes in Happy Meals and a la carte in that same period (July 2014 to May 2015 compared to July 2013 to May 2014).


Goal: Offer customers a choice of side salad, fruit or vegetable as a substitute for French Fries in value meal bundles.

Progress: Currently, 83% of U.S. and 96% of Italy’s McDonald’s restaurants offer a side salad, fruit or vegetable instead of fries as part of value meal bundles.

Goal: Generate excitement for fruit, vegetable, low/reduced-fat dairy, or water with Happy Meal packaging innovations and designs or by introducing new options in the Happy Meal.

Progress: McDonald’s U.S. and Italy have both generated excitement for fruit, vegetable, low/reduced-fat dairy and water. McDonald's Italy saw a steady increase in fruit orders over the last two years. And McDonald’s U.S. has introduced new Happy Meal options which resulted in serving 161 million tubes of Go-GURT® Low Fat Strawberry Yogurt (from July 2014 to May 2015) and 38 million Cuties Clementines (from November 2014 to March 2015) in Happy Meals and a la carte.

Goal: Use Happy Meal box or bag panels to communicate a fun nutrition or well-being message four times annually.

Progress: Both the U.S. and Italy have exceeded the four box panels that were required since the 2013 announcement.

Goal: Include a fun nutrition or well-being message in 100% of advertising directed to children.

Progress: The U.S. and Italy are more than 99% compliant with this commitment.

(The remaining ads shown during child-directed programs represent programming errors or unexpectedly high viewership among children.)

Though there is more to do in the coming years, together we have found that this model of partnership can create real-world, observable, and measurable change.

Steve Hilton is Vice President of Global Government and Public Affairs for McDonald’s Corporation. Steve leads a team responsible for McDonald’s strategic engagement with government entities, as well as non-governmental organizations, at the state, federal and global levels in support of the Brand and its franchisees.

Anne Ferree serves as the Vice President for Strategic Alliances for the Alliance for a Healthier Generation, founded by the Clinton Foundation and American Heart Association, working to reduce the prevalence of childhood obesity.

Photo courtesy of McDonald’s Corp.


Corporate Voices Transforming Tobacco

By André Calantzopoulos, Chief Executive Officer, Philip Morris International

The negative health effects of smoking are top of mind when society looks at Philip Morris International (PMI). For us, this translates into a societal mandate to transform our business by developing and offering to adult smokers an innovative range of alternative tobacco and nicotine products that have the potential to reduce risks for smokers and in turn reduce population harm compared to continued smoking. We refer to these revolutionary products as “Reduced Risk Products” (RRPs).

Transformation on this scale is a long-term process and has many organizational and business implications, but our organizational dedication to achieving this mandate has

already delivered the first tangible results with the commercialization of our first RRP, the iQOS tobacco heating system.

Investing to Meet Ambitious Objectives

We have been working at the development and scientific assessment of RRPs for over a decade. Since 2008, we have invested over USD $2.0 billion in product development and scientific research and in 2009, we opened a state-of-the-art R&D center in Neuchâtel, Switzerland. Within R&D we have over 430 scientists, experts and staff, with an impressive diversity of backgrounds ranging from clinical science and systems toxicology to materials science and consumer electronics.

As many public health experts have recognized, RRPs cannot succeed if they don’t meet two basic criteria. First, products need to present less risk of harm

PMI’s research center in Neuchâtel, Switzerland. Photo courtesy of PMI.

The Harm Reduction Equation as presented at the E-Cigarette Summit by Clive Bates (19 Nov 2013) Source: PMI


than cigarettes. Second, adult smokers need to find the products acceptable and switch to them.

We are focused on developing, assessing and commercializing products that provide an experience as similar as possible to smoking cigarettes and which, based on robust scientific evidence, are shown to be less harmful than cigarettes.

Addressing Different Adult Smoker Preferences

Experts agree that nicotine, while addictive, is not the primary cause of smoking-related diseases. When a cigarette is lit, the burning of tobacco and other materials produces thousands of chemicals, more than a hundred of which are widely recognized as being associated with the development of smoking-related diseases. Each of our product platforms is designed to significantly reduce or eliminate the formation of these chemicals, while approaching the taste, nicotine and ritual-oriented characteristics of cigarettes.

To address the different preferences of adult smokers, our RRP portfolio currently focuses on four product platforms: two platforms that use different innovations to heat rather than burn tobacco, and two different non-tobacco nicotine e-vapor platforms. To date we have over 1,100 patents granted worldwide relating to RRP platforms and over 2,000 pending applications.

Substantiating Risk Reduction

PMI’s RRPs are in various stages of development. We are conducting extensive and rigorous scientific studies on the risk-reduction potential of these products. We assess risk reduction compared to the health effects of quitting smoking. We are conducting extensive research, including both laboratory and clinical studies, and “perception and behavior studies” to help us shape our risk communication and gain an understanding of consumers’ behavior (and the behavior of other groups) pre-market.

Our studies on one of our heated-tobacco products, iQOS, are well advanced. We have already determined that, with the exception of nicotine, the aerosol generated by iQOS is substantially different than cigarette smoke and contains on average 90-95% less harmful and potentially harmful compounds compared to a reference cigarette based on lists identified by health authorities such as Health Canada, the US FDA and the WHO. We have also proven that the aerosol is 90 to 95% less toxic than smoke from a reference cigarette. In a three-month clinical study recently carried out in Japan, the average reduction in 15 biomarkers of exposure to 15 harmful and potentially harmful compounds measured in smokers who switched to iQOS approached the effect observed in smokers who quit smoking for the duration of the study. While conclusions on the risk reduction profile of iQOS will be based on the totality of the evidence, results of research conducted to date give us confidence that we are on course with our plans to demonstrate that iQOS is not only a reduced-exposure product but also a less harmful alternative for smokers who switch exclusively to this product from cigarettes.

iQOS, one of PMI’s heated-tobacco products. Photo courtesy of PMI.


Positive Feedback from Adult Smokers

In late 2014, we launched our heated-tobacco product iQOS in the pilot cities of Nagoya, Japan, and Milan, Italy, and communicated to adult smokers that iQOS produces no ash and generates less odor. Even without a reduced-risk claim, our initial results met or exceeded our expectations. We have subsequently launched iQOS in Switzerland and have begun national expansion of iQOS in Japan. We are making progress with our expansion plan for Italy, as well as planned city launches in other markets.

We are also present in the e-vapor category. In the UK, we market e-cigarettes under the brand names Nicolites and Vivid, and in Spain we have launched an e-vapor product branded Solaris.

Looking Ahead

This is only the beginning of an exciting journey to transform the industry. We have the ambition that RRPs represent 10-15% of our portfolio in 5-10 years from now. But we hope to achieve even more than that. Indeed, we can envision a future in which RRPs someday replace cigarettes.

André Calantzopoulos is Chief Executive Officer of Philip Morris International. He joined the company in 1985 and worked extensively across Central Europe, including as Managing Director of PM Poland and President of the Eastern European Region.


Sustainable Editorial “Wellness”: More than Healthcare Dollars Saved By Ken Mehlman, Global Head of Public Affairs, KKR

At KKR, we focus on improving a company’s operations and enhancing its value over a number of years. A longer time horizon allows us to look beyond quarterly earnings and instead focus on long-term value creation. Using this approach, we work to identify multiple ways to enhance a business. Workplace wellness is an evolving area of focus for us with multiple benefits for companies – and the communities where they operate.

When I discuss KKR’s focus on wellness in the workplace, the conversation inevitably leads to the return on investment. I am asked: “Does this help you save money? Do the savings justify the costs? Are there other benefits you can receive?” My answer to all three questions is, “Yes!”

Yes, wellness efforts can help save a company costs. Harvard Business Review identified this bottom line benefit in a December 2010 study titled, “What’s the Hard Return on Employee Wellness Programs?” In the lead anecdote, HBR cited Johnson & Johnson’s estimate that wellness programs saved the company $250 million over 10 years, with a return of $2.71 for every dollar spent. The authors concluded that “the savings on health care costs alone make for an impressive ROI,” an exciting proposition for those companies focused on wellness initiatives.

But that’s just the beginning. In addition to reducing health care spending and improving the bottom line, we believe that wellness programs can enhance a company’s top line. Effective wellness programs can enhance employee engagement, strengthen corporate culture, and improve recruitment. Earlier this year, the National Business Group on Health and Optum, the health services platform of UnitedHealth Group, published a white paper titled "Beyond ROI: Building employee health & wellness value of investment,” which queried 275 large employers (mostly 3,000+ employees) as to why they offered a health and wellness program. Cost savings figured prominently in the replies, but the methodology also highlighted improving employee job satisfaction and attracting or retaining talented employees.

In a world where the war for talent is real, we want our firm and our portfolio companies to be employers of choice. Part of achieving this goal is ensuring that employees are healthy, happy and engaged. Both physical health and a sense of well-being are critical inputs to this goal.

KKR started our wellness effort in 2011 with the premise that employees who undergo biometric screening and “know their numbers” (weight, BMI, cholesterol, etc.) will make better health decisions and be more productive at work. But knowing your numbers is just the beginning for us. Companies like ours are working to build a sustainable culture of wellbeing and happiness, which is shaped by physical, psychological and financial determinants, as well

©Stockasso / Crystal Graphics


as social, environmental, and interpersonal factors. We have a long-standing partnership with the American Heart Association and the University of Pennsylvania that has culminated in a research study intended to determine what factors are most important to creating value – for employers and employees – when it comes to wellness initiatives. Together we are working to create a community of best practices for our companies to learn from, along with a platform for idea exchange and tangible, relevant tools to create more effective wellness efforts.

The men and women who choose us and our companies over our competitors are committing a significant portion of each day to our success as an enterprise. Their loyalty, ability to deliver strong results, and their quality of life hinges far more on their overall health and happiness than it does on their resting heart rate. At KKR, we think that the value of investment for wellness is an idea whose time is long overdue. It is up to us and our peers to step up and work to improve the health of our companies, but equally important the health of our deeply interconnected communities.

Ken Mehlman is KKR’s Global Head of Public Affairs, helping the firm assess and improve the companies in which it invests by better understanding and managing geopolitical risk and engaging with their key stakeholders. He also oversees the firm’s global external affairs activities, including corporate marketing, regulatory affairs and public policy & communications. Mr. Mehlman leads KKR's ESG programs for the firm and its portfolio companies.


Sustainable Editorial

American Voices on Health & Wellness By Kimberly Gladman, PhD, CFA, Managing Director for Research at the JUST Capital Foundation

A man in North Carolina said: “Health care is a human right. Companies should not cut corners on this aspect.”

A woman in Idaho said: “Most companies now hire workers part time so they don’t have to provide insurance.”

A woman in Pennsylvania said: “When firms were required to provide health insurance to full-time employees, they cut the hours of full-time employees so they became part-timers. That was manipulative.”1

These people were among the over 43,000 Americans who participated in JUST Capital’s 2015 public opinion research on the role of the corporation in society. In what we believe to be the largest effort of its kind to date, we conducted five waves of research, involving focus groups, in-depth telephone interviews, electronic discussion forums, and online surveys, with samples balanced to census categories.2 We asked people what it meant for a corporation to be “just,” meaning “fair, balanced, equitable” and “’doing the right’ thing, whatever you may think that is.” Corporations’ role in protecting their employees’ health emerged as a key issue.

Overall, pay and benefits for employees are the most important issue in the public’s assessment of corporate justness.3 When asked what topics define just corporate behavior in this area, over three-quarters of respondents included the following health-related topics:

• Employer-sponsored health insurance (medical, dental, vision)

• Paid sick days

1 These statements were written in by respondents to an open-ended question at the end of an online survey we conducted in August 2015. 2 For detail on the JUST methodology, see http://justcapital.com/wp-content/uploads/2015/09/Just-Capital-Survey-Research-Methodology-2015.pdf. For an overview of findings, see http://justcapital.com/wp-content/uploads/2015/09/Just-Capital-White-Paper-2015.pdf.

• Employer follow through on retiree health care and pension commitments

• Family benefits (maternity, paternity, childcare)

• Employees not forced into part-time schedules to avoid paying health care costs

Fifty-nine percent also included the health-related item “Exercise, health screening and crisis support programs” in their definition of just employee pay and benefits.4

It’s noteworthy that, as we found in every area of our research, the public cares both about concrete material things corporations provide and about the integrity and values according to which they operate. The list above enumerates not only the benefits themselves, but also how corporations act with regard to them as times change. Do they try to shift workers

3 According to our weighting survey conducted among 20,000 respondents in July 2015. 4 Figures from an online survey of 5,000 US respondents in August-September 2015. Respondents chose from topics derived from the public through earlier waves of qualitative and quantitative research.

©PhotoShop Australia / Crystal Graphics

http://justcapital.com/wp-content/uploads/2015/09/Just-Capital-Survey-Research-Methodology-2015.pdf

http://justcapital.com/wp-content/uploads/2015/09/Just-Capital-Survey-Research-Methodology-2015.pdf

http://justcapital.com/wp-content/uploads/2015/09/Just-Capital-White-Paper-2015.pdf

http://justcapital.com/wp-content/uploads/2015/09/Just-Capital-White-Paper-2015.pdf


into part-time schedules when they suddenly face a legal obligation to provide health care to full-timers, or do they accept that providing such coverage is now part of a corporation’s role in American society? As a firm goes through various growth phases and transactions, do managers remember their obligations to retired workers, or see them as a cost to be eliminated? People understand that the choices made at the highest levels of American business have a huge impact on workers on the ground.

There are also large health implications connected to the public’s second-most important aspect of corporate justness, employee satisfaction and fair hiring. This factor includes, according to at least 75% of those surveyed, the following items:

• Loyalty to employees (not replacing long-serving workers with cheaper ones and not firing people who are dealing with family emergencies)

• Nondiscriminatory hiring and promotion (with regard to race, religion, gender, age, ethnicity, sexual orientation, or education unrelated to job)

• Fair handling of grievances (including harassment claims, unionization efforts, and protection of whistleblowers)

• Respect for employees as people (including work-life balance and individual beliefs)

• Minimizing impact of layoffs (through advance notice, clear explanation, retraining or severance pay)

• Hiring of people disadvantaged in workforce (veterans, cognitively disabled, formerly incarcerated)

• Promotion from within

• Hired based on merit regardless of educational background

• Superiors’ appreciation of employees’ work ideas and contribution to company

While the connection to health may be less obvious for this factor than for employee benefits, a recent study by researchers at Harvard and Stanford has found tangible links between many of these issues and health outcomes (Goh et. al, 2015).5 For example, the study documents that the stress of job loss or job insecurity is associated with higher rates of illness; the thoughtful handling of severance situations that our respondents believe is an obligation of just corporations would mitigate these effects. The researchers also show the negative health impacts of work-family conflict, perceptions of unfairness at work, and the absence of social supports in the workplace – all issues that the topic list generated by our research addresses.

The study concludes that “more than 120,000 deaths per year and approximately 5-8% of annual healthcare costs are associated with and may be attributable to how U.S. companies manage their work force.” It’s a stunning conclusion, and one that suggests immense challenges. But it would likely ring true to many of JUST Capital’s respondents across the country.

In the year to come, JUST will be working to share what we’ve learned from the US public – both about employee health issues and other areas of corporate performance – with corporations, investors, consumers and policy makers. We believe we can find a collective way forward, through a dialogue in which all Americans have a voice.

Kimberly Gladman, PhD, CFA, is Managing Director for Research at the JUST Capital Foundation. She serves on the UN-PRI Academic Network Steering Committee, the Research Advisory Committee of US-SIF, and the Global Advisory Council of Cornerstone Capital.

5http://www.hbs.edu/faculty/Publication%20Files/oph_MS_final_a97f5fc7-0ace-4e5d-b634-8e5516edfd9c.pdf

http://www.hbs.edu/faculty/Publication%20Files/oph_MS_final_a97f5fc7-0ace-4e5d-b634-8e5516edfd9c.pdf

http://www.hbs.edu/faculty/Publication%20Files/oph_MS_final_a97f5fc7-0ace-4e5d-b634-8e5516edfd9c.pdf


Upcoming Events Global ESG Calendar

Date/Time Event Location Information

1.12.16 – 1.13.16 Bio-Based and Sustainable Products Summit

Marriott La Jolla San Diego, CA

http://www.infocastinc.com/upcoming-conferences

1.20.16 – 1.22.16 Sustainable Foods Summit Hotel Nikko San Francisco, CA

http://www.sustainablefoodssummit.com

1.20.16 – 1.23.16 The Annual EcoFarm Conference Asilomar Conference Grounds Pacific Cove, CA

http://www.eco-farm.org

1.25.16 – 1.27.16 Cleantech Forum – San Francisco Parc 55 Hotel San Francisco, CA

http://events.cleantech.com/cleantech-forum-sf

1.25.16 – 1.27.16 Ecotourism and Sustainable Conference – ESTC America

University of South Florida Tampa, FL

http://www.ecotourismconference.org

1.27.16 2016 Investor Summit on Climate Risk, “Advancing the Clean Trillion”

United Nations New York, NY

http://www.ceres.org/investor-network/investor-summit/agenda

2.1.16 – 2.5.16 Education for Sustainability, Transformative Learning and the Earth Charter

San Jose Costa Rica

http://bit.ly/earthcharterfeb2016

2.9.16 – 2.11.16 Wind Power Finance and Investment Summit

Ranch Bernardo Inn San Diego, CA

http://www.infocastinc.com/events/wind-finance-investment

2.18.16 – 2.19.16 Net Positive – Energy and Water Conference

Manchester Grand Hyatt San Diego, CA

http://www.netpositiveconference.org

2.20.16 – 2.22.16 Wisdom 2.0 Conference Marriot Marquis Hotel San Francisco, CA

http://www.wisdom2conference.com

2.23.16 – 2.25.16 GreenBiz Forum 2016 JW Marriott Camelback Inn Resort & Spa Scottsdale, AZ

http://www.greenbiz.com/event/2016/02/23/greenbiz-forum-2016

3.2.16 – 3.4.16 GLOBE 2016 – International Environmental Business Summit Cornerstone Speaking Event

Vancouver, BC Canada

www.globeseries.com

3.8.16 – 3.9.16 The 11th Annual Women’s Leadership Conference

Hyatt Regency Hotel Rosebank, Johannesburg South Africa

http://welead.co.za/womans-leadership-conference

3.14.16 The 15th Annual Wall Street Green Summit Cornerstone Speaking Event

Columbia University Club New York, NY

http://www.wsgts.com

3.15.16 – 3.16.16 2016 Women’s Empowerment Principles Annual Event Cornerstone Speaking Event

United Nations New York, NY

http://weprinciples.org/Site/

3.22.16 3rd Geneva Summit on Sustainable Finance

International Conference Centre Geneva, Switzerland

http://www.geneva-summit-on-sustainable-finance.ch



http://www.sustainablefoodssummit.com/

http://www.sustainablefoodssummit.com/

http://www.eco-farm.org/



http://www.ecotourismconference.org/

http://bit.ly/earthcharterfeb2016



http://www.netpositiveconference.org/

http://www.wisdom2conference.com/

http://www.globeseries.com/



http://www.wsgts.com/

http://www.geneva-summit-on-sustainable-finance.ch/

http://www.geneva-summit-on-sustainable-finance.ch/


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