On September 22, 2020 the report “COVID-19 and Inequality: A Test of Corporate Purpose” by KKS Advisors and the Test of Corporate Purpose (TCP) initiative was published. TCP was founded by Mark Tulay. I co-chaired this effort with Hiro Mizuno, former Chief Investment Officer of Government Pension Investment Fund, and Sacha Sadan, Director of Corporate Governance and board member, of Legal & General Investment Management. The report is based on a global survey by GlobeScan of 561 individuals and an empirical analysis of 800 large companies by KKS Advisors using data provided by Truvalue Labs. In a post yesterday I summarized the key results from the empirical analysis. In this one I will focus on the survey results.

The survey had responses from people in 53 countries, with a fairly even gender split, and around one-third holding senior positions in their organizations. The research was conducted with a number of different stakeholder audiences, including corporate leaders, investors and financial analysts, civil society leaders, and broader group of influencers. Figure 1 below shows the components of each group and the percentage of respondents. In my previous post I noted that 92 percent of respondents favored a multi-stakeholder model versus a sole focus on investors. The high was 97 percent for corporates and civil society, followed by 91 percent for influencers. Slightly below them was investors at 84 percent. The fact that more than four out of five investors support a multi-stakeholder model is telling and suggests that they realize it is the best way to deliver long-term returns for shareholders.

Figure 1

Percentage Response by Stakeholder Type | GLOBESCAN

Although the focus of the survey was COVID-19 and inequality, respondents were asked to compare these two issues with climate change to identify the highest priority for large companies (see Table 1 below). Climate change was rated first and by a significant extent (44 percent), followed by COVID-19 (28 percent), and inequality (22 percent). Corporates most highly rated climate change as the top priority (48 percent) and institutional investors rated it the least (38 percent). In contrast, 33 percent of investors rated inequality as the top priority. I suggest that this reflects the fact that large institutional investors see both climate change and inequality as creating system-level risks which will inhibit their ability to earn the returns they need to meet the needs of their clients and ultimate beneficiaries. These issues are also related to each other, with those suffering from the consequences of inequality being the ones most likely to suffer from climate change. The same is true for COVID-19 and inequality as the past few months have made depressingly clear when looking at infection and death rates.

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