“Dec 9, 2020,10:59am EST
Pope Francis Partners With Corporate Titans To Make Capitalism More Inclusive And Fair: Is This For Real Or Just Corporate Virtue Signaling?
Pope Francis, aware of the fast-growing global wealth inequality between the ultra-wealthy and the rest of society, has proposed a challenge to corporate executives and public sector leaders to adopt a more inclusive, fair and transparent economic system that is equipped to address the dire challenges plaguing humanity and Earth.
“The world is rich, and yet the number of poor people is swelling all around us,” said Pope Francis. With the increasing wealth inequality, the pope pointed to the current challenges facing humanity, “Hundreds of millions of people are struggling in extreme poverty, and are lacking food, housing, healthcare, schooling, electricity, and drinkable water.
In response to the pope’s exhortation, business and public sector leaders formed an historic partnership with the Vatican. The Council for Inclusive Capitalism will serve as a movement to address the economic and environmental needs of the planet and its inhabitants. The council “boasts over more than $10.5 trillion in assets under management, companies with over $2.1 trillion of market capitalization and 200 million workers in over 163 countries.”
It should be noted that these extremely wealthy executives are not adversaries of capitalism, citing that the system has helped billions of people abscond poverty. However, the group acknowledges that capitalism has perilously left people behind, while also taking a toll on the planet. Ultimately, the partnership calls for a moral redress.
The “Guardians,” as the council members are called, are top executives of the world’s leading corporations who have promised to take bold actions toward creating inclusive capitalism. The Guardians will hold themselves accountable, committing to a list of intended actions involving environmental, social and governance matters. The Guardians, at their respective companies, have said they plan to hire and promote more women, increase diversity hires, commit to clean energy by purchasing 100% renewable electricity, reduce greenhouse gas emissions, promote the reuse and recycling of water and other initiatives.
The list of Guardians is lengthy and continues to grow. Here are some examples of the business leaders who have joined this mission:
Ajay Banga, president and CEO, Mastercard
Oliver Bäte, chairman of the board of management, Allianz SE
Marc Benioff, chair, CEO, and founder, Salesforce
Edward Breen, executive chairman, Dupont
Lady Lynn Forester de Rothschild, founder and managing partner, Inclusive Capital Partners
Kenneth Frazier, chairman of the board and CEO, Merck
Alex Gorsky, chairman of the board and CEO, Johnson & Johnson
Alfred Kelly, chairman and CEO, Visa
William Lauder, executive chairman, Estée Lauder
Bernard Looney, CEO, BP
Brian Moynihan, chairman of the board and CEO, Bank of America
Ronald P. O’Hanley, president and CEO, State Street Corporation
Rajiv Shah, president, the Rockefeller Foundation
According to the New York Times, “There are reasons to be both hopeful and skeptical of the initiative. The corporate pledges are meaningful, but some aren’t new: BP, for example, restates a commitment to achieve net zero carbon emissions by 2050 that it announced in February. And while the council has posted the pledges publicly, there’s not much to hold the companies accountable (aside from the risk of disappointing the pope).”
While we applaud the people who try to make the world a better place, there is an irony that can’t be ignored. The same people who are calling for an end to wealth and income inequality are extraordinarily wealthy. Of course, the noted leaders like capitalism, it’s been very good to them.
According to Forbes, Marc Benioff, the CEO of Salesforce, is worth nearly $90 billion. William Lauder, the executive chairman of Estée Lauder, has a net worth of $3.5 billion.
Lady Lynn Forester de Rothschild, the founder and managing partner of Inclusive Capital Partners, has her own wealth, but is also married to Sir Evelyn De Rothschild. He is the scion of one of world’s wealthiest family dynasties and is estimated to be worth $20 billion.
According to salary.com, Ajay Banga, the CEO of Mastercard, earned $23.2 million in total compensation for 2019. Bank of America CEO Brian Moynihan reaped $25.4 million in total compensation for 2019. These numbers don’t include any accumulated stock that they may own in their respective companies or their entire net worth.
There is nothing wrong with the Guardians being in the top 1%. However, these business leaders are the people that the pope points to when he calls out wealth inequality. Their massive wealth begs the question, since they have the financial means, why aren’t they personally leading by example? Why not write a large personal check, without claiming it as a tax write-off? When their corporations take actions, the monies don’t come out of the pockets of the executives, but are indirectly supported by the shareholders.
The wealthy elites could consider getting their own houses in order before trying to change the world. The CEOs are able to ask for and accept significantly less compensation and wave all of their stock options and lavish bonuses. They could certainly live on a $5 million salary and the other $20 million could be shared with their workers. Instead of accumulating all of the stock options, the executives should offer them to their employees, so that they have equity in their companies.
The titans of industry have the power to provide enhanced health insurance, additional vacation days, flexible work schedules, pensions, access to mental health resources and longer maternity and paternity leave. Who will be the first CEO to step down and replace himself with a person of color or woman?
The Guardians can exert peer pressure on fellow industry chief executive officers. They could ask Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg, Apple’s Tim Cook, Google’s Sundar Pichai and others to relinquish the fortunes they’ve accumulated during the Covid-19 pandemic and redistribute it to this initiative.
The glaring concern is that this partnership ends up as a public relations bonanza for the executives involved. They’ll bask in the glory of favorable media attention and virtue signal how wonderful and caring they all are. I’ll follow up in the New Year to report their progress—if any.”