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Companies that invested in their workforce were 'more resilient' during COVID: JUST CEO

JUST Capital CEO Martin Whittaker sits down with Yahoo Finance Live's Julie Hyman at the 2022 Greenwich Economic Forum to talk about ESG, how to retain employees, and more.

Video Transcript

- All right. Well, Yahoo Finance's Julie Hyman is live from the Greenwich Economic Forum, where speakers are discussing portfolio strategies and alternative investing amid all these market headwinds. She's joined now by JUST Capital CEO Martin Whittaker. Hey, Julie.

JULIE HYMAN: Hi, Rachelle. Thank you so much. Indeed, I'm right here with Martin Whittaker. And JUST Capital is a firm that looks into everything ESG, but sort of beyond that as well, sort of making corporate America a more just place. And there's been sort of a backlash against the sort of ESG movement, if you will. You've had some ETFs that are anti-ESG. So kind of how are you thinking about that environment right now?

MARTIN WHITTAKER: Well, there is a distinction, as you said, between what JUST Capital does and the ESG movement. I've been in that space a long time. And I think there is a lot of criticism around the ESG investing that is valid. And ESG has sort of not really addressed a lot of the issues like standardization, quality of data, and meaning and things like that. What JUST does is we poll the public on what issues matter. We track big publicly traded corporations on how they're doing on those things. And then we bring that to market in the form of investment products, indices, data, media, content, and so on and so forth.

So for us, we're really in the business of tracking, what are companies actually doing? And then when you poll the public and ask them what they think about this, Americans are actually united, not divided. We see a huge amount of agreement, across political lines as well, but by income, by geographic location, et cetera, on companies doing more.

And the last thing I'll point out, which is really important, given where we are right now, is that it's good for business. All the JUST indices have outperformed their benchmarks since inception and live trading. We've got the spread between the top 10% and bottom 10% since January 2018. It's a spread of over 40%. So we think it's good for business.

JULIE HYMAN: But do companies think it's good for business? And especially do they think it's good for business-- I mean, it's easy to say something's good for business, you do something when everything's going well, right. It's when times are getting tougher that that's when it's a true test of a new way of looking at your corporate balance sheet, for example, and your spending, et cetera, all of that. So is that sort of holding up? And do you expect it to continue to hold up if we go into a recession?

MARTIN WHITTAKER: I do. I'll tell you why. I think we saw during COVID how many companies responded during a complete shock to the system. It turned out companies that were leaders on investing in their workforce, for example, were much more resilient during that period of time. We haven't seen a pullback from the companies that we work with. So we engage probably over 500, maybe 600 companies.

If anything this year, we've seen an intensification of their engagement with us, working with us on the underlying issues. That's kind of interesting. So, no. I think companies that believe that this is good for business are in it for the long haul and probably see it as a way to actually more effectively manage through a recession.

JULIE HYMAN: The other thing I wanted to ask you about is during this period of time when the work force has been so tight, right, you have seen this surge in power of the worker. You've seen a surge in unionization. You've seen people sort of saying I want to be hybrid and getting that. As the job market starts to change and shift and we start to see maybe layoffs pick up, do you think they'll retain that power?

MARTIN WHITTAKER: Well, I think it's constantly shifting, where that power really resides. But it doesn't take away from the fundamental issue of companies that invest in their workforce, provide great training, good benefits, they have better retention, better productivity. The business rationale is very strong. And company leaders, CEOs and boards that get that, believe that that's part of their competitive advantage. So I don't think you become a good employer one day and then a bad employer the next day depending on how the labor market is moving. I think that's part of your business credo or it's not.

JULIE HYMAN: But I guess there are more companies sort of making that part of their business credo by necessity over the past couple of years, right? And I just wonder, is that necessity, that impetus going to be taken away a little bit?

MARTIN WHITTAKER: I mean, we'll find out. I think we didn't really see it during COVID, like I said, and the economic shockwave that happened after that. I think companies today are beginning to see human capital as a real source of alpha. We see that in our own research.

And so if you're really trying to protect for the downside and batten down the hatches, you might feel like you've got more of an ability to control wages, for example, or the amount of money you spend on benefits. And maybe short term, you have to pull some of those levers. But for the most part, I like to think that companies that we've seen so far who believe that human capital is part of what makes them special will continue with that.

JULIE HYMAN: Here's hoping.

MARTIN WHITTAKER: Here's hoping.

JULIE HYMAN: Martin, it's good to see you, in person especially. Martin Whittaker of JUST Capital, Thank you.