I serve on the board of the Business for Inclusive Growth (B4IG), started by the CEO of Danone, Emmanuel Faber, and the Secretary-General of the OECD, Angel Gurría. It is a Paris based group of 40 CEOs that aim for a more equitable division of resources, ensuring that capitalism is seen as a force for good across all income groups. At the moment, the impact of Covid has been most profound in the service industries such as hotels, restaurants and travel, which employ lower income workers who may lack social protection. The board discussion last week focused on advancing racial equity, the digital divide and the necessity of local initiatives in health and education.
The most ambitious idea came from Alan Jope, CEO of our client Unilever, who committed to Inclusive Restructuring. Should Unilever need to consolidate plants as a matter of efficiency and scale, while it cannot guarantee jobs for all its people, it is seeking to guarantee livelihoods. It aims that all affected employees will be upskilled, reskilled or provided with employability before a factory is closed, with active measures for relocating people, either at another Unilever facility or a new employer, included in business metrics. In this way Unilever aims to become a Net Zero Employer, seeking to not simply outplace, but to make systemic interventions to create roles too. Jope said that this requires consultations in advance with Government and Unions. There must also be recognition of the impact on the local community of a plant closure, from sandwich shop to pub.
I asked Jope whether this was something only being done by Unilever in the EU and in Latin America. “We are doing this in America as well,” he declared, “and hope that it can be a powerful example for others to follow.”
This type of thinking is in line with the broader commitment of B4IG members to upskill and re-train workers for the coming jobs apocalypse, that will affect financial services, consumer products and QSR restaurants in the next five years. The World Economic Forum says that two of three employers expect a return on their investment in reskilling within a year. It requires an effort across institutions from business to government to NGOs. Among the ideas are inclusive apprenticeships, internet access for teens and elderly, digital academies, a negative income tax (not guaranteed minimum income as a disincentive to work) and a registered group of minority owned small businesses that can qualify for large company supply chains.
The next big idea will be to link Inclusive Restructuring to Impact Investing. Sir Ronald Cohen’s new book, IMPACT, states, “The shift to optimizing risk-return-impact, which is led by entrepreneurs and investors, will have a transformative effect on the flow of capital in our economies. There is no other way to cope with the scale and severity of social and environmental issues than to attract investment capital.” Companies that commit to the full life cycle of an employee through training and placement will become both employer of choice and preferred investment vehicle.
Richard Edelman is CEO.