Amalgamated Bank works hard every day to support the most powerful change makers in America. We have the honor of standing with thousands of leaders of social change – nonprofits, foundations, labor unions, and more - as they take on complex, deeply rooted issues affecting hundreds of millions of lives.
Yet alone, those efforts will not make the fundamental change we need right now in our politics and economy. Given this moment in our country’s history, we know this is an ‘all hands on deck’ effort. Marginalized communities live challenging lives and face an intertwined set of complex problems. The multiple threats facing those communities spans across the environment, the economy, and the very democratic fabric of our country.
Income inequality, climate change, the lack of a well-thought out transition to an economy transformed by technology and artificial intelligence, the erosion of personal privacy, and real threat to the democratic norms that have provided relative peace and prosperity for 70 years are all real issues our society is confronting. Whether it be issues in the voting booth, foreign interference in our elections, or the stark partisanship that accomplishes nothing, the democratic structures set up by our country’s founders are unstable. With little national political progress, inequality of all types – particularly the racial wealth gap – have grown to their highest level since right before the Depression. We know this is not only unjust, but also dangerous for our economy. Such concentrations of wealth reduce the ability of the consumer to be an active member of the economy, which leads to shrinking markets over time.
The question that has been plaguing my mind in the recent months with an increase in mass shootings, an impending recession, and a warmer than ever planet: What will it take to make meaningful, lasting change in our society? Is simply changing policy and therefore government enough to solve these massive problems?
I am less convinced that we only need political leadership to solve the biggest challenges facing Americans. I want to see CEOs and the corporations they run step up to the plate to provide solutions.
The Role of CEOs and Corporations in Politics
Core to Adam Smith’s understanding of capitalism, was the notion that our economic system must have a moral accountability. Unfettered markets in search of only profit are hazardous for consumers and business alike. He knew, as did the founders of Amalgamated Bank, that business has a role in solving the complex problems facing our world. Business should not be part of the problem. Businesses need to be part of the solutions.
Even with steep hills to climb, I am ever more inspired at this moment. America’s history is abundant with examples of major progress. America has achieved a number of great social and technical successes, because we all came around the table ready to act. Achievements like the Voting Rights Act of 1965, the Clean Water Act, and many basic labor rights came at times of great struggle and great faith. We can do that again. We can recreate those moments of ingenuity and have the bold confidence to move forward. As political leadership changes and American culture continues to progress, businesses, who have lagged behind social progress for the last four decades, are hearing an even louder call to help lead the country forward.
It is not an understatement to say that government and the public are failing to act swiftly on real, massive problems facing everyday working Americans. There is a lot of work being done by partners such as the Center for Community Change, Jobs with Justice, Color of Change, and countless local groups to change the political landscape so that progress comes to and led by marginalized communities. While many are working to change political leadership and policies, business and finance also has a role to play.
The Case for CEO Leadership
It was interesting to watch the CEOs of major companies make the announcement with the Business Roundtable regarding corporate social purpose, especially since many of them argued against this idea for the last 40 years. CEOs need to be held accountable by shareholders to fulfill both a financial and social purpose. That social purpose requires leading on issues of the day. It is no longer enough for CEOs to stay silent. In the absence of strong political leadership, CEOs are finding and need to continue expanding their voice
Without a doubt, CEO leadership is good for business. Big, complex challenges directly affect the current economic landscape and jeopardize existing business models. Both business and politics need to evolve and adapt. Failing to act will negatively impact all of our businesses.
Also, consumers are clamoring for action on social issues and CEOs can show the market advantage of their companies by taking action. More and more consumers are voting with their dollars and want to do business with corporations who are part of the solution. No longer can businesses be without values. No longer can CEOs stand on the sideline.
There is significant evidence to prove this trend is working. From Walmart discontinuing to sell vaping products and some firearms, to banks refusing to do business with private prisons and to Amazon complying with the Paris Climate Accord, businesses are taking a stand and causing a significant ripple effect. All the while, Washington stays silent.
My Commitment as President and CEO of Amalgamated Bank
It’s one thing to sign a pledge, it is another to take real action. Amalgamated was the first bank to raise its minimum wage to $20 per hour, the only U.S. bank to endorse the UN Principles for Responsible Banking, and the only bank to back Everytown’s efforts to call for policy to end gun violence. At Amalgamated Bank, we have been providing social and financial purpose to our customers and shareholders for nearly 100 years. We were ESG before there was ESG.
Corporations have the power to set policies effecting kitchen table issues facing hundreds of millions of families. CEOs should look at the pay gap in their own corporations as a way to address the larger gap in the economy. Corporations have control over what products are on our shelves and banks can influence whose ideas receive financing. Employers control childcare, family leave, and health policies that could set the example for government.
I am committing to align those actions more closely with my principles and the mission of the Bank. I am committing to helping other CEOs and corporations exceed the Business Roundtable’s statement of corporate social purpose.
Enough waiting for government or the nonprofit sector to alone solve problems facing us all. CEOs and the business they run must come forward with solutions and use their voice to stand up for what is right. The urgency is now.