Hi everyone,
I saw this case study from The Shareholder Commons on the living wage and the engagement gap. The case study is about how to build portfolio value through improved wages using a systems lens. The key takeaways of this case study are attached here as the photo, the full case study - you can download from our library.
What I also found interesting is how The Shareholder Commons describe their theory of change. I am quoting:
"The most important factor determining diversified portfolios' long-term value is the economy's intrinsic value, not individual portfolio companies' relative financial performance. Accordingly, individual company behaviour that harms the economy threatens diversified investors, even when that conduct might increase the company's own long-term value. The structure of markets today focuses investors almost entirely on the effect company decisions have on the company itself: Shareholder ESG activism generally seeks "win- win" changes in corporate behaviour that will both improve a company's social and environmental impact and increase its enterprise value. This strategy implicitly permits business plans that harm social and environmental systems and, consequently, diversified shareholders, as long as those plans maximize value at the enterprise level".
The Shareholder Commons believes that there are tools available to diversified shareholders that allow them to prioritize the preservation and enhancement of systemic value, to improve financial returns and better align the financial sector the with global economy's need".
Do you believe that this change is happening now or is going to happen? What systemic changes are you seeing with your portfolios today?
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Aya Pariy
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