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The Growing Field of ESG: How this Consortium Alum Believes Capitalism Can Be a Force for Good

It may have taken some time, but Lorraine Spradley Wilson has found her calling, now serving in a role in which she can follow her passion and also feel good about.

After graduating with a bachelor’s degree in government from Georgetown University — she was considering law school — she moved into financial services, working for companies such as Goldman Sachs, Third Avenue Management and Merrill Lynch. In 2012, Wilson graduated from New York University Stern School of Business as a member of The Consortium with her MBA.

Lorraine Spradley Wilson

Now director of investment products at JUST Capital, a nonprofit research organization that strives to promote companies that are just, Wilson is able to focus on an area of importance to her: environmental, social and governance (ESG) issues. JUST is a mission-driven organization focused on shifting the role of business in society. Its goal is to drive investments to companies that treat their workers, customers and the environment well. To do this, JUST assesses and ranks companies based on issues of importance to the American public to help people make informed purchasing and investment decisions.

Wilson recently spoke with us about her passion for finance, the growing field of ESG and how capitalism can be a force for good.

How did you get into finance?

My first role out of undergrad was as a corporate finance legal assistant at Sullivan & Cromwell LLP. I was pre-law during undergrad and took this position to learn more about the different practice areas. I ended up leaving to work for one of our clients at the time – Goldman Sachs Asset Management.

I was a sales analyst on the public pension fund sales team at Goldman. We sold everything on the asset management platform to our clients. I would do these research projects — which I found so interesting — to get the client what it is they were looking for. This is where I carved out a niche that has actually helped me in my career overall: being the one to do the research, to go sit down with the investment team and learn about the features of the product — do sort of this deep dive — but then be able to go back to a busy sales team and share the key takeaways for them and their clients. That’s something that really served me well after Goldman when I was in hedge fund sales at Third Avenue Management. There, I got involved with investor letters and events early on — something that was typically reserved for more tenured business development team members.

At what point did you decide to get your MBA, and where did The Consortium come into the picture?

I always knew I wanted to go to graduate school. After spending four years working post-undergrad, I decided I wanted to stay in financial services and that pursuing an MBA would be the best course of action. A former Goldman colleague was enrolled in the full-time program at Stern. He explained to me the importance of The Consortium, the benefits of applying to top schools with a single application and the support the organization provided — with the Orientation Program as a starting point. It just made perfect sense as the next step in my business school application process.

The fact that you had to show a track record of volunteerism and supporting your community, that was important as well, and to be included in that like-minded group of people was something that I wanted.

How did you come into your role at JUST Capital?

I joined from Merrill Lynch. I had been working in a role evaluating exchange traded funds (ETFs) for clients and came across the JUST ETF, a large-cap core ESG ETF that is based on JUST Capital’s research. I learned about JUST Capital that way and knew the team at Goldman that had launched the ETF and thought really highly of them.

Evaluating ESG-related funds was a small part of my role, but it was something I really enjoyed. I saw a lot of adoption and product development taking place at the European firms I covered and knew the U.S. would eventually enjoy the same growth. Education is very important in terms of supporting ESG adoption, and I felt that the director of investment products role would play to my strengths — technical product and industry knowledge as well as communications and presentation skills.

Can you tell me a little about how JUST Capital works?

We rank companies based on what’s important, what the priorities are of the American public. Every year, we survey and do focus groups, and what we get back is the priorities of the public in terms of business behavior. We’re asking them “what makes a just company?” and they’re telling us year over year, they want companies to look out for their employees, to take care of their customers, to offer quality jobs and take care of the environment. There are seven issues that we measure, and those are just a few of them. We then use that work to rank companies and publish the list in Forbes every year. Rankings are great for consumers and for companies to know where they stand versus their peers.

We then have investor events as we want to drive capital toward companies that are just; you can do that from a consumer standpoint and an investor standpoint. On the investor side, we focus on partnerships with asset management firms in which they license our company research. We also develop indexes, such as the JULCD Index we licensed to Goldman for the JUST ETF. That’s another way to drive capital toward a good company.

Do the issues that you assess change as well as how Americans feel about them?

The seven issues don’t change year over year. What changes is how important they are to the public. These issues are workers; customers —fair treatment of your customers, including safeguarding their privacy; and quality products. We think products and services should be high quality and fairly priced. We look at product recalls for example, or if you’re a bank, we look at settlements.

We look at the environment; we expect companies to minimize their pollution no matter their industry. Instead of saying we’re not going to invest in energy companies, we would rather engage with them and encourage them to minimize their pollution to the best of their ability, reduce their waste, protect the planet. These are all things that we look at.

Then jobs — we look closely at the quality of jobs, fair pay for the work that you’re doing. So we celebrated when Amazon got to $15 an hour. We focus on fair pay for the industry and the job.

And then community — we want to know how you’re interacting with your communities. Are you hiring veterans? Do you work with oppressive governments abroad? Do you source locally? Do you engage in local communities through volunteering and other programs?

The last issue that we measure, which is essentially the bottom-ranked one based on our research, is company leadership and shareholders — things like CEO-to-worker pay ratio, following laws and regulations, creating value for your shareholders.

Are there certain companies that seem to rank at the top year after year?

We want to see a race to the top. Last year, we ranked 890 companies out of the Russell 1000 Index, and Microsoft was No. 1 out of all of them. It is an industry leader — really strong on workers, customers, the environment, local communities and company leadership and shareholders.

What trends have you seen in the time that you’ve been working in the ESG space?

When we do our survey work, we are really thorough. We have surveyed close to 100,000 Americans and work to match the U.S. Census demographics. So we’re looking at different generations, different political parties, different incomes, education rates, gender, et cetera. We’ve found that these people feel really strongly on these issues, and it’s pretty consistent across these different demographics, which is really encouraging. Our model is set up to take into account changes in sentiment. We’re interested in tracking whether the public’s views on the seven issues we measure change over time.

One thing we’ve noticed is that for the past two years, 80 percent of Americans have said that companies do not share enough of their success with their employees. These companies are doing well, they’re benefiting from corporate tax cuts, but the public feels like they’re not sharing enough of that with their employees.

We are capitalists here; we support capitalism. Workers are upset that they’re not sharing in these profits — they’re not getting the benefits — and they think that it’s a problem and that they need to reject capitalism as a response. But that’s certainly not the case; it just needs to be improved upon.

What do you do in your position at JUST Capital?

I’m director of investment products, so my role is really focused on the investor community. We have a corporate engagement team that works with the companies, and then my role is working in the investor, asset management/wealth management community. I’m focused on partnerships, increasing adoption of our research and on education. I speak regularly at conferences around the country and work with partners who are both new to ESG and long-time adopters to find new solutions for investors.

I’m intrigued by JUST’s belief that business and capitalism can and should be a positive force for change. Do you share this belief?

I definitely do. We think that companies can do more toward gender pay equity, toward quality parental leave, toward veteran hiring and engaging with the local community. Those are some of the areas where we think they can give back. And, by the way, there’s an investment case for it.

We published a report showing that companies that managed and disclosed on human capital metrics actually out-performed their peers. So there’s definitely an investment case where if you take a long-term view and invest in these areas, you can actually outperform rather than underperform.

How do you personally try to create a more just world? How, if at all, do you do so by remaining engaged with The Consortium?

I’m really involved with NYU on several fronts. I help with prospective student recruiting. That’s something that’s been really important to me. I am also working with the Center for Sustainable Business, and working on the reunion committee for Stern, I stay close to the community.

I also work with a group of families every year to fundraise money for undergraduate scholarships for minority students in the New York City area. Together, we’ve been supporting this effort for close to 30 years. It’s sort of like our own mini Consortium — complete with mentoring and career coaching — at the undergraduate level.

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